HOUSTON Feb 7 (Reuters) - California electric grid officials said Thursday they are planning for a second summer without output from either of the damaged San Onofre nuclear reactors.
The grid agency is also beginning to talk about what power infrastructure improvements will be needed in Southern California should the nuclear units never restart or are retired when the operating licenses expire.
The 2,150-megawatt San Onofre nuclear station, owned by Edison International and Sempra Energy, has been shut since January 2012 after the discovery of premature tube wear that damaged thousands of tightly packed tubes inside the large steam generators that were installed in 2010 and 2011.
Loss of the nuclear plant, located halfway between Los Angeles and San Diego, forced the California Independent System Operator (ISO) to recall two aging power plants and accelerate transmission projects last summer to avert rolling blackouts.
The head ISO told the board that he does not expect either San Onofre unit to produce electricity this summer.
"The situation without San Onofre will remain fragile, but we should be able to get through that," said Steve Berberich, ISO president. "We will absolutely have to rely on conservation and demand-side management as we did last summer."
The Nuclear Regulatory Commission is evaluating a plan proposed by Southern California Edison (SCE) to restart San Onofre 2 and run the unit at 70 percent of capacity for five months before shutting it to inspect for additional wear on the damaged tubes.
The NRC last week delayed until late April or May its decision on whether San Onofre 2 can restart.
A NRC spokesman said the timeline was delayed from March to allow for additional inspection work and is still subject to change.
Damage to San Onofre 3 is more severe and the utility has not yet proposed a plan to bring it back into service.
"San Onofre is the largest source of baseload generation and voltage support in the region and is a critical asset in meeting California's clean energy needs," SCE spokeswoman Maureen Brown said in an email.
The nuclear plant plays an important role in helping to meet California's strict air quality standards, she added.
Neil Millar, the ISO executive director of infrastructure development, said a plan to covert two power units owned by AES Corp into synchronous condensers by June 1 to bolster the Southern California grid is "still viable" despite an ongoing dispute at the Federal Energy Regulatory Commission (FERC).
The ISO proposal calls for the Huntington Beach natural gas-fired units 3 and 4 to be converted to equipment that can produce megavars that help "push" megawatts through the grid, much like water pressure helps push water through a hose.
The conversion, however, is the subject of a FERC dispute between the ISO and the trading unit of JPMorgan Chase & Co which has a marketing contract with AES.
AES declined to comment on the status conversion project or when the work would need to begin to meet the ISO's deadline.
In FERC filings, the ISO warned that work at the Huntington Beach site needed to begin in early 2013 to be ready by summer.
Other work by SCE to install other equipment and to reconfigure transmission lines in the area should be finished ahead of the summer, Millar said.
The ISO also wants to make the best use of existing demand-side management programs that allow utilities to curb power use in times of high demand this summer.
Such programs "were very successful last year and we want to make sure those programs are tuned up as well," Millar said.
Millar said the ISO is working to finalize proposals for additional grid improvements or new generation that might be needed for future summers or in the event the San Onofre units do not restart or are not relicensed.
SCE operates the San Onofre station and holds a 78-percent ownership stake. Sempra Energy's San Diego Gas & Electric owns 20 percent and the City of Riverside has a small stake.