The California Public Utilities Commission (CPUC) is holding its first Public Participation Hearing (PPH) in San Diego on how much the captive ratepayers of Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E) should pay for the defective San Onofre Power Plant. Please attend, even if you can only attend part of the session.

SCE and SDG&E customers pay about 50% more than the customers of the two largest California municipal electric utilities. Now SCE and SDG&E want us to pay for Edison’s defective nuclear reactor boondoggle. Enough is enough!  (Click for “Compare Rates and Edison Liability” Handout)

Ratepayers’ message to SCE & SDG&E:  YOU BREAK IT, YOU BUY IT!

CPUC Public Hearing

CPUC meeting information: http://www.cpuc.ca.gov/PUC/aboutus/pph.htm

Members of the public who wish to address the CPUC must sign in at the Public Participation Hearings and will be called upon in the order listed on the sign-in sheet. Community-based organizations and other groups are encouraged to identify one or two speakers to represent the views of the organization’s members. Elected officials attending the PPH are allowed to speak first. If a large number of people sign-up to speak, the ALJ may set a time limit in order to allow everyone a chance to be heard. There will be a CPUC court reporter present to record your comments for the official record.

Public participants may not bring to PPHs signs larger than 8.5 in x 11 in, or signs of any size with supports or handles (wood, metal, etc).

The CPUC opened this multiphase investigation to consolidate and consider issues raised by the extended outages of Units 2 and 3 at SONGS. Generally, the proceeding is focused on any warranted refunds to ratepayers or rate reductions. The Phase 2 Evidentiary Hearings on October 7-11, 2013 will consider the removal from rate base of non-useful capital assets at SONGS. Other phases of the proceeding have or will address other SONGS-related cost issues. These Public Participation Hearings are an opportunity for the CPUC to hear from the public about how the CPUC should adjust rates as a result of the non-operation of SONGS.  Administrative Law Judges Darling and Dudney, along with Commissioner Florio, will represent the CPUC at the meeting in San Diego.

Ratepayers’ message to SCE & SDG&E: YOU BREAK IT, YOU BUY IT!

The Coalition to Decommission San Onofre, a non-profit volunteer grassroots organization representing the interests of the 8.5 million people living within 50 miles of this defunct nuclear power plant (now a highly radioactive nuclear waste dump), recently submitted the following testimony in this investigation:

• The San Onofre Nuclear Power Plant was not “used and useful” at any time after the emergency shutdown on January 31, 2012. Furthermore, as soon as the Root Cause Analysis had been completed by SCE for both Units 2 and 3 on May 7, 2012, it should have been clear to any reasonable manager that the plant would never run again. The U.S. Nuclear Regulatory Commission (NRC) just published its finding that SCE failed to identify a flawed design for four replacement steam generators, which led to excessive wear to hundreds of tubes that carried radioactive water.  See Page 25 of  this September 20, 2013 NRC Confirmatory Action Letter Response Inspection Report (NRC ML13263A271.pdf), showing SCE’s awareness of the problems in the design stage.
• The CDSO argued in Phase 1 of this CPUC investigation that SCE did NOT exercise reasonable managerial skill in designing, fabricating, installing and troubleshooting the Steam Generator Replacement Project (SGRP) and related High Pressure Turbine (HPT) project, and Phase 3, the Reasonableness Review of the SGRP, remains to be conducted. Therefore, the CPUC has no basis on which to make the findings proposed by SCE and SDG&E in Phases 1 or 2 of the investigation.
• The calculation of net investment in fixed assets should be based on the plant without the defectively designed and failed SGRP and systems replaced contingent upon it. As a rough estimate, the base plant value, not including these failed/superfluous systems is about $449 million net investment in the core plant ($1,241 – $768 [SGRP] – $24 [HPT] = $449 million) . The $792 million difference between $1,241 and $449 represents the loss incurred by the failure of the SGRP and should be resolved between SCE and Mitsubishi Heavy Industries, and any insurance, with the rest covered by shareholders (through loss of their equity).
• Any remaining assets not already fully depreciated should be depreciated at a rate to allow investors to recover their investment, but not enjoy a return on the investment due to the inherent risk involved in such investments. Allowing investors to be risk-free in their investment continues to incentivize monopoly utilities to develop failed projects that run only for a short time, so they can have the entirety of their investment returned plus a return on investment (ROI) and have it returned faster than the normal depreciation schedule. This is an extremely counterproductive regulatory policy which has been fully exposed by the magnitude of this failed SGRP and its consequent costs. The CPUC needs no further reason to recognize this and cease repeating this perverse policy.
• San Onofre should be removed from the rate base at the earliest date allowed under Public Utilities Code Section 455.5: November 1, 2012; and all activities subsequent to November 1, 2012, considered “decommissioning” as the plant is no longer used and useful. The defectively-designed and failed Steam Generator Replacement Project and related High Pressure Turbine project should be treated as an abandoned plant, and therefore, shareholders should not recover their equity nor any return on their equity investment on them. The Investor-Owned Utilities who are the gatekeepers to our transmission grid and generation resources do NOT need any more help from this Commission. We ratepayers who fund their lavish compensation and can barely support ourselves, our families, and our small businesses, DO. To wit …
  • The Houston Chronicle reported that the average annual compensation of utility executives nationwide increased 150% from 2000 – 2011. In Southern California, it is even more egregious — the annual compensation for the Chair and CEO of SCE increased 15 times from 2000 – 2011, from $764,000 to 10.9 million; and that for the SDG&E Chair and CEO increased a mere 4 times in the same time period, from almost $1 to $3.9 million. http://www.chron.com/news/energy/item/Electric-Utility-Executive-Compensation-13532.php?appSession=003978379741089
  • The electricity rates paid by the captive customers of the SCE and SDG&E monopolies are about 50% higher than those paid in the two largest municipal electric utilities in California (Los Angeles D.W.P. and Sacramento Municipal Utility District) https://sanonofresafety.files.wordpress.com/2011/11/compareyourelectricrates2012-04.pdf
  • SCE is writing down San Onofre Nuclear Generating Station Units 2 and 3 on its books, and reported a 43% increase in year-to-date core earnings for 2013over 2012. http://online.wsj.com/article/PR-CO-20130801-915980.html?mod=googlenews_wsj
  • While also writing down its 20% share in San Onofre, SDG&E’s parent, Sempra Energy, reported a profit for 2nd Quarter 2013 that almost quadrupled from last year.http://www.rttnews.com/2167132/sempra-energy-q2-profit-nearly-quadruples-but-misses-view.aspx
  • Compare the guaranteed return expected by SCE and SDG&Eof 5+ % to the current return on other deposits and investments guaranteed by the government:
    • Daily overnight average for the 1-year CD 0.70%
    • One-Year Treasury 0.15
    • Constant Maturity 91-day T-bill auction avg disc rate. 0.020
    • 182-day T-bill auction avg disc rate 0.035
    • Two-Year Treasury Constant Maturity 0.47
    • Five-Year Treasury Constant Maturity 1.76
    • Ten-Year Treasury Constant Maturity 2.92
    • http://www.bankrate.com/
  • While our SDG&E and SCE rates go up even higher, the CPUC is currently soliciting bids for a $7 million contract to buff its tarnished image for safety and accountability. https://www.bidsync.com/DPX/ca/cdgs?ac=view&auc=1947395 
  • Read CDSO’s Testimony before the CPUC:   http://www.copswiki.org/w/pub/Common/M1383/CleanI1210013CDSOP2Testimony.pdf