Proposed settlement will cost SDG&E, Edison $873 million

Might the San Onofre nukes dispute be wrapped up?

In a settlement made late yesterday (January 30), Southern California Edison and San Diego Gas & Electric, which jointly own almost 100 percent of the shuttered San Onofre Nuclear Generating Station, agreed to not collect $873 million in ratepayer fees for the next five years in the long-running dispute over who was to pay for the decommissioning of the facility. Thus, ratepayers will, essentially, save that sum for the five years beginning December of last year.

Maria Severson

Maria Severson

A number of consumer organizations were involved in the settlement, but the main one was San Diego-based Citizens Oversight, which has been a party from the beginning in 2014, and was the appellant in this matter.

The California Public Utilities Commission, appellee in the case, must approve the settlement.

Mike Aguirre

Mike Aguirre

The San Diego law firm of Aguirre & Severson is scheduled to get $5.4 million from the settlement. Earlier, the firm got $800,000 from a settlement over Edison’s plan to bury dangerous spent nuclear fuel near the ocean at the San Onofre site. The two lawyers worked five years on this matter without compensation. The settlement, if approved, should wrap up the civil side of the long-running dispute.

Originally, the utilities commission wanted ratepayers to pick up $3.3 billion of the decommissioning costs. Aguirre & Severson fought that, along with other groups, and reduced it substantially with this deal.

Michael Peevey

Michael Peevey

That $3.3 billion was sketched out by former commission head Michael Peevey in a secret meeting with Edison in Poland. He was investigated criminally, but the attorney general’s office let the statute run out. Peevey had demanded that as part of the settlement, a large sum would go to the University of California at Los Angeles (UCLA) for clean-power research. It became a scandal and UCLA dropped out. Now, however, money will go to California State University in Southern California for such research.

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While this is not-bad news, is it really good news?

If ratepayers were originally on the hook for $3.3 billion, but now getting "relief" of $873 million, doesn't this mean we're still $2.43 billion out of pocket? Or is there a different amount that $873 million figure offsets?

Cassander: If this is approved, the net effect is that shareholders will pay $2.3 billion and ratepayers will have paid $2.4 billion. That is better than the original $3.3 billion to be paid by ratepayers that Peevey and Edison cooked up privately and illegally, but at least it is an improvement.

However, a 50-50 split is not satisfactory. Shareholders should have been required to pay 100 percent and ratepayers zero. The major mistake -- a faulty steam generator that caused the closure -- was 100 percent management's fault and thus Edison should have paid 100 percent. But, if this is approved, it might be the best ratepayers can get. Best, Don Bauder

Okay, so it is as I thought. And I agree: better than before, but that's about as relative a statement as has ever been made.

Ideally, Edison should have been allowed to go belly up, broken up, and parts turned into publicly owned utilities. But then, that would mean relying on the free market and voter choice, which our politicians are ever vigilant to protect us against.

Cassander: Not only our politicians -- but more importantly our corporations and their financiers -- do not practice free enterprise. They get all the corporate welfare they can grab from taxpayers. They only talk free enterprise.

Edison going bankrupt would have been one solution. The company went into default on its debt during the energy crisis of the early 2000s. California's municipal utilities have rates that are often about half of the rates of investor-owned utilities like Edison, so rates would have had to go down, and the value of assets would have to be written down before any breakup and sale to municipals. Practically speaking, I don't think a BK and breakup would have been possible. But shareholders should have taken 100 percent of the hit for the errors, totally by management. Best, Don Bauder

I'm not clear on what would have happened if those new heat exchangers had been used without mishap for forty years. My understanding was that once they were no longer satisfactory, the plant would have closed at the end of its service life. Would the rate payers be on the hook for de-comissioning costs then? Or was the concept one of the owners collecting enough during the decades of operation to cover the shut-down and removal cost?

Depending upon what sort of financial status the plant had, there may--and I stress MAY--be some justification for the rate payers to absorb some of the cost. But nowhere in the private sector can a corporation go back to its customers and collect from them to cover the cost of demolishing an old and out-of-date factory. The stockholders take the hit, and that is understood in the world of business. Utilities are not like the rest of the business world. In some ways they have the worst features of both the free-enterprise system and socialism.

Visduh: I don't know what would have happened if the equipment had not been defective and San Onofre had lasted another 40 years. I don't know if ratepayers would have been on the hook for all or part of decommissioning costs. Edison has had extremely high rates for many years (although not as high as SDG&E). It would have depended, I suppose, on the original deal.

