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Ratepayer Protection Coalition intervenes in CPS-NRG lawsuit as utilities play nice

Greg Harman
gharman@sacurrent.com

CPS Energy lied to and manipulated the public and City Council in its rush to consolidate support for the expansion of the South Texas Project nuclear complex outside Bay City. That’s not only the running public narrative these days, but the substance of a fresh legal complaint piled onto the multi-billion CPS-NRG spat this morning by a freshly minted non-profit.

CPS can’t represent the City of San Antonio, argues the Ratepayer Protection Coalition, a collection of familiar faces from the vindicated critics' pool. Not only has CPS “conducted a campaign of misinformation, disinformation, and deception designed to convince the San Antonio community about the merits of pursuing nuclear power” but threatened the City Council “that a decision not to pursue the nuclear project would lead to the loss of hundreds of millions of dollars spent on the project to date by CPS Energy.”

In short, CPS has “dirty hands” and can’t represent the City of San Antonio in court, according to RPC's complaint filed this morning in the 37th District Court, joining the CPS-NRG lawsuit as an intervener.

“We have standing,” said Karen Seal, a local Sierra Club member and one of the architects of the pleading, said today. “They have to do something to take us out.”

Representatives of CPS and its partners in the planned expansion of STP — NRG, NINA, and Toshiba — were scheduled to gather this morning at the Westin Riverwalk Hotel by invitation of San Antonio Mayor Julián Castro, who hoped to broker a peace deal and keep CPS's lawsuit from reaching trial later this month.

CPS is suing NRG, alleging the utility has manipulated CPS’s position in an attempt to gain control of the project by, in part, feeding sensitive information to the media. Interestingly, when CPS Board member Steve Hennigan first made the allegation, Express-News Editor Bob Rivard ridiculed it as a “conspiracy theory.” Now the theory has become the substance of a $32-billion lawsuit between feuding partners. (For more backstory, see “Operation: CPS”)

From the RPC press release:

"Ratepayers are not represented in the legal proceedings between these parties, although they will bear the brunt of a bad settlement deal with higher electric bills," said Orlando Gutierrez, President of the Ratepayer Protection Coalition. "There has been fraud and misrepresentation throughout this process. CPS withheld information and misled the public about the $4 billion cost increase throughout the series of eleven district meetings last year. Project partner NRG admits to misrepresenting costs for purposes of negotiation. Both partners deceived the City Council. Yet neither the Council, taxpayers, or voters have independent representation in the Court."

CPS alleges that NRG misled them about nuclear costs and called them "suckers." CPS failed to disclose the full cost of the nuclear reactors. They were concerned about whether Wall Street would invest in their bonds and whether federal loan guarantees would come through. "The outcome of the case is sure to affect consumers' electric bills. Ratepayers are at risk since hundreds of millions and potentially billions of dollars are involved," said Gutierrez.

"Both parties accused each other of misleading and potentially fraudulent behaviors, so we felt it necessary to intervene in this case. We're seeking discovery information in order to get to the truth and protect the rights of ratepayers, taxpayers and voters. We want the truth about the costs of the proposed nuclear reactors and the energy alternatives," said Karen Seal, attorney for the group. "There has been no independent investigation of this summer's cover up. It's likely that additional substantial information was kept from the public and the council, which could influence their decisions regarding this project."


The RPC has standing in the lawsuit, according to its complaint, because its members are taxpayers and “public funds are to be expended and have been expended on illegal activity.”

According to its court filing, the RPC’s mission is “to use educational and legal means to protect ratepayers residing in and outside of San Antonio from high utility bills, financial waste, fraud, misrepresentation and illegal expenditures; to protect San Antonio taxpayers from high utility bills, financial waste, fraud, misrepresentation and illegal expenditures; and to protect San Antonio voters by ensuring that the process for developing a San Antonio comprehensive energy plan is free from the taint of fraud and misrepresentation.”

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(ADDED 1:07 pm) Meanwhile, talks break down at Mayor's peace summit. Heads of NINA and NRG don't show and CPS interim GM complains: "CPS Energy is ready to honor Mayor Castro’s request and seek a sensible solution out of court,however it appears David Crane of NRG Energy and Steve Winn of NINA aren’t interested or else they would have attended today’s meeting. Instead, they’ve sent their lawyers who thus far have been very uncooperative.  Ignoring Mayor Castro’s invitation indicates Mr. Crane and Mr. Winn are not at all serious about a negotiated settlement.”

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RPC complaint is below:                                                                                                                                                      

Posted by gharman on 1/11/2010 11:35:23 AM
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