By Jim Shilander and Andrea Papagianis
Southern California electric ratepayers won’t pay some $1.4 billion but are still on the hook for $3.3 billion in replacement power due to the shutdown of the San Onofre nuclear power. It is part of a potential agreement reached Thursday between the plant’s owners and utility advocacy groups.
Southern California Edison, San Diego Gas & Electric, The Utility Reform Network and California Public Utilities Commission’s Office of Ratepayer Advocates have worked out a tentative agreement on who will pay—customers and utility shareholders—and how much they will pay of the estimated $4.7 billion for the purchase of auxiliary power and expenses related to faulty equipment.
SONGS was shutdown in January 2012 after a radiation leak and abnormal wear in new steam generators was detected. Citing rising costs and restart uncertainty, Edison chose to retire the plant in June 2013.
Through utility bills starting in February 2012, some of the $3.3 billion for replacement power has been collected. Under the proposed agreement this could continue through January 2021. The agreement does however let ratepayers off the hook for the more than $1 billion associated with damaged steam generators.
During a call with investors and the media Thursday, Ted Craver, president of Edison International, said the settlement provided a “balanced outcome.”
The settlement allows Edison to pursue claims against Mitsubishi Heavy Industries, the steam generator’s manufacturer, Craver said. Edison and Mitsubishi entered into arbitration last year. The utility is seeking up to $4 billion in damages, including losses to shareholders.