SDG&E settlement relieves customers $1.4 billion in charges
SAN DIEGO (CNS) – A proposed settlement reached this week would relieve
customers of Southern California Edison and San Diego Gas & Electric of paying
$1.4 billion in utility charges related to steam generators that caused the
shutdown of the San Onofre Nuclear Generation Station.
The settlement agreed upon by The Utility Reform Network, state Office
of Ratepayer Advocates and the two utility companies still needs approval from
the state Public Utilities Commission.
According to TURN and the state ORA, the deal would retroactively
prevent the utilities' customers from having to pay for the steam generators
starting on Feb. 1, 2012, one day after the shutdown. The financial burden
would be shifted to the utilities' shareholders.
For Rosemead-based SCE, that works out to $1.12 billion, according to
the ORA. For San Diego Gas & Electric, the total is $286 million.
SDG&E owned 20 percent of the plant on the northern San Diego County
shoreline, and received one-fifth of the power it generated.
According to SDG&E spokeswoman Stephanie Donovan, the dollar amounts are
split into portions dealing with the previous steam generator charges — $480
million for Edison customers and $121 million for SDG&E consumers — while the
remainder of the savings stem from a lower base rate the companies can charge
through 2022 since the plant is out of operation.
Joe Como, ORA's acting director, called the settlement agreement “an
extremely good deal for customers who will see a refund of hundreds of millions
of dollars in the coming years.”
ORA also announced that the utilities' customers could share in
additional savings, depending on whether Edison is successful in litigation
against Mitsubishi Heavy Industries, the Japanese firm that manufactured the
According to TURN, SCE and SDG&E would also refund any money collected
from ratepayers since the beginning of last year in excess of the actual
operational costs of the plant, and would refund to customers any money
resulting from the sale of extra materials and supplies along with unused
A small, non-injury leak forced the closure of one of San Onofre's
reactors two years ago. The other unit was undergoing scheduled maintenance at
the time, and was never restarted.
Edison shelved restart plans last June and decided to retire the reactors.
“This proposed settlement means that customers don't pay for the steam
generator project after the tube leak at San Onofre, leaving SCE financially
responsible for its ownership share in the project,” said Edison President Ron
“Our customers will pay for replacement power they received,” he said.
“The settlement, if approved by state regulators, provides certainty
regarding the appropriate cost recovery for the remaining investment in the San
Onofre nuclear plant, replacement power costs and authorized revenues.”
Litzinger said the deal would provide a “clear road map” for SCE to
pursue claims against Mitsubishi.
SDG&E President Jeffrey Martin called the proposed settlement “fair and
reasonable” for balancing the interests of customers and shareholders.
“The settlement ensures that customers will not have to pay for San
Onofre's faulty steam generators post-shutdown and also allows shareholders to
recoup the majority of their non-steam generator investment in the plant, which
provided clean, reliable, low-cost energy to the region for more than 40
years,” Martin said.
SDG&E said it would “vigorously” pursue claims against Mitsubishi.
CPUC President Michael Peevey said the settlement will come before the
commissioners for approval after a public hearing is held.
According to Donovan, if the agency grants approval in a timely fashion,
customers' bills will begin reflecting the benefits this year, providing a
mitigating effect for rate increases already in the offing for the utility's
other operations, which serve customers in San Diego and southern Orange