Edison May Permanently Shut San Onofre Nuclear Plant

Edison International, owner of California’s second-largest electric utility, may decide this year to permanently shut one or both units at its San Onofre nuclear power plant in Southern California if it isn’t able to resume operating Unit 2.

The company doesn’t see nuclear regulators issuing a decision by June 1 on restarting Unit 2, as it requested, according to a filing with the U.S. Securities and Exchange Commission today.

“Without a restart of Unit 2, a decision to retire one or both units would likely be made before year-end 2013,” Edison Chief Executive Officer Ted Craver said today during a conference call with investors. Edison, based in Rosemead, California, has spent $553 million on the plant, which has been shut since January 2012 because of damaged steam generators.

Managing California’s power grid will be “difficult” this summer with the San Onofre plant shut, low hydroelectric output and two natural gas-fired units in Southern California out of commission, the state’s grid operator said last month.

Edison has sought permission from the U.S. Nuclear Regulatory Commission to restart Unit 2 at reduced capacity to avoid shaking damaged pipes. Costs for repairs and inspections at San Onofre, located 60 miles (97 kilometers) south of Los Angeles, climbed to $109 million and replacement power expenses rose to $444 million through March 31, Edison said in an investor slide presentation today.

Public Hearings

Environmental groups and Senator Barbara Boxer, a California Democrat, have called for public hearings on Edison’s restart plan before the reactor comes back online. Those efforts may delay an NRC decision on Unit 2, Craver said.

State regulators opened a probe last year to decide whether Edison can cover the costs of its reactors, which produce about 2,200 megawatts of electricity. The steam generators were supplied by Tokyo-based Mitsubishi Heavy Industries Ltd.

Edison faces uncertainty in recovering expenses related to the nuclear shutdown, Craver said. “Effectively, we are underwriting the costs here,” he said. “There is just a general limit of how much we can continue to rack up these costs without certainty of recovery.”

Edison said today first-quarter income was $271 million, or 83 cents a share, nearly triple from the same period a year ago. The company said earnings excluding its Edison Mission unit were 77 cents a share, 11 cents higher than the average estimate of 14 analysts compiled by Bloomberg.

PG&E Corp., based in San Francisco, owns California’s largest electric utility.