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Sierra Club seeks rate reprieve from San Onofre nuclear station

Date: 
Wednesday, October 31, 2012
Author: 
George Watland

The San Onofre Task Force of the Sierra Club Angeles Chapter commends the California Public Utilities Commission for its unanimous decision to launch an investigation into the rates, operations, practices, services and facilities of Southern California Edison  and San Diego Gas & Electric), related to the San Onofre Nuclear Generating Station Units 2 and 3. 

The Commission met Oct. 25 to hear public input on the shutdown of the San Onofre facility and to vote on the related Order Instituting Investigation. San Onofre has been shut down since January after extensive and unexpected wear on piping in the plant’s steam generator system caused a leak of radioactive steam.

In an opening statement, PUC Commissioner Michael Florio said that within 45 days the utilities will testify on proposed rate adjustments and will be required to show costs related to San Onofre. He added that it may never be safe or economic to restart the plant. In that event, PUC long-range plans will address permanent removal of San Onofre from the supply base. “We have a responsibility to protect utility ratepayers and system users,” Florio concluded.

The Sierra Club's stance

In its statement to the commission, the Sierra Club noted that the San Onofre facility has been shutdown since January yet ratepayers have been paying $54 million a month in charges for the plant – an average $10 for each household in its service area. The defective system that forced shutdown cost $771 million but only $137 million is recoverable through the manufacturer’s warranty.

Glenn Pascall, chair of the Sierra Club task force, said, “While these facts are well known, the impact on the public review process is this: If the subsidy continues to cover all operating costs related to the faulty generators, it greatly reduces the incentive for Edison to resolve issues related to the future of the plant.”

He continued, “Ours is a free enterprise economy based on risk and reward. Investor-owned utilities are a special case where rates are set by a public agency to assure a fair return to investors and fair charges to consumers. But this principle is distorted in a situation where no power is being delivered and the utility's management purchased defective technology without adequate warranty coverage - yet rates continue to be imposed. 

“In such a case, if shareholders are able to shift the cost burden for repairs to the utility’s customers, the principle of risk and reward has been violated and ratepayers pay the consequences of management errors.

“The Sierra Club urges the Commission to terminate the ratepayer subsidy so the utility is no longer making decisions while it is artificially insulated from real-world economic conditions.”

Hundreds question NRC at meeting

On Oct. 9, the U.S. Nuclear Regulatory Commission held a three-hour public meeting Oct. 9 in Dana Point that drew 500 to 600 concerned citizens and activists. Environmentalists, nuclear energy industry representatives, union leaders and members of the public offered opening statements and responded to questions from the audience.

The meeting’s central focus was whether to attempt a restart of Unit 2 at the San Onofre nuclear power plant in North San Diego County. A few days earlier, Southern California Edison filed a 1,000-page report based on an eight-month analysis of the problem and wanted the regulatory body to agree to a restart of Unit 2 for a five-month test at 70% power.


George Watland is a Conservation Coordinator with the Angeles Chapter. You can reach him at george.watland@sierraclub.org.

Photo: The San Onofre nuclear station with a surfer in the foreground. Credit: Gary Headrick of San Clemente Greens

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