San Onofre still charging customers

By Morgan Lee

Originally appearing in UT San Diego State regulators are being asked to significantly reduce charges related to San Onofre from customers' utility bills now that the nuclear plant is being closed permanently.

The motion, filed Tuesday by the Division of Ratepayer Advocates, seeks to shift the costs back to the utility operators while regulators determine who will pick up the tab for the plant's failure -- utility customers or stockholders.

The California Public Utilities Commission has allowed plant operator Southern California Edison and minority owner San Diego Gas & Electric to continue billing customers while efforts were made to salvage the plant's damaged nuclear reactors. On June 7, Edison announced that it intended to close the plant for good, citing mounting expenses and uncertainty that federal safety regulators would approve a restart.

The plant stopped producing power on Jan. 31, 2012, when a leak developed in a steam generator tube carrying radioactive water. Rapid deterioration was discovered among tubes in the plants four recently replaced steam generators -- massive heat exchangers that were replaced starting in 2009.

The ratepayers division wants a large share of San Onofre-related annual revenues, which total more than $700 million, to be immediately removed from utility bills, with the exception of funding for essential safety and security. Revenues for plant decommissioning and replacement power would still be passed to customers.

The motion seeks to trim revenues associated not only with plant operations and maintenance but also recovery costs for the original steam generator replacement project.

"Charging ratepayers expenses for a non-operational plant is so clearly unreasonable that failure to remove San Onofre costs from rates immediately would be a violation" of the public utilities code, the motion states.

Mark Pocta, program manager at the Division of Ratepayer Advocates, said Edison already announced plans for a second-quarter write down on its plant investment -- meaning the plant owners should not be allowed to keep collecting the same profit returns from customers.

Edison Spokesman Maureen Brown called the motion premature and said San Onofre rates dating back to January 2012 have been marked by the utilities commission as "subject to refund."

Edison, she said, "acted reasonably and looks forward to demonstrating this fact in the evidentiary hearings."

Southern California utility customers are being billed more than $120 million a year for the faulty generators, with Edison and SDG&E seeking final authorization for the $768.5 million project.

Edison has laid the blame for generator design and construction flaws at the feet of manufacturer Mitsubishi Heavy Industries, and is seeking to recover at least $139 million. It also is seeking insurance recoveries that could defer customer costs.

Investigations are under way at the Nuclear Regulatory Commission into whether Edison provided incomplete or misleading information to regulators and the agency's own conduct.

The utilities commission so far has postponed consideration of responsibilities associated with flawed generators, while examining 2012 costs in the early aftermath of the shutdown.

Edison, SDG&E and a long list of consumer and industry advocacy groups are likely to weigh in on the rate-reduction request, in filings to the utilities commission. The commission may reject the motion, or adopt its suggestions in part or full.

Michael Aguirre, an attorney advocating for SDG&E utility customers, said he would file to support the motion, arguing that further delays in a rate reduction are unfair and illegal.

SDG&E spokesman Stephanie Donovan expects state utilities regulators to seek input before ordering any changes.

"We don’t expect the Public Utilities Commission will make an immediate or unilateral decision," she said in an email.

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San Onofre still charging customers

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