Customers of Southern California Edison and San Diego Gas & Electric would receive $1.3 billion in credits and refunds under proposed changes state regulators made Thursday to a settlement between the utilities and ratepayer groups associated with the shutdown of the San Onofre Nuclear Generating Station.
The proposal, which is scheduled to be voted on by the California Public Utilities Commission on November 20, would increase the amount of refunds contained in the original deal by $420 million.
The PUC's proposed decision is based on a revised settlement signed by SDG&E, SoCal Ed, the PUC's Office of Ratepayer Advocates, The Utility Reform Network, Friends of the Earth and the Coalition of California Utility Employees.
Under the proposed order, the utilities would be required to halt further collection through rates of the cost of replacing steam generators at the plant in 2010 and 2011 and return all monies collected after January 2012, when a leak in one of the units led to an initial shutdown of the two-reactor facility.
Further, the utilities must accept a substantially lower return on other prematurely retired assets related to the two nuclear units.
Ratepayers will still pay about $3.3 billion in SONGS-related costs incurred between 2012 and 2022, according to the proposed decision. These include the cost of replacement power the utilities purchased after the SONGS units shut and recovery of un-depreciated net investment in SONGS assets, excluding the failed replacement generators.
The proposed settlement also would reduce shareholders' return on SONGS investments to less than 3%.
The PUC first released a proposed decision in November 2013 that would have returned $94 million to ratepayers for overpayment of operating costs at the plant. SoCal Ed shut the units permanently in June 2013, citing the cost of regulatory reviews and repairs.
After that deal was criticized by ratepayer advocates as unfair to customers, the parties in April announced an agreement that would have refunded $890 million, an amount that represented the utilities' investment in the steam generators, incremental inspection and repair expenses and 2013 operations and maintenance costs.
The PUC, however, said the second agreement still fell short of what ratepayers should receive and ordered the settling parties to make additional changes, including language that would require SDG&E and SoCal Ed to share equally with ratepayers any money recovered through litigation against Mitsubishi, the manufacturer of the troubled steam generators. In addition, the PUC ordered that ratepayers should receive 95% of any money the utilities recover from their insurance provider.
Litigation against Mitsubishi is still pending and insurance recoveries have yet to be determined.
