San Onofre Closure to Cost $3 Billion, 1,100 Jobs

By Adam Townsend, Patch Editor

Trying to restart the San Onofre Nuclear Generating Station just doesn’t pencil out anymore.

Southern California Edison announced Friday it will permanently shut down the San Onofre nuclear power plant, leading to 1,100 lost jobs.

Executives addressed investors on their decision to permanently shutter the troubled power plant Friday morning. The decision came as a welcome surprise to legislators and activists who spent the last year fighting efforts to restart the plant, which has been offline since a radioactive steam leak was discovered in 2012. Nearly 8 million people live within 50 miles of the plant, and Friday’s announcement leaves significant questions about the economic and safety impact of decommissioning the nuke plant.

Edison International CEO Ted Craver said that the cost for operations and maintenance, purchasing replacement power and other expenses forced the utility’s hand.

“There was a clear cost advantage to continuing to operate the plant,” he said. “Over time, the economic advantage diminishes.”

Edison has $2.7 billion in its decommissioning fund for San Onofre Nuclear Generating Station, which is about 90 percent of the money required to take the plant fully out of service. 

Part of those costs include 1,100 of the 1,500 employees at the plant. In the coming months, they’ll be laid off.

Once the plant files a new safety plan with the Nuclear Regulatory Commission to reflect the plant’s shutdown status, Edison plans to lay off another 200, ultimately leaving 400 employees to oversee the spent fuel and equipment stored on site.

Despite Edison’s decision to shutter San Onofre, the plant will be active for years to come, Craver said.

The nuclear waste on-site will remain there in dry cask storage—encased in stainless steel and concrete—until national leaders come up with a permanent storage solution.

San Clemente Mayor Bob Baker lamented the imminent job losses at the plant.

“It’s going to have an impact when 1,100 people lose their jobs,” he said. “Hopefully Edison will be able to reassign them to other places.”

Environmental activists were jubilant at the announcement.

"I thought for over a year now the plant was unsafe, but I didn't think Edison would throw in the towel so soon," Arnie Gundersen said at an anti-nuclear activist press conference outside the plant. "The Nuclear Regulatory Commission gave these guys a bye."

A nuclear consultant hired by Friends of the Earth as part of their strategy to hammer Edison, Gundersen has authored several in-depth technical papers outlining the failures in San Onofre's steam generator design, regulation and management.

“This has ramifications around the country,” said Gundersen. “This is a seismic event in the nuclear industry.”

Gene Stone of San Clemente's Residents Organized for a Safe Environment said the decommissioning process would require just as much citizen involvement as the campaign to shutter the plant.

"The bad news is, the easy part is over," he said. "There is no way we're going to allow this plant to become a nuclear waste dump for the next 200 years."

Sen. Barbara Boxer, head of the Environment and Public Works Committee and a plant critic, praised the decision.

“I am greatly relieved that the San Onofre nuclear plant will be closed permanently,” said Boxer. “This nuclear plant had a defective redesign and could no longer operate as intended.”

Without the nuclear power plant, utility officials will have to fill a major gap in the energy supply serving the region.

Ron Litzinger, the head of Southern California Edison, said utility officials were in talks with the Independent System Operator -- the state power broker -- San Diego Gas & Electric, which owns a minority share of the plant and various government agencies to figure out how to replace the 2,300 megawatts generated by the San Onofre plant.

Southern California made it through last summer without outages, in part because the ISO made sure operators fired up a now-retired gas plant in Huntington Beach. Also, a massive power pipeline, the Sunrise Powerlink, came online. This summer, however, the Huntington Beach plant can't be fired back up because its emissions credits have expired.

It's still unclear how the shutdown of the plant will affect the ongoing investigation by the California Public Utilities Commission into whether Edison owes ratepayers money back for the now defunct plant. Craver said, however, based on other similar CPUC cases, the company could take a $450- to $650-million hit.

Edison said today it would pursue damages from Mitsubishi Heavy Industries of Japan, the company that supplied the replacement steam generators that wore out sooner than expected.

The plant's two reactor units, referred to as Unit 2 and Unit 3, have been offline since early 2012. Unit 1 was in operation from 1968 to 1992, when it was shut down over fears it could not withstand a major earthquake.

Unit 2 was taken out of service Jan. 9, 2012, for planned routine maintenance, while Unit 3 was shut down abruptly on Jan. 31, 2012, after a small leak of radioactive steam occurred. No one was hurt, but both reactors were kept offline while the issue was investigated.

Edison executives would later reveal the leak was caused by premature wearing of steam pressure tubes in the reactors. Each reactor has nearly 20,000 tubes and hundreds of those were found to have been worn down prematurely by rubbing against each other due to vibrations and a settling of support equipment.

The tubes carry hot, pressurized radioactive water from the reactors. The tubes then heat non-radioactive water surrounding them, producing steam used to turn turbines to create electricity.

The tubes also provide a critical safety function, forming a barrier between the radioactive and non-radioactive sides of the plant.

Edison had spent months trying to gain permission from the Nuclear Regulatory Commission to restart one unit at 70 percent power for five months as a test run.

Sen. Alex Padilla, D-Pacoima, the chair of the Senate Energy, Utilities and Communications Committee, said he will hold a hearing in the near future on meeting energy needs without the plant.

"We have a solid plan in place for this summer, but looking out on the horizon we have critical impacts to plan for, including assisting hundreds of plant employees who face the prospect of losing their jobs, replacing more than 2,000 megawatts of greenhouse gas-free baseload generation, and the costs and process of decommissioning the plant," he said.

Other Patch coverage:

Leaders React to Nuke Plant Closure
San Clemente Environmentalists Celebrate Closing
Social Media Reaction: What People Are Saying
Issue: Who’s to Blame for Permanent Closure?
KPBS Report: The Cost of Power Post-San Onofre

—City News Service contributed to this report.