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Edison tells customers they should pay for San Onofre shutdown

August 12, 2013|By Marc Lifsher
  • A surfer can be seen near the San Onofre Nuclear Generating Station. Southern California Edison is telling ratepayers that they must pay a portion of the costs to shut down the nuclear plant.
A surfer can be seen near the San Onofre Nuclear Generating Station. Southern… (Mark Boster / Los Angeles…)

SACRAMENTO -- Closing the San Onofre nuclear power plant is in the "best interests" of Southern California Edison's 4.9 million customers and those ratepayers should be prepared to pay a portion of the shutdown costs.

That's the message in a public letter published as a full-page advertisement in the Los Angeles Times on Monday.

"If a utility asset must be retired before the end of its expected life, the utility recovers from customers its reasonable investment costs," Edison wrote.

Q&A: Why is San Onofre closing and what will it cost?

Edison released the public letter because "it was important to make sure our customers know about how the utility business works, and why there is such a thing as 'cost recovery,'" said company President Ron Litzinger.

Those costs, ultimately, will be apportioned by the California Public Utilities Commission.

Critics are wary that Edison may try to assign too much of its costs to ratepayers. In June, the commission's independent Division of Ratepayer Advocates asked the commission to charge Edison's customers only for expenses related to "essential safety and security activities."

The Rosemead-based utility announced the permanent closure of two units of the 2,200-megawatt San Onofre Nuclear Generating Station on June 7. The facility had been closed for more than a year before the decision because of a small radioactive leak in a newly replaced steam generator system.

Experts cite many variables in calculating the cost of decommissioning the two reactors, including the expense of building alternative, non-nuclear power plants.

Edison pegs the cost at $4.1 billion to safely dismantle Units 2 and 3. Unit 1 was decommissioned in 1992.

About $2.7 billion in ratepayer money had accumulated in a special Edison decommissioning trust fund as of March 31. Two minority partners, San Diego Gas & Electric Co. and the city of Riverside electric utility, had collected another $927 million as of December.

Other funding could come from insurance and a potential legal settlement with Mitsubishi Heavy Industries of Japan, which manufactured the steam generators.

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