As the future of the San Onofre nuclear power plant hangs in the balance, a commissioner at the California Public Utilities Commissioner has suggested changing investment guidelines for the plant’s decommissioning fund.
Southern California Edison and SDG&E have collected money for the fund from ratepayers over the life of the plant, to pay decommissioning costs when it ultimately shuts down.
Electricity ratepayers have already paid more than $3 billion into the fund for San Onofre. It’s estimated that decommissioning Units 2 and 3 will cost $3.7 billion.
CPUC Commissioner Tim Simon, a former securities and banking industry attorney, suggested lifting limits on the way the money in the fund is invested, in hopes of earning a higher rate of return.
But ratepayer advocate Matt Freedman, with The Utility Reform Network, or TURN, is skeptical. The plant’s license expires in 10 years, he said, and the future of Unit 3 is in doubt, so this may not be in the public interest.
“It‘s a maxim of retirement planning that as you get closer to your own personal retirement, your investments get more conservative,” Freedman said, “not more risky. But in this case, Commissioner Simon is suggesting that as these units near their retirement, that we should begin to invest more of the money in very risky investments.”
Freedman said the proposal on the table appears designed to benefit investment managers who would charge higher fees for new categories of investments. He said without a lot of time to ride out market fluctuations, ratepayers could be left on the hook for any depletion of the fund caused by market drops.
San Diego ratepayers are currently contributing $8 million a year into San Onofre’s decommissioning fund. SDG&E has responded to the proposal, saying greater investment flexibility could be helpful, though fees would be higher.
Freedman said the Public Utilities Commission will vote on the proposal before changes are approved.
