California Probes Shutdown of Edison Nuclear Plant

The California Public Utilities Commission voted to open an investigation into the causes and costs of the shutdown of Edison International (EIX)’s San Onofre nuclear power plant in Southern California.

The commission voted 5-0 today to determine if customers should be charged for repairs and other expenses related to San Onofre, which has been shut since January after investigators found unusual wear on steam generator tubes. The commission will also determine the cost-effectiveness of repairing or replacing the generators.

The regulator “realizes the importance of the San Onofre nuclear plant to the state of California and the consequences of the problems with the plant for ratepayers and for all affected,” Michael R. Peevey, president of the commission, said in an e-mailed statement. “We will look very critically at the utilities’ financial responsibility for the prolonged outage and who should bear those costs.”

Without the nuclear plant, reliable power for San Diego and Los Angeles “is at risk” when demand is high, Neil Millar, an executive director of the California Independent System Operator, said in March. The shutdown has cost Rosemead, California-based Edison $165 million in inspection, repair and replacement power expenses through June 30, according to a July presentation to investors.

The U.S. Nuclear Regulatory Commission has determined that faulty computer modeling and manufacturing issues contributed to tube wear at the plant, located about 60 miles (97 kilometers) south of Los Angeles.

Restart Plan

Edison, which owns 78.2 percent of San Onofre and operates the plant, needs permission from federal regulators to resume power output from the two units, capable of generating 2,200 megawatts of electricity. The company proposed on Oct. 4 to run Unit 2 at reduced power for five months, while Unit 3 remains shut for further study.

Damage is more extensive at its Unit 3 reactor, where a pipe ruptured and released trace amounts of radioactive steam in January.

Sempra Energy (SRE) owns 20 percent of the plant and the city of Riverside, California, owns the remaining 1.8 percent.

Mitsubishi Heavy Industries Ltd. (7011) built the steam generators, which were installed in Unit 2 in January 2010 and Unit 3 in January 2011 at a cost of $671 million. Steam generators are massive radiator-like assemblies that transfer heat from the reactor to power-generating turbines.

Larry Agran, a council member for Irvine, California, said he supports the “safe, timely retirement” of San Onofre. “The people of Southern California are justifiably worried,” Agran said.

To contact the reporter on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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