All Done.
UPDATE 3-SCE to retire California San Onofre reactor
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Fri Jun 7, 2013 11:24am EDT
By Scott DiSavino
June 7 (Reuters) - Southern California Edison, a unit of
California power company Edison International, decided
to permanently retire the San Onofre nuclear power plant,
forcing California to find other electric sources to help keep
the lights on in the future.
Both units have been shut down safely since January 2012
following a small radioactive leak in a tube inside a steam
generator manufactured by Japanese engineering firm Mitsubishi
Heavy Industries Ltd.
Reliability regulators said California is already dealing
with "operational challenges" due to the reactor shutdowns and
noted a prolonged or extreme heat wave could force the state's
grid operator to impose rolling blackouts in the San Diego and
Los Angeles areas to maintain system integrity.
The two San Onofre units increase the number of U.S.
reactors retiring so far in 2013 to four due in part to weak
natural gas and power prices and uncertain major repair costs.
"It looks like more and more with an abundant supply of
cheap gas it is easier to walk away from a nuclear plant then to
fix it, This is a trend that I think will continue," said Phil
Flynn, senior market analyst with the Price Futures Group in
Chicago.
The other two reactors already shut this year are Dominion
Resource Inc's Kewaunee in Wisconsin due primarily to
economics and Duke Energy Corp's Crystal River in
Florida due primarily to the uncertain cost of major repairs.
For a factbox on other U.S. reactors that have retired, see
SCE started installing the two steam generators at San
Onofre in the 1,070-megawatt (MW) Unit 2 in 2009 and two more in
1,080-MW Unit 3 in 2010, one of which developed the leak, SCE
said in a release on Friday.
"(San Onofre) has served this region for over 40 years," Ted
Craver, Chairman and CEO of Edison International, said in the
release.
"But we have concluded that the continuing uncertainty about
when or if (San Onofre) might return to service was not good for
our customers, our investors, or the need to plan for our
region`s long-term electricity needs," he said.
The San Onofre reactors entered service in 1983 and 1984,
according to federal data. The plant is in San Clemente about 60
miles (96 km) southeast of Los Angeles on the Pacific Coast.
SECOND QUARTER CHARGES
In connection with the decision to shut the plant, SCE
estimates it will record a charge in the second quarter of
between $450 million and $650 million before taxes ($300 million
- $425 million after tax), in accordance with accounting
requirements.
SCE said it intends to pursue recovery of damages from
Mitsubishi Heavy as well as recovery of amounts under applicable
insurance policies.
SCE operates San Onofre for its owners, including SCE (78
percent), Sempra Energy's San Diego Gas and Electric
utility (20 percent) and the City of Riverside in California
holds a small stake.
On Friday, Edison International stock climbed nearly 2
percent to $47.25 per share, compared with a less than 1 percent
gain in the Dow Jones and Standard & Poors
utilities averages.
SCE submitted a restart plan to the U.S. Nuclear Regulatory
Commission (NRC) in October 2012. SCE proposed to restart Unit 2
at a reduced power level of up to 70 percent for an initial
period of about five months, SCE said.
The NRC has been reviewing SCE's plans for restart of Unit 2
for the last eight months, during which several public meetings
have been held, SCE said.
SCE said in April if the NRC did not approve of the restart
by the summer it may decide to retire the plant.
After an adjudicatory arm of the NRC, the Atomic Safety and
Licensing Board (ASLB), last month decided more public hearings
were necessary, SCE decided to retire the reactors due in part
to the uncertainty of when a final decision might be made on
restarting Unit 2.
SCE said additional administrative processes and appeals
could result in delay of more than a year. During this period,
the costs of maintaining San Onofre in a state of readiness to
restart and the costs to replace the power the plant previously
provided would continue.
Moreover, SCE said it is uneconomic for the utility and its
customers to bear the long-term repair costs for returning San
Onofre to full power operation without restart of Unit 2.
FOCUS ON THE FUTURE
SCE said its efforts are better focused on planning for the
replacement generation and transmission resources which will be
required for grid reliability.
"Looking ahead," said Ron Litzinger, SCE's President, "we
think that our decision to retire the units will eliminate
uncertainty and facilitate orderly planning for California`s
energy future."
But, Litzinger warned that "generation outages, soaring
temperatures or wildfires impacting transmission lines would
test the system."
SCE said with the San Onofre retirement, the company will
reduce staff over the next year from about 1,500 to about 400
employees with the majority of the reductions expected in 2013.
Full retirement of the units prior to decommissioning will
take many years, SCE said.