Updated at 9:55 p.m. May 9, 2016

Residents and businesses may not have to pay $3.3 billion to shut down San Onofre after all. Local utility customers had been facing 70 percent of the N-plant’s $4.7 billion closure costs.

The San Onofre Nuclear Generating Station, shut down since 2012 and now being decommissioned. Photo courtesy Southern California Edison

The state Public Utilities Commission announced Monday that a 2014 agreement that apportioned financial responsibilities for the shutdown of the San Onofre Nuclear Generating Station in northern San Diego County will be reconsidered.

“This is a huge breakthrough that we have been hoping for since November 2014,” said Ray Lutz of Citizens’ Oversight Projects. “Now the ratepayers have their ‘day in court’ regarding this tainted settlement agreement, which was preconceived by former CPUC President [Michael] Peevey in his meeting with [Southern California Edison] in Warsaw, Poland.”

Lutz said the big question is whether the PUC’s action is just an effort to settle all joint rehearing requests, “as well as the various petitions for modification of the ruling, or is it going to be an honest inquiry into the substance of the case?”

He said an inquiry into the shutdown was halted as soon as the settlement agreement was proposed, including a phase that was to determine the cause of the failure of the steam generators.

Order reopening talks on San Onofre settlement agreement. (PDF)

“From the information we have been able to get at this time,” Lutz said, “it seems SCE was well aware of the design issues way back in 2005/6.”

The agency, in a joint ruling by Commissioner Catherine Sandoval and Administrative Law Judge Maribeth Bushey, called for interested parties to submit comments on the multibillion-dollar settlement.

Consumer advocates, including two organizations that signed the original agreement, have called for it to be overturned since it was revealed that former CPUC Commissioner Peevey had undisclosed conversations with executives of the plant’s operator and majority owner, Southern California Edison, on settlement terms. Peevey later resigned.

The CPUC fined Edison $16.7 million late last year despite denials by the Rosemead-based utility that violations occurred.

“In light of our December 2015 penalty levied against Edison for failing to disclose ex parte communications relevant to this proceeding, it is prudent to review whether the settlement reached before those disclosures remains in the public interest and in accordance with our settlement rules,” said Sandoval, who is now overseeing the San Onofre issue. “It is important to reopen the record and hear from the parties through their filings in the CPUC’s proceeding.”

Signatories The Utility Reform Network and Office of Ratepayer Advocates, a state agency — both called for the deal to be overturned last summer.

The San Diego Union-Tribune reported a statement issued by majority plant owner Southern California Edison saying that company officials are reviewing the commission ruling, “but Edison nonetheless stands by the 2014 deal resolving costs related to closing the San Onofre Nuclear Generating Station.”

“SCE continues to believe the SONGS settlement remains in the public interest,” the statement said.

The nuclear plant on the northern San Diego County coastline hasn’t operated since a small, non-injury leak occurred in one of its two reactors in January 2012. An investigation fixed blame on improperly designed steam generators manufactured by Mitsubishi Heavy Industries of Japan.

Edison later decided to retire the reactors rather than pursue a costly restart process. The settlement was subsequently reached to apportion various shutdown costs between the utilities and ratepayers.

The CPUC called for Edison to file a summary of the agreement and a status report on implementation; and to specify and quantify accounting and rate-making actions taken so far, and planned actions for this and future years, by June 2.

The parties have until July 7 to file briefs on whether the deal meets CPUC standards for approving settlements.

Two weeks later, the parties can file responses and procedural recommendations.

In a statement released Monday night, Maria Severson of the law firm Aguirre & Severson said: “We are hopeful that ratepayers will get the full attention of the commission this time, and that the commission will look into the failure at San Onofre with fresh eyes. Ratepayers  must not be held accountable for mistakes that should have been paid for by Edison’s management and investors.”

Aguirre said: ”Utility rates are supposed to be set publicly in public hearings and not in secret in Polish hotel rooms,” says. He called the order reopening the San Onofre investigation a step in the right direction.

Charles Langley of Public Watchdogs said that under the old settlement, the average Southern California Edison and SDG&E ratepayer would have been “forced to pay an average of $1,635 per meter.”

— City News Service contributed to this report.

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