Dan Walters

California PUC’s big scandal over San Onofre closure heats up

Beachgoers walk near the San Onofre nuclear power plant in San Clemente. The plant was shut down in 2012. That closure led to a secret deal to have utility ratepayers bear most of the cost, then a scandal when the deal was disclosed. Now the Public Utilities Commission is reopening the case.
Beachgoers walk near the San Onofre nuclear power plant in San Clemente. The plant was shut down in 2012. That closure led to a secret deal to have utility ratepayers bear most of the cost, then a scandal when the deal was disclosed. Now the Public Utilities Commission is reopening the case. Associated Press file

The long-simmering scandal in the state Public Utilities Commission over a secret deal to stick ratepayers with most of the costs of shutting down the San Onofre nuclear power plant just got more interesting.

The PUC announced Monday that it is reopening the deal that its former president, Michael Peevey, privately negotiated in 2013 with a Southern California Edison executive, mostly during a 2013 meeting in Warsaw’s Hotel Bristol.

As part of the $4.7 billion settlement, which would cost ratepayers an estimated $3.3 billion, SCE donated $25 million to a Peevey-sponsored UCLA climate change research project.

After the secret negotiations surfaced, Peevey resigned, the PUC fined SCE $16.7 million for failing to disclose the “ex parte” negotiations with him, and the state Department of Justice launched a criminal investigation. It focuses not only on Peevey, a former SCE president before his PUC appointment, but fellow Commissioner Michael Florio, who was overseeing the San Onofre case, and PUC Administrative Law Judge Melanie Darling.

“There is probable cause to believe that Michael Peevey … used his position to influence SCE’s commitment of millions of dollars to UCLA to fund a research program,” says an affidavit from a Department of Justice investigator in support of a search warrant request. The agent, Reye Eugene Diaz, also declared that Peevey and SCE executive Stephen Pickett “conspired to engage in prohibited ex parte communications regarding the closure of a nuclear facility, to the advantage of SCE and to the disadvantage of other interested parties.”

Meanwhile, former San Diego City Attorney Michael Aguirre, now in private practice, launched his own investigation, pressing the PUC to reopen the case because some of the burden from the San Onofre closure would fall on ratepayers of San Diego Gas and Electric, a part-owner of the plant.

Aguirre is also demanding release of emails Aguirre says could implicate Gov. Jerry Brown in the secret San Onofre deal, but Brown and the PUC have resisted those demands, with the commission maintaining that only the appellate courts can deal with the issue.

The commission is appealing Superior Court Judge Ernest Goldsmith’s recent order that Aguirre could seek the emails, saying, “Withholding records of allegedly ex parte secret deals resulting in a shifting of utility losses to ratepayers cannot possibly be a regulatory function of the PUC.”

Reopening the San Onofre settlement is another Aguirre victory. “We have been doing the work of the CPUC and the California attorney general,” Aguirre said in a statement, “so today’s decision to revisit and examine the evidence of fraud is a huge step forward.”

Monday’s PUC order dryly declares that “the record must be reopened and the settlement agreement should be reviewed in light of the intervening ex parte disclosures and commission decision imposing sanctions as a predicate to considering further procedural actions.”

In other words, the PUC could scarcely fine SCE for its role in the secret negotiations and then allow the resulting deal to remain in force.

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