More consumerism from the California Public Utilities Commission – that was a fond hope of at least some of the voters who gave Jerry Brown a rare third term in the governor’s office.
So far, they’ve been disappointed, even though Brown appointees now make up a majority of the five-member commission that decides what Californians pay for electricity, natural gas and (in some places) water.
Under Brown’s appointees, the commission has encouraged a profusion of huge solar thermal energy projects guaranteed to fatten the coffers of companies like Pacific Gas & Electric and Southern California Edison. It has done little to punish PG&E for the negligence leading to the 2010 San Bruno gas pipeline explosion that killed eight and destroyed many more homes. It has kept secret the costs customers will eventually pay for several new power sources. And more.
This is California’s most powerful regulatory agency because once they’re appointed, commissioners can’t be removed even by the governor who named them. Now comes a rare opportunity for the PUC to prove it is just as interested in the welfare of state residents and small business as it is in helping giant utility companies.
That chance sprang up when Ted Craver, chairman of Edison’s parent holding company, announced unexpectedly in early June that his firm will retire the troubled San Onofre Nuclear Generating Station beside the I-5 freeway on the Orange-San Diego county line. The plant is partially owned by San Diego Gas & Electric Co., but majority owner Edison operates it.
Before that announcement, most effects of San Onofre’s troubles were in the hands of the federal Nuclear Regulatory Commission, which waffled for many months over whether to let the plant restart. It has produced no electricity since early 2012, when a leaking generator tube released a small amount of radioactive steam into the atmosphere.
That quickly raised fears of a rerun of Japan’s Fukushima power plant disaster, in the long term the most frightening aspect of the monster tsunami that struck northeast of Tokyo in 2011.
Ironically, it was a Japanese firm – Mitsubishi Heavy Industries – which built the generator that failed. Edison and Mitsubishi are currently battling over how much that company should pay as a consequence of all the problems caused by failure of its $700 million component.
Edison has said the San Onofre problems came as a surprise, but a 2004 letter from a company executive shows the firm may have known years earlier there could be design flaws in replacement steam generators. Yet Edison still certified the new generator as a like-for-like replacement. The letter was released in May by Democratic U.S. Sen. Barbara Boxer, who pushed for extensive federal hearings while Edison was still trying to get the plant at least partially reopened.
The issue for the PUC now is how much consumers should pay for the complex, lengthy process of taking down the plant and storing its high-level waste on site.
News stories on financial aspects of the shutdown sometimes mention that San Onofre’s owners over decades have paid more than $2.7 billion into a plant-retirement fund. But that’s not really company money; it all came from customers, built into electricity rates just as retirement expenses are for every nuclear power plant in America.
Now it turns out that amount is not enough; there may be another $1 billion or so in costs. The PUC will decide whether consumers or company shareholders pick up that expense.
The answer is obvious: the company should pay. Yes, many of its shareholders are senior citizens on fixed incomes who depend on steady dividends. But shareholders put in place the executives who let the generator tube problem fester for years while they hoped it would just go away.
Like most corporate shareholders, they periodically elect the directors who hire management. So if management failed, that is ultimately their responsibility. So shareholders should now pay all expenses beyond the billions consumers have already kicked in.
If the PUC doesn’t decide the issue in just that way, it will be continuing the consistent pro-corporate, anti-consumer stance it has adopted throughout PG&E’s San Bruno penalty process and many other questions for most of the last 40 years. By contrast, making Edison pay would be a signal things may be changing.
— Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” now available in an updated third edition. His email address is email@example.com