PROPOSED DECISION IN CPUC INVESTIGATION OF SAN ONOFRE OUTAGE: GOOD & BAD NEWS FOR RATEPAYERS

(San Diego) Agreeing with the position taken by the Coalition to Decommission San Onofre (CDSO) and other public interest advocates in the California Public Utilities Commission’s (CPUC) investigation into the San Onofre outage of 2012-2013, the assigned Administrative Law Judges (ALJ) have published a Proposed Decision in Phase 1 of the investigation, dealing with 2012 expenditures during the outage:

All Images from CPUC video
All Images from CPUC video

However, we find

[Southern California Edison] SCE to be single-minded about its restart plan, and slow to understand the technical challenges and regulatory timeframe required to implement it. SCE’s decision to apply resources to a restart plan was the result of an unsound decision-making process, primarily because SCE did not consider cost effectiveness or alternatives such as putting Unit 2 into preservation mode, or realistically assess the regulatory hurdles blocking a reasonably foreseeable restart.

The ALJ’s Proposed Decision calls for the first refund to the ratepayers of SCE and San Diego Gas & Electric (SDG&E) due to the unplanned outage of the twin nuclear reactors at the San Onofre Nuclear Generating Station, of $94 Million. This preliminary refund reflects only the over-collection of funds from ratepayers in 2012 that were previously authorized by the CPUC for normal operations associated with generating electricity. While CDSO welcomes the ALJs’ embrace of its position that SCE made unsound decisions at the expense of its own and SDG&E ratepayers, we consider the amount of this refund to be overly conservative, and will argue so in Comments on the Proposed Decision due by December 9, 2013. The 5 Commissioners may vote on a final decision on December 19, 2013.

The Proposed Decision defers decision on $122 Million spent by SCE in 2012 on the defective reactors to Phase 3 in this investigation. Phase 3 will judge the reasonableness and prudency of SCE’s actions and expenditures in replacing 4 steam generators in the San Onofre reactors in 2010-2011, which proved to be defective following a leak on January 31, 2012.

The Proposed Decision also defers to Phase 3 whether SCE and SDG&E will be allowed to recover costs associated with power purchases necessary to replace the electricity not generated by San Onofre. This Proposed Decision adopts a methodology for calculating what these “replacement power costs” are, and orders SCE and SDG&E to file new cost estimates using this methodology following the final decision.

In Phase 2 of this investigation currently underway, the CPUC is also considering SCE’s and SDG&E’s request to recover $3.2 Billion in sunk costs in the shuttered nuclear plant. Briefs are due later this week and in mid-December, after which the ALJs will begin to prepare a proposed decision.

To counter the intense lobbying by SCE and SDG&E already underway to reduce even this nominal inital refund for ratepayers, as well as to blunt the criticism of SCE’s unsound decision-making in responding to this outage, CDSO will once more mobilize public opinion to defend ratepayer interests. We will reinforce the resounding message given at the CPUC’s first public hearing in San Diego on this investigation, October 1st: Stop the San Onofre Bailout!

The Coalition to Decommission San Onofre (CDSO) is a grassroots project of Citizens Oversight, Inc., a 501(c)(3) public benefit corporation which encourages increased engagement by the public in the operation of their local, state and federal government to reduce waste, fraud and abuse by public officials. Our Coalition member organizations also include the Peace Resource Center of San Diego, San Clemente Green, SanOnofreSafety.org and Women Occupy San Diego.

Our CDSO Intervenor Team is led by 20-year CPUC veteran Martha Sullivan and Ray Lutz, the National Coordinator for Citizens Oversight and an engineer who has intervened at the U.S. NRC on San Onofre operating license specifications.

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