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Should Edison Be Allowed To Profit On San Onofre’s Faulty Steam Generators?

Above: The tightly packed steam generator tubes that are at the root of San Onofre's problems

Aired 9/12/13 on KPBS Midday Edition.


Truman Burns, California Public Utility Commission, Division of Ratepayer Advocates

Southern California Edison and San Diego Gas & Electric declined our requests for an interview.


Aired 9/12/13 on KPBS News.

Southern California Edison and San Diego Gas and Electric are asking ratepayers to pick up the investment costs in the generators that failed at San Onofre Nuclear Power Plant. They also want more than five percent return on their investment. The California Public Utility Commission's Division of Ratepayer Advocates said there should be no profit.

San Onofre Nuclear Generating Station may be shutdown for good, but that doesn't mean we're finished paying for it.

CPUC Investigation Phase 2

Testimony from Southern California Edison on ratemaking here.

Testimony from San Diego Gas & Electric on ratemaking here and here.

Testimony from the CPUC Division of Ratepayer Advocates on ratemaking here.

The San Onofre Nuclear Generating Station at San Onofre State Beach in a 2012 photo.

We recently learned that San Onofre owners, Southern California Edison and San Diego Gas and Electric, are asking to pass along the cost of investment in the faulty steam generators -- plus more than five percent return on their investment -- to ratepayers.

The combined amount being sought by the utilities is reportedly more than $3 billion.

The California Public Utilities Commission has been taking testimony on the utilities revenue requests, and they've been hearing a very different opinion about who should pay for the San Onofre breakdown from the CPUC's Division of Ratepayer advocates.

The California Public Utilities Commission will hold public participation hearings on phase two of the investigation in San Diego on Tuesday, Oct. 1 from 2 - 5 p.m. and 6:30 - 9:30 p.m. at the Al Bahr Shriners Building on Kearny Mesa Road.

The Nuclear Regulatory Commission will hold a public meeting on Sept. 26 in Carlsbad. That meeting will focus on the nuclear power reactor decommissioning process.

To view PDF documents, Download Acrobat Reader.


Avatar for user 'marasmom'

marasmom | September 13, 2013 at 6:53 a.m. ― 3 years, 6 months ago

The Coalition to Decommission San Onofre has also served our written Testimony in Phase 2 of the CA PUC's investigation into San Onofre outage and plant costs and who will shoulder how much of them.

Read our Reply Testimony at the following weblink, you will find you enjoy quite a bit of it, amongst all the dry regulatoryese. This sets the stage for our return to CPUC Evidentiary Hearings in S.F. in a month.

"So – SCE is writing down San Onofre Nuclear Generating Station Units 2 and 3 on its books, reports a 43% increase in year-to-date core earnings for 2013 over 2012 – and it can’t voluntarily take this permanently shut-down plant out of the rates paid by captive customers even as of the date it, itself, announced its permanent closure (June 7, 2013), as proposed by the Division of Ratepayer Advocates in its Motion of June 25, 2013? This is the height of hubris by this notoriously hubristic corporation.

Compare the guaranteed return expected by SCE of 5+ % to the current return on other deposits and investments guaranteed by the government:

Daily overnight average for the 1-year CD 0.70%
One-Year Treasury Constant Maturity 0.150
91-day T-bill auction avg disc rate 0.020
182-day T-bill auction avg disc rate 0.035
Two-Year Treasury Constant Maturity 0.47
Five-Year Treasury Constant Maturity 1.76
Ten-Year Treasury Constant Maturity 2.92

Compound this severe inequality between the government-guaranteed returns earned by most captive ratepayers of the two monopoly utility owners of the San Onofre nuclear power plant and those of these utilities’ shareholders with the 50% higher residential electricity rates they pay as captive customers than the two largest municipal utilities in California (L.A. and Sacramento) – and you have a seriously out-of-touch paradigm. "
CDSO Testimony for Phase 2 of CPUC OII on San Onofre.

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Avatar for user 'x76'

x76 | September 13, 2013 at 7:37 a.m. ― 3 years, 6 months ago

No. Edison can eat the cost. They have clever accountants and our tax system is as convoluted as it is in order to accommodate all manner of corporate shenanigans -- I'm sure there's some way to weasel out of any actual loss.

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Avatar for user 'CaptD'

CaptD | September 14, 2013 at 1:01 p.m. ― 3 years, 6 months ago

Ha Ha Ha
Now SCE wants $ 2.4 Billion for their shareholders after taking ratepayers to the cleaners with their faulty in-house designed replacement steam generators that was supposed to save ratepayers a Billion dollars but failed almost as soon as they were installed!

Unit 2 & Unit 3 now have more steam generator tube damage that all the rest of the nuclear fleet combined; but the real reason that San Onofre is being decommissioned is that SCE cannot afford to have the CPUC continue its investigation into the reasonableness of the replacement project because should all the facts be made public, SCE (and minority owners SDG&E 20% and Riverside County 2% ) may be potentially on the hook for 10 to 15 Billion dollars in ratepayer REBATES, and since SCE is a deep pocket they cannot afford to take that risk!

