SONGS Investigation Settlement

Background

On January 9, 2012, Edison shut down SONGS Unit 2 for scheduled maintenance, followed by the shutdown of SONGS Unit 3 due to a steam generator tube leak on January 31, 2012. Neither SONGS unit ever returned to service, yet customers continued to pay tens of millions of dollars each month to support the defunct plant and to buy replacement power. SONGS is owned and operated by Edison (78.21%) and served customers in the greater Los Angeles area including Inyo, Kern, Kings, Mono, Orange, Santa Barbara, Tulare, Ventura, and San Bernardino counties. It is co-owned with SDG&E (20%) and the City of Riverside (1.79%).    

In October 2012, the CPUC opened an Investigation into the causes and accountability for the premature SONGS closure. On March 20, 2014, parties filed a Notice of Settlement Conference with the CPUC, requesting that it refrain from taking any further procedural actions in the SONGS investigation.   

On November 19, 2014, the CPUC adopted the Final Decision approving parties' Amended Settlement agreement.  

 

Edison Violation of CPUC Rules

On December 8, 2015, the CPUC issued its Order fining Edison $16.7 million for improper ex parte meetings prior to SONGS settlement negotiations. 

 

CPUC Reopens SONGS Settlement

On May 9, 2016, the CPUC issued a Ruling reopening the record of the SONGS Investigation in light of its Decision that found Edison had violated the CPUC's ex parte communication rules. Additionally, the Ruling directs that:   

  • Parties are temporarily relieved of complying with the Settlement.  
      
  • Edison should submit a status of Settlement implementation, including accounting for ratemaking activities by June 2, 2016. 
      
  • Parties should submit Briefs on whether the Settlement meets CPUC standards for approval by July 7, 2016, followed by Reply Briefs on July 21.
     

Responses to Reopening the Record of the SONGS Settlement

On June 2, 2016, Edison and SDG&E filed their Responses with the CPUC regarding reopening the record of the SONGS Settlement.
 

   

See a detailed History of the SONGS Investigation and Settlement. 

 

   

ORA Position 

In response to the CPUC's May 9 Ruling, ORA finds that the SONGS settlement process was tainted by Edison’s violations of CPUC Rules and state law regarding ex parte communications with CPUC decision-makers. These violations were affirmed by the CPUC’s investigation and final decision fining the utility $16.7 million. Accordingly, ORA recommends that the CPUC should order Edison to make the following refunds in order to compensate its customers:  

  • $383 million, which is the current difference between ORA’s litigation position and the Settlement Agreement reached with Edison and other parties. 
      
  • $25 million, which were shareholder funds allocated for the Greenhouse Gas Research and Reduction Program.  


See ORA’s:
 

July 7, 2016 Brief.    

July 21, 2016 Reply Brief.
 

 

SONGS Settlement

ORA had supported the SONGS Settlement because it would refund hundreds of millions of dollars to customers, given that they have subsidized the power plant at the cost of tens of millions of dollars each month for more than 2 years, even though it has provided them no electric service. The magnitude of the Settlement agreement was unprecedented and would result in a significant rate reduction for Edison and SDG&E customers.  

In August 2012, ORA had sent a letter to CPUC commissioners requesting they remove SONGS from Edison’s and SDG&E’s rates to protect customers from the mounting costs of the non-operational plant.  

ORA argued that the utilities should have received no additional funding for the defective replacement steam generators that caused SONGS to stop operating.  

See ORA's May 1, 2014 Joint Testimony responding to questions in the CPUC's Ruling. 

See ORA's April 17, 2015 Press Release: ORA Director Joe Como Response to Conduct by Southern California Edison and Former CPUC President Michael Peevey to Undermine the SONGS Settlement Process. The Press Release voiced continued support for the SONGS settlement in addition to penalties for Edison and SDG&E shareholders, in order that ratepayers are not harmed by re-litigating the issues. 

 

 

Proceeding Docket

See the Proceeding docket for the full record of the case. 

 

 

Other Resources

Edison-Peevey March 2013 Hotel Bristol Notes  

Edison Litigation Position Comparison  

SDG&E Replacement Power Agreements  

SDG&E Litigation Position Comparison  

ORA's March 27, 2014 Press Release  

CPUC March 27, 2014 Press Release 

See ORA's August 13, 2012 letter to CPUC commissioners urging them to remove SONGS from rate base until it comes back online.