Friends of the Earth & 10 News & Bloomberg – 2013-06-07 22:39:42
http://www.foe.org/news/news-releases/2013-06-victory-edison-closes-san-onofre-for-good
Victory: Crippled San Onofre Nuclear Plant to Close Permanently
Friends of the Earth
WASHINGTON, D.C. (June 7, 2013) — The news just broke this morning: after years of fighting toe-to-toe with the billion dollar nuclear industry, WE WON!
Southern California Edison, the utility that operates the damaged San Onofre nuclear plant, has given up, saying it’s not economically feasible to continue trying to repair the crippled reactors. The reactors were shut down over 18 months ago after the failure of newly installed steam generators caused a radiation leak.
This is tremendous news for the people of Southern California — and also for the country as a whole. It’s another example of the failed promise of dirty and dangerous nuclear power, and it clears the way for a transition to a clean and safe energy economy based on the sun and wind.
Here is a statement from Erich Pica, president of Friends of the Earth, on the announced closure of the San Onofre Generating Station:
“This is very good news for the people of Southern California. We have long said that these reactors are too dangerous to operate and now Edison has agreed. The people of California now have the opportunity to move away from the failed promise of dirty and dangerous nuclear power and replace it with the safe and clean energy provided by the sun and the wind.”
Thanks for standing with us,
Damon, Shaun and Kendra, Climate and energy program, Friends of the Earth
San Onofre Nuclear Power Plant to Shut Down
10 News
LOS ANGELES (June 7, 2013) — Southern California Edison’s parent company announced Friday it is shutting down the San Onofre Nuclear Generating Station just north of Camp Pendleton, the latest chapter of a saga that began with the discovery of a small leak of radioactive steam.
Ted Craver, chairman and CEO of Edison International, SCE’s corporate parent, cited uncertainty about when the two units at the plant, which were taken offline because of technical issues, would be allowed to restart.
“… We have concluded that the continuing uncertainty about when or if SONGS might return to service was not good for our customers, our investors, or the need to plan for our region’s long-term electricity needs,” he said in a statement released from the company’s headquarters in Rosemead.
The company also said the administrative process to gain regulatory approval to restart could have lasted more than a year, entailing a cost too great to bear.
“… It is uneconomic for SCE and its customers to bear the long-term repair costs for returning SONGS to full power operation without restart of Unit 2,” according to Edison.
SCE estimates that it will record a charge in the second quarter of the current fiscal year of between $450 million and $650 million before taxes, or about $300 million to $425 million after taxes. The utility estimated in February that the closure had already cost it $400 million.
The plant’s two reactor units, referred to as Unit 2 and Unit 3, have been offline since early 2012. Unit 1 was in operation from 1968 to 1992, when it was shut down over fears it could not withstand a major earthquake.
Unit 2 was taken out of service Jan. 9, 2012, for planned routine maintenance, while Unit 3 was shut down abruptly on Jan. 31, 2012, after a small leak of radioactive steam occurred. No one was hurt, but both reactors were kept offline while the issue was investigated.
Edison executives would later reveal the leak was caused by premature wearing of steam pressure tubes in the reactors. Each reactor has nearly 20,000 tubes and hundreds of those were found to have been worn down prematurely by rubbing against each other due to vibrations and a settling of support equipment.
The tubes carry hot, pressurized radioactive water from the reactors. The tubes then heat non-radioactive water surrounding them, producing steam used to turn turbines to create electricity.
The tubes also provide a critical safety function, forming a barrier between the radioactive and non-radioactive sides of the plant.
Edison has spent months trying to gain permission from the Nuclear Regulatory Commission to restart one unit at 70 percent power for five months as a test run.
However, the plan has been strongly opposed by the anti-nuclear group Friends of the Earth and Sen. Barbara Boxer, D-Calif., who accused Edison of skirting federal regulations designed to prevent such mishaps.
And former NRC head Gregory Jaczko said in San Diego this week that the restart plan instilled no confidence because it effectively suggested that Edison lacked the confidence to run the plant at full power.
Opponents, including the environmental group Friends of the Earth, contended that Edison executives were not forthright in how they characterized replacement steam generators installed in the reactor units in 2009 and 2010. They recently released a series of communications they believe demonstrate that Edison executives knew the generators were of a radically different design than their predecessors.
“We have long said that these reactors are too dangerous to operate and now Edison has agreed,” Friends of the Earth President Erich Pica said this morning. “The people of California now have the opportunity to move away from the failed promise of dirty and dangerous nuclear power and replace it with the safe and clean energy provided by the sun and the wind.”
Edison said Friday it would pursue damages from Mitsubishi Heavy Industries of Japan, the company that supplied the replacement steam generators that wore out sooner than expected.
In connection with the retirement of Units 2 and 3, about 1,100 workers at San Onofre will lose their jobs over the next year.
“This situation is very unfortunate,” said Pete Dietrich, SCE’s chief nuclear officer, calling the affected workers “an extraordinary team of men and women. We will treat them fairly.”
