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Cost of Closing San Onofre Nuclear Plant: 13.6 Billion

San Onofre Closing

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.

The post McSwain calculates cost of antinuclear actions at San Onofre – $13.6 billion appeared first on Atomic Insights.

Photo Credit: San Onofre/shutterstock

Rod Adams's picture

Thank Rod for the Post!

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Discussions

I K's picture
I K on July 29, 2013

There will be no nuclear expansion in the west because existing coal stations fed by existing coal mines are very cheap and perhaps more importantly CCGTs are just brilliant beautiful pieces of engineering

Gas may be more expensive than coal or uranium but they have automated CCGTs so much that it only takes 40 full time men to run a 1GW CCGT vs 1000 staff at a similar sized old nuke. Couple that with extremely cheap prices to build new CCGTs (about $750m/GW) and what chance does nuclear have?

The only way nuclear or wind or pv or anything is going to take serious market share f

rom coal and ccgts is with subsidy direct or indirect.

 

 

 

 

 

 

 

The only way I can see nuclear expanding and ita highighly unlikely is with floating or submerged SMRs and even then they would need to be at most around $2/watt to succeed and have a staffing level not more than around 200 per GW

 

I K's picture
I K on July 29, 2013

as noted before as a 16 year old student you are permitted to handle alpha beta and gamma radioactive material with your hands if you take physics A-Levels. radioactivity is nowhere near as dangerous as you are trying to scare people into believing.

Robert Bernal's picture
Robert Bernal on July 29, 2013

Perhaps, the old LWR has finally met its match (time to move on to a better reactor design).

Nathan Wilson's picture
Nathan Wilson on July 29, 2013

4 billion in profits from shutting down a power plant, while handing the public 13 billion in charges for replacement fuel etc?  Brilliant move; the executives at Southern California Edison deserve enormous bonuses this year (for making a profit while giving the public what they want)!

The public utility commisioners, NRC people, and the politicians involved, however, deserve to be tarred and feathered.

Nathan Wilson's picture
Nathan Wilson on July 29, 2013

Huh?  steam generators are used in coal, natural gas combined cycle, and solar thermal power plants.  They will be used in most alternative nuclear designs.  The fact that San Onofre steam generators were able to permanently shutdown the plant is more a bad reflection on our society than on LWRs.

LWRs have a stellar safety record, even including Fukushima and Three Mile Island (neither of which produced any nuclear fatalities).  There is no question that without San Onofre, California will now have more pollution, more energy accidents, and higher cost electricity.

Jesse Jenkins's picture
Jesse Jenkins on July 30, 2013

“Capt D,” our apologies, some of your comments got held up in our moderation queue over night. They should all be published now. 

“I K,” you’ve been warned repeatedly to keep comments constructive and on topic and to avoid insults and snide remarks. This is a forum for a civilized conversation. 

Jesse Jenkins

Digital Community Strategist
TheEnergyCollective.com

I K's picture
I K on July 30, 2013

There was nothing negative in what I posted nor anything incorrect. You are able to use and handle radioactive materials from age 16

Although I think I was wrong to say the stuff about the cake decorating as they also handle radioactive material in the form of carbon isotopes in the flour……

 

Robert Bernal's picture
Robert Bernal on July 30, 2013

You’re right. I just meant that the LWR is mired in public unacceptance. Most of SCE’s customers probably wanted it to shut down (not knowing or caring about the excess CO2 detriment). I believe that these accidents would not have happened if a non pressurised reactor core was used instead, i.e molten salt (or whichever is best).

We can save the biosphere by deploying a better, inherently safe reactor on a modular, mass production scale. Or we can watch the effects of fossil fueled depletions play out while we wait for yet another expensive tech fix.

Is there ANY other options?

Jesse Jenkins's picture
Jesse Jenkins on July 30, 2013

Suggestion: The American people need balanced information and The Energy Collective should provide Pro-Con articles which would help promote balanced discussions on critical energy matters facing all of us.”

