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San Onofre settlement issue could end in 2018


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San Onofre settlement issue could end in 2018

The California Public Utilities Commission in 2018 could have an answer about whether changes will be made to a previously approved settlement tied to the premature closure of the San Onofre Nuclear Generating Station.

An Oct. 10 ruling that outlines a process to bring the proceeding to an end comes after those involved in talks to modify the settlement said they were unable to come to terms on an agreement. According to the ruling, the process to wind down the matter will begin in a few weeks and potentially end in 2018.

The facility, known as SONGS, was forced to close in 2013 after the discovery of defective equipment supplied by Mitsubishi Heavy Industries Ltd. Southern California Edison Co., which owns about 78% of the facility, and the plant's minority owner, San Diego Gas & Electric Co., later came to terms with other parties about SONGS' cost issues. The settlement approved in 2014 provided for ratepayer refunds and credits of about $1.45 billion but called on ratepayers to still pay about $3.3 billion in costs spanning the decade from 2012 to 2022.

The deal got unanimous approval from the commission but later faced scrutiny from ratepayer advocates and lawmakers after previously undisclosed ex parte communications came to light revealing a former utility official had discussed the deal in 2013 with Michael Peevey, then the president of the PUC.

The PUC in late 2015 fined SoCalEd $16.7 million for not revealing the exclusive communications, and lawmakers last year created new rules on such ex parte meetings, but ratepayer advocates continued to call for a renegotiation of the settlement.

In December 2016, SONGS owners were told they must try to settle with parties, who called for more generous terms than the 2014 settlement provides. Those involved in the talks had until Aug. 15 to either reach an agreement or file positions about how to move forward.

No agreement came. Only SoCalEd and SDG&E filed comments in support of the settlement.

The Oct. 10 ruling sets a status conference to address outstanding issues for additional evidentiary hearings to reassess the costs allocated between ratepayers and shareholders in the proceeding.

A status conference is scheduled for Nov. 7. Hearings are tentatively set for February and March 2018, with briefs due in March. A commission decision would be made after those events but that date has yet to be determined.

SoCalEd President Ron Nichols said the utility will participate in the process.

Nichols said the settlement ensured that customers did not pay for the faulty steam generators, which prompted the closure of the plant, from the time this equipment failed. The settlement also reduced the portion SoCalEd customers pay in their monthly bills for the past investments to build and maintain SONGS.

SoCalEd, an Edison International subsidiary, and SDG&E, a Sempra Energy subsidiary, have already returned more than $2 billion to customers under the 2014 settlement.