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4-Traders Homepage  >  Equities  >  Nyse MKT  >  Southern California Edison Co.    SCE.PRE

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05/26 SOUTHERN CALIFO : Edison, regulators, cooperated on subpoena
05/25 SOUTHERN CALIFO : With upcoming SCE rate change, electric bill incre..
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Southern California Edison : Edison, regulators, cooperated on subpoena

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05/26/2016 | 04:03pm CEST

May 26--Even as it was preparing to review a $4.7 billion deal settling costs for the failed San Onofre nuclear plant, the California Public Utilities Commission was working behind the scenes to draft and send subpoenas on behalf of plant owner Southern California Edison.

The legal demands for reams of technical documents and information were sent to Mitsubishi Heavy Industries, the Japanese maker of replacement steam generators that brought down the twin reactors housed in domes on San Diego County's north coast.

The close cooperation came as the commission was investigating the role of the utility and its vendor in the failure at the plant, raising the question of whether it was truly impartial.

Records obtained by The San Diego Union-Tribune show commission lawyers started their process with subpoenas drafted by Edison and repeatedly sought and received direction from the utility, collaborating on legal efforts.

"I understand ... that you want to coordinate mailing of your subpoenas with ours so that we can synergize?" commission lawyer Elizabeth Dorman wrote to Edison's attorney on March 12, 2014.

Later that day, she wrote, "Would you prefer that we send our subpoena ASAP rather than wait for you to finalize yours?"

The next day, Dorman asked the utility company for advice on how long Mitsubishi should be given to respond to the subpoena.

"30 days?" the Edison attorney suggested.

"That's what I was thinking," Dorman replied. "They can complain to the judge if they want more time."

Later that month, a settlement deal was announced assigning ratepayers, not the utility companies, to pay 70 percent of the costs for the premature plant shutdown.

The settlement agreement has unraveled over the past two years, amid revelations that it took shape in undisclosed meetings between regulators and utility executives, rather than in a required public process. The utilities commission this month agreed to reopen the settlement for further consideration.

The commission is under criminal investigation for its close relationships with the companies it is entrusted to oversee, and the cooperation with Edison on Mitsubishi subpoenas was immediately seen by critics through that lens.

John Geesman, a lawyer for the Alliance for Nuclear Responsibility in Northern California, said the new documents appear to show regulators acted outside the scope of their responsibility.

"Edison was the party supposedly being investigated by the CPUC," said Geesman, a former member of the California Energy Commission. "For Edison to be allowed to covertly enlist the commission's resources to fight a separate battle with Mitsubishi seems highly inappropriate. What were the regulators thinking?"

The utilities commission said the subpoenas were part of the investigation into what caused the plant shutdown.

"The CPUC issued subpoenas to Mitsubishi to gather information about the replacement steam generator project, and determine who knew what and when about the project during its design and manufacturing phases," spokeswoman Terrie Prosper said.

Mitsubishi did not provide any documents to the commission in response to the subpoenas, Prosper said.

Edison issued a statement saying it had done nothing improper.

"SCE believes that its efforts to obtain documents from Mitsubishi in connection with the (investigation) were appropriate," it said. "In order to obtain documents from Mitsubishi, SCE sought a subpoena from the CPUC in accordance with statute, CPUC rules and precedent."

She added, "SCE and the CPUC shared an interest in obtaining recoveries from Mitsubishi, in order to minimize the cost to ratepayers."

Mitsubishi issued a brief statement through a public relations firm.

"We have checked with the attorneys," it said. "Our response is that because we are not a party to the CPUC proceedings, we won't make any comments related to those proceedings."

Experts in utility regulation said the joint legal effort between Edison and its California regulators appears to be unusual.

"This does sound odd," said Nancy Brockway, a Boston energy consultant who served on the New Hampshire Public Utilities Commission for five years. "It's as if the commission is taking the side of the utility in the court case, and then trying to be objective in its own proceeding."

'Very simple, short'

Coordinated work on subpoenas for Mitsubishi dates to at least October 2013. At that time, Edison lawyer Henry Weissmann scheduled a meeting with Frank Lindh, a former utility lawyer who was then in charge of the utilities commission's legal division.

"Frank -- In anticipation of our meeting at 4 pm today I attach a draft subpoena," wrote Weissman, who copied SDG&E attorney James Walsh on the email. "The subpoena would be accompanied by a declaration, which we are still working on and hope to provide you prior to or at the meeting today."

Over the next several months, at least three other commission lawyers worked directly with Weissmann to draft and issue the Mitsubishi subpoena.

In February 2014, utilities commission attorneys and engineers met and went over the plan to issue two subpoenas. One would go to Mitsubishi, a 13-page demand for technical documents and requests for information regarding the steam generators.

The other would go to Southern California Edison, or SCE. A commission attorney described that subpoena as "very simple, short (about one-page) effectively putting them on notice that a subpoena is being issued as well to MHI and SCE would need to provide a witness in court."

The subpoenas were issued in March, directing Mitsubishi to hand over documents to Edison's satisfaction.

"You shall respond with all responsive information," the demand stated. "Should you withhold any requested information or documents for any reason, you are requested to state the basis for withholding the information in a manner sufficient to enable SCE to evaluate the validity of the withholding."

'Unfathomable depth'

In the investigation of the San Onofre matter, Edison was one of several stakeholders recognized by the CPUC as parties to the official proceeding. Under commission rules, all the parties are supposed to be notified of any actions affecting the case.

The "service list" of stakeholders was included as an attachment to one of the Mitsubishi subpoenas, although other parties were not apparently informed of the legal filing.

San Diego consumer attorney Mike Aguirre, who represents ratepayer Ruth Henricks, said his own requests for information as a party to the proceeding were not met with the same cooperation the CPUC gave Edison.

Melanie Darling, an administrative law judge for the commission, denied one Aguirre motion in January 2014.

"Henricks has not demonstrated that depositions are the best or the only way to obtain the substantive information that she apparently seeks," Darling ruled. "Henricks has not even specifically identified any substantive information that she seeks that is not included in the documents already produced by SCE."

Aguirre was still seeking information at a May 2014 hearing at which the commission first reviewed the proposed settlement agreement assigning ratepayers the bulk of the cost of the San Onofre shutdown.

Weissmann, the Edison attorney who was working on the Mitsubishi subpoenas, objected to questions from Aguirre during the proceeding. He said questions about what Edison knew about possible design flaws were "beyond the scope" of the hearing, and Darling agreed.

Aguirre said the latest documents show state utility regulators have lost credibility.

"The duplicity is at an unfathomable depth," he said. "With one hand, the commission restrained the utility customer investigation, and with the other, they turned over the keys to the commission offices to Southern California Edison attorneys."

He said the entire San Onofre proceeding should be assigned to an outside monitor.

"The Public Utilities Commission is incapable of rendering a faithful decision in this case," Aguirre said. "We really have to turn to the California Supreme Court to appoint an independent judge to preside over this case."

Under the commission ruling that reopened the San Onofre settlement terms earlier this month, Edison must file a status report by June 2. Parties to the case were invited to file briefs assessing whether the deal meets commission standards by July 7.

___

(c)2016 The San Diego Union-Tribune

Visit The San Diego Union-Tribune at www.sandiegouniontribune.com

Distributed by Tribune Content Agency, LLC.

© Tribune Content Agency, source Regional News

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