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Avatar for user 'CaptD'

CaptD | September 14, 2013 at 1:02 p.m. ― 3 years, 6 months ago

Uprate's: Big Profits for Utilities & Big Losses for Ratepayers

Uprate's allow more power to be generated which is wonderful for the Utilities bottom line (additional profits from same "old" nuclear power plant (NPP), but it is never mentioned that generating that additional power increases the wear and tear on the NPP, which the ratepayers, not the Utility, have to pay for!

At San Onofre NPP in CA (which is also now being decommissioned), SCE wanted to install new replacement steam generators (RSG's) so they could generate more power and make more profits but their poor in-house design resulted in their RSG's failing soon after being installed! Now ratepayers have pushed the CA Public Utility Commission (CPUC) into demanding an investigation into the reasonableness of all the monies spent in order to determine what amount of money should be rebated to ratepayers. Estimates of total cost of their debacle as 13 billion dollars, yet the Utility is claiming they are not responsible! Note, because the NPP was decommissioned prematurely, there is now a shortage of money to decommission the NPP of about 740 million dollars, since this money is collected from ratepayers while the NPP is in service. So get ready ratepayers in VT, chances are that you will soon be learning that you are going to have to pay for any shortage in decommissioning costs that have not been already collected.

Uprating is only a good deal for the Utilities and their shareholders who do not have to pay for the increased maintenance costs required by the uprate due to higher corrosion rates and fatigue stress, which are just past along to the ratepayers, as part of the NPP's ongoing maintenance. Remember, if additional maintenance is required, the Utility also profits from that "extra" work so there is little incentive to prevent wear and tear, especially when Utility profits are at stake!

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Avatar for user 'CaptD'

CaptD | September 14, 2013 at 1:03 p.m. ― 3 years, 6 months ago

This is just too FUNNY, first SCE promises that their new in-house designed replacement steam generators will save ratepayers over a Billion dollars and then when they fail, almost as soon as they were installed, SCE now thinks we the ratepayers should foot the bill!.

**HA HA HA**

Get ready SCE, because now the ratepayers are going to demand that the CPUC not only make you and your Shareholders cough up the money but also pay for all the additional expenses that are going to be incurred because of your debacle!

Some estimate that bill to be about $13 Billion, so the next CPUC meeting being held in San Diego (imagine that) to discuss rebates will be very interesting.

Notice that SDG&E, a part owner of San Onofre is laying low after informing their ratepayers that everyone's bills will be going up, I wonder why, could it be to reimburse the Utility for the damages they will be force to pay for their part of the San Onofre debacle?

Ratepayers are being suckered by the Utilities and the CPUC that is supposed to regulate them for the public good, instead the Utilities have earned record profits while we the ratepayers are paying the highest rates in the USA thanks to the CPUC and remember,we have enough of sunshine to become an solar energy exporter to the states that need it, which would also jump start our economy with many new GREEN jobs.

The Final Solution?

We the ratepayers need to urge the Governor to re-populate the CPUC with impartial commissioners that will demand that the Utilities start treating us fairly, instead of like the Utilities energy slaves!

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Avatar for user 'CaptD'

CaptD | September 14, 2013 at 1:04 p.m. ― 3 years, 6 months ago

Lets be clear, SCE's replacement steam generator design debacle was responsible for closing down San Onofre, so if you want to ask expertise questions I suggest that you ask SCE, who approved the designs and then used their CA licenses "chop" to sign off on the designs as meeting approved steam generator standards! They are the folks that caused the debacle, so I suggest that you question them, and the other professionals at the NRC that allowed the "like for like" replacement without a through NRC review that include a public review process.

BTW: Good luck finding out, since SCE has redacted its documentation to eliminate their employee's names, to prevent them from being called to testify at the CA Public Utilities Commission (CPUC) investigation that is ongoing!

SCE is just getting started with their CYA media PR Nuclear Baloney* (NB) but no matter because this perfectly clear, they caused the problems trying to make additional profits for their shareholders and now that they got caught they don't want to pay for it, asking the CPUC to pass all costs on to the ratepayers!

SCE has BRASS but their request to the CPUC will not be approved without massive public outcry which is something that the CPUC can not afford at this time since they are already under investigation for coddling the Utilities they are mandated to regulate!


If you read contract documentation* between SCE and MHI you will learn that SCE had final authority over what was being built despite SCE and MHI employees reservations about the replacement steam generator design!

SCE knew about problems: The SCE Letter to MHI Nov. 30, 2004

SCE cannot on one hand be in charge and on the other say that this was MHI's fault (that they built it as designed and accepted by SCE). This is just yet another ploy by SCE to the media to transfer the blame to MHI, when in fact it is nothing buy SCE CYA...


