Edison: Ratepayers Should Shoulder $1B for Shuttered Nuke Plant

By Adam Townsend

Southern California Edison has argued that ratepayers should be on the hook for more than $1 billion in costs related to the shuttered San Onofre Nuclear Generating Station, even though the plant hasn’t produced electricity since January 2012.

Officials argued their case before the California Public Utilities Commission on July 22, saying that certain fixed costs to keep nuclear fuel safe and maintain the now-retired nuclear plant should be borne by ratepayers, not the company’s shareholders.

Edison also cited the costs to create wetlands in San Diego County and maintain an artificial kelp reef off the coast of San Clemente, measures which were required by the California Coastal Commission to make up for the damage the plant’s operation caused to the coastal ecosystem.

“The assets related to used fuel storage and other safety and security activities at [the plant] must be maintained even with the units permanently retired,” officials said in the utilities commission hearing. “The marine mitigation assets will remain in service for approximately 30 years as required by the [California Coastal Commission]. Therefore, the revenue requirements associated with these assets should not be removed from rates.”

The shutdown—caused by a small radioactive steam leak that revealed the new steam generators at the plant were riddled with faulty components—has cost Edison more than $2 billion, factoring in the cost of engineer inspections, plant maintenance, replacement power and other expenses.

Edison and the the manufacturer of the faulty generators are gearing up for a fight over who has to eat the cost for their failure, which the Nuclear Regulatory Commission and independent experts linked to design flaws.

Generator manufacturer Mitsubishi Heavy Industries said it has paid Edison back according to the warranty in their contract, but Edison countered that Mitsubishi should reimburse the company for the entire cost of the generators. Edison argued the warranty limit in the contract is void, calling the generators “lemons.”

Meanwhile, Edison has started the long process of permanently retiring the plant, removing fuel from its reactors over the last week.