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Published on May 23rd, 2014 | by Roy L Hales

11

Is California’s Public Utilities Commission Complicit In A Cover-up?

May 23rd, 2014 by  


Originally published on the ECOreport.

Photo taken from the video

The attached videos of the May 14 Settlement Evidentiary hearing, for the closure of San Onofre Nuclear Generating Station, in California, are shocking. The shortest, posted at the very bottom of the page, is a collection of clips giving some keys points. They leave the impression that Judge Melanie Darling may be concealing, rather than examining, evidence. A different picture emerges from the longer video, posted almost immediately below. There was an ongoing struggle for control of the proceedings. Was the ratepayer’s representative out of order? Or is the Public Utilities Commission Complicit in a cover-up?

“The representation by the Commission that there was going to be an investigation into the reasonableness of Southern California Edison’s deployment of the defective steam generators was a promise of an investigation with the intent not to perform it,” said Mike Aguire, representing SanDiego ratepayers. “It is our contention that you, Ms Darling, Judge Darling, entered a ruling that put the investigation off into the remote future in order to avoid any such investigation.”

These proceedings revolved around a proposed settlement offer, in which the utility companies (Southern California Edison and minority partner SanDiego Gas & Electric) would be paid $3.3 million in connection to the decommissioning of San Onofre. Attorney Mike Aguirre, speaking on behalf of ratepayers, believes this is inappropriate when there has not been a full investigation into the events that led to the nuclear facility’s failure.

Ron Litzinger, CEO of Southern California Edison (SCE), turned out to be one of his star witnesses!

At several points during cross examination, Litzinger admitted to not submitting documents to the Commission.

His explanation was, “these general recitals were just provided as general background and that was what we were attempting to accomplish.”

Aguirre asked if the Commission had been given anything “to establish the sufficiency of the settling parties’ investigation into the extent to which SCE was responsible for the RSG design errors?”

Litzinger responded, “There is not.”

Asked if the Commission had been given evidence that showed SCE had acted prudently, Litzinger said, “It is not in the record.”

Attorney Mike Aguirre questioning Southern California Edison CEO Ron Litzinger - from the video

Attorney Mike Aguirre questioning Southern California Edison CEO Ron Litzinger — from the video

One of the most damming parts of Litzinger’s testimony were his assertions that SCE’s “exhaustive investigations” were designed to build their case against Mitsubishi Heavy Industries. This sounds like blame shifting and begs the question of whether SCE sought the actual cause of the problem.

Unfortunately, Aguire’s questions pertained to the record available to the Commission. This was, by Litziner’s admission, incomplete.

Aguire asked if these included any proof that SCE’s investigation included “whether SCE officials had any responsibility for design errors.”

Litzinger said, “I … same answer, I cannot.”

Judge Darling intervened when Aguirre asked about the value of Litzinger’s stock.

This prompted the feisty attorney to explain, “It is relevant to his testimony, He’s under oath. His credibility is at issue. Whether he’s making money off this settlement is an issue that you have to take into consideration. The step – the moment he put his hand up and swore, his credibility was at issue. This is a proper financial motivation cross-examination question that any court would allow.”

Litzinger inadvertently set the CPUC up by stating he had communications with the commissioners on multiple maters “all the time.”

Aguirre suggested that there was more to the proposed March 27 settlement offer than met the eye.

“It’s our position that Mr Peevey (of the CPUC) helped to orchestrate this settlement through Mr Freedman (also CPUC) and others, and it wasn’t a settlement negotiation. It was a meeting to figure out how not to have the reasonableness investigation,” he said.

“The rulings that you (Judge Darling) made prohibiting any kind of discovery into the relevant issues, when the dis .. when the settlement was announced, the coordinate press releases falsely stated, from Mr Florio and Mr Peevey, that the parties had settled which was picked up as part of the blitzkrieg in which the ratepayers were misinformed that they were going to get a $1.4 billion refund was a collusion, not a bona fide basis for this settlement. And we have a right to try to develop that record, which you are not permitting us to do.”

