SDG&E; Customers to Be Charged Over 30 Years : $470 Million to Ease Eventual N-Plant Closing

The state Public Utilities Commission has ordered customers of San Diego Gas & Electric Co. and Southern California Edison Co. to pay $2.2 billion during the next 30 years to cover the eventual costs of closing the San Onofre nuclear power plant.

SDG&E; customers will pay $470.6 million into the newly created trust fund, and Edison customers will contribute $1.7 billion. The fund will remain independent from the two utilities.

SDG&E; said the fund will increase the “typical” residential electric bill about 20 cents a month. However, that increase probably will be counterbalanced by various electricity rate reductions expected in 1988 that SDG&E; and Edison have requested.

One consumer group applauded the creation of the fund as “a positive thing (because) it’s not fair to wait until the plant closes and put the burden on ratepayers who never used the plant,” said Cynthia Pollack Shea, a senior researcher for the Washington-based World Watch Institute, a nonprofit research organization.

An independent board of trustees will determine how that fund is invested, according to a PUC spokeswoman, who indicated that the fund will be invested “very conservatively.”

It will cost about $873 million in 1988 dollars to dismantle San Onofre’s three units and dispose of the waste, according to PUC Administrative Law Judge Robert Barnett. In “future dollars,” however, the utilities will spend $6.5 billion between 2002 and 2020 to dismantle and dispose of the plant’s three units, Barnett said.

A 1985 state law requires utilities to establish externally managed funds that would accumulate enough money to dismantle nuclear plants and return the sites to their original condition. Previously, utilities had been allowed to accumulate funds that were administered internally.

The $2.2-billion fund is required “because the PUC has made some rather conservative assumptions, the main one being that the site would be fully restored to its natural condition,” according to an SDG&E; spokesman. “There is a possibility that the site would . . . instead be used for some other kind of power generating station.”

Given the difficulty utilities have had in obtaining plant siting permits, “it’s likely you’ll see another power plant or a similar use” for former nuclear plant sites, according to Pollack Shea.

“Nobody knows for sure what’s going to happen when the licensed life of (San Onofre) is reached,” according to SDG&E; spokesman Joe Kloberdanz. “There’s no reason, for example, that you couldn’t go back there and repower those plants.”

Regulators might also allow the utilities to “do interim things when (San Onofre’s) useful life is over,” Kloberdanz said. “There are several things we could do with Unit One while the other two are still operating.”

Additionally, the fund will be reviewed during the next 20 to 30 years to ensure that it remains large enough to dispose of the plant, according to an Edison spokesman. Technological advances, for example, might reduce the overall cost of dismantling the plant, the spokesman said.

Unit One at San Onofre began operating in 1968. It is licensed to run until 2004. Unit Two, which began operating in 1983, and Unit Three, which began operating in 1984, are expected to be retired in 2013 and 2014, respectively. However, the utilities could modify or replace parts of the units and extend their useful lives, a PUC spokeswoman said.