13 March 2015
$1.45 Billion San Onofre Settlement Approved
The California Public Utilities Commission has approved the settlement agreement that will provide consumer refunds and credits of $1.45 billion due to the premature shutdown of the San Onofre Nuclear Generating Station after a steam generator tube leaked in January, 2012. They said that it is the potential for customers to recover of the costs from Mitsubishi and nuclear insurance. The decision was approved to amend the settlement agreement between the coalitions of California utility employees, friends of the earth. Southern California Edison, and the utility reform network. The settlement will resolve all issues related to the premature shutdown and the two utilities will cease collecting the steam generator replacement project cost in rates. They will accept a substantially lower return on other prematurely retired San Onofre assets. All together it is reducing consumers cost by $1.45 billion. The CPUC found that the settlement is in the public interest and is close to the litigation position of the office of ratepayer advocates. Consumers pay for some cost including power the utilities purchased for costumers which excludes the failed steam generator. The settlement reduces shareholder return on San Onofre investments to less than 3%. The effect will reduce the shareholders return is that consumers save about $420 million over the 10-year period. This settlement is proposed by certain parties at a time that the record of the proceeding development and the CPUC could examine the prudency of the proposal. The CPUC figured out that today the settlement is reasonable in light of the whole record consisting with the law, and in the public’s interest. The settlement is also directed to the utilities to develop a multi-year project associated with the University of California, funded by shareholders dollars, to spur development of devices to reduce emissions at existing and future California power plants. Their decision should lead to greater attention to greenhouse gas in southern California through a cooperative effort of the two utilities.