California Regulators To Examine Customer Payments For Disabled San Onofre

Thursday, October 25, 2012
By Amita Sharmaand City News Service

California regulators opened an inquiry today into whether customers should pay for the $54 million-monthly bill to operate the crippled San Onofre nuclear power plant.

Regulators acted nearly 10 months after the plant was shut down following a tiny radiation leak in a faulty steam generator.

California Public Utilities Commissioner Mike Florio tried to assure a packed hearing that regulators will keep their core job -- to provide safe and reliable service at just and reasonable rates -- foremost in their minds during the investigation.

“We commit to stay vigilant throughout this proceeding to protect SCE and SDG&E customers," Florio said.

The five commissioners’ unanimous decision to launch the probe followed 90 minutes of comments from the public. Former California Energy Commissioner John Geesman told regulators this issue went beyond protecting the public from further costs at San Onofre. He said it’s a matter of holding the plant’s majority owner Southern California Edison accountable for installing defective equipment. He singled out Edison's chairman Ted Craver and its president Ron Litzinger.

“We pay Ted Craver $10.8 million and Ronald Litzinger $2.9 million to avoid the very type of mess that we’re experiencing at San Onfore," Geesman said. "Why should the customers continue to pick up the tab for their failures? Our system depends on you doing your job in order to get accountability out of Mr. Craver and Mr. Litzinger. Godspeed."

The CPUC, which provides state oversight of the nuclear power plant, voted 5-0 at the meeting in Irvine to initiate the investigation. It's not clear how long the investigation would take.

"The CPUC 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 effect,'' commission President Michael R. Peevey said.

"This investigation will allow us to address issues related to the outages as part of our responsibility to keep the lights on and keep rates just and reasonable. We will look very critically at the utilities' financial responsibility for the prolonged outage and who should bear those costs.''

The commission will consider whether customers of Southern California Edison and San Diego Gas & Electric should continue paying rates for San Onofre and if they are owed a refund dating back to Jan. 1 of this year.

The commission also will investigate what caused the outages, how the utilities responded to the problem that led to the shutdown, and the future safety and reliability of the nuclear power plant, as well as explore if there is insurance or warranty coverage of the losses associated with the shutdown of Units 2 and 3.

The investigation additionally will consider the cost of repairing or replacing one or both Units 2 and 3.

Edison officials said they would see if warranties and insurance can recover the expenses associated with the outages.

In a written statement, Litzinger said “SCE is committed to ensuring the safety and security of critical generation assets such as San Onofre. Reliable baseload generation in Southern California is something we need now and in the future.”

The company says it will continue to look to warranties and insurance to recover costs. The plant’s annual expenses come to $650 million.

The plant near the Orange County line has been offline since the end of January, when a leak was discovered in one of the two reactors' two steam-generating tubes. The other unit already was shut down for planned maintenance and has been offline since then.

A subsequent investigation found unusual wear in many of the tubes in both shuttered reactors.

Edison is seeking permission from the Nuclear Regulatory Commission to restart one of its shuttered reactors on a trial basis. A group called Friends of the Earth is opposed to the restart plan, questioning whether the plant is safe for the environment and residents living in its vicinity.

On Sunday, a hydrogen leak was detected in a pipe in a non-nuclear area of the plant but it was small and presented no health risk to employees or the public, according to Edison.

Though Edison is the plant's main operator, San Diego Gas & Electric owns a 20-percent share and receives one-fifth of its power.