* California PUC to vote Oct. 25 on probe of two hobbled
* Investigation could reduce consumer rates by $1.1 billion
* Units shut down in January due to degradation of steam
By Nichola Groom
LOS ANGELES, Oct 16 California regulators on
Tuesday took steps to open a formal probe into the outage at two
nuclear reactors at the San Onofre power plant, potentially
reducing the burden on rate payers by $1.1 billion until
southern California's largest power plant is reopened.
The California Public Utilities Commission said it would
vote on Oct. 25 to formally open an investigation into the
causes of the shutdown in January of the San Onofre Unit 2 and
Unit 3 reactors and whether they will be restarted to provide
"safe and reasonable service at just and reasonable rates".
In its filing, the commission said it could take all costs
associated with the two plants out of the rate base, dating
back to Jan. 1, and place them in a "deferred debit account
pending the return of one or both facilities to useful service".
Rates at utilities Southern California Edison and San Diego
Gas & Electric include more than $800 million in fixed costs and
$300 million in annual operating costs related to the units, the
commission said in its proposal.
The commission could also review some or all of the $671
million it authorized to replace the power plant's steam
Both of the San Onofre nuclear units have been shut since
January after a small radioactive steam leak at one unit pointed
to a problem with accelerated degradation of tubes in the units'
brand new steam generators.
"There are issues about how much cost, if any, should be
paid by rate payers and company owners," the commission said.
"Therefore, it is in the public interest to undertake an
investigation into the facts and circumstances of the outages
for the purpose of exercising our statutory authority over rate
recovery of associated utility costs."
San Onofre, the biggest power plant in Southern California,
is 78 percent-owned by Southern California Edison, a unit of
Edison International. The remainder is held by San Diego
Gas & Electric, which is a unit of Sempra Energy, and
the city of Riverside.
A representative for Southern California Edison, which is
responsible for operating the power plant, could not immediately
be reached for comment.
The commission asked the two utilities to track their costs
incurred on San Onofre after Jan. 1 of this year in a memorandum
It also warned that there may be questions about the degree
to which the manufacturer of the reactors' steam generators,
Mitsubishi Heavy Industries Ltd, may be responsible for
expenses related to the shutdown.
Southern California Edison said on Oct. 4 that it wants to
restart San Onofre's 1,070-megawatt (MW) Unit 2 and operate it
at up to 70 percent of capacity for about five months before
shutting it again for inspections.
The San Onofre plant carries both property damage and outage
insurance issued by Nuclear Electric Insurance Limited, Edison
said in filings with the U.S. Securities and Exchange
Commission. The company said it has notified the carrier of