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Edison’s San Onofre settlement mirrors bailouts of banks via Los Angeles Times

Put simply, Edison and SDG&E wanted their customers to pay for everything, as though the transformation of an operating nuclear plant into a nonfunctioning husk were an act of God like a meteor strike, not human error. The settlement, which was negotiated by the consumer advocacy group TURN and the Public Utilities Commission’s Office of Ratepayer Advocates, relieves customers of about $1.4 billion of the $4.7 billion the utilities had wanted to keep collecting.

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“There’s a big problem about ending review of all of this,” says Daniel O. Hirsch, a lecturer on nuclear policy at UC Santa Cruz. “They continue to have 10 Chernobyls’ worth of long-lived radioactivity in their spent fuel pools, and to the extent they cut corners badly on the steam generators you would want to learn those lessons. That is not happening.”

The anti-nuclear group Alliance for Nuclear Responsibility argues further that the settlement precludes examination of the shutdown’s ripple effects on electricity and environmental costs statewide, not merely on power supplies in Southern California. Those effects include the cost of excess carbon dioxide emissions from the burning of coal to replace San Onofre’s output, says John Geesman, the group’s attorney and a former California energy commissioner. He cites a study by the Energy Institute at UC Berkeley’s Haas School of Business, which calculates the increased emissions as the equivalent of putting 2 million more cars on the road, with an implied cost of $320 million a year.

To the consumer advocates who negotiated the settlement, these policy goals might be met only in a perfect world — not one in which Edison was prepared to delay endlessly and spend lavishly in a legalistic fight for its existence.

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“The nuclear power industry is remarkable in its lack of belief in the free market system,” Hirsch says. “When they have to pay, they generally don’t want to pay.”

Indeed, not long after mothballing San Onofre last year, Edison began arguing that its shareholders should be “made whole” for their entire investment in the plant, leaving customers to bear all the burden of its incompetence.

The negotiators from TURN and the Office of Ratepayer Advocates managed to walk Edison back by more than $1 billion, but there was little they could do to keep the same utilities that mismanaged San Onofre from overseeing the radioactive facility’s future. That could be the next 60 years or so, the time needed to dismantle the plant and restore the landscape to pristine condition. The costs of the San Onofre adventure are far from over.

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