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Letters: How power is priced

March 15, 2013

Re "Ratepayers shafted in San Onofre fiasco," Column, March 13

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.

Ronald Litzinger


The writer is president of Southern California Edison.

My favorite part of Hiltzik's column was when an Edison spokeswoman told him that retroactively changing the rules that allow customers to be charged for operating San Onofre would be unfair and create "regulatory uncertainty."

This brought me back to when my son was in kindergarten and complained about unfairness. I had to explain to my son at a young age that some things are just not fair, a tough life lesson for someone who always gets his way.

Regulatory uncertainty is a fact of life in California. It's also unfair that after electricity deregulation in California, I have only one choice for my electric provider. It's also unfair that coastal power plants now have to deal with new regulations for using sea water for cooling, resulting in retrofits that cost millions of dollars.

Life can be unfair, but most of us have learned to live with uncertainties.

Bob Hoffman

Redondo Beach


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