Edison International Declines After California Reviews Pactby
Regulators ask parties to comment on San Onofre settlement
Consumer advocates had said they couldn't support pact
Edison International fell as California said it’s reassessing how much the utility should be able to collect from customers for the shutdown of a nuclear power plant near Los Angeles after a probe showed it failed to disclose private talks.
The shares slid as much as 2.4 percent, the most on an intraday basis since April 21. They closed 1.8 percent lower at $71.32 in New York.
The California Public Utilities Commission said in a statement Monday that it’ll reassess whether a settlement that established how Edison and ratepayers would split the costs of taking the San Onofre power plant out of service is still “reasonable” given that Edison violated communication rules. The company’s Southern California Edison utility was fined $16.7 million for failing to disclose so-called ex-parte talks between an executive and former utilities commission president Michael Peevey.
“They wouldn’t be having a reopened case unless there were some potential they were going to change the terms,” Kit Konolige, an analyst at Bloomberg Intelligence, said by phone Tuesday. “Investors in this utility space have a lot of choices of different stocks and they’re always going to pick one without a regulatory overhang.”
The revelation of back-channel communications between Peevey and SoCalEd has triggered backlash from consumer groups. The Utility Reform Network and the public utility commission’s own Office of Ratepayer Advocates, both of whom had agreed to the settlement with Edison, said they could no longer support it. The talks only stand to increase scrutiny of a state commission that is already under federal and state investigation over its discussions with utilities Edison and PG&E Corp. One state lawmaker has called for the agency to be dissolved.
Edison believes the settlement remains "fair, lawful and in the public interest," the Rosemead, California-based company said in a statement Tuesday. Edison plans to file comments on the case, the company said.
Under the terms of the agreement, customers would pay $3.3 billion for the nuclear shutdown and Edison would offer $1.45 billion in customer refunds and credits. Edison said it has already made "significant" refunds under the settlement.
Edison decided to shut the San Onofre nuclear power plant after discovering a leak in 2012.