Who’s paying for San Onofre?
For more than eight months, ratepayers of Southern California Edison have been paying $54 million a month — a per-customer average of more than $10 — for a nuclear power plant that has been delivering no electricity. This situation should never have been allowed to drag on for so long.
Part of that $10-a-month cost was imposed several years ago when Edison, the majority owner of the San Onofre Nuclear Generating Station, purchased new steam generators for the plant. At that time, it sought and was granted a special rate increase to cover the $671-million cost, the argument being that ratepayers would benefit from safe, reliable electricity. “Safe” is a debatable term after the meltdown at the Fukushima nuclear plant in Japan raised new questions about nuclear plants in earthquake territory, and “reliable” has proved elusive after the faulty generators were found to be causing strange wear on steam tubes, forcing the shutdown of the plant.
The problem was especially acute in Unit 3, which might remain shuttered forever. Edison proposes to bring Unit 2 back online at partial power. Clearly, Edison customers are paying — the cost of the generators alone is about $1 per month for each residential customer — without getting the promised benefit. Yet the Public Utilities Commission has been woefully remiss by ignoring the situation.
Initial reports by the Nuclear Regulatory Commission indicate that the chief problem with the generators was faulty design and engineering by the manufacturer, Mitsubishi Heavy Industries. To the extent that’s true, Mitsubishi should bear responsibility. But where Edison erred — and in doing so failed to protect its customers — was in signing a contract that limited Mitsubishi’s liability to $137 million. The cost of such gaffes should be borne by the company’s shareholders, not its customers.
In November, the PUC must, under state law, launch an investigation into the shutdown. If the investigation, which will probably take months, finds that customers are due a rate reduction, that decrease would be retroactive to the date the inquiry started, but not to the date when San Onofre stopped delivering power.
The PUC could have moved earlier — in fact, it was scheduled to consider the matter months ago — but delayed. At this point, Edison is proposing to run Unit 2 at 70% power for five months, then check the tubes. The NRC has said it would examine that request carefully, and we hope it does, though the process is expected to take months. The NRC failed to vet the design of the new steam generators, and it shouldn’t make the same mistake twice. If Edison manages to bring Unit 2 back online, the PUC can always raise ratepayers’ monthly bills accordingly, but it should not allow the utility to charge customers for what they aren’t getting.
