* Agency offers first indication of Unit 2 decision timeline
* NRC staff to discuss restart plan with SCE officials Tuesday
* Both San Onofre units shut since January due to tube wear
HOUSTON, Dec 17 (Reuters) - The U.S. Nuclear Regulatory Commission (NRC) may issue a decision in March on whether operators of the damaged San Onofre Unit 2 nuclear reactor in California can restart the unit, according to a timeline on the agency's website.
Both San Onofre reactors, which are owned by Edison International and Sempra Energy, have been shut since early 2012 after the discovery of premature tube wear in large steam generators installed in 2010 and 2011.
The posting is the first indication from the agency about the status of its review process and a schedule to decide whether Unit 2 can safely restart.
The NRC staff plans to meet with representatives of Edison's Southern California Edison utility Tuesday to discuss details of the company's plan to restart the 1,070-megawatt reactor.
The NRC has called the damage to the tubes inside the steam generators "unprecedented" and said SCE can't restart either unit without NRC approval.
SCE has proposed running the unit at 70 percent of capacity for five months, then shutting it to inspect for additional wear on damaged tubes within the reactor's steam generators.
SCE officials could not be reached immediately for comment.
The utility's Unit 2 restart plan is being opposed by environmental groups and local residents who say the plan is an experiment that could endanger 8 million people living near the plant which is located about halfway between Los Angeles and San Diego.
The two-reactor San Onofre nuclear station is the biggest power plant in Southern California and its prolonged shutdown forced the state grid operator to take steps to bolster the power grid during the summer when customers use air conditioning.
The cost of the outage to Edison has topped $317 million in repairs and replacement power.
Premature wear in the Unit 2 steam generator tubes was discovered in early January, about 21 months after the generators were installed.
Tube wear in Unit 3, rated at 1,080-MW, was discovered after a small radioactive steam leak forced it to shut in late January.
SCE has plugged more than 1,300 worn tubes inside the massive steam generators built by Japanese multinational engineering firm Mitsubishi Heavy Industries Ltd.
Edison officials have described the damage to tubes in San Onofre 3 as more severe than that found in Unit 2 even though Unit 3's steam generators had operated for less time. No plan to restart Unit 3 has been proposed.
Another public meeting is scheduled in Southern California in mid-February to discuss the inspections and technical review at Unit 2, the NRC said.
If inspection activity is complete, a report may be made public in late February or early March, followed by a notification to parties of the NRC's intent to issue a decision.
The NRC warned that dates were tentative and subject to change based on inspection results and possible new information.
Separately, Edison International's unregulated power arm, Edison Mission Energy, filed for Chapter 11 bankruptcy protection Monday.