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PUC is urged to cut ratepayer costs in wake of San Onofre closure

PUC is urged to cut ratepayer costs in wake of San Onofre closure.The California Public Utility Commission's ratepayer advocate division sent a letter Monday asking that the commission act immediately to lower Southern California Edison and San Diego Gas & Electric customers' bills to remove the costs associated with the shuttered San Onofre nuclear plant.

Division of Ratepayer Advocates Acting Director Joseph Como asked the commission to act now rather than waiting until November, when the plant will have been out of service for nine months. 

At that point, state law would trigger an investigation in which the commission must consider lowering the utility’s rates and potentially refunding money to customers so they would not be paying for the costs of a plant that is not producing power.

The commission had been slated to vote to open an investigation into the costs of the outage on Aug. 2, 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 and triggered an investigation by the U.S. Nuclear Regulatory Commission.

Energy officials scrambled to put a plan in place 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 any time in the foreseeable future.

"The cost to ratepayers if the Commission does not act soon is substantial," Como wrote, noting that the annual cost included in Edison's rates for operating and maintenance, depreciation and return on investment at San Onofre is $650 million. "That translates to about $54 million per month that SCE is charging its customers for a plant that is no longer 'used and useful.' "

On top of that, utility customers are paying the costs of the replacement steam generators that malfunctioned and could be asked to chip in for the power Edison has purchased on the open market to replace the energy generated by San Onofre.

PUC Commission President Michael Peevey said the commission wants to study the issues carefully before acting to reduce rates.

"That would be a drastic step, and if that were to occur, it would not occur on the spur of the moment," he said.

Peevey said the commission will look at all the costs of the plant after the investigation is triggered 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 DRA seems to be requesting," he said.

How long the outage will persist and whether the plant will ever be able to operate at full power again remain open questions. According to the DRA letter, Edison told commission staff in a July 23 briefing that one generating unit would remain out of service until at the least November and the other until at least December.

The DRA 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.

Edison spokeswoman Jennifer Manfre said the company expects to submit a restart plan for Unit 2 to the NRC by the end of the year. Restart would still be contingent on NRC approval.

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."

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-- Abby Sewell

Photo: The San Onfore nuclear power plant. Credit: Allen J. Schaben / Los Angeles Times

 
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