Thanks for the suggestion. We  may try to do something like this. Overall, we aim to foster a wide range of views and opinions at the Energy Collective, provided they are all well researched and substantiated. While we don’t generally do point-counterpoint stories like that, if you look at our home page on any given day or week, you will likely see articles with positions that starkly contrast one another. And we rely on our comment community to further the discussion on each article (as has happened here). Thanks for commenting,

Jesse 


Robert Bernal's picture
Robert Bernal on July 30, 2013

Without reading the other posts, i must say that the leak that was detected by a radiation monitor was probably on the order of the same kind of radiation given to my daughter after I signed a consent to have her face cat scanned (or something like that). I eventually looked it up and found out it was HUNDREDS of times the exposure than that of a single x-ray. And everybody who is afraid of nukes must surely be afraid of x-rays! Anyways, 5 years later, she is fine (but I am still pissed off at myself for allowing such for a silly scratch from falling off a bicycle, a few x-rays would have been just fine to search for a fracture!).

To further my position that the leak was probably not that radioactive is a science show I seen with Brian Cox, talking about how early 20th century scientists would intentionally use radioactive material – just to study fundament partical science, and electrons… to this day, a gieger counter STILL detects it (in the very desk used, meaning that very small amounts are detectable, not that it is dangerous, because those guys did not die early… I know I need to figure out just which show that was but I forgot the name of that scientist he was talking about).

Anyways, when you talk about multiple problems… then I concede. You’re probably right, that we don’t need to take a chance with pipes blowing up (because they are under, well, over pressure)! I just want to make straight that the radiation exposure is probably no more than that of a toxic coal ash heap, except that the politics of fear bounds one but NOT the other!

So, the logical thing to do is focus on the SAFEST possible reactor design and then mass produce from there in a modular manner.

Because the biosphere will not wait for us and our exceedingly slow approach to effecient renewable energy storage, instead (due to the chemical, physical and even historical nature of excess CO2), it will FRY.

Rod Adams's picture
Rod Adams on July 31, 2013

@CaptD

Your statements are not true. The operators shut down unit 3 immediately upon the receipt of the radiation alarm. 

It is never quite kosher to use a self-reference, but I published a carefully reasoned, referenced analysis of the technical reports filed by both SCE and the steam generator vendor. It is far too long to post as a comment.

http://atomicinsights.com/san-onofre-steam-generators-honest-error-drive...

Although the internet is a place that protects anonymity, my professional training and work history is published for all to see.

http://atomicinsights.com/wp-content/uploads/Rod-Adams-resume-Atomic-Ins...

Readers can feel free to evaluate that information to determine if they would rather believe my analysis or the work of an anonymous commenter with a history of statements in opposition to the beneficial use of nuclear energy on a variety of sites.

I will leave people with a final link – I wrote this post to contrast the reaction given to the small leak of essentially pure water from San Onofre to the reaction to a fatal refinery accident and release of massive quantities of toxic material.

http://atomicinsights.com/media-coverage-chevrons-richmond-ca-refinery-v...

I wrote that long before the decision was made to use that tiny leak as an excuse to shut down a two unit facility that provided approximately 15% of California’s electricity in favor of massively increasing the state’s natural gas consumption. It is clear to me who the real winners are in the battle to make people irrationally fear nuclear energy – the oil&gas companies are taking additional earnings of $2-$10 million to the bank every day.

Rod Adams's picture
Rod Adams on July 31, 2013

@Robert Bernal

You appear to have accepted the arguments of the antinuclear opposition. I would guess that you might be one of the molten salt / thorium reactor proponents who claim that all will be better and nuclear energy will prosper if we simply move on to “better” technology.

Based on my reasonably deep well of knowledge about the safey and reliability of light water reactors over their fifty year operating history – approximately 25,000 reactor years worth LWR operations around the world (about half of that number comes from shipboard power plants) – the real issues that lead to such a strong organized opposition do not stem from the weakness of LWR technology. LWRs certainly have their challenges, but most have been mitigated with good design, maintenance and operation.

There are people that will oppose any nuclear technology that actually makes it into the market place. Some of them hate nuclear because of its tenuous relationship with nuclear weapons. Some hate nuclear because it provides abundant, reliable energy and they would prefer for human society to revert to an earlier, less powerful time when people only had access to “natural” energy sources.

Finally, and in my opinion most importantly, there are people who oppose nuclear energy because it competes directly with their favorite sources of energy and income – coal, oil, gas, solar, wind, hydro, geothermal. If not artificially restrained, it is a formidable competitor that not only captures market share, it drives down the market prices of all other forms of energy because it represents an increase in the supply without increasing the demand.

Energy suppliers hate the idea of selling fewer BTUs at lower unit prices per BTU. So do their bankers, equipment suppliers and other investors.

