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PUC poised to investigate rates at troubled San Onofre

October 16, 2012 |  5:39 pm

San onofre
The California Public Utilities Commission is poised to open an investigation into the troubled San Onofre nuclear plant, a process that could result in ratepayers getting reduced utility bills in the future.

Some Southern California Edison and San Diego Gas & Electric ratepayers have complained that it's unfair for them to be paying to operate a plant that is not functioning.

Commissioners will vote next Thursday on a proposal to open an investigation into the unexpected outage at the plant, which by then will have stretched on for nearly nine months.

If approved, the investigation would provide a single means by which the commission could consider the various complex issues of costs and energy planning related to the plant’s plight, including the “causes of the outages, the utilities’ responses, the future of the [San Onofre] units, and the resulting effects on the provision of safe and reliable electric service at just and reasonable rates,” according to the proposal released Tuesday.

As well as examining the costs of the outage to date, the probe would look at the cost effectiveness of different options for repairing or replacing the defective equipment that led to the shutdown. 

San Onofre once provided as much as 20% of the power to large swaths of Southern California. It was shut down because of unexpected wear on steam generator tubes, which resulted in a leak and the release of a small amount of radioactive steam. The steam generators had been replaced less than two years prior in a project that cost plant owners Edison and SDG&E a combined $771 million.

Ratepayers have been paying for the costs of replacing the steam generators and have continued paying for the plant's capital and operating costs despite the fact that it is producing no power. According to the commission proposal, Edison and SDG&E are currently collecting $1.1 billion a year from ratepayers for costs relating to the plant.

Edison has said that it hopes to recover a large portion of the outage costs from insurance and from steam generator manufacturer Mitsubishi Heavy Industries. But the utility could also ask the commission for permission to recover some of the costs from ratepayers.

The investigation had been anticipated for months. State law requires the utility commission to open an investigation if a plant remains out of service for nine months, to determine if a rate rollback is warranted. 

Some groups, including the commission's own ratepayer advocate arm, had pushed the panel to act sooner.

Joseph P. Como, acting director of the Division of Ratepayer Advocates, wrote a letter in August calling on the commission to slash bills immediately "instead of waiting several more months and allowing hundreds of millions of dollars in needless costs to be borne by the ratepayers."

The commission had contemplated opening an investigation as early as June, but put it off to give Edison, the plant's operator, more time to look into the technical side of the plant's problems.

Earlier this month, Edison submitted a proposal to the U.S. Nuclear Regulatory Commission to restart one of the plant's two reactor units, where the steam generator tubes showed less wear, and run it at 70% power for five months to see if that would solve the problems.

Officials said the unusual wear was a result of "fluid elastic instability" — high-velocity steam flow and low moisture in certain areas that caused the tubes to vibrate excessively — and that running the reactor at lower power would address the problem.

The other unit will remain out of commission indefinitely.

The NRC has said it will take months to review Edison's proposal. Meanwhile, area residents and watchdog groups, led by the environmental group Friends of the Earth, have pushed the agency to force Edison to go through a license amendment process, including courtroom-like hearings, before making a decision on the restart plan.


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Photo: San Onorfe nuclear plant. Credit: Los Angeles Times