Sierra Club's opposition to San Onofre settlement is right on the mark

The San Onofre Nuclear Generating Station near San Clemente was closed about two years ago because of safety flaws in steam generators that caused a small radioactive leak. But that wasn't the end of the story. What was to be done with nuclear waste stored at the plant, and who would pay for it? Who would bear the economic loss of shutting San Onofre a decade before the end of its expected operation?

Ultimately, the U.S. Nuclear Regulatory Commission and Department of Energy have responsibility for safe storage of nuclear waste. Monitoring progress on waste cleanup is the focus of a 25-member Community Engagement Panel on which the Sierra Club serves as the only environmental representative.

The California Public Utilities Commission is the front-line player on cost-sharing issues. The PUC held a public hearing in Costa Mesa last June that heard a panel of witnesses including the PUC’s Office of Ratepayer Advocate, the Utility Reform Network TURN (a self-styled consumer group), Friends of the Earth, and Southern California Edison. These parties supported an agreement that would require ratepayers to compensate Edison for $3.3 billion of the $4.7 billion economic loss.

In the weeks and months that followed the PUC hearing there was a murky process during which the proposal moved through various levels of adoption as Commission policy. But even as it progressed internally it was being undermined by external events.

Multiple public investigations revealed improper communications between the PUC and Edison. It’s a complex saga but at its center is one key dynamic: PUC President Michael Peevey seemed to have lost any sense of boundaries between his official role as a public regulator and his self-designated role as confidential strategy advisor to a regulated utility (Peevey’s term expired at the end of 2014 and he was not reappointed).

As more evidence came to light, it increasingly placed the proposed settlement under a cloud of suspicion. A fair and open regulatory review process seemed to have been trumped by confidential coordination between Peevey and the utility on terms of the agreement. The investigations culminated in the recent ruling by a PUC administrative judge that these contacts and conversations were improper.

In the wake of this ruling, the utility reform network TURN was first to jump ship as a supporter of the settlement. Shortly thereafter, the PUC Office of Ratepayer Advocate followed suit. The position of these parties in June 2014 was that the proposed deal was the best anyone could hope for. That view is now history. TURN and PUC staff members are calling for the settlement to be reopened and revisited by the Commission. Friends of the Earth, a Sierra Club ally on many issues, has yet to be heard from in the wake of the revelations.

From the get-go in June of last year, and many times in the months that followed, the Sierra Club called for the proposed settlement to be scrapped. We were joined by San Diego attorney Mike Aguirre and Ray Lutz of citizens Oversight Inc. Frankly, it shouldn’t have taken a scandal to bring about a revision in this unreasonable proposal. Ratepayers had no part in the technology breakdown that shut San Onofre.

The issue is entirely between Edison and the equipment manufacturer, Mitsubishi. It is revealing that Edison, in a lawsuit against Mitsubishi, recently hiked the amount of compensation it seeks from about $770 million – the direct cost of the hardware - to a figure in the billions that includes general economic losses.

Perhaps Edison senses that the process calamity clouding the settlement dims the prospect of placing the majority of costs on the rate-paying public. We wish them success in their lawsuit against Mitsubishi. If there are still costs to be borne, we look forward to learning the views of the PUC ratepayer advocate and the utility reform network on what a fair cost sharing would look like.

At the June 2014 hearing the Sierra Club argued that ratepayers should bear no more than half the shutdown cost rather than the proposed 70% As time went on with no apparent movement on settlement terms, the Sierra Club and other activists asked why ratepayers should bear any responsibility for a problem in which they played no part. That remains the Sierra Club Angeles Chapter position. The Chapter awaits next moves and will not hesitate to speak out.

Glenn Pascall is chair of the Angeles Chapter's San Onofre Task Force.