By Don Kelly, Executive Director
In May 2014 the Union Tribune published UCAN’s Op Ed supporting the proposed decommissioning settlement for San Onofre Nuclear Generating Station (SONGS) which was negotiated between The Utility Reform Network (TURN) the Office of Ratepayer Advocates (ORA) and Southern California Edison (SCE) and which was subsequently approved by the California Public Utilities Commission (CPUC).
Since the approval of the settlement disturbing new facts have come to light, seriously calling into question the integrity of the settlement process. At minimum the transparency of those proceedings was severely compromised when Southern California Edison (SCE) failed to disclose – within three days as required by law – the private (ex parte) discussions they had with CPUC President Michael Peevey about what settlement terms he would accept for San Onofre. Exacerbating the ex parte violation, the conversations were revealed to have been held at a luxury hotel in Warsaw, Poland almost two years before they were disclosed.
UCAN believes that SCE gained an unfair advantage in negotiating the settlement because they had inside information from CPUC President Peevey on what settlement terms he would accept.
While UCAN has not before publicly announced our changed position on SONGS, we were active behind the scenes in encouraging the SONGS settlement be set aside. In April 2015, John Geesman, an attorney for the Alliance for Nuclear Responsibility (A4NR) filed a motion to amend the SONGS settlement. In early June I had conversations with John Geesman, encouraging him to have discussions with both TURN and ORA to join his motion. In addition, prior to TURN and ORA publicly announcing their changed position, in early June I was at the CPUC and talked with Matt Freedman from TURN and Gregory Heiden from ORA (both of whom worked on the SONGS case) about joining Mr. Geesman’s motion. I mentioned, among other things, that Mr. Geesman was claiming that TURN and ORA were victims of “fraud by concealment” based on SCE’s failure to disclose their contacts about the San Onofre settlement with the Commission President.
On June 24, 2015 Mr. Freedman from TURN withdrew TURN’s support for the SONGS settlement and noted the following:
“A4NR asserts that the failure of SCE to disclose its extensive communications with former President Peevey represents fraud by concealment that unfairly disadvantaged TURN and the Office of Ratepayer Advocates in the settlement negotiations. A4NR argues that, had SCE filed ex parte notices disclosing these communications, ‘both ORA and TURN would likely have negotiated a better settlement’”.
“TURN agrees that recent disclosures detailing extensive communications between SCE and CPUC decision makers during the pendency of this proceeding are very troubling. TURN was a good faith participant in the settlement negotiations, and was not aware of the Warsaw note, the private meeting, or any agreement between Mr. Peevey and SCE at any time before or during the extended settlement negotiations that led to the proposed settlement. Had SCE disclosed these communications in a timely manner, this information would have had an impact on settlement negotiations . . .”
On August 11, 2015, the Office of Ratepayer Advocates also changed their position and asked that the SONGS settlement be set aside:
“ORA respectfully requests that the Commission overturn its decision adopting the settlement and reopen the SONGS investigation to all for resolution through litigation rather than through settlement.”
“The A4NR PFM (Petition for modification) was premised on the revelation of significant, pervasive, unlawful and previously undisclosed communications between senior Edison executives and the Commission President Michael Peevey, particularly referencing what has come to be known as the Hotel Bristol notes (Notes). In those Notes, which Edison asserts were transcribed by Edison Executive Vice President of External Relations, Stephen Pickett, as dictated to him by Peevey at the at the Hotel Bristol in Poland, Peevey indicated his suggested outcome for a SONGS settlement. ORA, along with other parties to the SONGS proceeding, and much of the observing public, were shocked by the revelation of the Hotel Bristol Notes.” (Emphasis added)
While for the last several months UCAN supported setting aside the SONGS settlement, we did so behind the scenes. Through this article, however, UCAN is now announcing publicly our changed position. UCAN agrees with the Alliance for Nuclear Responsibility (A4NR) that SCE’s failure to fulfill their legal obligations and timely notify all parties of their meeting with President Peevey resulted fraud by concealment. UCAN’s support of this settlement in the Op-Ed I wrote in May 2014 was based in part on the belief that the negotiations had been fair and that every party acted in good faith. We now know that was not true. Had SCE disclosed what they were legally required to disclose, as Mr. Freedman from TURN noted, it would have had an impact on the negotiations.
UCAN, along with the Alliance for Nuclear Responsibility, the Office of Ratepayer Advocates and the Utility Reform Network, as well as numerous other parties, are now urging the CPUC to rescind the previously approved settlement.
What can you do? Contact the Public Advisor for the CPUC, Karen Miller, by phone, email or postal mail as indicated below. Her office’s job is to gather, consolidate and forward your input to the Commissioners:
- Telephone: 866-849-8390 or 415-703-2074
- Postal Service: CPUC Public Advisor, 505 Van Ness Avenue, Room 2103, San Francisco, CA 94102