Investor-owned utilities have guaranteed profits. That is not true in the private sector, at least in most industries. One could argue that shareholders should have absorbed some costs had the facility last another 40 years. I would not have agreed with that, however. Best, Don Bauder

CHARLES LANGLEY SAYS LAST NIGHT'S DEAL WAS TOO CLOSE TO THE ORIGINAL PEEVEY/EDISON SCAM IN WHICH RATEPAYERS WERE TO GET RAPED. THEY'RE STILL GETTING RAPED, HE SAYS. "This 'new' settlement is basically the same sack of detestable excrement in a new bag," says Langley, executive director of Public Watchdogs. He formerly worked for Aguirre and Severson.

He notes that Edison and the plaintiffs announced the deal so late in the day that there was little time for thoughtful discussion. True. I got my release at 5:28 p.m. I was able to get to Aguirre and Severson (separately but only briefly) before filing my blog item at 7:05 p.m. It didn't print until today.

Langley says "Edison won" because the "documented history of criminal activity will never be made public in a regulatory court." Actually, the settlement, if OK'd by the CPUC, will only be civil.

Langley says Aguirre boycotted secret meetings on the grounds that utility rates should be set in public, but then went ahead with this deal in secret. The first deal was illegally set in private in a Warsaw, Poland, hotel. Former CPUC head Mike Peevey and Edison executives participated. Thus far, they have gotten away with this criminality, says Langley.

He says that "every single deal point" made illegally in Warsaw has been enacted through this proposed settlement. "The public is only being given 15 days to review this settlement before the approval hearing will occur. If past is prologue, the shareholders of Edison will be making fat profits at the public trough with the help" of the very people who sued over the deal in the first place. Best, Don. Bauder

Thanks, Don. So when you add Langley to the discussion I'm reminded of his role in exposing the Michael Shames and UCAN debacle. Which adds a third Michael to the discussion and a muddled train of thought about our poor consumer protection infrastructure locally. Aguirre & Severson were the only local voices in this matter as I recall. Where was Langley and Public Watchdogs? Are they watching different dogs?

swell: As I pointed out, Langley worked for Aguirre and Severson. Then Langley got into a dispute with Aguirre, left, and formed Public Watchdogs. The organization was unhappy, as were several knowledgeable people, with the deal in which Edison only said that it would look into the possibility of moving the deadly nuclear waste away from the ocean's edge. Aguirre and Severson got $800,000 out of that deal -- hardly excessive given the work they put in -- and Edison, it certainly appears now, got off the hook. It keeps hedging on how far it will go but it says it is preparing to proceed with the move that would endanger North County and south Orange County citizens.

Langley is unhappy that Aguirre and Severson got $5.4 million out of this settlement. I think they deserved it. I have been following this for as long as they have been on the case and none of this would have happened if Aguirre hadn't found out from a third source about the Warsaw, Poland sneak deal. Langley thinks Aguirre and Severson have finally received compensation for their work, and are now walking away. One can't blame Langley for feeling that way. Best,Don Bauder

Sad, but there's another interpretation of all this. Maybe Mike and Maria sold us all out for $5 million. And with what we know at this moment, that doesn't seem all that unreasonable picture of events. Let's hear what they have to say about this before condemning the deal. But let's make all the feet are held to the fire.

Visduh: No doubt some people think Aguirre and Severson walked away after getting their money. It certainly looks that way, but maybe they just realized that this was the only deal they could get. And they were tired of five years of this. Best, Don Bauder

It now appears that the San Diego Water Department is taking lessons from the corrupt SDG&E, Edison and the CPUC. The Water Department is charging their customers high water rates and inflating the water used. Of course the City of San Diego is one of the most corrupt cities in California.

time to install your own meter to know the truth ( one way or another ) ?

Murphyjunk: That is something to ponder. Best, Don Bauder

AlexClarke: Yes, I am getting complaints about water bills shooting up for no apparent reason. I understand city council will look into it. When you think about it, though, staggeringly high prices were probably inevitable.

San Diegans pay the highest electric utility rates in the nation. And now those water bills shoot up shockingly. How do the people pay those bills? Best, Don Bauder

John Warren Lentz: I agree with you on both points, and have said it before. Peevey broke the law. The AG's office had the goods on him, but then-AG Kamala Harris let the statute run out -- deliberately -- because she needed the help of Jerry Brown, Peevey's buddy, in her successful run for the U.S. Senate. Best, Don Bauder

"California State University in Southern California" means which University? There are at least 11 universities which could fit that description, but none with that name.

