In criticizing Southern California Edison for continuing to charge customers to operate the offline San Onofre Nuclear Generating Station, Michael Hiltzik demonstrated a misunderstanding of how California's regulated utilities set their rates. Delivering reliable electric service 24/7 requires building and maintaining a massive infrastructure of power plants, transmission lines and distribution networks.
To operate San Onofre, capital is secured from shareholders and borrowed from credit markets. The California Public Utilities Commission approves costs, which are then recovered through customers' monthly bills. To keep rates affordable, costs are spread out over many years and millions of customer accounts. Edison will first look to the manufacturer's warranty and insurance to recoup the cost of damage to the plant's steam generators, and then regulators will make the ultimate decisions.
What customers are paying for is the constant supply of power from the entire grid. San Onofre is an important part of the grid and is vital for California's ambitious clean energy goals. We're doing everything possible to restart it safely and soon.