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Edison May Have Violated Securities Laws On San Onofre, Congressman Says

A congressman suggested today that Southern California Edison may have violated federal securities laws by withholding from investors information on steam generators at the idled San Onofre Nuclear Generating Station in northern San Diego County.

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The San Onofre Nuclear Generating Station is seen from the beach along San Onofre State Beach on March 15, 2012 south of San Clemente, California.

Rep. Edward Markey, D-Mass., raised the allegations in a letter to Elisse Walter, chairwoman of the Securities and Exchange Commission.

Markey said Edison's prior knowledge of design flaws in steam generators installed in 2009 and 2010 and decision "against making recommended safety modifications'' was a material fact that should have been disclosed to investors. Withholding a material fact is a violation of the Securities Act of 1933, according to the congressman.

A document discovered about two weeks ago shows the utility was aware before installation of problems in the equipment manufactured by Mitsubishi Heavy Industries of Japan, Markey said. Edison denies the allegation.

"Investors presumably want to know whether a company is choosing not to implement additional safety protocols because such actions might require a nuclear reactor to go through a more strenuous licensing process,'' Markey wrote. "Such choices could be evidence of poor management or even possible future civil liability.''

A small leak was discovered in a steam pressure tube in one of the reactors in January last year, and the unit was shut down with no one being hurt. The other unit was undergoing scheduled maintenance at the time.

Neither has been restarted.

SCE wants to restart the reactor that was undergoing maintenance and is awaiting clearance from the Nuclear Regulatory Commission. A decision is possible as soon as the end of April.

Opponents of SCE's restart plans want the NRC to put the utility through a rigorous license amendment process.

Markey did not explicitly ask for an SEC investigation of Edison, but he asked Walter to respond by March 15 with information on the penalties that can be levied on companies that violate the Securities Act and whether the SEC has ever investigated an energy company for failing to disclose safety issues.

In a statement to City News Service, Edison said allegations that it knew of serious problems with the generators before they were installed were "simply not accurate.''

"Edison International has been open and transparent about the San Onofre Nuclear Generating Station outage and inspection, NRC and California Public Utilities Commission processes and contractual matters,'' the statement said. "SCE would never, and did not, install steam generators that it believed would not perform safely.''

SCE said it sought improve safety and performance in the new steam generators.

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