MITSUBISHI HEAVY STATEMENT ON EDISON’S COST CLAIMS
(The following is a reformatted version of a press release issued by Mitsubishi Heavy and received via electronic mail. The release was confirmed by the sender.)
June 12, 2013
Concerning the Recent Announcement by Southern California Edison for its Plans to Retire San Onofre Nuclear Generating Station
On June 7, 2013, Southern California Edison (SCE) announced its decision to permanently retire Units 2 and 3 of its San Onofre Nuclear Generating Station (SONGS). As explained by SCE in the press release announcing the units’ retirement, its permanent shutdown decision was driven by regulatory concerns involving the Nuclear Regulatory Commission (NRC) and associated economic impacts such as the costs of replacement power and maintaining SONGS in a state of readiness to restart.
SONGS Units 2 and 3 have been off line since January 2012, when SONGS Unit 3 experienced primary to secondary leakage of reactor coolant in one steam generator. The direct cause of the leakage was determined to be tube-to-tube contact wear in the U-bend region of the steam generator. The kind of wear that occurred had never been observed in any steam generator of the U-bend type.
The SONGS steam generators were designed and manufactured in accordance with well established and accepted codes and standards along with our own knowledge and experience plus that of outside experts.
Since the tube wear of the steam generator at Unit 3 was first detected, Mitsubishi Heavy Industries, LTD. and Mitsubishi Nuclear Energy Systems (Mitsubishi) have worked closely with SCE to analyze technical issues necessary to safely restart SONGS Unit 2 and 3 and Mitsubishi has developed a repair plan which is practical and effective.
Additionally, the other steam generators that Mitsubishi has designed and manufactured in Japan and other countries have featured significantly different heat transfer surface area and weight and have operated safely for decades. None of them have experienced similar tube wear as that which occurred at SONGS. Therefore, Mitsubishi is confident that similar tube wear will not occur at any of those steam generators.
Mitsubishi’s liability to SCE is limited by the contractual provisions to which the two parties agreed, as SCE has discussed in its filings with the U.S. Securities and Exchange Commission, and includes an overall limitation of liability (approximately $137 U.S. million) as well as a preclusion of consequential damages, including the cost of replacement power.
Mitsubishi will continue to work with SCE, the NRC and others in the industry to share data and lessons learned from this experience. The top priority of Mitsubishi is, and always has been, the safe and reliable operation of all the plants and components it designs, engineers, supplies and supports.
For your information, at this moment, Mitsubishi does not expect there to be an impact by this SONGS shutdown on our results of operation considering the said limitation of liability and our belief that Mitsubishi has fulfilled its obligations under the contract. If there are any new matters which require disclosures, Mitsubishi will update the information promptly.