SAN FRANCISCO (CN) - The California Public Utilities Commission Thursday slapped Southern California Edison with a $16.7 million fine for hiding a backdoor meeting between its utility executive and former commission president Michael Peevey.
The commission's fine stems from a 2013 meeting in Poland between Edison executive Stephen Pickett and Peevey where the two etched plans to share the estimated $4.7 billion cost of shutting down the San Onofre nuclear plant.
Nearly 20 months later, the commission unanimously approved a settlement passing on more than $3 billion in closing costs to Southern California utility customers.
The regulator said Edison had several chances to disclose the backdoor meeting but repeatedly "misled" the commission.
"Under the CPUC's rules, communications with decision-makers are permitted in rate-setting proceedings, but they must be reported and noticed. In this case, several communications were not properly noticed or reported, although the underlying communications were not prohibited by CPUC rules," commissioner Catherine Sandoval said in a statement.
Edison was fined $20,000 for each of the 826 days it waited to disclose the meeting between Pickett and Peevey at the Hotel Bristol Warsaw. The advocacy group Alliance for Nuclear Responsibility unsuccessfully petitioned the commission to issue the maximum fine of $50,000 per day before Thursday's vote, which would have resulted in a nearly $42 million fine.
John Geesman, attorney for the advocacy group and former commissioner on the California Energy Commission, blasted the utilities commission for being soft on the utility that provides services to more than 14 million people.
"This is a big win for Edison, which did not contest the penalty amount. You pay a token fine, you get your wrist slapped, you pocket a couple billion dollars. That's a phenomenal return on investment."
Edison finally acknowledged the 2013 meeting this past February, after investigators obtained notes from the secret meeting between the state employee and utility executive. According to the commission, the two met for dinner in Poland and later discussed "possible settlement partners" via email.
California law allows the ex parte discussions - for the benefit of one side only - if they are disclosed within three days. The commission said Edison failed to report eight ex parte communications regarding the shutdown of the nuclear plant between March 2013 and June 2014.
Thursday's fine is meant to protect the "integrity of a decision-making process," commissioner Liane Randolph said.
"This fine is a clear statement by the CPUC that these rules matter, that we are watching and that we will enforce them."
Edison disagreed with the $16 million fine, saying the commission's ex parte rules are unclear and need revising.
"We respectfully disagree with the commission's decision," Edison president Pedro Pizarro said in a statement. "The decision reinforces the need for clearer ex parte rules and we support comprehensive reform of those rules. We have already strengthened internal procedures to ensure our employees understand their obligation to adhere to the highest ethical standards when interacting with the CPUC."
Edison decided to shut down the nuclear plant after a 2012 radioactive leak damaged the plant's cooling system. The commission eventually approved a deal that assigned nearly 70 percent of the cost to customers of Edison and San Diego Gas and Electric Company.
Meanwhile, the commission is also the focus of a controversy surrounding the shutdown of the nuclear plant and emails between the commission and California Gov. Jerry Brown. Mike Aguirre, a San Diego attorney, sued the commission in San Francisco Superior Court for failing to release emails between Brown and Picker under a Public Records Act request.
Aguirre claims the commission is withholding about 130 emails related to the power plant's closure. A hearing is scheduled for Dec. 9 before Superior Court Judge Ernest Goldsmith.
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