Regulators Set to Choose Fines & Refunds

By Published On: December 12, 2013

Fines and refunds are expected to dominate the California Public Utilities Commission’s agenda Dec. 19. Decisions are due on proposed penalties of up to $17.25 million for Pacific Gas & Electric. On Southern California Edison and San Diego Gas & Electric, regulators may vote to refund $94 million they collected to cover costs at San Onofre Nuclear Generating Station—now allegedly deemed unreasonable since it shut down. With the controversial PG&E fine, the commission faces a choice between two proposed penalties for failing to correct material misstatements made in 2011 as the utility argued for the right to raise the gas pressure on pipelines running through San Carlos and Palo Alto. Regulators ordered the utility to reduce pressure until it could review specifications and test the integrity of its pipelines after one burst in 2010 causing a natural gas explosion that devastated a neighborhood and killed eight people in San Bruno. Administrative law judge Maribeth Bushey is proposing a fine of $6.75 million, while commissioner Mark Ferron in an alternate decision wants a stiffer $17.25 million penalty (Current, Dec. 5, 2013). Ferron is seeking more, noting in his decision that when it came to the misstatement regarding the condition of the pipeline, utility managers “chose to wait several months to correct information that they knew to be false and that they knew the commission relied upon. We simply cannot tolerate such deliberate and calculated dishonesty.” PG&E Corp. chief executive officer Anthony Earley Dec. 2 admitted to regulators that the utility communicated poorly with them. But Earley defended PG&E’s underlying plan to provide documents and make the pipelines safe. In the San Onofre matter, the commission is to weigh ordering majority owner Edison and 20 percent owner San Diego Gas & Electric to immediately return $93.5 million to their customers in the form of bill credits. Edison would refund $74.2 million and SDG&E $19.3 million of $5.67 billion in ongoing San Onofre-based costs. The proposed decision is based on a review of expenses in 2012 at the closed-down nuclear reactor. The assessment showed the money is no longer needed to cover some of the normal operation and maintenance costs incurred when the plant is producing power. The commission continues to review whether the utilities collected money from ratepayers is no longer justified after the reactor shut down in 2012 due to the failure of its steam generators. The commission also is expected to take up two new rulemakings. They’re aimed at spurring cooperation between energy and water utilities to save both water and energy and to further review utility long-term procurement plans for power. The power procurement review is particularly of note, according to the commission, in light of looming environmental requirements like phasing out once-through cooling of coastal generating plants and ongoing greenhouse gas reduction requirements. Other key actions expected next week are: * Clearing the way for SoCal Gas to offer onsite processing and upgrading services to biogas producers at farms, landfills, sewage treatment plants, and other sites to enable them to inject their product into the natural gas pipeline; * Enabling community choice aggregation programs, like in Marin County, to administer energy efficiency programs with the funds collected in rates subject to the same requirements, for the most part, as the state’s investor-owned utilities; and * Awarding Southern California Edison an initial 2011 incentive payment for energy efficiency of $13.5 million, with the potential to earn up to $18.6 million subject to an audit of its 2011 efficiency measure portfolio. Finally, the commission is expected to approve $755 million in “climate dividend” rebates to residential utility customers in the coming year.

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