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Calif. parties come out for, against PUC tossing out SONGS settlement

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Calif. parties come out for, against PUC tossing out SONGS settlement

Partieshave filed opening briefs for and against re-examining a settlement of thecosts of closing the San Onofre Nuclear Generating Station, or SONGS, in lightof improper communications that occurred between utility officials and theCalifornia Public Utilities Commission.

Thestate Office of Ratepayer Advocates saidthe settlement has been compromised and in ORA's view plant majority ownerSouthern California Edison Co.should refund $383 million to its ratepayers.

TheORA reasoned that it would not have given up its position to join thesettlement if it had known of the illegal ex parte communications. SoCalEdofficers met privately with former PUC President Michael Peevey to discusssettlement terms in violation of the commission's ex parte rules.

ThePUC approved thesettlement in late 2014, but on May 9 reopenedthe case to take further evidence after the ORA and other parties filedpetitions. The settlement split SONGS' costs of $4.75 billion and leftratepayers to pick up $3.3 billion of that sum.

TheUtility Reform Network, which had also settled before the ex parte violationswere revealed, saidthe PUC-approved settlement should be set aside or modified to disallowrecovery of 50% or more of the $2.17 billion in base plant to reflect thatSONGS was prematurely retired due to imprudence. Further, SoCalEd and minoritySONGS owner San Diego Gas &Electric Co. should refund $150 million collected in rates prior tothe plant shutdown due to leaking steam generator tubes, make $87 million inrefunds related to unreasonable expenses and slash $100 million more inratepayer costs.

Otherparties, meanwhile, urged support for the settlement.

Friendsof the Earth said thatdespite the ex parte rule violations, the facts and rationale supporting thesettlement remain unchanged. "The settlement provides significant benefitsto ratepayers and is reasonable in light of the whole record, is consistentwith the law and is in the public interest," the group said.

Furtherthe settlement eliminates the need for intense litigation that would distractparties from other pressing issues including meeting southern California'senergy needs in the absence of SONGS, the group said.

TheCoalition of California Utility Employees said the settlement it signed struck a fair balance sothat ratepayers pay for the portions of SONGS that reliably served customersbut at a greatly reduced rate of return for SoCalEd, and ratepayers pay for thereplacement power they consumed, but not for the steam generators after theyfailed.

Theemployees group said the ex parte violations did not change its own evaluationof the settlement, which prevented premature layoffs of utility workers.

SoCalEdmaintained thesettlement requires its shareholders to pay for the faulty steam generatorsfrom the day they no longer provided power and reduced customer costs for pastinvestments to build and maintain the plant.

Customercosts have been reduced by $500 million largely due to recoveries from NuclearElectric Insurance Ltd., and may be reduced further by recoveries fromMitsubishi Heavy Industries Ltd.,the manufacturer of the defective generators, SoCalEd said.

TheEdison Internationalsubsidiary said the failure of the generators was due to errors deeply embeddedin Mitsubishi's proprietary computer codes that were unknown to SoCalEd andthat the utility could not have detected.

SDG&Esaid its ratepayersreceived or will get $225.7 million in rate credits due to the settlement. Thatsum plus other reimbursements will total $425.5 million in ratepayer benefits.The settlement and decision approving it should remain undisturbed, theSempra Energysubsidiary said.

"Inaddition to losing the benefits received under the Amended SettlementAgreement, ratepayers would experience immediate heavy financial burdens andthe loss of potential future benefits," the utility said.