The California Public Utilities Commission on Thursday approved a settlement between utilities, led by Southern California Edison, and ratepayer advocates over who should pay for the more than $4.7 billion in costs to date for shutting down the troubled San Onofre nuclear power plant.
Under the settlement, ratepayers of Southern California Edison and San Diego Gas & Electric will pay $3.3 billion over 10 years to cover the shutdown costs. These include the purchase of replacement power after the nuclear plant was taken offline in January 2012 due to leaks and alleged design flaws in tubes of a newly-installed steam generator.
However, the utilities and their shareholders will also hand over $1.4 billion in refunds and credits to ratepayers for shutdown-related costs the ratepayers have already been charged. These costs include charges for the new steam generator that were collected after the Jan. 2012 shutdown. As a result, shareholders of SCE parent Edison International in Rosemead will see a return of only 3 percent on their investment in the new steam generator.
Ratepayers may see even more money coming back to them, depending on the outcome of Southern California Edison’s lawsuit against Mitsubishi Heavy Industries of Tokyo, which made the steam generator with the problem tubes. Under changes made this summer in the settlement agreement, any proceeds from the lawsuit will be split evenly between ratepayers and shareholders.
San Onofre has been jointly owned and operated by three utilities: Southern California Edison, which owns 78 percent; San Diego Gas & Electric, which owns 20 percent; and the city of Riverside’s utility, which owns the remaining 2 percent.
Representing ratepayer interests in the settlement talks were the Utility Reform Network and the Public Utilities Commission’s Office of Ratepayer Advocates.
Shares of Edison International fell 30 cents on Thursday to close at $62.25; however, shares had rallied over the last couple months, largely in anticipation of the settlement approval.
Check out previous coverage in the Business Journal.
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