UPDATE 4-San Onofre nuclear restart plan faces lengthy review

Thu Oct 4, 2012 4:43pm EDT

* NRC must approve San Onofre Unit 2 restart
    * SCE wants to run Unit 2 at 70 pct for about five months
    * Unit 3 to remain shut for additional tests
    * Critics call plan "an experiment"


    By Eileen O'Grady
    Oct 4 (Reuters) - A plan laid out by Southern California
Edison on Thursday to restart one of two damaged nuclear
reactors faces months of regulatory review plus skepticism from
industry critics.
    SCE, a unit of power company Edison International,
submitted a plan to nuclear regulators to restart the
1,070-megawatt Unit 2 at San Onofre nuclear station in
California, saying it will run the unit at 70 percent of
capacity for five months before shutting it to inspect wear on
damaged tubes within the reactor's steam generators.
    Both San Onofre nuclear units have been shut since January
following a small radioactive steam leak at one unit that
pointed to a problem with accelerated degradation of tubes in
the units' brand new steam generators.
    San Onofre is the biggest power plant in Southern
California. Loss of output from the units has increased the 
likelihood of power outages in the region, forcing the state
grid operator to take steps to bolster the power grid.
    New of the possible restart pushed Edison International
shares up 1 percent to close at $47.10 on Thursday, after rising
to $47.49 which was a 12-month high. 
    "We have concluded that Unit 2 at San Onofre can be operated
safely and within industry norms," Ron Litzinger, SCE president,
said in a statement. "When implemented, this plan will get San
Onofre Unit 2 back to providing reliable and clean energy to
Southern Californians."
    It is not known how soon Unit 2 might restart since the plan
must first be approved by the U.S. Nuclear Regulatory
Commission, SCE said.
    The NRC said months of inspection and analysis will be
required before a decision is made.
    "The agency will not permit a restart unless and until we
can conclude the reactor can be operated safely," NRC Chairman
Allison Macfarlane said in a separate statement.
    "This could take a number of months. Our inspections and
review will be painstaking, thorough and will not be rushed,"
Macfarlane said.
    NRC had determined that the serious damage to thousands of
tubes inside the steam generators was "unprecedented" and that
the utility must identify the root cause and find ways to manage
tube vibration before seeking approval to restart the units. 
    San Onofre 3, rated at 1,080 MW, will remain offline while
the utility continues to study problems that SCE said are unique
to that unit. A recovery plan may be submitted to the NRC next
summer, officials said.  
    Both reactors can generate enough power to supply about 1.4
million Southern California homes.
    
    'EXPERIMENT'
    Nuclear industry critics called SCE's plan "an experiment"
that could endanger 8 million people living nearby, citing the
lack of repair work planned to address vibration that led tubes
to rub against each other and against support structures inside
the massive generators.
    "They are not out of the woods by reducing the power to 70
percent; I just don't believe it is appropriate to treat
Southern California as a science experiment," Arne Gundersen, a
nuclear engineer, told reporters on a conference call.
    "Running at reduced power may not fix the problems but
rather make them worse or shift the damage to another part of
the generators," said Gundersen, who works at nuclear consulting
company Fairewinds Associates and who has prepared technical
reports on San Onofre for Friends of the Earth. 
    Pete Dietrich, SCE's chief nuclear officer, said vibration
analysis showed running Unit 2 at reduced output would eliminate
some thermal hydraulic conditions that led tubes to rub against
each other and would reduce tubes rubbing against supports.  
    "This is not an experiment," Dietrich told reporters. "We
have conducted, over eight months, more than 170,000 tube
inspections. We've assembled a renowned team of experts and we
have brought independent analysis and evaluation to this
process."
    Dietrich said the experts concluded it will be safe to run
Unit 2 for a short operating period, then shut it to "conduct
another series of inspections to confirm our conclusions and
that our corrective actions have been effective." 
    Noting that Unit 2 operated at full power safely for 21
months after new steam generators were installed in 2010,
Dietrich said, "It's important to our customers that an asset
that is able to be utilized safely is used to support the
electric needs of our customers." 
    SCE officials declined to talk about how costs associated
with the extended San Onofre shutdown will affect customer
rates. 
        
    EMISSION, GRID CHALLENGES
    The prolonged shutdown of San Onofre, located in San
Clemente about halfway between Los Angeles and San Diego, has
been felt by the grid agency, other power producers and
California's carbon market, which will formally launch Nov. 14
when the state auctions about 61 million allowances. 
    Prices spiked for forward contracts for the permits in
over-the-counter trading in July when the severity of San
Onofre's problems were detailed by the NRC. 
    The absence of the carbon emissions-free power plant has
been bullish for carbon permit prices, which utility companies
like SCE will need to surrender to the state to comply with the
coming environmental regulation. 
    With San Onofre out of service for the summer months,
California's power grid operator had to make contingency plans
to ensure sufficient power during the hottest days when
consumers use air conditioning to escape the heat.
    The ISO has already started making plans for next summer if 
San Onofre remains offline.
    The steam generators built by Japanese multinational
engineering firm Mitsubishi Heavy Industries Ltd were
installed in 2010 and 2011.
    SCE shut Unit 2 on Jan. 9, 2012, for a planned outage. Unit
3 was safely taken offline Jan. 31, 2012, after station
operators detected a small leak in a steam generator tube.
    Nuclear fuel is being removed from Unit 3 and had been
removed earlier from Unit 2, SCE said. 
    SCE operates San Onofre for its owners: SCE (78.21 percent),
Sempra Energy's San Diego Gas & Electric (20 percent)
and the city of Riverside (1.79 percent).
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