top secret

Framework was set in Poland, before public process began
By Jeff McDonald
April 10, 2015 – Updated 9:00 p.m.

Notes of a March 2013 secret meeting at a luxury hotel in Warsaw show that a $4.7 billion deal to divide shutdown costs for the failed San Onofre nuclear plant was largely in place a year before any provisions were made known to the public.

The notes were entered into the case file on Friday in a lawsuit challenging the deal as unfair because it assigns 70 percent of closure costs to customers, and the rest to shareholders in the utility companies that own the plant and installed flawed equipment.

Notes of the meeting in Poland between then-California Public Utilities Commission President Michael Peevey and a Southern California Edison executive were seized in January by criminal investigators probing backchannel communications and possible favoritism by regulators. An Edison spokeswoman noted that some elements of the final plan differed from the notes.

Commission business is supposed to be conducted in public, so notes showing billions of dollars of decision-making taking shape 6,000 miles away has serious implications.

The two-page handwritten hotel notes were submitted to U.S. District Court Judge Cathy Ann Bencivengo, who earlier this week scheduled oral arguments in a lawsuit filed by Citizens Oversight, the San Diego consumer group that sued the commission and Edison late last year. The hearing will be held Thursday afternoon.

The notes were also released to U-T San Diego on Friday in response to a Feb. 27 request under the California Public Records Act.

Sketched out during the secret meeting two years ago between Peevey and Edison’s Stephen Pickett, the notes show several deal points that became key pieces of the San Onofre settlement.

Both the notes and the official agreement adopted in November call for ratepayers to absorb the entire cost of replacement power, an expense that has added hundreds of millions of dollars to the monthly bills sent to Southern California consumers.

They also call for the commission to disallow billing of ratepayers for costs related to the $680 million faulty replacement steam generator project after Feb. 1, 2012, the day after a radiation leak resulted in the plant closure.

Perhaps most telling are two amendments Commissioner Michel Florio proposed this past September — 18 months after Peevey and then-Edison executive Stephen Pickett discussed them during their meeting at the Hotel Bristol.

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