Prior to being shuttered early last year, San Onofre was able to keep the lights on in 1.4 million Southern California homes. Edison is the majority owner, but San Diego Gas & Electric and the city of Riverside each have a small stake.
SDG&E has said the plant’s shuttering has not affected its ability to serve residents in San Diego County, largely because of the Sunrise Powerlink that came online last summer. The major transmission line is capable of carrying 800 megawatts of electricity — nearby double SDG&E’s share of energy from San Onofre — from the Imperial County desert into San Diego and southern Orange County.
“Since the units went offline in early 2012, SDG&E’s primary concern has been continuing to meet our customers’ energy needs as safely and reliably as possible,” said Jessie Knight Jr., the utility’s chairman and CEO. “With the Sunrise Powerlink now in service and with additional contracted resources, barring any unforeseen system emergency, our region should have adequate power supplies for this summer.”
SCE executives said they would continue to work with the California Independent System Operator, the California Energy Commission and the California Public Utilities Commission in planning for its customers’ energy needs.
“The company is already well into a summer reliability program and has completed numerous transmission upgrades in addition to those completed last year,” said SCE President Ron Litzinger.
“Thanks to consumer conservation, energy efficiency programs and a moderate summer, the region was able to get through last summer without electricity shortages,” he said. “We hope for the same positive result again this year, although generation outages, soaring temperatures or wildfires impacting transmission lines would test the system.”
Gov. Jerry Brown released a statement that said, “Since San Onofre nuclear power plant went offline last year, energy utilities and the state have worked to provide Southern California with reliable electric power year round.
“At my direction, California’s top energy experts will continue developing a long-term plan that ensures there is reliability for decades to come. As we move into the hot summer months, we can all do our part by continuing to conserve.”
Copyright 2013 by City News Service. All rights reserved.
Edison Faces Regulatory Battle Over San Onofre Shutdown Cost
Mark Chediak and Jim Polson
(June 7, 2013) — Edison International (EIX) faces a regulatory battle over who will pay for about $3.4 billion of costs related to the decision to retire the San Onofre nuclear plant amid a record number of US nuclear closures.
Southern California Edison, the utility unit that owns and operates what had been California’s largest source of round-the clock electricity, has a $2.1 billion investment in the two reactors and may have to refund some of the $1.3 billion collected from customers since the plant quit producing power in January 2012, Chief Executive Officer Ted Craver told reporters today on a conference call.
Four commercial nuclear-power units, including Edison’s two, have been permanently closed in the US this year, the highest-ever annual total, according to US Nuclear Regulatory Commission data. A glut of shale-fed natural gas and government-subsidized wind has upended power-market dynamics and squeezed margins, making costly repairs uneconomical for some nuclear operators.
“It no longer makes sense to restart San Onofre,” Craver said today. Buying power on the open market became the cheaper alternative because a year of delay cut too deeply into its operating life, he told reporters. The reactor license expires in 9 years. Edison was spending $30 million a month preparing for the restart, he said.
Edison estimates that shareholders will absorb after-tax costs of $300 to $450 million, although further writedowns are possible, Chief Financial Officer Jim Scilacci said. The company hasn’t determined how much it will seek from customers, he said.
Decommissioning Costs
The cost to customers may not be settled until late next year, Edison said. The company has already asked for a $16 million a year increase to cover the cost of decommissioning the reactors, Scilacci said on today’s call. The decommissioning fund is about $300 million short of what’s needed, he said.
Both reactors at the San Onofre plant, about 45 miles (72 kilometers) southeast of Long Beach, were shut in January 2012 after a radioactive leak and the discovery of unusual wear on tubes that transfer reactor heat to power-generating turbines.
Edison may recover some investment costs from Mitsubishi Heavy Industries Ltd. (7011), maker of the failed plumbing, and from its nuclear insurer, Craver told reporters. The company has asked Mitsubishi for $139 million and $234 million from the insurer, according to a filing.
Regulatory Uncertainty
Uncertainty over when the utility would gain approval from federal regulators to restart one of its reactors led to the decision to shutter operations. The company saw a less than 50 percent chance of receiving the approval that it needed by the end of this year to operate the unit economically, Craver said.
The decision to permanently shut San Onofre came after the NRC’s Atomic Safety and Licensing Board ordered a hearing on the company’s plan to restart the least-damaged reactor at 70 percent of full power.
“That’s the ruling that made clear we’re going to have a much more uncertain process,” Craver told reporters.
Adding to the potential delay is the US Senate’s confirmation of Allison M. Macfarlane as NRC chairman, Andrew L. Smith, a Houston-based analyst for Drexel Hamilton LLC, said in an interview.
The committee handling the confirmation is led by Barbara Boxer, a California Democrat who had called for the US Department of Justice to probe Edison’s attempt to restart the plant. Boxer’s “greatly relieved” that Edison is closing an “unsafe” plant, she said in a statement today.
