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Superior Court lawsuit demands CPUC comply with the law by holding public hearings and responding to PRA requests

FOR IMMEDIATE RELEASE, March 10, 2015

Click here for copies of the actual filing.

Should the public PAY for the criminal defense of disgraced public officials?

Superior Court lawsuit asks Judge to rule on whether or not it is Okay to force the public to pay an $882-per-hour criminal defense firm to protect public servants who may have committed criminal acts without complying with the Government Code and making certain findings.

Overview:

CPUC, the California Public Utilities Commission, has awarded Southern California Edison (Edison) a ratepayer-funded electric price increase with a 390% return on investment* for its failed nuclear generators at San Onofre. The award is unfair because utility customers are being forced to pay for electricity they never received from failed generators put in without the required license amendment, and whose costs were required to but were not asked to be permanently put in rates. In addition, Edison's intentional installation of defective nuclear generators threatened the lives of 8 million people.

The money was awarded to Edison in an unlawful out-of-court settlement process which is currently the subject of a criminal investigation. This out-of-court settlement was falsely touted by as a "refund" even though the average cost per ratepayer will amount to roughly $1,000.00 per electric meter on average.

The settlement appears to have been crafted by former Commission President, Michael Peevey, who is also a person of interest in the ongoing criminal investigations by the Federal Department of Justice and the California Attorney General. Peevey is a former officer of Edison, the company that owns the failed nuclear generators.

Under California law, documents of the CPUC and its officials are a matter of public record. The law firm of Aguirre & Severson has made repeated requests for public records involving unlawful the communications between CPUC officials including Michael Peevey, Commissioner Florio, and Administrative Law Judge Melanie Darling, regarding secret meetings with Southern California Edison on the San Onofre nuclear plant investigation and settlement that ended the investigation.

Evidence obtained pursuant to a criminal search warrant of Peevey's home shows that Peevey met secretly (and unlawfully) in Warsaw, Poland with Edison. The evidence suggests that during this meeting, Peevey crafted a bailout of the failed nuclear plant that would prevent an investigation into how and why Edison skirted Federal safety procedures by installing unlicensed and experimental nuclear generators at San Onofre.

Because Edison lied to the Nuclear Regulatory Commission, those generators were not subjected to a safety review. The generators failed after 11 months when they began leaking unsafe levels of radiation. CPUC's decision to convene secret and unlawful meetings with utility executives for the purpose of covering up a near-miss nuclear disaster may result in criminal charges against CPUC employees and officials.

Commissioner Michel Florio endorsed the unlawful bail-out scheme, and Administrative Law Judge Melanie Darling helped delay and kill an investigation into why ratepayers should be held responsible for Edison's mistakes.

CPUC officials are refusing to obey the law that requires them to release documents to the utility fraud attorneys at Aguirre & Severson LLP. Now CPUC has, behind closed doors, hired expensive criminal lawyers for reasons they have unlawfully failed to disclose to the public in a public proceeding.

What the case is about.

On March 9, 2015, the law firm of Aguirre & Severson LLP filed a Petition for Writ of Mandamus to force the California Public Utilities Commission to justify -- in public hearings -- why it is necessary to hire $882-per hour criminal defense attorneys at public expense. It also asks the court to force the CPUC's compliance with the Government Code, which requires CPUC to identify to whom the criminal defense services are to be provided, and make findings that the person receiving the defense services acted in the scope of his employment as an employee of the CPUC, and that "such defense would be in the best interests of the public entity and that the employee or former employee acted, or failed to act, in good faith, without actual malice and in the apparent interests of the public entity."

The petition argues that public hearings are required, and the the names of the alleged criminal defendants in the case be publicly identified. What's more, these alleged criminal defendants must offer proof that when they committed possible criminal acts they did so in the best interests of the public.

The Cover Up

After Southern California Edison (Edison) "invested" $700 million in the shuttered nuke plant at San Onofre, the California Public Utilities Commission allowed the utility to bill $5.1 billion -- guaranteeing EDISON a 590% return on its investment -- at ratepayer expense.

The law requires EDISON to "prove" in public hearings that it is reasonable to bill ratepayers for electricity and other expenses from a failed power plant that is not producing electricity. But that never happened: When CPUC imposes a rate increase, it is supposed to approve them in public hearings that the public can attend. Instead, CPUC opted to secretly negotiate a bailout of Edison, and then "settle" the case out of court ... in secret.

Those activities were unlawful.

And because of these unlawful actions, customers of Edison and SDG&E have been forced to pay as much as $1000 per electric meter for electricity and other benefits they never received.

What should have happened.

If Edison had been forced to obey the law, it would have been required to seek a license amendment and prove that its plant is "used and useful" and that it acted reasonably when it decided to install nuclear generators that were not licensed or approved as required by the Federal Nuclear Regulatory Commission.

Edison unlawfully dodged Federally required safety reviews when it installed its experimental new nuclear generators. The unapproved generators failed after eleven months and began leaking deadly radiation. Because radiation kills people, Edison was forced to shut the generators down or risk endangering the health of 8 million Southern Californians.

Under the law, public hearings are required to determine if Edison was "reasonable" and whether or not the failed nuclear generators were "used and useful."

Those public hearings never happened. In fact, the evidence suggests that top officials at the California Public Utilities Commission worked very closely with Edison to kill the investigation showing that Edison should pay for its own mistakes.

CPUC is supposed to protect you, the public

Public Utility Commissioners and Judges are not supposed to "help" utilities cover up their unlawful or unsafe behavior. In fact, they are supposed to make sure that your utility rates are reasonable, and that the utilities are behaving in a way that does not kill people, as occurred in the San Bruno pipeline explosion and the 2007 San Diego wildfires.

In response, the California Public Utilities Commission rewarded Southern California Edison for its failure by forcing ratepayers to foot the bill for $5.1 Billion against Edison's original investment of $700 million on the failed nuke plant (a 590% return on investment). According to some estimates, Edison's generators, illegally installed without a license amendement, risked the lives and safety of as many as 8 million Southern Californians.

This $5.2 billion hike, which ratepayers have already paid for in unapproved electric rates, was falsely portrayed as a "refund" by top CPUC Commissioners.

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1* The cost of the failed nuclear generators was $700 million. When the generators failed after less than a year of operation, CPUC agreed, in secretly negotiated out-of-court settlement, to award Edison with a $4.135 Billion in costs that were billable to consumers - a 390% return on investment.

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Aguirre & Severson LLP
501 West Broadway, Suite 1050
San Diego, CA 92101

Phone: 619-780-2752
Toll Free: 877-834-2027
Fax: 619-876-5368
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