The owners of the San Onofre nuclear power plant in Southern California,
which has been shut since January 2012, said on Friday that they would
close it permanently because of uncertainty over when it could be
The two reactors at San Onofre had not run since a small amount of
radioactive steam escaped from new tubes damaged by vibration and
friction. Coming months after the Fukushima Daiichi meltdown in Japan,
the event prompted a wave of public opposition and set off a legal and
regulatory battle that included Southern California Edison, the Nuclear
Regulatory Commission and Mitsubishi Heavy Industries, which
manufactured the parts that leaked.
Those parts, called steam generators, cost more than $600 million. In
the end, uncertainty over the plant’s fate “was not good for our
customers, our investors, or the need to plan for our region’s long-term
electricity needs,” said Theodore F. Craver Jr., chief executive of the
utility’s parent company, Edison International.
The decision delighted nuclear opponents. “I approach today with a good
deal of joy,” said S. David Freeman, who shut down construction on
several reactors when he ran the Tennessee Valley Authority, and who ran
the Sacramento Municipal Utility District after it retired the Rancho
Seco nuclear plant two decades ago.
“I think this is a step in the right direction, another move toward the
renewable revolution that is under way in the state of California,” Mr.
Freeman said, adding that closing the reactors opens up the market to
use the renewable power that will follow. For now, though, the
replacement power source is natural gas.
The nuclear industry has had a difficult year as it tries to compete
with cheaper, abundant natural gas. San Onofre’s two reactors are the
third and fourth reactors to be retired so far this year in the United
“It’s no secret that power markets have been radically changed by the
development of shale gas,” said John Reed, an investment banker who
specializes in nuclear reactors. “That changes the economics of any
other power supply option, including nuclear.”
The loss of San Onofre has already pushed up electricity prices in
Southern California, to about $4.15 a megawatt-hour higher than prices
in Northern California. Those higher prices are an inducement to
developers to build new generation, either natural gas or renewable
energy, according to Marie Rinkoski Spangler, an electricity analyst at
the Energy Department’s Energy Information Administration.
Ms. Rinkoski Spangler said that since June 2012, California has added
slightly more generating capacity than it will lose with the retirement
of the reactors, in the wrong places.
“Geography really matters,” she said. “The generation itself is not
enough, because of where San Onofre sat” near Los Angeles and San Diego.
At the California Independent System Operator, the company that runs the
power grid in most of the state, Steve Berberich, the chief executive,
said that most of the replacement power had come from natural gas, and
that if California’s goal is to reduce greenhouse gas emissions per
kilowatt-hour, “you’re moving in the wrong direction.”
But in the longer term, he said, retiring San Onofre would encourage the
replacement of older power plants with newer ones that would produce
more electricity with the same amount of fuel. And the newer ones could
increase and decrease their output faster, he said, making them useful
to balance a system with a lot of wind and solar generation, which is
San Onofre 2 and 3 entered commercial operation in August 1983 and April 1984. A third reactor was mothballed in 1992.
Many nuclear plants around the country have won permission from the
Nuclear Regulatory Commission to run 20 years beyond their initial
40-year licenses, but in a conference call with reporters, Mr. Craver of
Edison International said that the prospects for license renewal were
uncertain, following the three meltdowns at the Fukushima Daiichi plant
in March 2011, and the demand by regulators for a re-evaluation of San
Onofre’s vulnerability to earthquake.
Edison had been seeking to restart one of the units at 70 percent power,
a level it thought the steam generators could tolerate, but when plant
opponents persuaded a panel of three administrative law judges at the
Nuclear Regulatory Commission that this would require a public hearing,
the company concluded that the proceedings could stretch to the end of
next year or longer. