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Group shut out of San Onofre funds

Santa Barbara alliance says it spent $425,000 advocating for public

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A Santa Barbara nonprofit group is criticizing the California Public Utilities Commission for rejecting its application for public-advocacy funds related to its work on the failure of the San Onofre nuclear plant.

The commission awards so-called intervenor funds to groups whose work benefits the public in utility matters.

The World Business Academy, an energy sector think tank, sought more than $425,000 for contributions to the decision last year that settled costs related to the premature closure of the plant on San Diego County’s north coast.

The deal calls for customers of plant owners Southern California Edison and San Diego Gas & Electric to pick up 70 percent of the $4.7 billion in estimated costs related to the January 2012 closure.

Commissioners declined the World Business Academy request last Thursday, the same day they agreed to pay another nonprofit group almost $290,000 for similar work.

“It’s clear to me that what happened is a gross miscarriage of justice,” said Rinaldo Brutoco, founder and president of the advocacy group and think tank. “We expended every penny of that money after we were approved as intervenors.”

In its 33-page application, the World Business Academy said it “assisted the commission in developing a full record necessary to assess the reasonableness of 2012 expenses charged to ratepayers.”

Also, the academy “made significant contributions throughout this proceeding, many of which were incorporated into the final settlement agreement,” stated the application, which cited almost 1,200 hours of legal work and expert testimony.

According to the commission, the academy application was rejected in part because it is not a direct customer of either Edison or SDG&E. Instead, its utility costs are built into its monthly rental payments.

“The participant must be an actual utility customer who represents more than the participant’s own self-interest; a self-appointed representative,” wrote Karen Clopton, the commission’s chief administrative law judge. “WBA does not receive an electric bill in WBA’s name.”

The commission’s intervenor compensation program is designed to promote alternate perspectives and information beyond that provided by utilities when they apply for rate increases.

The money is awarded to groups and individuals once they are approved as intervenors and deemed to have contributed significantly to the debate over any particular commission proceeding. The cost of the claims is passed on to customers of the companies, on the theory that the advocacy group’s work saved customers more money by participating.

The Utility Reform Network, or TURN, last week was awarded $289,794 for its work on the San Onofre case, even though the group subsequently said the settlement deal should be scrapped. TURN accepted the funds without reservation, saying the payment was consistent with the commission’s longstanding practices.

“Most of TURN’s work involved litigating the facts and law in two separate phases with the remainder related to the settlement process,” Executive Director Mark Toney said in a statement. “TURN continues to urge the commission to set aside the settlement.”

TURN withdrew its support for the San Onofre agreement in June, four months after Edison disclosed two years late that one of its executives held an undisclosed meeting with former Commission President Michael Peevey in Warsaw, Poland, to sketch out a framework for the settlement.

Much of the World Business Academy’s criticism of the commission’s decision on its funding request is based on a 2013 finding from commission Judge Melanie Darling, who determined then that the group was eligible to participate in the proceeding as an intervenor.

“These documents are responsive to my request for additional information and establish that WBA is a customer of SCE and that participation in the proceeding could result in a significant financial hardship for WBA,” Darling wrote to the academy lawyer.

Critics say the intervenor compensation program is flawed because it requires participants to invest time and money contributing to a case without any assurance they will get repaid. It also allows regulators to reward groups that support outcomes they prefer, the critics say.

According to commission records, TURN has received approximately 45 percent of all such compensation awarded since 2013.

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The World Business Academy is not a routine recipient of intervenor compensation. Available commission records dating back to January 2013 show no funds awarded to the group during that time period.

Brutoco declined to say what he would do in response to the funding denial.

In a commission filing, he stated he has loaned or donated almost $1.5 million to the academy in the past four years. The nonprofit offers memberships on its website for $300 a month and associate memberships for $25 a month.

In all, six groups applied to the commission for intervenor compensation in the San Onofre case. TURN is the only group to be approved to date. Requests are pending from Womens Energy Matters, Alliance for Nuclear Responsibility, Friends of the Earth and National Asian American Coalition.

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