San Diego Gas & Electric dropped a lawsuit against Southern California Edison after Edison agreed to declare an ?operating impairment? at the San Onofre Nuclear Generating Station (SONGS). The accord apparently gets SDG&E off the hook for an $800 million steam replacement project Edison is pushing for SONGS, leaving unanswered who will pick up the tab for the overhaul at the 2,150 MW nuclear facility if the California Public Utilities Commission gives Edison approval. SDG&E on June 22 withdrew a lawsuit filed in San Diego Superior Court seeking an operating impairment on grounds that SONGS steam generators have eroded prematurely. Once Edison agreed to this designation, a legal challenge was no longer needed, according to Peter Hidalgo, SDG&E spokesperson. This agreement with Edison means SDG&E doesn?t need to invest in SONGS, ?and we don?t intend to pay,? Hidalgo said. In exchange for extricating itself from the investment, SDG&E said it is willing to reduce ownership shares from the current level of 20 percent to no less than 13 to 15 percent. Edison maintains a 75 percent interest in SONGS, and municipal utilities own the rest. ?It is too early to tell? what the financial impact on Edison customers will be if SDG&E doesn?t participate in the project, said Gil Alexander, Edison spokesperson. The utility maintains that without the new steam generators, the nuclear facility could deteriorate as early as 2009. The commission is currently considering whether new investments in the aging nuclear facility are worth the financial risk. Nuclear opponents are also trying to raise the question of continued operational risk to public health and the environment. In a footnote to its June 25 letter to the commission, Edison warned it has the right to halt the project under the operating agreement if it doesn?t get ?sufficient commission approval.?