Dive Brief:
- Southern California Edison (SCE) and co-owners of the San Onofre Nuclear Generation Station (SONGS) settled with the Nuclear Electric Insurance Limited (NEIL) on limited loss remuneration for the facility's closure. SCE will receive $312.8 million, San Diego Gas & Electric will get $80 million, and the city of Riverside will receive $7.16 million.
- SCE will pass 95% of the settlement to its customers through 2% to 2.5% bill reductions over time. The California Public Utilities Commission (CPUC) earlier this year approved a consumer-advocate-contested compromise resolution of costs for the SONGS closure in which the utilities cover $1.4 billion and customers contribute $3.3 billion.
- SCE continues to pursue a reported $7.6 billion in damages from Mitsubishi Heavy Industries (MHI), the contractor that installed the steam generators that failed and led to closure of the 2,200 MW facility.
Dive Insight:
Monies recovered from MHI would be split 50-50 between the utilities and customers.
SONGS was shuttered in 2013. It was taken offline in January 2012 after detection of radioactive steam leaks were determined to be from prematurely worn steam generator tubes that had been part of MHI renovations.
MHI’s 2013 after-action assessment showed it and SCE were aware of serious problems with the replacement steam generators before they were installed but rejected safety modifications to avoid “a more rigorous license amendment and safety review process.”
Consumer advocates initially accepted the compromise cost allocation for the loss of the facility but it is now being contested because investigations of former CPUC President Michael Peevey, who had once been SCE’s CEO, found the $5 billion settlement had been discussed in unethical and potentially illegal ex-parte meetings between Peevey and SCE Vice President Steven Pickett.
Consumer advocates also argue 100% of the NEIL monies should returned to customers through remunerations and not as bill reductions.
