Cost of Closing San Onofre Nuclear Plant: 13.6 Billion
- July 29, 2013
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Dan McSwain, a business columnist and investigative reporter for U-T San Diego, has published an article titled The secret decision to kill San Onofre nuke. McSwain estimates that consumers will be required to pay least $13.6 billion in additional costs as a result of the unplanned, early retirement. I think that calculation is low because it does not account for the increase in the market price of replacement fuel (mostly natural gas) that will be driven by the loss of nuclear energy supply in an area where there is a tight balance between energy supply and energy demand.
In the same article, McSwain shows how SCE may capture profits of $4 billion from its decision to shut down the nuclear plant. That decision that was made essentially irreversible last week when the company filed the final certification required in order to give up its NRC operating license. Customers who may just now be realizing the enormous costs they will be forced to pay have no legal recourse. Here is a quote from the press release that the company sent to announce its “accomplishment”.
San Onofre Nuclear Plant Operating License to be Retired After Final Fuel Removal
ROSEMEAD, Calif., July 24, 2013 — The San Onofre nuclear plant has completed the final regulatory step required to formally retire its operating license.
Southern California Edison (SCE), majority owner of the nuclear plant, sent a letter to the Nuclear Regulatory Commission (NRC) on Tuesday certifying that fuel has been removed from the Unit 2 reactor. A similar letter for Unit 3 was submitted on June 28. Once the NRC certifies the Unit 2 defueling, the nuclear plant will have a “possession” license rather than an operating license, and will no longer be authorized to place fuel in the reactor vessel.
“While we have safely performed this kind of defueling work for four decades, the final removal of fuel from the Unit 2 reactor marks a significant milestone in San Onofre’s history,” said Pete Dietrich, SCE senior vice president and chief nuclear officer. “We are committed to remaining focused on public health and safety as we transition through decommissioning.”
The defueling of Unit 2 was completed on July 18. The 217 fuel assemblies were moved to the spent fuel pool where they will be stored and cooled until transferred to dry cask storage. The transfer was executed entirely under water by specialized equipment, as captured in this video.
SCE announced June 7 that it would retire San Onofre Units 2 and 3, and begin the process to decommission the facility.
No plant in the United States has ever been restarted after giving up its initial operating license. There is no process available for that action short of a full license review as if the plant was a new construction project.
Southern California Edison (SCE) is understandably reluctant to expose its hasty decision process to public scrutiny. Here is a quote from McSwain’s U-T San Diego article.
I’ve tried to ask him (Ted Craver, SCE CEO), along with PUC President Michael Peevey, to share Edison’s basic cost-benefit analysis on fixing the nuke vs. shutting it down. Both men declined my interview requests.
“There is no CPUC or statutory requirement for a utility to obtain CPUC prior approval before shutting down a nuclear generating facility,” an Edison spokeswoman said via email.
This is the same utility that involved the PUC for years in its 2007 decision to abandon the Mohave Generating Station, a giant plant in Laughlin, Nev., that polluted the Grand Canyon with coal smoke.
SCE recently filed a formal notice of dispute on Mitsubishi, claiming that the company supplied defective steam generators and should be held liable for a large portion of the costs associated with attempting to repair the plant and purchasing replacement power.
In the Notice of Dispute, SCE argues that limitations on Mitsubishi’s liability set forth in the Contract do not apply because of contractual exceptions and because of provisions of California law. Mitsubishi, like the manufacturer of a “lemon” automobile, was unable to fix the defects in its product because they were so fundamental and pervasive. In this circumstance, SCE claims that the limitations are not enforceable, and Mitsubishi is therefore responsible for the full measure of damages incurred by SCE, the other SONGS owners and their customers.
Aside: I feel the need to remind readers that the controversial steam generators exhibited signs of wear in a small section of the large devices. Out of four replacement steam generators involved in the dispute, one of them experienced a single tube leak at a rate 1/2 of the technical specification limit.
That statement means that even with the leak, the plant never reached the point at which it was required, by regulation, to shut down. Though good operating practice leads to a shutdown and investigation to prevent a larger leak from developing, the rules were written by people who understand that heat exchangers often leak. From the perspective of an operating engineer who recognizes that nothing made by man is perfect, the leak rate was acceptable. End aside.
Mitsubishi has responded to SCE’s notice, stating that they offered several viable repair options and reminding SCE that they have a contracted liability limit of $137 million for warranty repairs.
This whole episode is giving me a “deja vu all over again” feeling. One of the contributors to the end of the first atomic age in the United States was a long running dispute between utility customers and nuclear plant vendors over steam generators and their unexpectedly short lifetimes. There was a lot of finger pointing and lawyers made a ton of money. Not surprisingly, the dispute between customers and suppliers discouraged new orders.
The leaders in the nuclear industry seem determined to repeat their conflicted history; it is no wonder that the antinuclear movement has been so successful. the antinuclear actions mentioned in the headline of this article have been taken by people that the public and the media would classify as “pronuclear”. With friends like this in decision-making positions, who needs enemies?
PS John, the man who sent me the link to Dan McSwain’s article in U-T San Diego identified himself as a SONGS retiree. I would imagine there are plenty of disgruntled and disappointed people who were still working at the plant at the time their leaders decided to halt production.
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Photo Credit: San Onofre/shutterstock