Although some state lawmakers in California have asked that the settlement agreement surrounding the retirement of the Edison International (NYSE:EIX) San Onofre nuclear complex be reopened, AllianceBernstein sees little chance of that happening.
In an April 16 examination of the issue led by Bernstein Senior Analyst Hugh Wynne, the firm says there are several reasons to believe that the settlement won’t be reopened.
“Thomas Picker, the President of the California Public Utilities Commission (CPUC), is a very independent minded person who will resist any effort by state politicians to interfere with CPUC decision-making,” according to Bernstein. “Picker demonstrated this in his April 1st letter to Assemblyman Anthony Rendon, where he stated that he does not intend to reopen the SONGS settlement.”
Likewise, California Gov. Edmund (Jerry) Brown would probably resist legislative involvement “in the decision making of an expert agency,” according to the Bernstein analysis. Brown and the California PUC want to upgrade the state’s electric and natural gas delivery and modernize the grid to integrate renewable energy and distributed generation, the firm noted.
All such objective would likely become more complicated with “legislative interference,” according to the Bernstein analysis.
“The fact that the settlement met with the approval of [The Utility Reform Network] TURN and the Department of Ratepayer Advocates reflects the fact that it offers material advantages to ratepayers. The settlement was rendered even more ratepayer friendly when it was subsequently modified by the Commission to retain for ratepayers a higher proportion of any recoveries by South California Edison. This raises the question of who benefits from re-opening the settlement other than few grandstanding politicians,” according to the Bernstein firm.
CPUC in November 2014 approved a settlement agreement that provides consumer refunds and credits of approximately $1.45bn due to the premature shut down of the San Onofre Nuclear Generating Station following a steam generator tube leak in January 2012.