Southern California Edison Sued Over San Onofre Rates.


Photo: Tom Abbott

“Every American citizen has the constitutional right not to have their personal property taken without just compensation.” This is how Mike Aguirre started his portion of the news conference. He, and Maria C. Severson are representing a group of San Diego and Orange County residents, as well as Citizens Oversight, Inc, based in Delaware, in a lawsuit against Southern California Edison (SCE) and the California Public Utilities Commission (CPUC)

The case alleges that starting in January of  2012, rate payers started to pay for the new steam generators at the reactors of the San Onofre Nuclear Station (SONGS). These reactors failed soon after. Ratepayers  have been charged for power we have not received. They also allege that the settlement of March 27, 2014 between SCE and the CPUC is a phantom, “it is so small, it is not expected to even have a material impact on SCE income.”

They further write “under the direction of (Peter) Florio and (Michael) Peevey, SCE forced its customers to relinquish their private property without just compensation in violation of the Fifth Amendment to the United States Constitution.”  They also allege that there has been collusion between the utility and the regulating agency. This is no longer about regulatory capture, when agencies for the most part do what those they regulate want them to do. It is worst. According to Aguirre this is adverse domination, which means, in this case the utilities make the decisions.

As evidence of this, the case presented in the Southern United States Federal Court, the lawsuit alleges that both Peevey (will step down in December) and President of the Commission Florio (on his way out), did not exercise the necessary regulatory oversight over the SONGS project starting in 2005. According to the lawsuit, rate increases were approved  as early as 2005, but not applied. This is an important distinction. “Normally, new construction like the new steam generator project at San Onofre had to be shown to be ‘used and useful’ in producing electricity before the costs could be put into rates. However, the decision authored by Peevey in 2005, allowed SCE to charge plaintiffs for the new steam generators.”

The suit also alleges the CPUC allowed the utility to sidestep the Nuclear Regulatory Commission, which should have proved the changes in the new steam generators, for safety purposes.

The rates started to appear on users in 2012, after the plan started having problems. The lawsuit says that “the San Onofre power plant has not been used or useful since Jan. 2012, however the CPUC has continued to change plaintiffs for its cost without allowing them to participate in a hearing whether San Onofre should be removed from rates, and the funds returned to plaintiffs.”

The money at play is over 3 billion dollars, distributed between both San Diego Gas and Electric (SDG&E), and SCE. Some of the reasons that SDG&E was not included in the lawsuit is that the local utility, while a minority owner and operator of SONGS, did not agree with the insulation of the new steam generators. During the Press Conference there was a hope that SDG&E would join the plaintiffs.

If this lawsuit succeeds, rate payers will stop paying for the electrical power that SONGS is no longer generating.

Some of the evidence provided in the lawsuit to the improper actions of the CPUC include emails  that were brought to light after the San Bruno explosion in 2010 in Northern California. During the lawsuit, emails came to light between Commissioner Peevey and PG&E and has led to his resignation from the commission. These communications behind closed doors were regarding the appointment of an administrative law judge.

The suit alleges that the CPUC has attempted to create the impression of openness regarding SONGS, including an Oct. 2012 public announcement as to hearings on the SONGS outages. This hearing never really happened, the suit alleges, and on Jan. 28, 2013 the CPUC ordered the postponement  on these hearings.

If this lawsuit succeeds, rate payers could see upwards of $1000 per meter reimbursement. They should also see the end of any rates paid for SONGS in their monthly electrical bill.

A previous version of the story said that Peevey has stepped down, but he will not seek reappointment for a third term in December.

Twitter: @nadinbrzezinski

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Categories: Lawsuit, SCE, SDG&E

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