SONGS Reactor Stays Docked as $6 Billion Decommissioning Pot Grows

In yet another unanticipated snag, Southern California Edison is facing an additional delay in its effort to send the reactor vessel from its first nuclear power plant to a final resting place in Barnwell, South Carolina. The company had planned to ship the encased reactor vessel around the tip of South America this fall, but now the U.S. Department of Transportation has raised safety concerns, and the State Department is examining whether the shipment could create a diplomatic crisis. The departments? objections are only the latest in a complicated and uncertain path the utility is blazing along a decommissioning trail on which California ratepayers will spend nearly $6 billion. Decommissioning?the process of dismantling and burying radioactive power plant parts and spent fuel?is well along at Edison?s San Onofre Nuclear Generating Station (SONGS) Unit 1 and has begun in earnest at another reactor in California. Not surprisingly, work at SONGS has not gone exactly as planned in an endeavor that is still relatively novel in human history. The cost estimate for decommissioning has ballooned for Edison and others operating nuclear plants, said Scott Fielder, an attorney who has represented environmental groups on decommissioning issues before the California Public Utilities Commission. California ratepayers, according to state regulators, will pay an estimated $5.9 billion for the cost of decommissioning nine nuclear reactors owned by the state?s major utilities. ?As a percentage of your bill it?s not very much,? said Truman Burns, regulatory analyst for the state?s Office of Ratepayer Advocates. ?But it?s a lot of money.? Edison is now on its third attempt to move the SONGS Unit 1 contaminated reactor vessel to one of the nation?s scarce low-level radioactive waste disposal facilities. Originally, the company planned to ship the 770-ton vessel by rail to Houston, Texas, and then send it by barge to South Carolina. Aside from the liability concern, the railroads would not take the large and heavy vessel because the maximum speed of the rail car would be 15 miles per hour on the 1,600-mile journey. An alternative plan, which also did not come to fruition, was to ship the vessel through the Panama Canal, but Edison learned that it exceeded Panama?s weight limit for radioactive packages. That left the utility with Plan C?which suddenly became uncertain. Edison has packed up the old reactor vessel at the plant and was due to ship it any day, according to Blair Spitzberg, chief of the fuel cycle and decommissioning branch of the Nuclear Regulatory Commission (NRC). It was to be loaded onto a barge at the south end of Camp Pendleton in San Diego County and towed around Cape Horn, where pirates and other sailors who survived the dangerous passage once earned their earrings. One tugboat would pull the loaded barge while an accompanying tug darted in and out of ports along the way to pick up fuel and other supplies so the radioactive cargo will never have to enter a harbor on its voyage. In all, Edison is set to pay some 30 contractors a total of up to $15 million to execute the three-month shipment. Edison?s snafus in shipping the reactor vessel illustrate uncertainties in decommissioning that can drive up costs, say nuclear watchdogs. On October 17, the Department of Transportation wrote to Edison about a number of safety issues involved in the planned shipment, said SONGS spokesperson Ray Golden. Edison has responded to those concerns and is expecting to receive the department?s approval for the voyage sometime soon. Edison is also placing spent fuel from Unit 1 in dry casks for long-term storage on-site until a permanent repository is opened, Spitzberg said. The CPUC estimates that by the end of the year, Edison will have spent some $200 million on decommissioning. On Humboldt Bay, where Pacific Gas & Electric brought one of the nation?s early commercial nuclear reactors on line in 1962, the initial estimate?decades ago?for decommissioning the plant was $500,000, said Fielder. Today, the CPUC estimates it will cost $300 million once work begins in 2006. In addition, the CPUC acknowledges that PG&E is spending more than $8 million a year to maintain the plant in safe storage mode. The plant originally cost $24.2 million to build, according to the commission. The utilities place money collected from ratepayers for decommissioning into trust funds. Traditionally, they held all the money in safe instruments, such as bonds, but regulatory changes a few years ago allowed them to place half of it into stocks. ?We saw the values of the trust funds drop because of the drop in equities,? said Burns. ?But they have returned.? The CPUC monitors the trust funds in conjunction with its triennial reviews of utility decommissioning costs, collections, and expenditures, which it completed last month for PG&E, San Diego Gas & Electric, and Edison. On November 13, the commission will consider amending the San Diego utility?s decommissioning trust fund agreements to bring them into conformance with new federal rules that require utilities to provide the NRC 30 days? notice before funds are withdrawn for anything other than decommissioning expenses. Aside from uncertainties about how well the funds will fare in financial markets, there are a number of other unknowns that could drive costs up, according to Fielder, who has represented the Surfrider Foundation and Redwood Alliance on decommissioning issues. Key among them is the cost of low-level waste disposal. ?No state really wants to have that stuff buried in their backyard,? he said, noting that the estimate of $200 per cubic foot that the commission used in its most recent decommissioning cost calculations is likely inadequate. PG&E estimates, for instance, that it will cost $404 per cubic foot. Also upping the ante are how long utilities will have to manage spent fuel on-site before a permanent high-level nuclear waste repository is opened and any future liabilities for both on- and off-site contamination at nuclear plants, according to Paul Gunter, director of the reactor watchdog project for the Nuclear Information and Resource Service. Meanwhile, depending on cost estimates, the number of ratepayers in utility territories, and the amount historically contributed to trust funds, customer payments for decommissioning vary significantly across the state. Sacramento Municipal Utility District (SMUD) customers will pay the most. Decommissioning SMUD?s Rancho Seco nuclear plant, which local voters closed by initiative in 1989, will cost a total of about $524 million, or an average of about $1,164 for each of the district?s 450,000 customers, according to Dace Udris, a spokesperson for SMUD. The average SMUD customer pays about $60 a year toward decommissioning. On the low end of the range is PG&E with 4.8 million customers, where decommissioning costs are estimated to average about $354 per customer. SDG&E?s 1.3 million customers will pay an average of about $434 and Edison?s 4.5 million customers an average of about $613, according to regulatory data. Annual costs per customer at this time are relatively low in these utility areas because they have accumulated significant decommissioning trust funds. ?The costs of doing the work have been going up,? said Burns. However, the magnitude of unknown costs planned for as contingencies has been reduced as the industry has learned more about what is involved in decommissioning, he added. SONGS, where Unit 1 was shut in 1992, has produced a considerable amount of information about decommissioning. SDG&E, which owns 20 percent of the plant, and Edison, which has the remaining ownership share, will pay some $622 million to complete the work at SONGS 1. Under the CPUC action last month, SDG&E customers will pay a total of about $6.7 million a year and Edison customers $32.8 million a year over the next three years toward decommissioning costs. In total, SONGS 2 and 3 costs are estimated at $2.2 billion when the reactors close in 2022. Edison customers also will pay for the utility?s estimated $503 million share of decommissioning the three Palo Verde reactors in Arizona, slated to close between 2024 and 2027. With their combined ownership share of 12 percent, the Los Angeles Department of Water & Power and the Southern California Public Power Authority can be expected to contribute some $400 million in decommissioning costs. PG&E shut down its Humboldt reactor in 1976 and placed it in safe storage. The company plans to begin decommissioning work in 2006 at an estimated cost of $300 million. Contributions to fund decommissioning work at the company?s Diablo Canyon 1 and 2 units?for which operating licenses are set to expire in 2021 and 2025, respectively?already are adequate to cover the estimated decommissioning cost of about $1.4 billion, according to the commission.

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SONGS Reactor Stays Docked as $6 Billion Decommissioning Pot Grows

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