Michael Peevey

The Hotel Bristol Warsaw, where state regulators met with a utility executive.
Shareholder says company erred in not disclosing

By Morgan Lee | 6:13 p.m. July 9, 2015

A federal lawsuit filed this week accuses two top Edison International executives of harming shareholders by failing to disclose secret meetings with California regulators regarding a $4.7 billion settlement of costs for the failure of the San Onofre nuclear plant.

The lawsuit alleges that Edison CEO Ted Craver and Chief Financial Officer Jim Scilacci failed to disclose private communication with decision makers at the California Public Utilities Commission, including a March 2013 meeting at a luxury hotel in Poland.

The company is already facing state sanctions for its two-years-late disclosure of the meeting during the regulatory process. The lawsuit raises the issue of whether shareholders should have been informed as well.

The meeting at the Hotel Bristol Warsaw laid out a framework for dividing up closure costs for the nuclear plant north of Oceanside, which closed in January 2012 amid a radiation leak.

The company disclosed the meeting in February of this year, days after The San Diego Union-Tribune reported that notes on Hotel Bristol Warsaw stationery had been seized by criminal investigators interested in close relationships between regulators and utility executives.

The investigation remains active, as state agents served a fresh round of search warrants in May and June at the commission’s headquarters in San Francisco and at Edison offices outside Los Angeles.

A final San Onofre deal approved in November 2014 assigned 70 percent of the shutdown costs to customers, as opposed to shareholders. Now that the Poland meeting has become known publicly, calls to reopen settlement talks have intensified by those seeking a better deal for ratepayers.

The lawsuit on behalf of shareholders is baseless, company spokesman Charles Coleman said in an email.

“Edison International intends to vigorously defend itself against these claims,” he said.

Edison’s stock price hit a record high in January, as the contentious San Onofre matter seemed settled. The price has fallen more recently amid the revelations about private meetings, favor trading and socializing among Edison executives and regulators.

The utilities commission’s role in the San Onofre settlement was supposed to be as an impartial arbiter of a deal worked out between plant owners and consumer groups — not as a participant in negotiations or an ally to utility companies.

To read entire story, click here.