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San Onofre nuclear plant: uneconomic, and a political burden?

Could the looming costs become so large that they would make operation of San Onofre financially unworkable?

“The decision for closing a nuclear plant is much above and beyond economics,”  “Closing (San Onofre) really has a very heavy political burden.”

 San Onofre Costs: Could Economics Doom The Ailing California Nuclear Plant? HUFFINGTON POST, By MICHAEL R. BLOOD 07/04/12 LOS ANGELES — The
future of the troubled San Onofre nuclear power plant could balance on an inescapable question: Is it worth the money to fix it?

Engineers face a daunting task finding a solution for problems that knocked the seaside plant offline last winter. And even if they come up with a plan that fully addresses safety and operational issues, will it all make sense on a balance sheet?..

… Two decades ago, San Onofre’s Unit 1 reactor was shut down and then dismantled when owners faced the prospect of swallowing a $125 million bill for upgrades and repairs. Oregon’s Trojan nuclear plant closed its doors in 1993, rather than replace steam generators that had leaky tubes.

Now, similar issues will be on the table for San Onofre’s two
remaining reactors, shuttered as engineers try to figure out how to
stop unprecedented decay in generator tubes that carry radioactive
water. The plant hasn’t produced electricity since Jan. 31.

The plant normally generates enough power for 1.4 million homes. With
summer here and no restart date in sight, state officials are
encouraging conservation to ensure the lights stay on in Southern
California when temperatures and electricity use peak.

Regulators and plant owners insist the reactors won’t be restarted
until all safety issues are addressed. Meanwhile, costs mount and
scrutiny intensifies.
The state Public Utilities Commission plans to vote on an order next
month requiring plant owners Southern California Edison and San Diego
Gas & Electric to disclose the potential economic hit for ratepayers,
ranging from a relatively quick restart to a permanent shutdown of the
twin reactors.
The agency, which determines how much utilities can charge homeowners
and businesses for electricity, plans to scrutinize the cost of
replacement power, repairs and, ultimately, who gets stuck with a bill
that is increasing daily, according to a draft order.

Majority owner Edison hasn’t updated potential cost figures since
March 31, when the utility said it had spent $30 million on
replacement power and estimated repairs could hit $65 million.

That was at a time when Edison was discussing a June restart for at
least one of the reactors, and before the Nuclear Regulatory
Commission determined design flaws caused heavy vibration that damaged
tubing. Eight tubes failed during pressure tests in the Unit 3
reactor, an unprecedented number in the industry.

Now, the repair cost is likely higher, as is the cost for replacement power.

The key issue, says analyst Miller, is whether the PUC allows the
company to recover its costs from customers.
Among the questions: Is it fair to continue charging customers for
generators that, at least for now, don’t work? Who should pay for
replacement power that’s been needed during the long-running shutdown?
And does continued operation make economic sense, with plenty of
economical gas-fired electricity available?

The cost connected to the steam generator crisis is just part of the
financial wallop that could come for a plant with just 10 years left
on its 40-year operating license.

A multimillion-dollar study of earthquake risks is under way and could
lead regulators to require expensive safety upgrades. And two years
ago, state water regulators ordered San Onofre and other coastal power
plants that suck up ocean water to phase out equipment in coming years
blamed for killing fish and other sea life. There is continuing
discussion over how that decision will impact nuclear plants, but one
study commissioned by Edison estimated that it could cost up to $3
billion to comply at San Onofre.

Could the looming costs become so large that they would make operation of San Onofre financially unworkable?

“The short answer is they could,” said Mark Pocta, a manager with the
state Division of Ratepayer Advocates, an independent arm of the PUC.
“You are talking about a lot of uncertainties.”

Edison officials declined a request for an interview………
The tubes are a critical safety barrier – if one or more break, there
is the potential that radioactivity could escape and serious leaks can
drain cooling water from a reactor.

Activists critical of the nuclear industry argue it’s too dangerous to
restart a damaged plant with 7.4 million people living within 50 miles
of its twin domes.

The tube damage “has the potential to cause extremely serious releases
of radioactivity into the environment, which in turn could cause grave
injury to public health,” environmental group Friends of the Earth
said in a recent petition to the NRC. The group has argued that Edison
misled the NRC about modifications, including adding 400 tubes to each

An assessment of its finances will be critical as the three-decade old
plant moves into the sunset years of its operating license, which
expires in 2022. Edison has not said if it intends to seek a license
renewal from the NRC or close the plant at that time…….
“The decision for closing a nuclear plant is much above and beyond
economics,” says University of Southern California engineering
professor Najmedin Meshkati. “Closing (San Onofre) really has a very
heavy political burden.”


July 5, 2012 - Posted by | business and costs, USA

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