Is San Onofre Ever Coming Back?

By Thomas W. Overton, JD

As unlikely as it might have seemed a few months ago, recent developments in the ongoing saga over the beleaguered San Onofre Nuclear Generating Station (SONGS) have begun to raise the previously unthinkable possibility that the plant may never restart.

Publicly, of course, the authorities are saying nothing of the sort. Southern California Edison (SCE) still insists it will submit its long-delayed plan for restarting Unit 2 some time in October. It had originally planned to restart the reactor back in June before the NRC put the brakes on it.

But consider some other recent developments:

* In August, SCE announced that it was laying off 730 workers at the plant—one-third of SONGS’s workforce.

* Also in August, SCE said in its second-quarter conference call that it has put its insurers on notice of potential claims for property damage and outage costs related to SONGS. It has already had to spend almost $200 million on repairs and replacement power purchases.

*Last month, SCE pulled the fuel rods from Unit 3, effectively mothballing the reactor.

*Cal-ISO has begun drawing up contingency plans for a 2013 with no power from SONGS.

*The California Public Utilities Commission (CPUC) has begun considering, at least unofficially, whether to remove San Onofre from the ratebases for SCE and San Diego Gas & Electric (which owns 20% of the plant). It’s required by law to make a formal determination on that point any time a plant is out of service for nine months. Those dates land in November (Unit 3) and December (Unit 2). Currently, local utility customers are paying $54 million a month for SONGS.

*It’s still not clear if the problems with the steam generators can be corrected short of complete replacement. Months of investigation have settled on a flawed computer model leading to a “major design discrepancy” as the root cause of the excessive wear to the steam generator tubes. The generators are covered under a $137 million warranty, but any claim would require years of litigation to resolve. The warranty does not cover replacement power.

Units 2 and 3 entered commercial operation in 1983 and 1984, respectively, putting them at about average age for a U.S. nuclear plant. NRC licenses for both units run through 2022. While the costs of a premature shutdown would be huge, the wider impact is harder to predict. Despite dire predictions earlier this year, Southern California weathered a SONGS-less summer without any real problems.

A decision to throw in the towel on a restart, while unlikely, would not be unprecedented. The Rancho Seco nuclear plant near Sacramento, plagued by years of expensive operational and mechanical problems, was shut down after a ratepayer revolt against the municipal utility owner and ensuing referendum in 1989.

A similar process is currently playing out at Duke Energy’s Crystal River 3 plant in Florida. The projected costs to repair cracks in the containment vessel—caused during a similar steam generator replacement in 2009—have ballooned to more than $1.3 billion. Following the Duke-Progress Energy merger, Duke’s board has been considering whether the expenses are justified and whether the plant can be repaired at all.

SONGS isn’t there yet, but all signs appear to be pointing in that direction. The first steam generator replacement two years ago cost $771 million, and would cost even more if it had to be done again. Worse, another go-round would almost certainly have to be paid for by SCE and SDGE shareholders, not their ratepayers. It’s a fair bet they would balk at that idea.

—Thomas W. Overton is POWER’s gas technology editor