Without permission to restart Unit 2 Edison may announce decision to decommission San Onofre by end of year

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In 2013, Edison International has been focused on narrowing the uncertainties which surround the San Onofre Nuclear Generating Station after a first-of-a-kind event shut down the nuclear reactors.  The licensee submitted a plan to return Unit 2 to 70% power for an initial 5-month period, but was unable to provide a plan which would ensure the accelerated wear which shut down both units would be arrested and admitted that the problems would lead to a shortened life expectancy of the plant without massive overhauls.  Edison is worried the process could be delayed due to the number of interveners and other groups which are filing appeals, and have admitted that it could stretch into year-end or a longer period.

The Nuclear Regulatory Commission continues to evaluate Southern California Edison’s Confirmatory Action Letter response, despite the request of multiple public officials and state organizations to provide a more in-depth review of the problems at the San Onofre Nuclear Generating Station.  The NRC’s continued consideration of the restart plan has attracted an unforeseen amount of controversy and opposition.  Mitsubishi Heavy Industries, the company which designed and manufactured the steam generators, has advised that a possible course of action would be the replacement of significant portions of the steam generator, a process that could take more than 5 years.

The licensee had requested the NRC made a decision on the Unit 2 restart by May 24th, so they could restart by June 1st, but now they do not expect this timeline to be met and admitted that it is very likely the process to continue for at least a few more months before any NRC decision is made.  In the April 16th notice of the Federal Register, the NRC requested public comments on Southern California Edison’s proposed license amendment, though the 30 day window to submit comments is nearly half expended.  The license amendment notice also requests comments on the NRC’s proposed no significant hazards consideration determination.  The commission can make a decision on the license amendment request if there’s a no significant hazards consideration following the public comment period.

In a first-quarter results conference call, Edison executives acknowledged that “there’s a general limit of how much” the company can rack up in terms of cost “without certainty of recovery” but options to limit costs are limited due to logistics of restarting the facility if a favorable decision is reached.   Edison is hoping that the outside parties allow the nuclear safety technical work to be overseen by the NRC, as it would likely allow the fastest restart of the Unit 2 reactor, but the public has a right to file motions to stay the issuance of license amendments before the Nuclear Regulatory Commission and federal courts.  Though Edison has laid off as many workers as possible while waiting for a decision to restart, they are working to keep all systems at the nuclear power plant ready to go so that if a decision to restart is made, they can do so as quickly as possible, but even if the license amendment is approved by the NRC, the approval of the Confirmatory Action Letter restart plan for the Unit 2 reactor could take some time, and the licensee would be forced to obtain necessary authorizations for long-term power operation beyond that cycle.

While on one hand publicly promoting the safety of the restart plan to the Nuclear Regulatory Commission and the public, Edison is worried about the possibility of future stranded costs, where there is no further opportunity to reduce the debt and the utility is forced to eat the difference. To address this potential and reduce the soaring costs, Edison is working swiftly behind the scenes to recover as much as possible from Mitsubishi Heavy Industries, and have also filed over $230 million in insurance policy claims with the NEIL nuclear insurance program.  The utility is also still in the early stages of proceedings with the California Public Utilities Commission to review possible rate-hikes for incurred costs related to the outage.

If denied the authority to restart the Unit 2 reactor, Edison executives have indicated that a decision to decommission one or both units would likely be made before the end of the year.  This announcement signals Edison’s attempt to warn the NRC and nuclear industry that without some clarity on what the NRC decision is going to be, it will be difficult for the licensee to continue underwriting the costs of the outage.  “There’s a practical limit to how much we can absorb of that risk,” said Theodore F. Craver, Chief Executive Officer and President.

Source: Edison Transcripts

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