Taxpayers Pay Millions a Month for Shuttered San Onofre

Friday, August 31, 2012
San Onofre Nuclear Generating Station

California taxpayers are shelling out $54 million a month for use of the disabled San Onofre nuclear power plant that—by law, according to the Public Utilities Commission’s (PUC) own Division of Ratepayer Advocates (DRA)—must be “used and useful” in order for owner Southern California Edison to get paid.

San Onofre is neither.

The plant’s two reactors have been offline since January, when a generator tube leaked radioactive steam and sparked a shutdown and investigation that uncovered severe safety problems. Hundreds of tubes were found to suffer from excessive wear as a result of design and engineering problems. It has not been determined when, or if, the reactors will be restarted.

Joseph P. Como, acting director of the ratepayer advocates division, wrote the PUC on August 13 that commissioners should stop paying Edison now “instead of waiting several more months and allowing hundreds of millions of dollars in needless costs to be borne by customers.”

Como lamented the loss of San Onofre generating capability and acknowledged that a task force would be addressing the plant’s problems, but he argued that paying Edison was a separate issue and could be decided now without waiting for investigations to conclude.

Como also said the commissioners shouldn’t feel constrained by a PUC rule that allows a utility nine months to report a nonfunctional facility, thereby triggering an investigation. “Section 455.5 is not intended to be a free pass for utilities to earn a return on nonfunctioning hardware for nine months,” he wrote. “Indeed, the Commission has a responsibility to act sooner when the facts before it demonstrate that a major part of a jurisdictional utility’s plant is out of service.”

Although the ratepayer advocate has a bully pulpit of sorts, and is an independent arm of the PUC, it has no institutional power. It represents consumers in commission proceedings, pursuant to statute.    

The PUC, which is chaired by former Edison president Michael Peevey, may take up the matter of Edison compensation in October, or it may not. Edison announced a week ago that it was cutting its San Onofre workforce by 730, leaving 1,500 workers on site. Meanwhile, Edison collects $54 million a month.    

–Ken Broder


To Learn More:

Agency Calls for Rate Cut over San Onofre Outage (by Abby Sewell, Los Angeles Times)

PUC Dithers as Consumers Keep Paying to “Run” Crippled San Onofre (by Michael Hiltzik, Los Angeles Times)

Removal from Rates of Costs Associated with San Onofre Generating Station (PUC Division of Ratepayer Advocates) (PDF)

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