Edison Fined Nearly $17 Million over Secret Deal with Top Official

On Dec. 3, Southern California Edison was fined nearly $17 million over secret deal with top official during a meeting in Warsaw, Poland. According to the California Public Utilities Commission, which issued the fine, a company’s top executive and a former utility regulator had a secret meeting, where they agreed on how to recover costs from the Edison’s now-defunct San Onofre nuclear plant.

The secret deal which forces utility consumers to pay 70 percent of shutdown costs, which total $4.7 billion, was given the green light by the commission before the covert meeting was exposed.

The commission was not irked by the secrecy of the meeting, but by Edison’s refusal to disclose the secret discussions within three days so every side involved in the issue can take notice of the communications and reply.

But the fine was given for eight secret discussions between 2013 and 2014, the report shows, and two incidents in which Edison broke ethics rules by either hiding information or providing the commission with false data.

San Onofre Nuclear Generating Station (SONGS) was shut down in early 2012 because of a leak caused by a defect in a steam generator.

A former top executive from the company and a former commission member met in great secrecy in Warsaw in March 2013 to negotiate how costs of the failure of the nuclear station would be divided between customers of the public utility and shareholders.

The Warsaw agreement surfaced last spring when police investigators found the meeting notes during a search at the former commission member’s home while trying to probe the regulator’s close ties with the industry.

The notes were made public a month later. Investigators noted that the handwritten points in the notes are surprisingly similar to the points adopted by the commission shortly after the meeting.

Commissioner Catherine J.K. Sandoval argued that the $16.7 million penalty was given for SCE’s failure to notice and report the secret discussions according to the commission’s rules. Sandoval also noted that SCE’s lack of integrity compromised the decision-making process.

Other members of the commission expressed a similar view to Sandoval’s and there was a unanimous vote. One of the commissioners had to recuse himself because he was part in one of the backchannel discussions.

SCE said Thursday that it was disappointed with the fine, and complained about the rules not being clear enough. President Pedro Pizarro added that his company disagrees with the recent decision and seeks a revamp of those rules.
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