Regulators Open San Onofre Cost Case

By Published On: January 11, 2013

Nearly a year after the San Onofre Nuclear Generating Station’s shut down, state regulators held the first hearing Jan. 8 on whether electricity customers should keep paying for the power plant. Southern California Edison estimated in testimony to the commission that its revenue requirement for San Onofre last year was $739 million. Part-owner San Diego Gas & Electric told regulators that its share of the cost to ratepayers was $253 million, according to the Division of Ratepayer Advocates. Added to that nearly $1 billion is the purchased power required for substitution and the cost of keeping expensive supporting power plants on line, like Huntington Beach, according to The Utility Reform Network attorney Matt Freedman. He noted wrap-up costs for last year won’t be available until February. While this week’s hearing was ministerial, a contingent of consumer and environmental activists used the event to call for a permanent shut down of the plant and customer financial absolution. “The issue is not just the hundreds of millions of dollars squandered on badly designed equipment or the money Edison has spent trying to reopen the plant,” S. David Freeman, Friends of the Earth senior advisor, stated. “What will be decided is the long-term cost-effectiveness of the plant--does it make economic sense to operate it?” Edison “will continue to look to warranties and insurance to recover costs associated with the current outages. But, as with all regulated utilities, costs associated with the outage will be reviewed by the CPUC to determine if the costs were reasonably incurred,” the utility stated after the hearing. San Onofre unit 3 was shut down Jan. 31, 2012. It’s nearly new steam generators exhibited excessive wear and caused a radioactive leak. Unit 2 was shut down at the time for maintenance and was never restarted. Its steam generators also showed undue wear upon inspection. The 2,200 MW plant has been out of service ever since. Edison, which owns 78 percent of the plant, with San Diego Gas & Electric responsible for 20 percent, applied to federal regulators in October 2012 to restart Unit 2 at 70 percent power for five months. After that time, Edison and the Nuclear Regulatory Commission would review steam generator operations for safety. Edison maintains, “Should San Onofre remain offline beyond 2014, [it] would need to consider a combination of generation resources and/or transmission, including new lines in Los Angeles and Orange Counties.” Federal regulators have yet to approve the trial start up. On Dec. 26, 2012, commission staff requested further engineering information from the utility. Another meeting on the issue at the federal commission is set for Jan. 11. In related news, federal regulators denied one consumer group’s attempt to get a full evidentiary hearing in retrospect on the steam generators’ installation, while another environmental group’s request for a full hearing on less technical grounds remains in play. A division of the federal commission--the Atomic Safety & Licensing Board--denied a hearing request by Citizens Oversight Dec. 21, 2012. In general, Citizens requested a full “license amendment” hearing on San Onofre’s steam generators for a change in technical specifications for radiation surveillance frequencies. A broader request by Friends of the Earth appears to be getting more traction among federal regulators. A federal meeting is set to review environmentalists’ request Jan 16.

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