It was at this point that Aguirre tried to ask Mr Peevey a question and Judge Darling intervened, saying, “No, you don’t have any questions.”

Aguirre proceeded anyway, “Mr Peevey did you have any discussions with any parties about the settlement process while it was taking place, sir? Will you put that on the record? And the same with Mr Florio. Will you put that on the record?”

Throughout this dialogue, Judge Darling kept repeating “No.”

“Your honor, you wanted the basis for you not to find the settlement to be fair, legal and reasonable is if there was collusion. You are now interfering,” Aguirre said.

Judge Darling, “No.”

To which Aguirre pointed out that as fiduciaries, “You have an obligation to put on the record if you had any knowledge of the settlement negotiations or in any way participated in them while they were underway.”

Mr Peevey gave a partial answer, saying he did not talk to the attorney for the Utility Reform Network during the entire time.

This prompted Aguirre to ask, “What about Southern Cal Edison?”

Peevey, “Sorry, about Edison?”

Aguirre, “Yeah.”

Peevey, “I’m not hear to answer your questions.”

Judge Darling, “Mr Aguirre.”

Peevey, “I’m not hear to answer your Goddamn questions, now shut up! Shut up!”

“It is not a bonafide evidentiary hearing,” Aguirre concluded. “And I again request that you allow for a proper review with proper findings.”





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About the Author

is the President of Cortes Community Radio , CKTZ 89.5 FM, where he has hosted a half hour program since 2014, and editor of the the ECOreport, a website dedicated to exploring how our lifestyle choices and technologies affect the West Coast of North America. He writes for both writes for both Clean Technica and PlanetSave on Important Media. He is a research junkie who has written over 1,600 since he was first published in 1982. Roy lives on Cortes Island, BC, Canada.



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  • CaptD

    CPUC practices crooked as a dog’s hind leg
    10
    Head of regulatory body former Edison president

    http://www.sandiegoreader.com/news/2014/apr/24/ticker-cpuc-practices-crooked-dogs-hind-leg/

  • CaptD

    SCE’s Erroneous Assumption*:

    SUMMARY: In non-engineering terms, the cause of San Onofre Replacement Steam Generator (RSG) debacle was SCE’s in-house design teams erroneous assumption that their four new RSG’s would be identical “enough” to the original San Onofre Steam Generators (SG’s) as manufactured by Combustion Engineering twenty five years prior, in both design and operational function to qualify SCE to make these replacements safely under the NRC’s like for like replacement criteria, instead of having to seek an amendment to the San Onofre Nuclear Power Plant Operating License via the lengthy NRC 10 CFR §50.59 review process which includes public input.

    SCE then expanded their basic assumption to justify allowing their own in-house engineering staff to:

    1. Develop the RSG design specifications that later proved to be unsafe, causing them to fail soon after being installed.

    2. To manage the entire Replacement Steam Generator Project (RSGP), which included selecting Mitsubishi Heavy Industry (MHI) as the most qualified contractor, from a list of SG manufactures. to manufacture their four new RSG’s, even though neither SCE or MHI had any prior experience in building RSG’s anywhere near this size and/or capacity.

    NRC Region IV, which is based in Texas, is responsible for overseeing the safe operation of San Onofre. Those NRC staff responsible for reviewing SCE’s design assumptions knew full well that there were significant differences between the OSG and the RSG yet they did not have the technical training to understand how these changes would result in the failure of the RSG’s, so instead of seeking additional input from others within the NRC that did have the required technical expertise, they chose to accept SCE assumptions. This decision by NRC Region IV resulted in compounding the problems at San Onofre because now those tasked with making sure that the SCE RSGP was safe were in fact making their decisions based on SCE’s own assumptions instead of industry proven engineering principles, said another way, the blind were leading the blind…

    The result of these assumptions by SCE and NRC Region IV was that, as the NRC Inspection Report (NRC AIT) states, “replacement steam generators were installed at San Onofre with a significant design deficiency, resulting in rapid tube wear of a type never before seen in recirculating steam generators”.

