Southern California Edison and San Diego Gas & Electric ratepayers are up for a refund beginning January 2015. The ratepayer refund is for monies accumulated in 2012 for the shutdown San Onofre Nuclear Generating Station, according to a settlement that California Public Utilities Commission approved Nov. 20. The commission pegged the total value of the settlement to ratepayers, including refunds and cost reductions, at $1.45 billion. Because the San Onofre power plant was shut down permanently June 2013, customers of its owners—Edison at 78 percent and San Diego Gas & Electric at 20 percent—should not be held responsible for the cost of the closed plant, according to policy makers. The decision forbids double dipping—that is, ratepayers are not liable for the cost of replacement power from the closed 2,100 MW nuclear plant, as well as the cost of San Onofre. “Ratepayers should pay once, not twice” for replacement power, said commissioner Mike Florio. He also noted that the settlement for monies two years ago “has a long and tortured history.” The original settlement was floated in May with a direct $94 million refund. Since then, details have been massaged—including lessened shareholder returns at 2.62 percent, and a shareholder contribution to the University of California to explore lower greenhouse gas emission power plants. Utility shareholders would be responsible for $4 million in research through the state university system and SDG&E owners $1 million for five years of research. The parties to the settlement include Edison, SDG&E, the Office of Ratepayer Advocates, and The Utility Reform Network. Edison has publicly noted it believes the deal is in the public interest according to a Nov. 20 Security & Exchange Commission filing. The operating utility “anticipates customers will see a rate reduction in January, reflecting the San Onofre settlement.” Edison added that in 2015 it “expects rates will increase to cover the higher cost to buy power to meet customer needs, though the size of the increase will be mitigated by the settlement.” The plant stopped generating electricity in January 2012 when its steam generators leaked, one causing a radioactive release. Decommissioning for units 2 and 3 is expected to cost another $4.4 billion. The settlement calls for: • A $597 million reduction in cost for Edison customers; • A $160 million reduction for SDG&E customers; • $480 million to Edison customers in refunds for operations and maintenance; • $121 million to San Diego ratepayers for operations and maintenance refunds; • A $99 million reduction to Edison customers for steam generator replacement costs; • A $5 million reduction to SDG&E ratepayers for steam generator replacement costs; and • Refunding all money collected from both utilities’ ratepayers since Feb. 1, 2012. The agreement limits the utilities from collecting returns on investments made after Feb. 1, 2012. No public information is available on whether the latest proposal adjusts this agreement. It also allows for a reduced rate of return on investment, to 2.62 percent, with no common equity return on the estimated asset worth of San Onofre at $1.9 billion. “We haven’t had much luck with nuclear power here in California,” commissioner Mike Picker noted. Commission president Mike Peevey tried to impress that the monies going to state universities to explore low-greenhouse gas emissions electricity to replace nuclear fission is a positive outcome of the settlement.
