Regulators Open San Onofre Investigation

By Published On: October 26, 2012

The enormity of a possible permanent shutdown of the 2,100 MW San Onofre Nuclear Generating Station--in electrons, grid support, and cost--hit the California Public Utilities Commission Oct. 25. In response, it voted to investigate whether the public should continue to spend $65 million/year on the closed facility, as well as put the management of the plant under a regulatory microscope. Opening the investigation will “bring clarity,” commissioner Tim Simon said. In a meeting held in Irvine--within driving distance of the San Onofre facility--regulators heard from many business representatives who endorsed a restart for both reliability and a potential price consideration. Some called it “affordable and safe” energy. Another contingent argued both for permanent shutdown and decommissioning. One characterized it as a move to “cut our losses.” Included in the investigation is a review of the reasonableness of investing $670 million in steam generators for the plant--which were found defective. It also is to consider whether the plant should stay in ratebase, or whether it is no longer considered “used and useful” and thus its cost no longer included in ratepayer utility bills. This is an unusual case for implementing the commission “used and useful” doctrine because two of the major owners of the plant--Southern California Edison and San Diego Gas & Electric--have their triennial general rate cases pending before regulators. Because of those pending cases, commissioner Mike Florio said that any rate adjustments found to apply after the investigation could be retroactive as rate increases have yet to be finally approved. Florio, the commissioner in charge of the investigation, noted that the plant “possibly may never be safe or economical to return to service.” The mounting costs of the offline facility include $800 million in fixed costs in ratebase and $300 million in operations and maintenance. There’s another $46 million in spending on seismic studies set to begin at the end of the year, as well as the ongoing cost of replacement power and voltage support.

Share this story

Not a member yet?

Subscribe Now