Customers could see refunds from San Onofre nuclear plant closure

The overall value of the deal to consumers would be $1.4 billion when other provisions are considered

LOS ANGELES (AP) — Utility customers would see about $600 million in refunds in a proposed settlement over costs tied to a shuttered nuclear power plant in Southern California, officials said Thursday.

The overall value of the deal to consumers would be $1.4 billion when other provisions are considered, they said.

If approved by state utility regulators, the agreement could end a long-running dispute over who gets the bill for the defunct San Onofre plant, which was closed permanently in June after a bitter fight over whether it was safe to restart.

Operator Southern California Edison and minority owner San Diego Gas & Electric Co. have been negotiating with consumer advocates over how to divide a long list of costs from the twin-domed plant, from replacement power purchased after the plant shut down to money invested in reactor equipment.

The Office of Ratepayer Advocates — an arm of the state Public Utilities Commission — said Edison customers would be credited with refunds of about $480 million by the end of 2014, and customers of the San Diego utility would receive $121 million.

"The proposed settlement represents a huge win for consumers," said Matthew Freedman, an attorney with the Utility Reform Network, a consumer group involved in the talks. "It will hold utility shareholders accountable for the fiasco ... and expedite refunds to customers."

At issue had been who should take the financial hit — company shareholders or customers.

Edison decided to close the plant for good in June but it hadn't produced electricity since January 2012, after a small radiation leak led to the discovery of extensive damage to tubing that carried radioactive water.

The problems at San Onofre centered on steam generators that were installed during a $670 million overhaul in 2009 and 2010. After the plant was shut down, tests found some tubes in the generators were so badly eroded that they could fail and possibly release radiation, a stunning finding inside the nearly new equipment.

Under a key piece of the settlement, ratepayers of the two utilities will not have to cover the bulk of the long-term cost for the defective generators.

"This proposed settlement means that customers don't pay for the steam generator project after the tube leak at San Onofre, leaving SCE financially responsible for its ownership share in the project. Our customers will pay for replacement power they received," Ron Litzinger, president of SCE, said in a statement.

The California Public Utilities Commission has been overseeing a broad investigation into costs at the plant. SCE and the other parties in the talks had asked an agency judge not to rule on key issues, pending the outcome of the settlement negotiations.

The agreement would have to be approved by the commission.

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