Edison awaits ALJ ruling on San Onofre settlement

Edison International (NYSE:EIX) hopes to wrap up a settlement agreement soon on California Public Utilities Commission (CPUC) issues surrounding retirement of more than 2,000 MW of generation at the San Onofre Nuclear Generating Station (SONGS).

The record is complete and utility subsidiary Southern California Edison (SCE) could see a ruling soon from a state administrative law judge (ALJ), Edison CEO Theodore (Ted) Craver said during a quarterly earnings call July 31.

SCE and its minority partners in San Onofre have made their filings as have numerous other stakeholders including consumer groups, labor and environmental interests, Craver said.

There has been “relatively little opposition,” Craver said. “Everyone who has standing, who wants to speak, has spoken,” Craver said.

SCE, the 2,200-MW nuclear plant’s operator and largest owner, announced a joint settlement with The Utility Reform Network (TURN) and the CPUC Office of Ratepayer Advocates (ORA) in March.

Later this year, Edison expects to file a decommissioning plan with the Nuclear Regulatory Commission (NRC), Craver said. The Edison CEO said decommissioning is “fully funded.”

San Onofre Units 2 and 3 were idled in January 2012 when problems were discovered in tubes in the relatively new steam generators at the station. SCE announced in June 2013 that it was giving up on its effort to win NRC approval to restart one of the units and would, instead, permanently retire both reactors.

The two pressurized water reactors (PWRs) are located in San Clemente, Calif.

On other items, Edison said that CPUC approved the SCE forecast for fuel and purchased power on May 1.

SCE has some large transmission projects, approved by California ISO, which are expected to go online between 2018 and 2020, company officials said.

Upgrading and modernizing the grid is critical to achieving public policy goals such as cutting carbon dioxide or integrating electric cars, Craver said.

Southern California Edison expects to make a selection in October for 500 MW to 700 MW of replacement generation to make up for the loss of the San Onofre units. SCE plans to have the replacement generation online by 2022.

In addition, SCE is targeting a net of 14 MW of additional energy storage.

Edison International is responding to industry change by embracing environmental sustainability; distributed generation and flattening domestic demand for electricity, the company said in its materials.

Edison capital expenditures are forecast to be between $15.1bn and $17.2bn for the 2014 to 2017 period.

Edison reported second quarter 2014 net income on a GAAP basis of $536m, or $1.64 per share, compared to losses of $94m, or $0.29 per share, in the second quarter of 2013. On an adjusted basis, Edison International’s second quarter 2014 core earnings were $352m, or $1.08 per share, compared to $259m, or 79 cents per share, in the second quarter of 2013.

“Edison International continues to deliver strong earnings growth from investing in our core wires business infrastructure, managing our costs, and benefiting from favorable tax items,” said Craver. “Based on our year-to-date results, we expect full-year earnings to be well above the high end of our core earnings guidance range. We are not providing new earnings guidance at this time, but may consider adjusting guidance when third quarter results are reported.”

In the second quarter of 2013 SCE incurred various employee severance costs in connection with the retirement of the San Onofre nuclear plant.

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.