Costs related to the San Onofre Nuclear Generating Station (SONGS) were seemingly a nonfactor in the first-quarter 2018 balance sheet for its majority owner.
In a Tuesday conference call on Edison International’s latest earnings, the retired nuclear power plant barely came up as analysts and executives at the California-based utility discussed wildfire recovery costs and an ongoing rate case.
“With respect to SONGS, we announced a revised settlement in late January that was the result of multiple mediation sessions with a diverse set of parties,” Edison International President and CEO Pedro Pizarro said during the call. “We continue to work with the other parties to complete the steps in this proceeding and are hoping for a swift commission decision approving the revised settlement, especially since all the parties actively involved in the mediation joined the settlement.”
The California Public Utilities Commission on Wednesday held a public meeting on the revised settlement proposed to cover costs for SONGS’ premature, permanent closure in 2013. The new proposal would cut $775 million from the $3.3 billion ratepayers would have had to pay under a prior deal approved and later invalidated by the commission.
The commission approved the $4.7 billion settlement in 2014, but canceled it two years later after it was found that former CPUC President Michael Peevey and an executive for Southern California Edison, an Edison International subsidiary and lead owner at SONGS, had discussed the matter in ex-parte discussions in 2013. The utility and a number of advocacy groups reached a new settlement last year.
Edison’s net income dropped from $362 million ($1.11 per share) in first-quarter 2017 to $218 million ($0.67 per share) this year. First-quarter 2018 loss from continuing operations increased by $81 million from first-quarter 2017 losses of $37 million.
First-quarter 2018 earnings for Southern California Edison dropped by $63 million ($0.19 per share) on a year-over-year basis. “The decrease in earnings resulted from the impact of the July 2017 cost of capital decision on the GRC revenue, higher operation and maintenance expenses and higher net financing costs,” according to an Edison press release.
SONGS’ minimal effect on Edison International’s first-quarter bottom line is a major contrast to the plant being the top factor behind most of its fourth-quarter 2017 net loss of $545 million.
The San Onofre nuclear plant began operations in 1968 in San Diego County, on land owned by the U.S. Navy. Reactor Unit 1 shut down in 1992 and has been largely decommissioned. Units 2 and 3 were permanently taken offline in five years ago due to faulty steam generators.
In 2016, SCE awarded a $1 billion contract to an AECOM-EnergySolutions joint venture, SONGS Decommissioning Solutions, to act as general contractor for decommissioning the plant.
Work will be conducted in three phases. The first, transition and mobilization, was completed last December with the transfer of 21 plant systems to Songs Decommissioning Solutions, including safety, engineering, and radiation control and protection.
The second phase, major decontamination and decommissioning, cannot begin until the California Coastal Commission issues a coastal development permit. That is anticipated in early 2019, SONGS plant manager Lou Bosch told RadWaste Monitor on the sidelines of the Nuclear Energy Institute’s Used Fuel Management Conference in Savannah, Ga. Major cleanup is anticipated to wrap up by 2028.
Decommissioning is expected to cost $4.4 billion. The SONGS decommissioning trust has somewhat less than that now, but interest is expected to cover the remaining amount — the trust earned $30 million net from investments in the first quarter, according to Edison’s latest 10-Q filing with the U.S. Securities and Exchange Commission.
When decommissioning is complete, all that will remain of the plant will be a switchyard and its independent spent fuel storage installation. SONGS’ dry storage pad was expanded so that the remainder of its used fuel could be removed from wet storage – as of the latest update on May 1, 259 fuel assemblies were on the pad, 37 were in the transfer process, and 2,372 remained in the cooling pool.
An August 2017 agreement to settle a lawsuit from the watchdog group Citizens’ Oversight on spent fuel storage allows SONGS to keep the waste on site while it takes “commercially reasonable” steps to find an off-site location.
According to SCE’s April 26 status update on the settlement, an expert panel required by the agreement has begun work on a transport plan and strategic plan for dealing with the spent fuel.
While the Palo Verde nuclear plant in Arizona has been seen as one option for taking SONGS’ used fuel, its leadership last year rejected such a move.
Ultimately, the Department of Energy is legally responsible for taking spent fuel from SONGS and all other U.S. nuclear power plants. However, it is already more than 20 years past its congressionally mandated deadline of Jan. 31, 1998, to begin accepting the fuel.
Southern California Edison has estimated the Energy Department could begin taking used fuel in 2035. That is the “best estimate that we would say when they would take the fuel,” Bosch said.
Once the radioactive waste is gone, the utility could remove the storage pad and complete site restoration by 2051. The land would ultimately be returned to the Navy.