As I recall, UCLA was supposed to get $25 million from the utilities to pay for greenhouse gas research. Instead, the new agreement includes a provision that utility shareholders will provide $12.5 million to fund research at the California State University system to address mitigation and reduction of GHG emissions and to facilitate the adoption of renewable energy sources in rural and impoverished communities. No specific campuses have been spelled out, at least as of yet. The sum reportedly originally proposed for UCLA was said to be $25 million. So, is it really better that the money, only half that amount over the next 5 years, is spread around among several campuses instead?

danfogel: That $12.5 million could be the best the educational systems could get, because UCLA backed out and Peevey got a black eye over the whole thing. Best, Don Bauder

profundis: Good question. I had to write this on the fly. I had time for quick interviews with Severson and Aguirre, but that was one question that was not high on my list. In stories such as this, it's critical to get the basics online as quickly as possible. I will try to answer your question. Best, Don Bauder

In other words, you were lazy in your "reporting," and you were rushing to publication, as if there's such thing as a "deadline" when publishing to the internet. As far as I can see, you got a release from Aguirre's firm, called your boss -- Aguirre -- for his blessing, but didn't call SDG&E or anyone else, or view the settlement documents, or ask for anyone's opinion other than Aguirre's (and his partner whose photo is also published here for some reason), wrote up this item in which you credit Aguirre with saving taxpayers a lot of money, and awaited your paycheck. You also, apparently, either copied and pasted straight from a release or actually transcribed "California State University in Southern California" from the release. Got it. OK, see, a real reporter would read the release, see that ridiculous phrase "California State University in Southern California," and call into question the veracity of the information in the release and the source itself. However, you are not a real reporter, but rather a PR agent, based in Colorado, for a local law firm run by a gadfly politician touting a proposed settlement involving a college that does not exist.

petezanko: You called me once some time ago and said you had worked for the U-T. Maybe so, but I question your knowledge of journalism. You seem to feel there is no reason to beat the competition in getting something online. That proves you know nothing. Your suggestion that I got a paycheck from Aguirre and Severson is a gross insult, athough I wouldn't be surprised if you have taken money from law firms and flacks in this journalism career you claim to have had. Best, Don Bauder

My insult is doubled down upon, you fraud, because you refused to refute my accusations, but instead turned it personal. Again, did you call SDG&E, or bother to clarify "California State University in Southern California," or seek opinion from anyone other than your source. I'd give you a lot more credit if you WERE being paid by the firm, rather than flacking for free. And this is to say nothing of your insulting, tin-foil hat take on Filner the sex criminal. Best, Your Momma

I worked at five daily newspapers in my career. Your one-sided tripe would never pass muster on my copy desk and it wouldn't be surprising if you were terminated from your previous positions for cause. Now, do yourself a favor and search the archives on this very site for stories mentioning "Aguirre," see how many you've written, and see why it's obvious you work for that flake. You know, you do remind me of one reporter I had the displeasure of working with -- Sara Carter, who is also a fraud but appears all the time on Sean Hannity's show so she gets paid to be a fraud. I guess you're the same level of uselessness, gullibility and laziness, only it's more infuriating because you purportedly come from the left -- though no true progressive would ever print the sexist tripe you have. F U, Bauder. Go away. Go enroll at Californian State University in Southern California and learn that "If your mother says she loves you, get a second source."

For those of you who would like to see a full story, which gives time to each side, provides background and doesn't worship Aguirre, here you go. Oh yes, it's from the paper that Bauder loves to hate, probably because his editors when he worked there forced him to actually do his job correctly, from time to time. http://www.sandiegouniontribune.com/business/energy-green/sd-fi-aguirre-cpuc-20180220-story.html

Mike Murphy: No, this was Plan A dressed up a little. What emerged from all this was a deal that had stark similarities with what Peevey illegally sketched out in Warsaw, and Edison illegally put into practice. Nice world, isn't it? Best, Don Bauder

It will be interesting who will be responsible for paying all the "unforeseen" costs

Murphyjunk: You know that Edison, SDG&E and the CPUC will attempt to pass those costs to ratepayers. Best, Don Bauder

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