Contact: Eben Burnham-Snyder, Rep. Ed Markey, 202-225-2836
Company May Have Failed to Fully Inform Investors about Design Issues, Rejected Safety Fixes, Attempted to Avoid New License Requirements
WASHINGTON (February 21, 2013) – Rep. Ed Markey (D-Mass.) today raised the possibility that the utility in charge of the San Onofre nuclear power plant in southern California may have violated federal securities laws by failing to publicly report safety information to investors.
According to a letter sent by Rep. Markey to Securities and Exchange Commission head Elisse Walter, the lawmaker says investors do not appear to have been fully and accurately informed of design flaws found by Southern California Edison and Mitsubishi in advance of the replacement of parts of the plant, and that SoCal Edison decided to reject recommended safety modifications for fear that they would be required to undertake a new license process before the parts could be installed. SoCal Edison is the operator of the plant and hired Mitsubishi as a contractor.
The plant’s two nuclear reactors have been shuttered since January 2012 because of unusual amounts of wear found in tubes in the replaced steam generators. In his letter to the SEC, Rep. Markey raises the question of whether by hiding potential design flaws in the replacement generators, and omitting that the company reportedly did so to avoid having to apply for an amended license to operate the reactors, SoCal Edison may have violated the Securities Act of 1933. That law says that all “material facts” -- information that an investor would consider important -- must be fully disclosed.
“Investors presumably would want to know whether a company is choosing not to implement additional safety protocols because such actions might require a nuclear reactor to go through a more strenuous licensing process,” writes Rep. Markey, who is the Ranking Member of the Natural Resources Committee. “Such choices could be evidence of poor management or even possible future civil liability.”
The full letter to SEC Acting Chairman Walter is available HERE.
Rep. Markey also asked the SEC what the penalties would be for violations of this law, and whether other enforcement actions have been taken against energy companies for failing to disclose under similar facts and circumstances. Last week, the Nuclear Regulatory Commission confirmed that they are investigating the completeness of information SoCal Edison provided on the replacement of steam generators.
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