Rod Adams

Publisher, Atomic Insights

Mike V's picture
Mike V on July 31, 2013

 Zak,

The half-life of the radioisotope N-16 in the steam is 7 seconds so your 75 gallons of water would not be radioactivity for very long. The activity would be down by a factor of a trillion in 5 minutes. 

Rod Adams's picture
Rod Adams on July 31, 2013

@Zak Red Ridge

Nearly all of my friends and colleagues developed over the past 30 years have far more detailed nuclear knowledge than an unidentified “nuclear technician”. Among those friends I can probably count no fewer than 2 dozen with PhD’s and a substantially larger number with MS NEs. Then there are the people who are qualified Senior Reactor Operator or Engineer Officer on nuclear powered ships.

They would agree that your friend is misinformed.

The IAEA and the WHO also have issued reports indicating that there is little chance that there will ever be any deaths that can be attributed to the radiation exposures received by the small discharges of radioactive material (something less than 20 kilograms of Cs-137 and a few tens of grams of I-131)

Einstein was absolutely correct. Atomic fission is one hell of a way to boil water. Humans worked for several thousand years before discovering such a nearly perfect source of heat – huge energy density of 2 million times more than oil, almost no waste, and no need for an external oxygen source.

 

 

Rod Adams's picture
Rod Adams on July 31, 2013

@CaptD

I have spoken to some that knew those that were there when Unit 3 started leaking, two hours elapsed between the first alarm and starting the reactor shut down sequence!


Your own post contradicts that statement. A couple of paragraphs later you state that the initial alarm was received at 15:05. By 17:05, two hours later, the reactor power was less than 35%.

You may not understand what you wrote, but that tells me that the operators immediately started shutting down the plant. It takes some time to reduce power in a reactor producing enough juice to power half a million to a million households. It would not be prudent to rapidly reduce power (scram) a plant that has evidence of a leak – the thermal stresses would be likely to increase the size of the leak.

Rod Adams

Robert Bernal's picture
Robert Bernal on July 31, 2013

Rod, thanks for replying…

I also believe that the main reason nuclear isn’t being used is because of the money thing. But I don’t know why we would want to stick with the light water reactor for two reasons:

One, that they are “mired in fear”, causing me to have NO faith in their resurrection.

And two, why deal with the high pressures that caused the few accidents in the first place when there are supposedly better technologies like IFR, MSR, HTGR, PRISM, LFTR, etc.

I kinda forget about the arguments, pro and against concerning thermal compared to fast reactors, but I believe that if MONEY was taken out of the equation, then the world would know the absolute BEST reactor design to mass produce, given all the people who do actually know enough about nuclear physics could collaborate and decide upon this most urgent decision.

I understand that these “better” design require a much more intense gamma, but for like only 300 years. Doesn’t the LWR also have these fission products too (in addition to the unspent fuel)?

Also, can you point me in a direction that can teach me more about all the various different pros and cons concerning the different reactor types, that would explain more about how the nuetrons, the math, the half life’s, how hard is it really to deal with molten salts, etc (I’m tired of just seeing the pro’s from everyone’s fave design)?

Thanks

David Rickmers's picture
David Rickmers on August 3, 2013

Many of us would prefer decentralizing electricity generation. I like the idea of methane fuel cells running on sewage gas, augmented by natgas as needed. After Fukushima I can’t believe any sane person would trust a corporation with such destructive power.

Paul O's picture
Paul O on August 3, 2013

Rod I agree with you on San O.

I wish to add my two cents on LWR vs LFTR and other MSR. From my perspective, the biggest problem with LWR and current technology is the wastefull once through fuel cycle concept. Why in the world would we keep on with old technology that uses 1 to 2 PCNT of the energy in Uranium and leave behind longlived (even if manageable actinides.

 

The Nuclear haters can and will keep hating all they want, but supporters of Nuclear Power should move the technology forward in spite of them.

 

One other reason to support LFTR, MSR, and other gen 4 reacotrs over LWR is that compactly transportable inherrently safe 4th Gen Tech. is infinitely more sellable to 3rd world Nations and can make a greater impact on our planet’s energy demand.

The best way to keep the nuclear haters and the Natural Gas sellers out of the 3rd world (Besides helping them develop CSP) is to develop and sell them cheaper, better 4th Generation Baseload Nuclear power.

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