SCE’s San Onofre nuclear plant to stay offline this summer

Edison International (NYSE: EIX) CEO Ted Craver said May 2 that he expects Southern California Edison’s San Onofre nuclear plant will not be returned to service in time for the dog days of summer.

Progress is being made on the unusual wear issues on some of the steam generator tubes at the dual-unit plant, but the situation probably won’t be fixed in time for the summer season, Craver said in a quarterly earnings call. The CEO also again stressed that this major nuclear generator won’t be returned to service prematurely.

The steam generator leak was discovered Jan. 31. SCE is Edison’s utility subsidiary in California.

“Over the last three months we have been conducting a battery of tests and studying the phenomenon causing the tube wear,” Craver said. “We have identified some unusual wear in approximately 1% of the nearly 39,000 steam generator tubes that transfer heat to produce the steam, which drives the turbines and generates the electricity. While wear in steam generators is to be expected, we are taking very seriously the significance of the tube wear since it is occurring in newly installed steam generators.”

When Edison is satisfied with the causes of the wear, the company will seek NRC confirmation for its repair plan, the CEO said. “We are absolutely committed to the safe operation of San Onofre and will not return the units to service until we and the Nuclear Regulatory Commission are completely satisfied it is safe to do so,” Craver said.

 “Therefore, we have been working with the California Independent System Operator and San Diego Gas & Electric [a minority partner in the plant] on power supply contingency plans for this summer. Those plans include transmission upgrades, bringing idled plants owned by other companies back into service, conservation, and demand response programs to reduce the possibility of service interruptions,” the CEO added.

Nuclear plant could be blamed for any blackouts?

“Given the large scale, technical complexity and meticulous safety regulation of nuclear power plants, the prolonged outage of a nuclear power station is rarely without risk for its owner,” Bernstein Research analyst Hugh Wynne said in his review of the situation. “The outage of the 2,200 MW San Onofre Nuclear Generating Station (SONGS) is likely to be a case in point.”

SCE expects to incur $55m to $65m in operation and maintenance expense, Wynne said. More troubling perhaps is the “political backlash” that could result from any potential rolling blackouts in California this summer, according to the Bernstein analysis.

SCE incurred $0.04 per share of incremental steam generator inspection and repair costs related to outages at the San Onofre Nuclear Generating Station, which were offset by other operation and maintenance cost reductions.

Edison reported first quarter 2012 basic earnings of $0.28 per share, compared to basic earnings of $0.61 per share in the same quarter last year.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.