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Avatar for user 'CaptD'

CaptD | September 14, 2013 at 1:05 p.m. ― 3 years, 6 months ago

Here is what Former Japanese PM Kan (1), Gregory Jaczko (2) the Former Chairman of the Nuclear Regulatory Commission and 2 other Nuclear Experts (3) had to say at a June 4, 2013 seminar in San Diego,CA, "Lessons for California" which was based upon what they experienced as the Leaders "in-charge" when 3/11/11 occurred:




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Avatar for user 'CaptD'

CaptD | September 14, 2013 at 1:09 p.m. ― 3 years, 6 months ago

I hope to see every ratepayer in SoCal at the CPUC Oct. 1, 2013 San Diego meeting.

If you can't make it be sure to ask for your rebate:

By phone: 866-849-8390

or by email: />

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Avatar for user 'CaptD'

CaptD | September 14, 2013 at 1:13 p.m. ― 3 years, 6 months ago

Great article:
Flare-up: How the Sun Could Put an End to Nuclear Power
Solar energy may soon eclipse nuclear power – only not in the way we hoped. According to NASA, the planet will soon face an outbreak of powerful solar flares capable of collapsing global power grids. Were this to happen, the world’s nuclear reactors could be left to run wild, overheat, melt, and explode.
The sun’s magnetic cycle peaks every 22 years while sunspot activity crests every 11 years. Both events are set to peak in 2013. Coronal Mass Ejections (CMEs) trigger geomagnetic disturbances (GMDs) – tides of high-energy particles that can disrupt power lines. Since the 1970s, the array of high-voltage transmission lines spanning the US has grown tenfold. NASA warns these interconnected networks can be energized by a solar flare, causing “an avalanche of blackouts carried across continents [that] … could last for weeks to months.” A National Academy of Sciences report estimates a “century-class” solar storm could cause 20 times the damage as Hurricane Katrina while “full recovery could take four to ten years.”

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Avatar for user 'CaptD'

CaptD | September 14, 2013 at 1:13 p.m. ― 3 years, 6 months ago

FACT: A once in a hundred year or even a thousand year event is just as likely to happen tomorrow as many years in the future; then what?

This is where the NRC and the nuclear Industry fails the public trust because they live in Nuclear Denial* because they believe nothing BAD will happen to any Nuclear Power Plants (NPP's).

French Nuclear Disaster Scenario Was So Bad The Government Kept It Secret via @bi_contributors


Catastrophic nuclear accidents, like Chernobyl in 1986 or Fukushima No. 1 in 2011, are, we’re incessantly told, very rare, and their probability of occurring infinitesimal.

But when they do occur, they get costly. So costly that the French government, when it came up with cost estimates for an accident in France, kept them secret.

But now the report was leaked to the French magazine, Le Journal de Dimanche. Turns out, the upper end of the cost spectrum of an accident at the nuclear power plant at Dampierre, in the Department of Loiret in north-central France, amounted to over three times the country’s GDP.


The illogical belief that Nature cannot destroy any land based nuclear reactor, any place anytime 24/7/365!

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Avatar for user 'CaptD'

CaptD | September 14, 2013 at 1:17 p.m. ― 3 years, 6 months ago

Still to be determined is where San Onofre's vast amount of Nuclear waste will be kept once it is relocated! Until that happens all of SoCal is at risk just like Fukushima!

Remember Yucca Mountain is yet another money pit that the nuclear industry will demand that America pour billions into in order to try and justify using it as their place to dump nuclear waste, despite the blue ribbon panel's prior recommendations that it was unsuitable to use.

It is also interesting to note that the current Chairman of the NRC, Dr. Allison Macfarlane who is not only a world class geologist but was also a member of that same blue ribbon panel!

So now the high courts are telling the scientists what to do! Deciding an election is one thing but dictating what is good science from the bench is quite another and in my opinion (pun intended) quite scary!

This is yet another reason that everyone in the USA should be very concerned about how our Government is placing the wants of the nuclear industry (profit) ahead of nuclear safety, even if it goes against GOOD science.

The nuclear industry in Japan did the very same thing at Fukushima and now they have a Trillion Dollar Eco-Disaster that is still un-contained two and a half years later!

The real question is:

Should America risk losing the Colorado river as a source of fresh water because of any type of radioactive accident (which could be caused by man or Nature) at Yucca Mountain, which would affect the entire southwest of the US forever?

I'd suggest that these same billions of dollars would be far better spent installing a massive amount of Solar (of all flavors) which would then generate clean solar energy for the next 20 to 40 years at no risk to US or our drinking water!

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Avatar for user 'efseitz'

efseitz | September 15, 2013 at 7:24 a.m. ― 3 years, 6 months ago

What in the world kind of question is that?? Hopefully, purely a rhetorical question. Or maybe you simply want to ensure that we have at least one healthy laugh for the day...
Of course Edison should not be allowed to profit from this fiasco. They need to be held accountable to us ethically, legally, and financially.

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Avatar for user 'CaptD'

CaptD | September 16, 2013 at 12:05 p.m. ― 3 years, 6 months ago

I'd like KPBS to disclose how much money they have accepted from SDG&E, SCE and/or energy lobbyists because it directly affects their willingness to publicize this story!

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