San Onofre Closing to Cost Ratepayers $2.2 Billion

The state Public Utilities Commission has ordered electric customers of Southern California Edison and San Diego Gas & Electric to pay $2.2 billion during the next 30 years to cover the eventual costs of closing the San Onofre nuclear power plant.

Edison ratepayers will contribute an additional $1.7 billion into the newly created trust fund during the next 30 years. SDG&E; ratepayers will pay a total of $470.6 million to the fund, which will remain independent from the two utilities.

SDG&E; said the fund would increase the “typical” residential electric bill by about 20 cents a month. However, that increase probably will be counterbalanced by various electric rate reductions expected in 1988 that SDG&E; and Edison have requested.

One consumer group applauded the creation of the fund as “a positive thing (because) it’s not fair to wait until the plant closes and put the burden on ratepayers who never used the plant,” said Cynthia Pollack Shea, a senior researcher for the Washington-based World Watch Institute, a nonprofit research organization.

An independent board of trustees will determine how that fund is invested, according to a PUC spokeswoman.

It would cost an estimated $873 million in 1988 dollars to dismantle San Onofre’s three units and dispose of the waste, according to PUC Administrative Law Judge Robert Barnett. In “future dollars,” however, the utilities will spend $6.5 billion between 2002 and 2020 to dismantle and dispose of the plant’s three units, Barnett said.

A 1985 state law required utilities to establish externally managed funds that would accumulate enough money to dismantle nuclear plants and return sites to their original conditions. Previously, utilities had been allowed to accumulate funds that were administered internally.

The massive $2.2-billion fund was required “because the PUC has made some rather conservative assumptions, the main one being that the site would be fully restored to its natural condition,” according to an SDG&E; spokesman. “There is a possibility that the site would . . . instead be used for some other kind of power generating station.”

Unit One at San Onofre began operating in 1968. It is licensed to run until 2004. Unit Two, which began operating in 1983, and Unit Three, which began operating in 1984, are expected to be retired in 2013 and 2014, respectively. However, the utilities could modify or replace parts of the units and extend their useful lives., a PUC spokeswoman said.

The NRC is in the process of establishing guidelines that will govern dismantling and disposal of nuclear plants, Pollack Shea said. Those eventual guidelines will govern how money that accumulates in the fund will be spent, according to an Edison spokesman.

On Friday, the PUC also ruled that Edison customers would also have to pay a total of $652 million to cover Edison’s share of costs associated with the closing of the Palo Verdes nuclear power plant outside of Phoenix. Edison owns about 16% of that plant.