Southern California Edison (SCE) announced on Friday that it has decided to permanently retire Units 2 and 3 of its San Onofre Nuclear Generating Station (SONGS), which have been shut down since January last year.
Unit 2 was taken out of service Jan. 9, 2012, for a planned outage; Unit 3 was taken offline Jan. 31, 2012, after station operators detected a small leak in a tube inside a steam generator manufactured by Mitsubishi Heavy Industries (MHI).
The beleaguered plant has been on a deathwatch for months. Environmental groups have called for a total shutdown. Meanwhile, SCE submitted a restart plan to the Nuclear Regulatory Commission (NRC) in October and proposed to restart Unit 2 at reduced power (70%) for approximately five months to evaluate its performance. Last month, the NRC ruled that the units could not be restarted until the commission held a formal license amendment proceeding with full public participation. The uncertain timing of a final NRC decision was a major factor in the decision.
In the June 7 announcement, Ted Craver, chairman and CEO of Edison International, SCE’s parent company, said, “we have concluded that the continuing uncertainty about when or if SONGS might return to service was not good for our customers, our investors, or the need to plan for our region’s long-term electricity needs.”
“Additional administrative processes and appeals could result in delay of more than a year,” SCE said. “During this period, the costs of maintaining SONGS in a state of readiness to restart and the costs to replace the power SONGS previously provided would continue. Moreover, it is uneconomic for SCE and its customers to bear the long-term repair costs for returning SONGS to full power operation without restart of Unit 2. SCE has concluded that efforts are better focused on planning for the replacement generation and transmission resources which will be required for grid reliability.”
Short-term supply has been a subject of concern. On May 6, the California Independent System Operator (CAISO) said the indefinite shutdown of SONGS heightens reliability concerns for areas of Southern California this summer.
SCE estimates that the retirement decision will result in a charge in the second quarter of “between $450 million and $650 million before taxes ($300 million – $425 million after tax), in accordance with accounting requirements.” Staff reductions will also result over the next year “from approximately 1,500 to approximately 400 employees, subject to applicable regulatory approvals. The majority of such reductions are expected to occur in 2013.”
SCE says it intends to pursue recovery of damages from MHI, “as well as recovery of amounts under applicable insurance policies.”
Sources: POWERnews, Edison International
—Gail Reitenbach, PhD, Managing Editor (@POWERmagazine, @GailReit)
NOTE: This story was originally published on June 7