Southern California Edison has said it hopes to restart one of the plant’s… (Allen J. Schaben / Los Angeles…)
Nearly seven months after the San Onofre nuclear power plant was closed because of a leak, officials are grappling with whether it makes financial sense to bring the plant fully back online, and if so, who should pay for the necessary repairs.
Fixing San Onofre is shaping up to be an expensive proposition, with the price tag jumping into the hundreds of millions of dollars if the plant's massive steam generators require replacing.
But keeping San Onofre shuttered is also proving costly to the two utilities that own the plant. Southern California Edison had spent $117 million by June 30 to replace the power lost when San Onofre went offline, and San Diego Gas & Electric had spent $25 million, costs that ratepayers may be asked to pick up.
Imported energy is more expensive than electricity generated at San Onofre, which had provided about 20% of the power to large swaths of Southern California.
The first task for the utilities and federal regulators is to determine whether San Onofre can safely be restarted.
But the question of costs is also looming.
"One, there's the issue of can they do it, can the units be repaired? And if they can, then there's a question of whether it's cost effective," said Mark Pocta, program manager for the California Public Utilities Commission's Division of Ratepayer Advocates.
"Safety's the first issue, and then there's cost effectiveness."
Southern California Edison has said it hopes to restart one of the plant's two reactors — probably at reduced capacity — in the coming months. But the issues with the other reactor are so severe that officials said it may be unable to restart at all without extensive repairs.
Edison is preparing to submit a plan to theU.S. Nuclear Regulatory Commissionfor restarting one of the reactors, Unit 2. The other reactor, Unit 3, has been taken off the table indefinitely.
What the necessary repairs might be, and whether they would be worth the cost, has not been determined, or at least not publicly disclosed.
Edison this week said only that "we see the reality that Unit 3 will not be operating for some time.... It is too soon and would be inappropriate to speculate as to what is needed for repair for Unit 3."
It remains unclear who would pay.
Edison said inspections and repairs have cost $48 million through June. But those costs could swell, especially if the company hopes to bring Unit 3 back online.
The utility has said it hopes to recover much of the cost stemming from the equipment problems through insurance and manufacturer Mitsubishi's $137-million warranty on the steam generators. The warranty does not cover replacement power.
Watchdogs have pushed back against the possibility that ratepayers, who are still paying for plant operating costs during the outage and for the costs of the last steam generator replacement, could be asked to help foot the bill for repairs or another replacement. The steam generator replacement completed less than two years ago has cost Edison and San Diego Gas & Electric a combined $771 million, according to recent company filings.
Matthew Freedman, staff attorney for ratepayer watchdog the Utility Reform Network, said he thought replacing the generators again — especially at the expense of ratepayers — would be a non-starter, especially since the plant's current license expires in 2022. Edison has not submitted a renewal application.
"It's not going to happen," Freedman said. "My assessment is there will be no proposal to replace the steam generators. I think it's an extreme expense, and if Edison wants to do it, it would have to be on the shareholders' dime."
The PUC's ratepayer advocate division has called the commission to slash Edison and San Diego Gas & Electric rates immediately, noting that Edison alone is charging customers about $54 million a month in costs "for a plant that is no longer 'used and useful.'"
If the outage of one or both units extends until November — which appears likely — the public utilities commission will be required to launch an investigation into whether a rate rollback is required. Rates could be reduced even if only one unit remains out of service.
On Monday, Edison announced planned layoffs of 730 employees at the plant, about one-third of the workforce. Though company officials had been talking about paring down staffing for more than two years, the final number of cuts was 230 more than had been previously projected.
Edison said in a statement that the company needs to be "prudent with its future spending while SCE and regulators review the long-term viability of the nuclear plant."
Although Edison has financial incentives to get the plant operating, it will have to first convince federal regulators that it's safe to do so.