SDG&E & Edison Notch Up Nuke Rift

By Published On: August 13, 2005

If the California Public Utilities Commission decides against requiring Southern California Edison to buy out San Diego Gas & Electric’s 20 percent interest in the San Onofre Nuclear Generating Station, then SDG&E requests that its tab for Edison’s management of SONGS be reined in. The nuclear ownership issue is now a subject in two pending cases. The buyout is in the case considering investments in new steam generators for the nuclear plant?with a decision overdue. The cost-containment matter is in Edison’s general rate case, with testimony delivered after <i>Circuit</i> press time. The general rate case tiff and SDG&E’s request to be released from its ownership in the nuclear steam generator replacement investment case highlight the growing tensions over the cost of San Onofre borne by SDG&E ratepayers. Until last year, SDG&E let Edison lead the legal and regulatory way in nuclear plant proceedings. San Diego supported Edison’s lead and rode its coattails in nuclear ratemaking. Since the beginning of last year, however, SDG&E has challenged Edison, declining to support the utility’s plan to invest $680 million in new steam generators. At press time, SDG&E expected to file more details in its fallback plan to force Edison into a cost-control mechanism in Edison’s general rate case. Using the general rate case venue is basically San Diego’s “plan B” if the commission fails to require Edison to buy out its share of the plant in the steam generator investment case. “The cost has gone up dramatically” to run SONGS, said SDG&E counsel James Walsh. SDG&E claims that Edison is unable to forecast and control costs without financial motivation. Edison rejects that stance but did not give details as to why. Its official response in the general rate case is a move to strike any reference to the potential buyout of SDG&E’s portion of the nuclear plant?and its subsequent proposal to buy 430 MW of the plant’s output through a power-purchase agreement. Edison claims that invoking the buyout in the general rate case is adding excess baggage. The “commission review of this issue in [the general rate case] is a waste of commission time and resources,” Edison states. The two utilities have completed arbitration without resolving the matter, according to Walsh. SDG&E Faults Accounting for SONGS In a third case related to the San Onofre Nuclear Generating Station, San Diego Gas & Electric accuses the California Public Utilities Commission of overcharging it for its stake in the nuclear plant. San Diego, in a rehearing at the commission on SDG&E’s cost of service rate case, asserts that Edison’s charges for 2004 and 2005 are overstated by $9 million each year because of regulatory accounting errors. There was a “serious miscalculation,” claimed SDG&E attorney Glen Sullivan. The overcharge, he said, was made after litigating Edison’s general rate case. When the accounting for the nuke was entered in 2004, SDG&E claimed that there were discrepancies. According to Sullivan, Edison is charging more than the authorized amount. In July 22 testimony, SDG&E stated that the commission is using the wrong model and estimating contract costs rather than providing exact numbers for expenditures. Edison did not file opposition to the rehearing. However, administrative law judge Doug Long insisted last month that SDG&E justify its numbers to the commission. According to Sullivan, the alleged cost-sharing error is not directly related to the context of the larger issue of SDG&E wanting to extricate itself from its nuclear ownership and responsibility.

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