Shutting down San Onofre: How much should Edison’s customers pay?

The decision to close the San Onofre nuclear power plant is only the start of many decisions to come: How will the decommissioning be carried out to maximize safety and restore the land as close to its original condition as possible? (The fuel has to stay on site, however, encased in casks that are then encased in concrete.) Where will Southern California Edison’s customers get the power that the nuclear plant used to provide? (Supplies are expected to be adequate through this summer.)

And then there’s the question of who pays for the whole debacle of the new steam generators with the fatal flaw. They were supposed to last for many years, giving Edison a leg up on arguing later this decade that the operating licenses for the plant should be renewed for a couple of decades more. Instead, after being installed in 2009 and 2010, the generators operated for just a couple of years before showing a rate of wear on their tubes that was unprecedented in the industry.

Edison persuaded the California Public Utilities Commission to allow a rate increase so that its customers were paying for the new equipment. But when ratepayers don’t get anywhere near the use they had a right to expect, the PUC is required to reconsider their costs, which it is in the midst of doing. In addition, Edison has spent hundreds of millions more in costs related to bringing the plant back on line, and that doesn’t count the heavy expenses connected to decommissioning it.

GRAPHIC: Wear and tear at San Onofre

It seems fair for ratepayers to bear the cost of dismantling the plant. That’s an event that would have occurred at some point anyway; in fact, chances are it would have been far more expensive in future years because there would have been more fuel to store. And customers also must pay to buy power to replace what’s been lost from San Onofre. That power is almost certain to be more expensive; nuclear power is relatively cheap.

But the PUC, which certainly has a reputation for not always putting the customer first, should stand firm on a couple of points. Edison’s customers should pay no more than a pro-rated sum on the steam generators that represents the couple of years they got out of the equipment, relative to how long it should have lasted. If one counts the expiration of the current licenses as the life of the equipment, that means customers would pay a fourth or a fifth of the $670 million cost. And they should bear no financial liability for the plant’s operations, and attempted repairs, since San Onofre was shut down early in 2012. Those expenses belong with the company and its shareholders.

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