SAN ONOFRE: Congressman suggests utility may have violated federal law

A congressman suggested Thursday that Southern California
Edison may have violated federal securities laws by withholding from
investors information on steam generators at the idled San Onofre Nuclear
Generating Station in northern San Diego County.

Rep. Edward Markey, D-Mass., raised the allegations in a letter to
Elisse Walter, chairwoman of the Securities and Exchange Commission.

Markey said Edison's prior knowledge of design flaws in steam generators
installed in 2009 and 2010 and decision “against making recommended safety
modifications” was a material fact that should have been disclosed to
investors. Withholding a material fact is a violation of the Securities Act of
1933, according to the congressman.

A document discovered about two weeks ago shows the utility was aware
before installation of problems in the equipment manufactured by Mitsubishi
Heavy Industries of Japan, Markey said. Edison denies the allegation.

“Investors presumably want to know whether a company is choosing not to
implement additional safety protocols because such actions might require a
nuclear reactor to go through a more strenuous licensing process,” Markey
wrote. “Such choices could be evidence of poor management or even possible
future civil liability.”

A small leak was discovered in a steam pressure tube in one of the
reactors in January last year, and the unit was shut down with no one being
hurt. The other unit was undergoing scheduled maintenance at the time.

Neither has been restarted.

SCE wants to restart the reactor that was undergoing maintenance and is
awaiting clearance from the Nuclear Regulatory Commission. A decision is
possible as soon as the end of April.

Opponents of SCE's restart plans want the NRC to put the utility through
a rigorous license amendment process.

Markey did not explicitly ask for an SEC investigation of Edison, but he
asked Walter to respond by March 15 with information on the penalties that
can be levied on companies that violate the Securities Act and whether the SEC
has ever investigated an energy company for failing to disclose safety issues.

In a statement to City News Service, Edison said allegations that it
knew of serious problems with the generators before they were installed were
“simply not accurate.”

“Edison International has been open and transparent about the San
Onofre Nuclear Generating Station outage and inspection, NRC and California
Public Utilities Commission processes and contractual matters,” the statement
said. “SCE would never, and did not, install steam generators that it believed
would not perform safely.”

SCE said it sought improve safety and performance in the new steam

Categories: KUSI