By Jeff McDonald | Noon Aug. 15, 2015
When Southern California Edison replaced the steam generators at the San Onofre nuclear plant, state regulators allowed the utility to start billing customers for the upgrade without the benefit of what’s called a “reasonableness review.”
Normally such reviews are required to make sure the equipment that utilities invest in is “used and useful” before customers foot the bill — and to help the California Public Utilities Commission meet its mission of ensuring just and reasonable rates.
The generators leaked radiation months after they were installed and San Onofre was shut down in 2012. Edison and minority owner San Diego Gas & Electric are charging ratepayers more than $3 billion for their lost investment.
Now the utilities want regulators to let them spend billions of other dollars set aside to pay for decommissioning the failed power plant — and to conduct reasonableness reviews of those costs after the money has been spent.
Edison said there is nothing unusual about its proposal. The utility said it adopted the core principles of safety, stewardship and community engagement to guide it through the years-long decommissioning process for the plant on San Diego County’s north coast.
The plan includes a robust cost-review program that includes ongoing review by the utilities commission and yearly reporting of cost requirements, including proposed future expenditures and detailed reporting of past expenses, Edison said.
“The proposed annual reasonableness reviews will provide for more frequent scrutiny than has ever been applied by the CPUC for decommissioning projects in California,” Edison spokeswoman Maureen Brown said.
But the proposal has run afoul of consumer advocates. They worry that the spending plan now being considered by regulators, a 37-page analysis called a decommissioning cost estimate, or DCE, is based strictly on utility calculations with no independent verification.
“SCE is trying to use the rough estimate DCE as the basis for determining the reasonableness of actual expenditures,” said David Peffer, an attorney for the activist group SanOnofreSafety.org. “The actual expenditures should be subject to a normal reasonableness review.”
John Geesman of the Alliance for Nuclear Responsibility was more blunt in a commission filing earlier this year. He said if the funds are allowed to be spent up front — based on estimates with no outside justification — the utility projections would be wrongly presumed reasonable.
To read expanded article, click here.