San Onofre: Restart plan would cost customers $150M more than replacement power

San Onofre: Restart plan would cost customers $150M more than replacement power

Edison financials show keeping reactor shut down three times cheaper than startup

SAN FRANCISCO — Restarting one of the crippled San Onofre nuclear reactors this summer would cost Southern California Edison’s customers three times as much as keeping it shut down and buying power from other sources, according to an independent analysis commissioned by Friends of the Earth.

In an emergency motion filed today with the California Public Utilities Commission, Friends of the Earth said Edison’s own figures show that restarting reactor Unit 2 and running it at partial power for five months, as the utility proposes, would cost almost $150 million more than buying readily available replacement power on the open market. If Edison can’t justify that cost, the group said, the PUC should rule at once that Edison can not pass those costs on to consumers, which could lead to Edison deciding to keep it closed.

“San Onofre hasn’t produced any power for 14 months, but right now its customers are still paying for it in their monthly electric bills,” said S. David Freeman, former head of the Los Angeles Department of Water and Power and a senior advisor to Friends of the Earth. “If Edison can’t come up with a good reason, the PUC should put the brakes on before Edison goes ahead with its risky restart experiment.”

The analysis by M.Cubed, a San Francisco consulting firm, found that Edison’s publicly reported cost of operating San Onofre in 2012 was $640 million — an amount charged to customers even though the plant produced electricity for just one month. The cost of replacement power was $175 million for the year. Scaling Edison’s figures to five months of operation shows that operating Unit 2 would cost about $214 million, versus $66 million for replacement power.

“Under either scenario — based on the costs of a full year, or of five months, of plant operation — ratepayers would save more than three times as much money by relying on replacement power than if San Onofre were to be restarted,” Steven Moss, principal of M.Cubed, said in a declaration filed with PUC.

Based on Moss’ analysis, Friends of the Earth asked the PUC to determine “at the earliest possible time, whether the cost of the continued operation of San Onofre pursuant to Edison’s proposed restart plan would be a reasonable and cost-effective investment for the ratepayers of Edison and the San Diego Gas & Electric Company,” which owns 20 percent of the plant. Edison should be required to provide a cost-benefit analysis for its restart plan within two weeks, the motion said.

Friends of the Earth said the issue is an emergency because the Nuclear Regulatory Commission has indicated that it could rule as early as May whether to allow Edison to restart the reactor and run it at 70 percent power for five months — an untested experiment that could further damage the plant’s severely worn steam generators — this damage already caused the release of radioactive steam in January 2012.

The NRC, acting on a petition from Friends of the Earth, is considering whether Edison must undergo a formal license amendment process to determine if the plant is safe to restart. The PUC’s investigation into the cost-effectiveness of operating the plant does not look at safety, but whether the utility can pass on to customers the costs of repairing, restarting and operating San Onofre.

Moss’ analysis showed that with replacement power readily available, San Onofre is not needed to meet electricity demand this summer or in the future. “Despite record temperatures,” he said, “Southern California did not experience any outages associated with San Onofre being unavailable in 2012.” “Therefore,” said Damon Moglen, Climate and Energy Program Director for Friends of the Earth “the only interest served by the restart plan appears to be Edison’s self-interest.”


Damon Moglen, Friends of the Earth: (202) 222-0708
Steven Moss, M.Cubed: (415) 643-9578