Customers still waiting for Edison refund decision

Residents of Laguna Beach and other California cities must wait until at least mid-January to find out if they will receive refunds from two utility companies because of decisions made related to the failed San Onofre Nuclear Generating Station, including the purchase of replacement power.

The California Public Utilities Commission, which oversees the state's utility companies, pushed back a public hearing and vote to Jan. 16, commission spokesman Christopher Chow wrote in an email.

The vote had been scheduled for the Dec. 19 meeting, but members of the commission requested more time to review the matter, according to Chow.

Southern California Edison and San Diego Gas & Electric may owe close to $94 million collectively to their customers: Edison, which owns 78% of the station, would be responsible for $74.2 million, while SDG&E;, a 20% owner, would owe $19.3 million, according to a preliminary commission decision made public in November.

The proposed decision, from administrative law judges Melanie Darling and Kevin Dudney, would require refunds for Edison and SDG&E; customers as a result of reduced operating costs in 2012 following a steam generator tube leak in Unit 3 on Jan. 31, 2012, a news release said.

Darling and Dudney claim that Edison's continuing to spend money on a restart plan for San Onofre after May 2012 was an unsound decision, primarily because Edison did not consider alternatives or the effect on rates, and it did not realistically assess the regulatory hurdles blocking a reasonably foreseeable restart, the release said.

"The proposed decision issued is the first in a series that evaluates costs to ensure customers don't pay for both the power plant that was shut down and the power that had to be purchased to replace it," Mike Florio, the lead commissioner for the San Onofre investigation, said in a prepared statement. "The CPUC is considering hundreds of millions of dollars in additional refunds to customers resulting from replacement power costs, steam generator replacement costs and removing San Onofre from rate base."

Edison serves about 12,300 residents and businesses in Laguna — the city's population is around 23,000 — while SDG&E; has 122,000 customers in south Orange County, though it's unclear how many of those customers live in Laguna Beach.

Edison officials contest the proposed refunds and were "disappointed" with the judge's preliminary decision, according to a company news release.

"It would have been imprudent and unwise for Edison to lay off valuable technical staff in 2012 who were needed to meet operational and regulatory obligations," Pete Dietrich, Edison's senior vice president and chief nuclear officer, said in the release. "It would have been difficult if not impossible to rehire within any reasonable time these highly specialized employees had restart proven successful."

Edison supports other elements of the decision, which noted the company acted prudently in responding to a leak at San Onofre that led to the shutdown, that Unit 2 refueling outage costs were reasonable and that the utility acted appropriately in placing fuel in Unit 2 during that outage, according to Dietrich.

Edison announced June 7 that it would retire Units 2 and 3 and begin preparations to decommission the facility, the release said.

The company's work force has dwindled by more than 900 employees — to 520.

Edison officials believe the builder of the San Onofre steam generators should be held accountable.

In October, Edison filed an arbitration request against Mitsubishi Heavy Industries Ltd. and Mitsubishi Nuclear Energy Systems Inc. after the companies couldn't come to a resolution.

The arbitration request alleges Mitsubishi totally and fundamentally breached its contract by failing to deliver what it promised, according to an Edison news release.

"Among other things, SCE also alleges that Mitsubishi failed to submit to a contractually mandated audit requiring it to disclose documents relevant to the design and other aspects of the replacement steam generator project and its implementation," the release said.

Mitsubishi officials deny the accusations, calling them "factually inaccurate," on the company's website.

"Through the arbitration process, Mitsubishi will aggressively defend itself by accurately representing the facts involved and the applicable legal principles," the company's website says. "[Mitsubishi] has been damaged by inappropriate actions by SCE regarding the restart of SONGS [San Onofre Nuclear Generating Station] and the repairs of the steam generators."

Edison filed the arbitration request with the International Chamber of Commerce.

SDG&E; wouldn't be as affected as Edison if the commission determines the utilities need to reimburse customers, SDG&E; spokeswoman Stephanie Donovan wrote in an email.

"The impact on rates would be minimal — a reduction of about one-tenth of a cent per kilowatt-hour," Donovan said.  

A majority of the five commissioners would need to approve the refunds during a voting meeting, according to the release.

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