One of California’s most complex and unusual financial/political/legal conflicts was settled last week, but the deal left a couple of mysteries.
The two Southern California utilities that own the now-shuttered San Onofre nuclear power plant agreed to modify a 2014 Public Utilities Commission decree that saddled their customers with two-thirds of $4.7 billion in decommissioning costs. Instead, the costs will be split 50-50, saving the ratepayers $775 million.
It’s a win for consumer groups and Michael Aguirre, the former San Diego city attorney whose law firm has been fighting the initial PUC decree for four years and will get $5.4 million for its efforts.
The PUC’s 2014 decision ratified a deal struck by its then-president, Michael Peevey and a Southern California Edison executive in a private 2013 meeting in a Warsaw, Poland, hotel room.
Edison is the majority owner of San Onofre, with San Diego Gas and Electric. Peevey is Edison’s former president. As part of the deal, Edison donated $25 million to a Peevey-sponsored UCLA climate-change research project.
After the meeting was disclosed, Aguirre filed a series of actions, including a federal lawsuit, challenging the secret deal. He demanded emails he alleged could show Gov. Jerry Brown was involved. Brown’s office has denied any role and the existence of any San Onofre-related emails, and the PUC has steadfastly rejected Aguirre’s demands.
A Superior Court judge sided with Aguirre. But the PUC won on appeal.
Meanwhile, the state Department of Justice opened a criminal investigation. “There is probable cause to believe that Michael Peevey … used his position to influence SCE’s commitment of millions of dollars to UCLA to fund a research program,” a DOJ agent said in an affidavit for a search warrant.
Eventually, Peevey was forced to step down from the PUC, saying, “Twelve years is enough.”
The PUC took a baffling attitude toward the scandal. It fined Edison $16.74 million for engaging in ex parte, or unofficial, negotiations, but in trying to quash Department of Justice search warrants, it defended private dealings as a normal aspect of rate setting.
Until last week’s revised deal, the PUC had refused to modify the original decree that let the utilities and their stockholders mostly off the hook.
The San Onofre scandal and other cases, such as private communications with PG&E over a disastrous gas-pipeline explosion, indicate the PUC has been too cozy with the utilities it is supposed to regulate in the public interest.
Peevey’s successor, Michael Picker, has promised more transparency and accountability, and the Legislature has enacted some reforms.
With the new San Onofre settlement, the criminal investigation and effort to open emails involving Brown – if they exist – could fade away. The episode has been embarrassing to everyone involved except Aguirre, so there’s probably little appetite for airing more dirty linen.
However, the still-pending aspects of the San Onofre case should not be allowed to wither. The Department of Justice should tell us whether it considers the Warsaw meeting a criminal act. And we should be told whether Brown, as Aguirre alleged for years, played a role. Sunshine, after all, is the best antidote for official malfeasance.
Dan Walters writes for CALmatters, a public-interest journalism venture that explains how California politics work and why it matters. Go to calmatters.org/commentary.