SCE White Paper Offers Additional Economic Analysis of Decision to Retire
Mitsubishi’s Steam Generator Repair Options Were Risky, Untested, Costly
ROSEMEAD, Calif. -- November 13, 2013
Southern California Edison (SCE) today released a white paper demonstrating
that its decision in June to permanently shut down the San Onofre Nuclear
Generating Station (SONGS) in light of the failure of the replacement steam
generators supplied by Mitsubishi Heavy Industries (Mitsubishi) was an
appropriate cost-mitigation measure. The white paper is posted on
“Once we decided to shut down SONGS due to the circumstances created by the
failed replacement steam generators, we were able to significantly reduce
costs,” said SCE President Ron Litzinger. “This paper shows that these cost
savings were greater than the benefits that could have been achieved by
continuing to work toward returning SONGS to service, given the uncertainty
about if and when SONGS would have been allowed to restart.”
SCE compares the additional costs it would have incurred to continue to pursue
a restart of San Onofre to the costs that it expects to incur to purchase
power from other sources in the market. SCE’s white paper compares these costs
through 2022, the year that the license to operate San Onofre was set to
“We believe this white paper presents an opportunity to thoroughly answer any
remaining questions about why we shut down the plant when we did and why it
was the best option for customers,” Litzinger said.
While the cost of operating San Onofre was projected to be lower than the cost
of buying power on the market, this benefit would decrease as restart was
delayed. On the other hand, to continue to pursue restart, SCE would have been
required to maintain personnel and systems in place. The longer that restart
was delayed, the more the costs would have increased and the benefits
SCE’s white paper shows that the costs outweigh the benefits if San Onofre had
not restarted in the near future. A near-term restart was unlikely, however,
given the process required to obtain approval from the Nuclear Regulatory
Commission (NRC) before restarting even one of the San Onofre units.
SCE’s white paper also demonstrates that it would not have been prudent to
spend more money to pursue Mitsubishi’s ideas to repair the steam generators
that it had defectively designed. One of Mitsubishi’s ideas was preliminary,
and Mitsubishi failed to demonstrate that this approach was technically viable
or would have been approved by the NRC. Mitsubishi’s other idea was also
preliminary, risky, costly and not economically viable unless the plant could
have restarted promptly.
“SCE had hoped to restart SONGS,” said Litzinger. “But in light of the
significant delays it encountered in obtaining approval for restart, and the
likelihood of additional delays, it no longer made sense to continue spending
money to keep that option open. The economic analysis in this paper shows that
our decision to shut down SONGS was economically prudent.”
In October, SCE filed a Request for Arbitration of the utility’s claims
against Mitsubishi in an attempt to recover all damages caused by Mitsubishi’s
failed replacement steam generator design.
SCE has made public key documents regarding the failure of Mitsubishi’s
replacement steam generators in a Digital Document Library located at
www.SONGScommunity.com/library, although the Digital Library remains
incomplete because of Mitsubishi’s continued refusal to permit other key
documents to be made public.
SCE announced June 7 that it would permanently shut down San Onofre Units 2
and 3, and begin the process to decommission the nuclear plant. For more
information about SCE, follow us on Twitter and Facebook.
About Southern California Edison
An Edison International (NYSE:EIX) company, Southern California Edison is one
of the nation’s largest electric utilities, serving a population of nearly 14
million via 4.9 million customer accounts in a 50,000-square-mile service area
within Central, Coastal and Southern California.
Southern California Edison
Media Contact: Maureen Brown, (626) 302-2255
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