Lawsuit dismissed over rate passthrough of costs for San Onofre’s defective generators

A federal judge on April 16 dismissed a November 2014 lawsuit over the costs related to defective steam generators at Southern California Edison‘s now-retired San Onofre Nuclear Generating Station (SONGS).

This matter was before a judge at the U.S. District Court for the Southern District of California on the separate motions to dismiss filed by defendants California Public Utilities Commission (CPUC), Michael Peter Florio and Michael R. Peevey, and also Southern California Edison (SCE). The judge on April 16 bounced the case due to lack of subject matter jurisdiction, without getting into the merits of the case itself.

The named plaintiffs are residents of southern California who allegedly have been charged for defective steam generators at SONGS on their monthly utility bills. The complaint purports to assert claims on behalf of a plaintiff class of 17,400,000 utility customers whose utility bills included charges for the defective generators. Plaintiffs allege that the inclusion of costs related to SONGS in the utility bills of southern California residents was/is a taking without compensation in violation of the United States Constitution.

“Although the twenty-eight page complaint purports to seek billions of dollars in relief, and the briefing on the instant motions includes hundreds of pages of documents of which the parties want the Court to take judicial notice, the facts and allegations relevant to the Court’s decision to dismiss this case for lack of subject matter jurisdiction are few and undisputed,” the judge wrote.

SCE operated SONGS along with San Diego Gas & Electric, which was not a defendant in this case. In 2005, CPUC authorized SCE to replace four steam generators in the two active reactors at SONGS. The CPUC’s 2005 authorization conditionally allowed SCE to charge utility customers for these new generators subject to SCE applying to CPUC to include these costs in utility rates permanently after the installation was complete. The installation of these generators was completed in one of the reactors in 2010, and in the other in 2011. In January 2012, the reactors at SONGS were shut down. After defects were discovered in the steam generators, SCE announced that the shut down would be permanent.

In October 2012, the CPUC opened a formal investigation into the outages at SONGS. “This investigation was divided into phases, took over two years and was not even complete as of the date of this opinion in light of a motion for rehearing that is currently pending,” the judge noted.

Judge Cathy Ann Bencivengo in part tossed the case because this situation doesn’t involve interstate commerce, so there is no federal question. “There can be no dispute that the orders in question here involve only the utility rates of California customers, and in any event, such orders usually do not affect interstate commerce,” the judge wrote.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.