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California Utility In Talks Over San Onofre Repair, Inspection Costs

San Onofre Nuclear Generating Station

Credit: Nuclear Regulatory Commission

Above: San Onofre Nuclear Generating Station

LOS ANGELES — Talks are underway to resolve a costly question at the shuttered San Onofre nuclear power plant in California — who pays a bill that could top $3 billion, officials disclosed Friday.

Edison International — the parent company of plant operator Southern California Edison — said in a government filing that a meeting would be held next week to discuss details of a possible deal.

SCE and minority owner San Diego Gas & Electric Co. have been negotiating with consumer advocates over how to divide a long list of costs from repairs and inspections at the now-closed reactors to replacement power once the plant shut down.

At issue has been who should take the hit — company shareholders or ratepayers.

"Our goal is to secure the maximum amount of refunds for customers as soon as possible, and to ensure that utility shareholders bear a significant share of responsibility for the premature shutdown of San Onofre," said Matthew Freedman, lead attorney for the Utility Reform Network, a consumer advocacy group involved in the talks.

"It's been far too long that customers have been paying for mistakes made at that plant," Freedman said.

The twin-domed plant between San Diego and Los Angeles was closed permanently by Edison last year after a long and costly fight over whether it was safe to restart. The plant hadn't produced electricity since January 2012, after a small radiation leak led to the discovery of extensive damage to tubing that carried radioactive water.

The problems at San Onofre centered on steam generators that were installed during a $670 million overhaul in 2009 and 2010. After the plant was shut down, tests found some generator tubes were so badly eroded that they could fail and possibly release radiation, a stunning finding inside the nearly new equipment.

The California Public Utilities Commission has been overseeing a broad investigation into costs at the plant. SCE and the other parties involved in the talks asked an agency judge not to rule on key issues, pending the outcome of the negotiations.

SCE declined comment.

Morningstar analyst Travis Miller said it was critical for Edison to resolve the case, though he emphasized a deal had not been completed.

"No investor likes uncertainty, especially when it's a large number," Miller said.

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