Customer Refunds Proposed in Wake of San Onofre Shutdown

A pair of California Public Utilities Commission administrative law judges proposed Tuesday that San Diego Gas & Electric and Southern California Edison refund tens of millions of dollars to customers because of the shutdown of the San Onofre Nuclear Generating Station.

The judges proposed that SDG&E pay back $19.3 million, and Edison give back $74.2 million, after finding those costs were neither reasonable nor necessary, according to the CPUC.

The commissioners will have to vote on whether to approve the recommendation, possibly at a meeting scheduled for Dec. 19.

The nuclear plant along the northern San Diego County coastline has been idle since January 2012, when a small leak was discovered in a relatively new steam generator.

Edison, the operator and majority owner of the plant, decided in June to retire the two reactors, citing the economic impact of mounting regulatory problems. The utility is pursuing damages against Mitsubishi Heavy Industries, which manufactured the steam generators.

The CPUC has been investigating the impact of the shutdown and retirement of San Onofre on utility rates, and how much is a fair portion for customers to pick up.

"The proposed decision issued today is the first in a series that evaluates costs to ensure customers don't pay for both the power plant that was shut down and the power that had to be purchased to replace it," Commissioner Michael Florio said.

 "The CPUC is considering hundreds of millions of dollars in additional refunds to customers resulting from replacement power costs, steam generator replacement costs, and removing San Onofre from rate base."

Consumer advocates contend that costs should be borne by utility shareholders, not customers.

San Diego Gas & Electric owned 20 percent of the plant and received one- fifth of its power when it was operational.

Representatives for both SDG&E and Edison said officials with the utilities were reviewing the administrative law judges' findings and had no immediate comment.

According to the CPUC, the proposed decision determined that Edison's continuing to spend money on a restart plan for San Onofre after May 2012 was the result of an unsound decision-making process, primarily because the utility did not consider alternatives or rate impact, or realistically assess the regulatory hurdles blocking a reasonably foreseeable restart.   

– City News Service