    * This is the first part of a much longer article for SoCal ratepayers to help them better understand exactly what went wrong at San Onofre and why they should demand full refunds from their Utilities which caused them!

  • CaptD

    https://s3.amazonaws.com/s3.documentcloud.org/documents/347889/col-nrc-tech-paper.pdf

    As to why they went forward with the RSG knowing that they had “issues”, see my reply at the top, so it does not get buried…my best guess is that they had to since they had already committed themselves as the Operators that were in charge of the RSGP to the CPUC, the NRC and their shareholders, so if they suddenly had to say, “Ah, guys we think we may nave a small problem or two” they would have set themselves up for even bigger legal accountability issues that could have ended up with SCE being not allowed to replace the OSG, which were getting near their plugging limitation and therefore were not generating as much Energy and/or profits as SCE wanted. Another issue is the use of high burn-up fuel and its effect on the original steam generators and other hardware, which was one of the reasons that SCE wanted to install new RSG since they would have better corrosion resistance since they used a newer alloy for the tubing.

    I also think that most of the decision makers at SCE did not understand FEI and figured that they could get away with operating the RSG’s in such a way as to minimize any potential problems until they could explain them away as being unrelated to their specific design. Remember that Unit 2 was replaced first and was operated with different parameters than Unit 3 for about a year and I bet these same decision makers at SCE were feeling pretty confident that both Unit 2 and Unit 3 would work out OK, that is until Unit 3 started leaking, which then lead to the discovery of all the internal SG tube damage which even the NRC said was unprecedented in the history of the US Nuclear Fleet.

    This NRC damage assessment was the wake up call for SCE who then shifted into CYA mode, which included coming down hard on any employees that hinted at or even worse provided documentation that these problems were predicted by SCE team members but ignored by those in charge. As SCE tried to regroup as they “studied the problem” they brought in outside experts but only gave them “some” of the data, which I believe was the reason that all their results conflicted with each other, creating a bigger smoke screen for SCE to better hide behind.

  • CaptD

    +

    As to why they went forward with the RSG knowing that they had “design issues”, my best guess is that they had to since they had painted themselves into a corner by already committing themselves as the Operators that were in charge of the RSGP to the CPUC, the NRC and their shareholders, so if they suddenly had to say, “Ah, guys we think we may have some small design problems” they would have set themselves and SCE up for even bigger legal accountability issues that could have ended up with SCE being not allowed to replace the OSG, which were getting near their plugging limitation and therefore were not generating as much Energy and/or profits as SCE wanted. Another issue is the use of high burn-up fuel and its effect on the original steam generators and other related hardware, which was one of the reasons that SCE wanted to install the new RSG since they would have better corrosion resistance since they used a newer alloy for the tubing and would be able to generate more energy and profits for SCE.

    Another issue is that even today, most of the decision makers at SCE do not understand FEI and the danger it poses to steam generators, so they figured that they could get away with operating the RSG’s in such a way as to minimize any potential problems until they could explain them away as being unrelated to SCE’s specific design. Remember that Unit 2 was replaced first and was operated with different parameters than Unit 3 for about a year and I bet these same Senior decision makers at SCE were feeling pretty confident by that time, that both Unit 2 and Unit 3 would work out OK, that is until Unit 3 started leaking, which then lead to the discovery of all the internal SG tube damage which even the NRC said was unprecedented in the history of the US Nuclear Fleet.

    This NRC damage assessment was the wake up call for SCE who then shifted into CYA mode, which included coming down hard on any employees that hinted at or even worse provided documentation that these problems were predicted by SCE team members but ignored by those in charge. SCE then circled its wagons as they tried to regroup while they “studied the problem.” They brought in outside experts but only gave them “some” of the data, which I believe was pre-planned and the reason that all their results conflicted with each other, creating an even bigger smoke screen for SCE to hide behind.

