Edison–Mitsubishi Dispute over San Onofre Heats Up

The San Onofre Nuclear Generating Station (SONGS) has gone cold for good, but the dispute between Southern California Edison (SCE) and Mitsubishi Heavy Industries (MHI) over who’s responsible for the ill-fated steam generator replacement that led to the plant’s retirement is starting to heat up.

On October 7, SCE president Ron Litzinger “formally demanded” that MHI agree to an audit of its design and manufacture of the replacement steam generators under the original purchase contract. SCE has requested such an audit several times, but MHI has insisted the contract language only covers financial information necessary to support invoices. It is resisting SCE’s efforts to examine engineering data and records related to the replacement.

MHI supplied the steam generators for the refit project, which took place in 2009 and 2010. In early 2012, inspections following a tube rupture uncovered accelerated tube wear in both units. Following an extensive investigation, the Nuclear Regulatory Commission (NRC) concluded that the problems stemmed from a flawed computer model that was used to design the replacements. After the NRC expressed doubts about a quick restart this spring, SCE decided to retire the plant rather than commit to repairs. It said at the time that the decision would result in a charge of $450 million and $650 million before taxes.

SCE is in the process of trying to recover damages under its warranty with MHI. It filed a notice of dispute in July, and in September took the dispute public, accusing MHI of dragging its feet in negotiations over the warranty. According to SCE, MHI is claiming that it is responsible for only $7.6 million of the more than $140 million SCE spent on the investigation. “Mitsubishi’s actions have made it clear that no reasonable level of documentation will ever be sufficient to support payment in its view,” SCE said in a statement. “We are therefore unwilling to engage in yet another time-consuming effort, only to face continued stonewalling by Mitsubishi.”

MHI has yet to make any public statements in response to SCE’s allegations. The October 7 announcement from SCE suggests litigation may be necessary to resolve the dispute.

—Thomas W. Overton, JD, gas technology editor (@thomas_overton, @POWERmagazine)