V. Proposed Settlement Review
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BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA FILED 5-07-14 04:59 PM Order Instituting Investigation on the Investigation 12-10-013 Commission’s Own Motion into the Rates, (Filed Oct. 25, 2012) Operations, Practices, Services and Facilities of Southern California Edison Company and San Diego Gas and Electric Company Associated with the San Onofre Nuclear Generating Station Units 2 and 3. And Related Matters. Application 13-01-016 Application 13-03-005 Application 13-03-013 Application 13-03-014 THE COALITION TO DECOMMISSION SAN ONOFRE'S OPENING COMMENT ON JOINT MOTION OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E), ET AL FOR ADOPTION OF SETTLEMENT AGREEMENT Raymond Lutz [email protected] THE COALITION TO DECOMMISSION SAN ONOFRE (CDSO) Citizens Oversight, Inc. 771 Jamacha Rd, #148 El Cajon, CA 92019 Telephone: (619) 820-5321 May 7, 2014 (ORIGINAL SUBMISSION DATE) DOCUMENT ID: CDSO-503 CDSO-503 - Comment On Proposed Settlement of April 3, 2014 Page 1 Table of Contents Revision Summary.....................................................................................................................................3 Authorities and References........................................................................................................................3 I. INTRODUCTION..................................................................................................................................2 About CDSO.........................................................................................................................................3 II. BACKGROUND...................................................................................................................................3 III. Context -- Review of Precedent...........................................................................................................7 1. Earthquake Risk Understanding Evolves..........................................................................................8 2. Human-Error Accident Risk Assessment Evolves............................................................................9 3. Treatment of Net Investment, ROI and Project Failures...................................................................9 A. Humboldt Bay 3.........................................................................................................................10 B. PG&E Geysers 15......................................................................................................................10 C. Other Plants Abandoned Due to Regulatory Change.................................................................12 D. Closure of Mohave Generating Station in 2005........................................................................13 E. Mohave Generating Station 1985 Accident...............................................................................14 F. Helms Pumped Storage Project..................................................................................................15 4. Summary of Relevant Precedents....................................................................................................19 IV. PRUDENT OR IMPRUDENT...........................................................................................................20 1. Presumption is imprudence; utility bears burden of proof of prudence..........................................20 2. Common Law Doctrine of res ipsa loquitur....................................................................................21 3. Avoiding the License Amendment Process was Imprudent............................................................22 4. SCE knew about the problems long ago.........................................................................................23 5. Conclusion: Imprudent....................................................................................................................24 V. PROPOSED SETTLEMENT REVIEW..............................................................................................24 Proposed Mandatory Settlement Criteria............................................................................................25 A. Settlement Should Not Be Based On Future Events..................................................................25 B. Settlement Should Incentivize Actors........................................................................................25 C. Settlement Should Be Open and Verifiable By The Public........................................................25 1. SGRP...............................................................................................................................................25 A. How useful were the RSGs?......................................................................................................26 B. Split Shutdown Should have been preferred..............................................................................29 C. Rebate to ratepayers for imprudent SGRP.................................................................................31 D. Penalty to SCE for imprudent emergency shutdown.................................................................31 2. Base Plant........................................................................................................................................31 A. Unique case that goes beyond existing precedent.....................................................................32 B. Remaining Value of the Base Plant............................................................................................32 C. Transfer NWO to Decommissioning Activity............................................................................33 3. CWIP - Construction Work in Progress...........................................................................................33 4. Materials and Supplies (“M&S”) Inventory....................................................................................34 5. Nuclear Fuel Inventory....................................................................................................................35 6. Replacement Power.........................................................................................................................35 7. Base O&M ("Operations and Maintenance")..................................................................................36 8. SGIR O&M.....................................................................................................................................36 9. Third Party Recoveries....................................................................................................................36 VI. Should SCE be "babied"?..................................................................................................................38 CDSO-503 - Comment On Proposed Settlement of April 3, 2014 Page 2 A. Failed Projects Must Be Disincentivized.......................................................................................39 B. Original Investors have already recovered the original investment in SONGS.............................39 C. SCE may come out about even anyway.........................................................................................40 VII. Summary of Recommended Settlement...........................................................................................41 SUMMARY SPREADSHEET (All figures in millions).....................................................................42 VIII. Recommended Action by the Commission.....................................................................................43 Appendix A – Ratepayers Reject the Settlement......................................................................................45 Revision Summary Rev Date Description ---------- -------------- ------------------------------------------------------------------------------ -- 2014-05-07 Original release submitted to service list but filing rejected. REV1 2014-05-08 Separated Attachment 1 from base document, created separate file fro Attachment 1 with contact information redacted. Base document unchanged. Submitted to service list but filing rejected. REV2 2014-05-21 Added signature block and this revision summary, Document ID number, however the base document remains unchanged. Authorities and References Commission Decisions D.05-12-040 - Final Decision on SONGS SGRP, 2005-12-15..................................................................7 D.85-08-046 (Humbolt Bay 3).................................................................................................................12 D.59407 (Humbolt Bay 3).......................................................................................................................12 D.92-12-057 (Geysers 15)........................................................................................................................12 D.85-12-108.............................................................................................................................................14 D.11-09-017, "DECISION On The Ratemaking Treatment For The Abandoned Hill Street Water Treatment Facility And The Agreement With The Contra Costa Water District To Acquire Replacement Water To Serve The Bay Point Service Area"..........................................................................................15 D.12-11-051 "DECISION ON TEST YEAR 2012 GENERAL RATE CASE FOR SOUTHERN CALIFORNIA EDISON COMPANY" November 29, 2012...................................................................15