Any Collusion To Charge Ratepayers Billions For San Onofre Shutdown Is the Public’s Business

This Thursday morning, the California Public Utilities Commission begins a day-long public hearing during which it will vote on a staff recommendation to withhold amd redact vital records on a $4.7 billion settlement that stuck ratepayers with most of the tab to shutter a defective nuclear power station called San Onofre. It may seem perfunctory. It's anything but. What is at stake is nothing less than government transparency so that Californians can judge whether government officials are doing their jobs by representing their interests.

On Thursday, Californians will see whether government officials continue to hide records that belong to the public, or finally release them so the public can rule out any collusion between government regulators and a major investor-owned utility, Southern California Edison (SCE), to stick ratepayers with the bill for its terrible decisions. PUC commissioners will respond to an appeal made by two public interest attorneys, Mike Aguirre and Maria Severson, to release the records under the Public Records Act.

The pair of attorneys wants to see emails to and from 22 individuals, including a roster of SCE executives, PUC commissioners and advisors, and Administrative Law Judge Melanie Darling who managed to snuff out the PUC’s public investigation before determining who was responsible for the defective steam generators that leaked and led to the plant's shuttering. 

Governor Jerry Brown’s office was also involved, according to the filing, as SCE went straight there when San Onfre failed in 2012 “and the Governor’s office obliged” in prioritizing concerns about safety over accountability for the failed plant. “To the extent the records to and from the Governor’s office show obstruction of justice, they are not exempt from disclosure,” the filing states. 

Aguirre and Severson have sued on behalf of ratepayers in federal court over the San Onofre settlement for favoring SCE's shareholders. If they obtain the information they want from the PUC, it may connect the dots on collusion between the PUC and SCE—and perhaps even the Governor’s office—to block a public investigation into responsibility for the San Onofre debacle in order to make ratepayers pay for defective steam generators.

The PUC has refused to release all of the settlement-related records, and argues that since it is reopening the case, Aguirre and Severson's case is moot. But federal judges aren’t having it: they recently said that just because state regulators are reopening the settlement isn’t a good enough reason to dismiss a lawsuit over how that tab was calculated.

That should have state regulators, especially PUC President Michael Picker and the Governor’s Office, nervous and for good reason. A public body, the PUC, is illegally withholding information concerning the conduct of the people’s business, according to Aguirre and Severson. They argue in their latest filing before the PUC that this information must be released. The PUC's credibility will be on the line this Thursday if it refuses.

Under intense media criticism, last year the PUC reopened the settlement agreement assigning 70 percent of the cost to close San Onofre onto ratepayers, instead of shareholders. 

The crooked ex parte deal was cut in a Warsaw hotel room between former PUC President Michael Peevey, now under criminal investigation, and an SCE executive, in 2013. At the time, Michael Picker was a key Brown senior energy advisor. Brown appointed him a PUC commissioner in January 2014 and PUC President when Peevey resigned under a cloud in December that year.

The PUC has refused to release 63 communications and three redacted records on the subject between current PUC President Michael Picker and the Governor’s Office. The PUC’s excuse is that it would reveal the “deliberative and mental thought processes” of commissioners. But that just doesn’t answer the question of what Picker knew about the crooked deal cut in Warsaw, or why the PUC never examined whether SCE acted reasonably in its handling of the steam generators’ replacement.

 “The writings might show Picker thought over what happened in Warsaw and decided to go along with the deal struck there,” the filing stated. “On the other hand, the writings may show Picker made his San Onofre decisions independent of Warsaw. Either way, there is a compelling public interest in understanding how Picker made his San Onofre decisions. Picker decided to make utility customers pay for San Onofre without finishing the [Order Instituting Investigation]. This was the very objective of the Warsaw meeting.”

All Picker’s writings must be disclosed to determine if Picker was engaged in crime or fraud, the filing argues.

The filing points out that Picker lied to an Assembly committee when he said in a 2014 hearing that he made up his mind solely on the public record. Picker said that he relied on an evidentiary hearing. But there is a wrinkle: he wrote in a publicly disclosed email that he wasn’t going to make it.

“Had he attended the evidentiary hearing on 14 May 2014, Picker would also have heard the CPUC President refuse to answer whether he had engaged in secret settlement negotiations,” according to the filing. “Picker falsely told the Assembly the decision to approve the settlement was ‘based on evidence offered in the record that [he] reviewed.’ There was no evidence on the only question that mattered: Who was responsible for the failed steam generators that brought down the plant?”

The answer to that question is contained in a report produced by Mitsubishi Heavy Industries, maker of the failed steam generator tubing.

According to a letter from Senator Barbara Boxer and Congressman Edward Markey in February 2013 to the Nuclear Regulatory Commission, “The Report indicates that Southern California Edison (SCE) and Mm were aware of serious problems with the design of the San Onofre nuclear power plant’s replacement steam generators before they were installed. Further, the Report asserts that SCE and MHI rejected, enhanced safety modifications and avoided triggering a more rigorous license amendment and safety review process.” 

SCE tried to pin the debacle onto Mitsubishi but failed in a multi-billion-dollar lawsuit against it for supplying faulty steam generators. In March, an arbitration panel awarded SCE just $125 million. 

Aguirre and Severson argue that the records comprise evidence that "is relevant to whether there was a ‘full and fair’ determination of utility customers’ claims to be free of the financial burden of the failed plant.” 

The truth--the records that the attorneys should be handed under the law--could set ratepayers free.

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