The San Onofre Nuclear Generating Station, shut down since 2012 and now being decommissioned. Photo courtesy Southern California Edison
The San Onofre Nuclear Generating Station, shut down since 2012 and now being decommissioned. Photo courtesy Southern California Edison

An agreement between utilities and ratepayer advocates that parcels out financial responsibilities for the shutdown of the San Onofre Nuclear Generating Station in northern San Diego County was approved Thursday by the state Public Utilities Commission.

Consumers will pay about $3.3 billion over 10 years under the deal, which includes paying for power purchased on behalf of customers after the nuclear plant was taken offline in January 2012, following a small, non-injury leak in one of the its two reactors.

In exchange, majority owner Southern California Edison and San Diego Gas & Electric, which owns 20 percent of the plant, will stop further collection of the steam generator replacement project costs in rates; return all such costs collected after Jan. 31, 2012, to ratepayers; and accept a substantially lower return on other prematurely retired San Onofre assets, according to the CPUC.

The commission said those settlement terms will result in consumer credits and refunds worth $1.3 billion.

“This settlement was proposed by certain parties, including consumer groups, at a time that the record of the proceeding was sufficiently developed and the CPUC could examine the reasonableness and prudency of the proposal,” said CPUC Commissioner Mike Florio.

“The CPUC determined today that the settlement is reasonable in light of the whole record, consistent with law, and in the public interest,” he said.

Former San Diego City Attorney Mike Aguirre contends the deal is bad for ratepayers, and has filed multiple lawsuits against Florio, Commissioner Michael Peevey and Edison.

The agreement was reached by the two utilities, along with the Coalition of California Utility Employees, Friends of the Earth, Office of Ratepayer Advocates and The Utility Reform Network.

Investigations into the cause of the leak focused on relatively new steam generators made by Mitsubishi Heavy Industries of Japan that were found to be of a faulty design. Last year, SCE decided to retire the reactors rather than pursue a costly restart plan.

“This settlement resolves all issues regarding the Public Utilities Commission investigation of San Onofre in a fair and reasonable manner,” said SCE President Pedro Pizarro. “This agreement has broad support from leading consumer, environmental and labor organizations and delivers substantial benefits to our customers.”

SCE said it anticipates customers will see a rate reduction in January, reflecting the San Onofre settlement. Later next year, SCE expects rates will increase to cover the higher cost to buy power to meet customer needs, though the size of the increase will be mitigated by the settlement.

The settlement also provides a road map for future customer benefits if SCE recovers funds from Mitsubishi for the defective replacement steam generators. Customers also would benefit from any successful insurance claims the utility is pursuing, according to SCE.

SDG&E, which serves customers in San Diego and southern Orange counties, released a statement from Lee Schavrien, senior vice president of finance, regulatory and legislative affairs, that said the utility is “pleased the commission has approved the SONGS settlement in a timely manner, to allow SDG&E and Southern California Edison customers to see the benefits of the agreement as soon as Jan. 1, 2015.”

“We believe the settlement achieves a fair balance for all parties involved, and reflects input from customers and consumer advocate groups, as well as the modifications proposed by the CPUC,” Schavrien said.

—City News Service