Anaheim, Riverside Sue Over San Onofre : Claim Delays, Overruns at Power Plant Cost Them $41 Million

The cities of Anaheim and Riverside claimed Thursday that cost overruns and delays in the construction of the San Onofre Nuclear Generating Station have cost them $41 million.

The allegations were contained in a lawsuit filed jointly by the two cities against Southern California Edison Co., builder of the nuclear power plant in northern San Diego County.

Both cities participated in the construction of the plant under a 1977 agreement. Anaheim now owns a 3.16% interest and Riverside a 1.79% interest in Units 2 and 3 at San Onofre, according to the lawsuit, filed in Orange County Superior Court.

The lawsuit claims that the utility, which managed construction of San Onofre, was negligent, breached its contract with the cities and intentionally misrepresented some facts about construction and suppressed others.

Anaheim claims $26,196,000 in damages and Riverside claims $14,839,000.

Edison spokesman Robert A. Krauch declined comment on the suit itself, saying: “Company officials and attorneys have not had an opportunity to review the claims in the suit. We would give proper response when we have had a chance to do that.”

Litany of Complaints

The 20-page lawsuit contains a litany of complaints against the utility, including charges that Edison did not properly supervise or adequately manage the design, construction and operation of the project.

The suit alleges, among several claims, that the utility failed to meet projected production rates, provide adequate engineering support and apply adequate “quality assurance and quality control programs.”

Edison completed Unit 2 in October, 1983, two years behind schedule. Unit 3 was not completed until April 1984, over a year late, according to the lawsuit.

The total cost of construction was $4.5 billion, more than twice the $2.2 billion stated in the 1977 construction agreement, according to the lawsuit.

Anaheim and Riverside also claim the utility’s actions have forced them to pay “unreasonable, unnecessary and excessive costs of construction.”

Interest Reduced

The cities also allege that the value of their ownership interest has been reduced because of delays in completing the project and were prevented from suing earlier because the utility withheld important information about construction, according to the lawsuit.

Edison has been battling similar allegations made nearly a year ago by the California Public Utilities Commission, which made an initial finding that $800 million in construction costs should be disallowed.

Recently, however, Krauch said the PUC staff has dropped challenges to 75% of the questioned costs after Edison presented evidence and testimony of nuclear experts, including Adm. Hyman Rickover, to show that the facilities were built in as timely and prudent a manner possible.

A major factor in the delays, he said, was the nuclear disaster at Three Mile Island in Pennsylvania, which occurred while construction at San Onofre was under way.

“Because of Three Mile Island, a number of retroactively imposed regulations had to be met in the middle of construction. It caused unforeseen and understandable delays,” Krauch said.

Times staff writer Kristina Lindgren contributed to this story.