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Agency calls for rate cut over San Onofre outage

Ratepayer advocate asks the utilities commission to slash customers' bills because the nuclear plant has been offline since January.

August 14, 2012|By Abby Sewell, Los Angeles Times
  • The San Onfore nuclear power plant.
The San Onfore nuclear power plant. (Allen J. Schaben / Los Angeles…)

Southern California Edison and San Diego Gas & Electric ratepayers should have their bills immediately reduced because the San Onofre nuclear power plant remains shuttered, a state ratepayer advocate said Monday.

Customers are continuing to pay for costs at San Onofre — including operations and maintenance costs of about $650 million a year — even though the plant has been closed since January.

Joseph P. Como, acting director of the Public Utilities Commission's Division of Ratepayer Advocates, wrote a letter asking the panel to cut the bills immediately "instead of waiting several more months and allowing hundreds of millions of dollars in needless costs to be borne by the ratepayers."

The ratepayer advocate's proposal is more aggressive than the PUC's current course.

In November, when the plant will have been out of service for nine months, state law will trigger an investigation in which the commission must consider lowering rates. The investigation could eventually result in refunding money to customers so they would not pay the costs of a plant that is producing no power.

The commission had been scheduled to vote to open an investigation into the costs sooner than that, but the action was postponed.

San Onofre was shut down Jan. 31 after a tube in one of the plant's recently replaced steam generators began to leak, releasing a small amount of radioactive steam. The incident led to the discovery that many more tubes were wearing out more quickly than expected.

Energy officials scrambled to replace San Onofre's 2,200 megawatts of power over the summer and are now confronting the possibility that the plant will not be back online at full power in the near future.

Como noted that Edison is charging customers $54 million per month in operating costs "for a plant that is no longer 'used and useful.' "

In addition, utility customers are paying the costs of the replacement steam generators that malfunctioned and could be asked to help pay for the power Edison has purchased on the open market to replace San Onofre's power during the outage.

Utilities commission President Michael R. Peevey said the commission will look at all the costs when the investigation begins in November.

"We're going to do this, and we're going to protect ratepayers ... but the manner in which we're doing it, I think, is more thoughtful than what the [Division of Ratepayer Advocates] seems to be requesting," he said.

Stephanie Donovan, a spokeswoman for San Diego Gas & Electric, said the company feels the ratepayer advocate is "jumping the gun a bit."

"There are existing procedures that could address the same issues," she said.

How long the outage at San Onofre will persist and whether the plant will ever be able to operate at full power again remains an open question. According to the ratepayer advocate's letter, Edison told commission staff in a July 23 briefing that one reactor unit would remain out of service until at least November and the other until at least December.

The ratepayer advocate called those dates "overly optimistic." Since then, Edison officials have indicated that Unit 3, which has more severe issues, is not likely to return to service this year, and they have been cautious about giving dates for Unit 2, saying only that the company expects to submit a restart plan for Unit 2 to the Nuclear Regulatory Commission by the end of the year.

Peevey said he thought there is a "reasonable possibility" that Unit 2 could come back online at reduced power before the end of the year, but added, "Unit 3, I have no sense at all."

The state's power grid survived triple-digit heat in the summer's first heat wave last week, but as the heat continued Monday, officials were concerned that overloaded equipment at other facilities would fail.

The California Independent System Operator has issued a Flex Alert, calling on Californians to conserve energy Tuesday. During a similar alert Friday, conservation lowered demand statewide by nearly 1,000 megawatts, officials said.

abby.sewell@latimes.com

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