SoCal Edison, stakeholders strike agreement over San Onofre closure

Dive Brief:

Southern California Edison has reached a settlement with a range of stakeholders, including large consumers, that could finally end negotiations over the cost of shutting down the San Onofre nuclear facility.
The nuclear plant shut down in 2013 in what was supposed to be a temporary closure for repairs. But following a debate with environmental groups over whether the plant was safe to reopen, it was permanently closed.
The settlement means customers of SCE and San Diego Gas & Electric will not pay $775 million in investments related to the plant. For customers, it will save them about $68 each over the next four years.

Dive Insight:

The closure of San Onofre has required years of negotiating and multiple settlements, but majority-owner Edison says that if regulators approve the agreement, it should put the docket to bed.

SCE President Ron Nichols in a statement said the negotiating parties "undertook extensive efforts over many months" to reach the agreement. Parties to the settlement include the Alliance for Nuclear Responsibility, California Large Energy Consumers Association, California State University, the Office of Ratepayer Advoactes, and others.

In addition to setting aside the $775 million, the settlement calls for dismissal of a lawsuit related to a 2014 settlement. And, SCE will reimburse SDG&E for SDG&E’s $151 million share of the $775 million.

SDG&E is a co-owner of the plant, and combined the two utilities say they have already returned more than $2 billion to customers under the 2014 settlement. That agreement was reached to ensure that customers did not pay for faulty steam generators, which prompted the plant's closure.

If regulators approve the settlement, it will also provide certain exclusions from the determination of SCE’s ratemaking capital structure, the utility explained in a summary of the settlement. Debt borrowed to finance the regulatory asset will continue to be excluded from SCE’s ratemaking capital structure, and the utility can exclude the after-tax charge resulting from the implementation of the Revised Settlement Agreement from its ratemaking capital structure.

Last year, SCE reached an agreement with Citizens Oversight Inc. regarding the storage of spent fuel. That settlement laid out steps the utility would take in order to move the spent fuel to an off-site location. A third of San Onofre’s used fuel is currently in dry cask storage and the remaining two-thirds is stored in steel-lined concrete pools.

Citizens Oversight participated in the most recent settlement as well, doing business as the Coalition to Decommission San Onofre. SCE plans to move the fuel from the pools into dry storage by 2019 where it would remain until an off-site storage facility is available.