Mercy Baron 7:30 p.m., May 27
Costs Surrounding San Onofre Shutdown Continue to Climb
Costs resulting from the prolonged idling of the San Onofre Nuclear Generating Station in northern San Diego County are all but certain to exceed $100 million, the website InsideClimate News is reporting.
These expenses include daily purchases of alternate power at utilities normally served by the plant, increased oversight from the Nuclear Regulatory Commission, and customer-funded energy conservation incentives, as well as repair and replacement of equipment and parts. The final cost on that list has itself been estimated at $400-800 million.
In 2005, the plant’s operators were granted permission by the California Public Utilities Commission to spend up to $680 million installing new steam generators at the facility, which now appear to be defective in design after a radiation leak led to the discovery of hundreds prematurely worn tubes. Additional costs up to a total of $782 million were also approved. Plant operator Southern California Edison still has not submitted the final bill for the generators, installed in 2010 and 2011, for review.
The question remains: who will foot the bill for expenses related to the plant shutdown? Possible parties include equipment manufacturer Mitsubishi Heavy Industries (for manufacturing defects), engineering firm Bechtel (for design issues), other contractors employed on the project (for improper installation), or electricity customers at Edison and San Diego Gas & Electric (if the plant was improperly operated).
Mitsubishi’s liability, however, is capped at $137 million under a 20-year warranty issued on the generators, far less than estimated repair costs. Its warranty also doesn’t cover the cost of replacement power, which plant operators reported to be in excess of $30 million by the beginning of this month. InsideClimate, however, reports that these costs had hit $42 million by the end of March with the inclusion of an additional $12 million spent by SDG&E, and that experts estimate the ongoing cost to be $750,000 to $1 million per day. SDG&E and Edison have both already stated that they intend to cover these costs through extra charges to customers rather than from utility company profits.
Additional costs related to the shutdown include at least $12.5 million in costs related to securing backup power – including a $2.5 million per month contract to reactivate the shuttered AES Huntington Beach natural gas power plant. The cost of offering discounts to customers for reduced energy use and advertising to promote conservation could is currently unknown, but could top $18 million. SDG&E intends to offer $6.4 million to commercial customers who cut their energy use.
The cost of enhanced regulatory oversight is another unknown, but the plant will be billed $273 per hour for each additional Nuclear Regulatory Commission inspector called in to review ongoing work and investigation at the site.
More like this:
- Nuclear Regulatory Commission finds fault with Mitsubishi's calculations on failed San Onofre generators — Sept. 23, 2013
- Ratepayers should pick up the tab for San Onofre closure, utility says — Aug. 13, 2013
- Beginning of the end for San Onofre? — May 1, 2013
- Public Utilities Commission set to open San Onofre probe — Oct. 17, 2012
- San Onofre Operator to Present Plan to Resume Operations — May 4, 2012