Nuclear Option: Mediation

A multibillion-dollar fight over who should pay for the San Onofre nuclear plant failure will go to mediation with the mediator from the recent NFL owners and players settlement, according to a joint filing with the Ninth U.S. Circuit Court of Appeals and the California Public Utilities Commission. Lawyers report that Layn Phillips will host an initial conference by telephone and then in-person mediation sessions this summer. Phillips, a former federal prosecutor and judge, will try to resolve the complicated dispute over almost $5 billion in costs stemming from the premature shutdown of the California coastal power plant amid a radiation leak in 2012. Any settlement would have to be approved by the federal appeals court, which took the case last year when consumers sued the commission and Edison over the original terms of a settlement agreement. The commission which ordered the latest round of negotiations, also would have to approve any revised agreement. The 2,200-megawatt nuclear plant along the Pacific failed after newly installed replacement steam generators leaked radiation. Majority plant owner Edison opted to permanently shutter the facility in 2013. The following year, state regulators approved a settlement deal allowing the utility to recover 70 percent of the $4.7 billion in premature closure costs from customers, as opposed to shareholders. Edison later disclosed its executives met privately with utility regulators at a luxury hotel, negotiating a framework for the deal eventually approved in 2014. Those backchannel communications between utility executives and regulators are under criminal investigation by the California Attorney General’s Office. The mediation effort agreed to by Edison and consumers aims to resolve a federal court case filed by the group Citizens Oversight shortly after regulators approved the settlement. As public criticism of the original settlement terms mounted, the Public Utilities Commission ordered the San Onofre record reopened. While the terms from 2014 remain in place, regulators ordered the two sides to begin new settlement talks this year and now the parties will go to mediation. Interestingly, earlier this month, arbitrators at the International Chamber of Commerce resolved an arbitration case between Edison and Mitsubishi Heavy Industries, which manufactured the equipment that led to the plant failure in 2012, awarding Edison a fraction of the damages the utility had sought. The Chamber also ordered Edison to pay $58 million in legal fees to Mitsubishi. The Japanese manufacturer is seeking to keep portions of the evidence submitted in the arbitration case confidential. The federal appeals court has ordered regular updates to the negotiations. See more reported here-- http://bit.ly/2nE84bd and a statement of mediation from the court here-- http://www.ca9.uscourts.gov/mediation/