    Since NRC Region IV accepted the like-for-like story in the first place, SCE now had some insurance that Region IV would not come down too hard on them when they did their AIT Report but that backfired on both SCE and Region IV when their findings were challenged. Once outside experts starting asking pointed questions, SCE restart plan was exposed as being technically unsound and from that time onward SCE started to accept that the only way out for them was to decommission San Onofre as “a cost savings for ratepayers”, which to many just added insult to injury, as SCE continues to push for having the ratepayers pay for the debacle that SCE caused, instead of SCE’s shareholders who have enjoyed huge yearly profits while this entire process was happening.

  • CaptD

    Here is yet more info on how SCE tried unsuccessfully to game the NRC’s Like-For-Like rules, while bragging in an Industry Trade Journal about all the huge number of changes to the Replacement Steam Generators (RSG’s) they made!

    ==> ☢ Karma ===> This article came out just weeks before Unit 3 started leaking ☢

    Improving like-for-like RSGs

    ===> Published just before the Unit 3 leak occurred in January 2012.

    https://s3.amazonaws.com/s3.documentcloud.org/documents/347889/col-nrc-tech-paper.pdf

  • CaptD

    The ALJ has decided that almost no discovery was necessary and that helped SCE try to make the case that they were wronged by MHI when in fact SCE was in charge of the RSGP, not MHI and there is SCE documentation to prove it. Since Michael Aguirre asked where the SCE supporting documentation is in the official record and SCE can’t point to it, it clearly shows that it has never been “discovered” which is a major issue since any settlement must be based upon a review of all the relevant facts. Now it is clear that the ALJ was far too restrictive in what was discoverable because SCE has not disclosed all the relevant facts, so any proposed settlement based upon partial information is questionable at best!

    If I were advising the CPUC, I’d suggest that they hold a meeting with all the parties that were not part of the settlement discussions and find out what they feel needs to be done to settle this case, or if that is unworkable, get ready for a lengthy legal appeals that will be both costly and time-consuming.

    Once this case leaves the CPUC, I expect it to expand in its scope and that is something that can only work against SCE since they were the operators of San Onofre who installed faulty replacement steam generators, which caused this debacle.

    Much more info posted here:

    http://www.scpr.org/news/2014/05/06/43954/public-workshop-on-san-onofre-nuclear-waste-storag/#comment-1391520026

    and

    http://www.kpbs.org/news/2014/may/14/settling-bill-colosure-san-onofre-nuclear-generati/#c29798

  • Disgruntled Rate Payer

    I has been well known for a long time now that the PUC does
    not protect the rate payers, we the rate payers are supposed to pay for
    electricity not the bungled operations of an incompetent company. And Mr.
    Peevey should be removed from the PUC for showing such disrespect to a
    rate payer advocate. Yes Mr. Peevey you are there to answer our questions
    and how dare you treat us like this. Mr.
    Aguirre has every right to question what you are doing and the manner in which
    you are doing it, you are after all supposed to be a public servant! A response like this from you Mr. Peevey
    suggests only one thing you are working
    for the power company and not the rate payer. You should resign!!! For anyone reading this we need to get new
    people in this office or as Mr. Aguirre suggest, the PUC should be disbanded
    and a new commission created by the people and for the people of
    California. If you need more proof look
    at what the PUC did for us when SDG&E went to them to ask for a rate
    increase due to their loss in profits from solar, no one ever guaranteed
    profits but by the PUC allowing this they “the PCU” just did!

    Signed a disgruntle rate payer.

    • Thanks. I hope this video gets shared widely. Ludicrous.

  • Michael Berndtson

    Like it or not this type of information will help all of us understand how renewables will probably end up moving forward. Thanks for doing this Roy.

    This is the sausage making done on almost every environmental, energy and infrastructure project ever implemented since the 18th century. More of this please.

    Note: I’m an engineer and I hate policy. But, it’s important for every person interested in having our country move towards a renewable economy – to understand how policy works. It get’s even uglier than this. Try environmental cleanup and Superfund litigation. It almost gets as yucky as the sites.

  • Matt

    Is this a made for TV movie? The acting is not very good.

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