Recouping Costs
The California Public Utilities Commission will decide how much customers will have to pay for the retirement of the reactors, which provided almost 20 percent of the power for Edison’s customers.
The CPUC will decide “as quickly as possible” who will pay for the shutdown, Michael Peevey, president of the CPUC, said in an e-mail statement.
Sempra Energy (SRE), which had a 20 percent stake in San Onofre, expects California regulators to allow it to recover its $519 million investment from ratepayers, the San Diego-based company said in a filing today. The company’s San Diego Gas & Electric Company utility will likely record an after-tax charge of $30 million to $110 million in the second quarter of 2013 related to the plant.
Shuttered Reactors
Edison should be able to bill ratepayers for its investment in the plant based on previous commission decisions, Smith from Drexel Hamilton said today. He rates Edison shares buy and owns none.
Some of the $529 million Edison charged customers for replacement power since the plant was shut or the $813 million charged for operating it when it wasn’t generating electricity, will have to be refunded given previous rulings, he said.
Duke Energy Corp. (DUK) decided to shutter its Crystal River Unit 3 reactor in central Florida rather than risk spending billions of dollars on repairs to its cracked containment dome. Dominion Resources (D) Inc. last month closed its Kewaunee nuclear station in Wisconsin after failing to find a buyer for the money-losing plant.
Edison rose 2.7 percent to $47.61 at the close in New York, the most since Nov. 30, 2011.
To contact the reporters on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net; Jim Polson in New York at jpolson@bloomberg.net
Pressed by Calif. Regulators, Edison Forced to Release another Damning Letter
Friends of the Earth
WASHINGTON, D.C. (May 29, 2013) — Under pressure from the California Public Utility Commission, Southern California Edison has released to Friends of the Earth another suppressed and highly incriminating internal document, showing that the utility knew eight years ago of serious flaws in the design of replacement steam generators for the San Onofre Nuclear Generating Station. The letter directly contradicts written testimony Edison gave in January to the US Nuclear Regulatory Commission.
The 2005 letter from then-Edison Vice President Dwight Nunn was released Tuesday, after the state PUC sharply questioned why Edison had not provided it as part of the PUC’s investigation of failure of the San Onofre reactors, shut down since January 2012 after a leak of radioactive steam.
The day before, Boxer released a 2004 letter from Nunn proving that Edison knew that the flawed generators were not “like-for-like” with the ones they replaced, but failed to reveal that to the NRC in order to expedite approval from the NRC.
“This new letter shows conclusively that in 2005 Edison was aware that its defective design could lead to vibration and cracking of steam generator tubes,” said Damon Moglen, Friends of the Earth’s climate and energy program director. “While Edison knew this could lead to what the earlier letter calls ‘a disastrous outcome,’ they didn’t fix the problem, they didn’t tell the NRC then and denied it again in testimony this year. This is a scandal of the highest order: Edison prioritized its construction schedule and profits and endangered the lives and livelihoods of millions of Southern Californians.”
In the June 16, 2005 letter, Nunn writes to Mitsubishi Heavy Industries, which manufactured the replacement steam generators to Edison’s specifications, about the “probability” that the design could cause the tubes to vibrate and crack.
Despite later suggestions from a joint Mitsubishi/Edison design team to fix the problem prior to construction, the contractors rejected such changes because they would have triggered a lengthy NRC license amendment review, including public hearings. In January, in written testimony to the NRC in a case brought by Friends of the Earth, Edison claimed that the problem “was not known at the time.”
S. David Freeman, former head of the Tennessee Valley Authority and of several nuclear utilities, said Edison knew it was taking a risk.
“With these revelations, it’s clear that Edison was conducting an experiment all along,” said Freeman, senior advisor to Friends of the Earth. “They were operating reactors with equipment that they knew had major problems. That’s unforgivable.
“Edison gambled that additional safety measures were not needed when they gave the highest priority not to safety but speed of construction. Of course they didn’t know for sure that the equipment would fail, but they did know that they were taking a risk and they lost on their gamble. Gambling with the safety of a nuclear plant is not acceptable and an egregious misuse of ratepayer’s money.”
The mounting revelations of Edison’s deception dash the utility’s request to restart San Onofre rector Unit 2 this summer, said Moglen. “The NRC must make sure these reactors are not restarted with this damaged equipment, and the PUC must make sure no ratepayer money is spent to operate, let alone restart, this failed plant,” he said.
After Senator Boxer released the 2004 letter yesterday, the California PUC issued a statement asking “whether Edison had a duty to disclose the letters earlier.” PUC Executive Director Paul Clanon said the Commission “need(s) to investigate whether Edison took unnecessary risks, or tried to evade regulatory oversight.” Edison quickly released the 2005 letter, along with other suppressed internal documents that may hold more revelations. Friends of the Earth is currently evaluating the remaining documents.
See more at: http://nukefree.foe.org/news/2013-05-pressed-by-calif-regulators-edison-releases-letter#sthash.OAVPcfaP.dpuf
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