Regulators fine Edison $16.7 million for secret San Onofre talks

The California Public Utilities Commission fined Southern California Edison $16.7 million for failing to report talks that utility representatives had with regulators over the closed San Onofre nuclear plant.

In a 4-0 vote Thursday, the commission approved penalties recommended by Administrative Law Judge Melanie Darling. Commissioner Mike Florio abstained.

Darling proposed the fine based on evidence supporting eight violations of rules governing communications with regulators, known as ex parte rules. The talks, Darling said, related to the payment of costs surrounding the January 2012 shutdown of the San Onofre nuclear plant.

“Ensuring that parties follow reporting requirements is critical to promote transparency,” said Commissioner Catherine J.K. Sandoval, who was assigned to the proceeding. “The failure of Edison to follow reporting rules that protect the integrity of a decision-making process merits the significant penalty imposed.”

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In a statement, Edison officials called the penalty a “disappointment” that comes at a time when the utility already is making reforms.

“We respectfully disagree with the commission’s decision,” said Pedro Pizarro, Edison’s president.

“The decision reinforces the need for clearer ex-parte rules and we support comprehensive reform of those rules,” he said. “We have already strengthened internal procedures to ensure our employees understand their obligation to adhere to the highest ethical standards when interacting with the CPUC.”

Edison closed the plant after a small amount of radiation leaked in one of two replacement steam generators. The generators proved faulty after their installation in 2010 and 2011.

The utility permanently closed San Onofre in 2013.

The closure led to a settlement agreement approved by the utilities commission. Under the deal, the plant’s owners — Edison and San Diego Gas & Electric Co. — would pay $1.4 billion in reactor closing costs; their customers were left on the hook for an additional $3.3 billion.

The judge’s ruling stems from communication between former commission President Michael Peevey and Edison’s then-executive vice president for external relations, Stephen Pickett, during a meeting at an energy-industry junket in Warsaw.

Notes from Pickett’s meeting with Peevey, the judge said, indicated that they discussed how costs might be allocated in a settlement if San Onofre were to permanently close. The notes came to light in April, when they were filed as part of a federal lawsuit.

The judge called into question remarks by Pickett in an April 2015 statement in which he said he didn’t recall “anything of substance” discussed with Peevey at the meeting. But later, the judge noted, Pickett said in an email that he was “working” on San Onofre at the dinner meeting with Peevey.

For more energy news, follow Ivan Penn on Twitter: @ivanlpenn

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