By Jason Fordney

California utilities and other parties say they have reached a new settlement over the costs of shutting down the San Onofre nuclear power plant, replacing a contested 2014 agreement.

Southern California Edison and San Diego Gas & Electric, co-owners of the plant, said Tuesday that they submitted the agreement for approval by the California Public Utilities Commission, which in December 2016 ordered renegotiations after it came to light that former commission President Michael Peevey had engaged in undisclosed ex parte communications with SCE. The original settlement stuck ratepayers with 70% of the costs related to the early closure of the plant. (See CPUC Orders Renegotiation of San Onofre Settlement.)

The settlement stipulates that the two utilities would cease rate recovery of $775 million in costs related to San Onofre. It also reduces the regulatory asset value used to calculate recovery by $72 million by applying funds from litigation between the utility and the U.S. Department of Energy over fuel disposal responsibilities. Depending on the commission’s decision on the reduction in asset value, rate recovery would cease on either Dec. 19, 2017, or April 21, 2018.

SCE would retain amounts collected under the prior agreement before the cessation of rate recovery and will keep $47 million from arbitration with Mitsubishi Heavy Industries over the plant’s faulty generators. The utility would also retain the right to keep proceeds from selling nuclear fuel, which “may be significant.”

The proposed agreement also reduces from $25 million to $12.5 million the amount the utilities would spend to fund greenhouse gas reduction programs. SCE said the total after-tax earnings charge from the settlement will be $448 million.

“SCE and plant co-owner, SDG&E, have already returned more than $2 billion to customers under the 2014 settlement, which ensured that customers did not pay for the faulty steam generators, which prompted the closure of San Onofre, from the time this equipment failed,” SCE said.

Elizabeth Echols, director of California’s Office of Ratepayer Advocates, said: “This deal saves SCE and SDG&E customers hundreds of millions of dollars over the next several years. ORA and others worked hard to put together a strong case and succeeded. Now customers won’t end up unfairly paying for many of the costs associated with the [plant’s] premature failure.”

Other parties to the settlement include the Alliance for Nuclear Responsibility, the California Large Energy Consumers Association, California State University, Citizens Oversight, the Coalition of California Utility Employees, the Direct Access Customer Coalition, ratepayer Ruth Henricks, The Utility Reform Network and Women’s Energy Matters.