Economics could doom oceanside nuclear plant

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LOS ANGELES — The future of the troubled San Onofre nuclear power plant could balance on an inescapable question: Is it worth the money to fix it?

Engineers face a daunting task finding a solution for problems that knocked the seaside plant offline last winter. And even if they come up with a plan that fully addresses safety and operational issues, will it all make sense on a balance sheet?

The twin reactor plant between San Diego and Los Angeles has long been a source of lower-cost power, but its complex and costly mechanical troubles have raised questions that might have seemed unrealistic just months ago.

“Shutting down the plant, at the end of the day, might not be the worst-case scenario for shareholders or customers,” says Travis Miller, director of utilities research at equities analyst Morningstar Inc.

Two decades ago, San Onofre’s Unit 1 reactor was shut down and then dismantled when owners faced the prospect of swallowing a $125 million bill for upgrades and repairs. Oregon’s Trojan nuclear plant closed its doors in 1993, rather than replace steam generators that had leaky tubes.

Now, similar issues will be on the table for San Onofre’s two remaining reactors, shuttered as engineers try to figure out how to stop unprecedented decay in generator tubes that carry radioactive water. The plant hasn’t produced electricity since Jan. 31.

The plant normally generates enough power for 1.4 million homes. With summer here and no restart date in sight, state officials are encouraging conservation to ensure the lights stay on in Southern California when temperatures and electricity use peak.

Regulators and plant owners insist the reactors won’t be restarted until all safety issues are addressed. Meanwhile, costs mount and scrutiny intensifies.

The state Public Utilities Commission plans to vote on an order next month requiring plant owners Southern California Edison and San Diego Gas & Electric to disclose the potential economic hit for ratepayers, ranging from a relatively quick restart to a permanent shutdown of the twin reactors.

The agency, which determines how much utilities can charge homeowners and businesses for electricity, plans to scrutinize the cost of replacement power, repairs and, ultimately, who gets stuck with a bill that is increasing daily, according to a draft order.

Majority owner Edison hasn’t updated potential cost figures since March 31, when it said it had spent $30 million on replacement power and estimated repairs could hit $65 million.

That was at a time when Edison was discussing a June restart for at least one of the reactors, and before the Nuclear Regulatory Commission determined design flaws caused heavy vibration that damaged tubing. Eight tubes failed during pressure tests in the Unit 3 reactor, an unprecedented number in the industry.

Now, the repair cost is likely higher, as is the cost for replacement power.

The key issue, says Mr. Miller, is whether the Public Utilities Commission allows the company to recover its costs from customers.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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