Citizens group appeals San Onofre ruling

Union Tribune (2015-09-25) Jeff Mc Donald

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More Info: San Onofre Settlement Federal Case, Stop The Unfair Settlement

The San Diego consumer group suing to reverse the San Onofre settlement that charges ratepayers billions of dollars for the failed nuclear plant has taken its case to the U.S. Ninth Circuit Court of Appeals.

The nonprofit organization Citizens Oversight is asking federal appellate judges to return the case to District Court, where a judge earlier this year declined to hear the case.

“The order requiring utility customers to pay over $3,300,000,000 was issued without fair notice or hearing, and therefore all the conditions of the Johnson Act are not met,” the appeal states. “The order below should be reversed, and the case remanded to the district court for further proceedings and discovery.”

Citizens Oversight challenged the agreement approved in November by the California Public Utilities Commission, alleging the decision amounted to the illegal taking of property — ratepayer money — without just compensation.

The November ruling allowed plant owners Southern California Edison and San Diego Gas & Electric to charge customers more than $3.3 billion of the estimated $4.7 billion in costs related to the premature shutdown on the plant, north of Oceanside.

Judge Cathy Ann Bencivengo dismissed the claim in April, saying that Citizens Oversight had yet to exercise all of its potential remedies at the commission level or in state court.

The commission did not immediately respond to questions about the appeal. Edison issued a brief statement saying it would reply to the court.

“SCE will formally respond in accordance with the court’s schedule,” spokeswoman Maureen Brown wrote. “Pending that response, we remain firmly of the view that the federal district court properly dismissed plaintiffs’ claims.”

The utilities have defended the San Onofre deal, calling it a fair resolution to a complex problem.

But according to the complaint, regulators conspired with utility executives to kill an internal investigation into what caused the San Onofre plant to leak radiation and shut down in January 2012 and to pass the majority of costs related to the closure onto customers rather than company shareholders.

The appeal cites an undisclosed meeting in Warsaw, Poland, between former commission President Michael Peevey and former Edison executive Stephen Pickett, who sketched out the framework for a settlement on stationery from the luxury Hotel Bristol in March 2013.

It also refers to a January report in The San Diego Union-Tribune disclosing that the “RSG notes on Hotel Bristol stationary” were seized by state criminal investigators executing a search warrant at Peevey’s Los Angeles area home.

“RSG” refers to replacement steam generators, the flawed equipment that caused the failure of the nuclear power plant on the San Diego County coast.

“Nine days after the Union-Tribune reported criminal investigators under a search warrant had seized the RSG notes from the CPUC president and 683 days after SCE was supposed to report such ex parte communications, SCE admitted Pickett had met with Peevey in Warsaw,” the appeal states.

Since the San Onofre deal was approved by the commission, two of the main signatories to the agreement have publicly retracted their support for the settlement. Both the commission’s Office of Ratepayer Advocates and The Utility Reform Network consumer group said the 2013 meeting in Warsaw showed the agreement was not negotiated in good faith.

The commission has yet to rule on a rehearing request filed in the case last year.

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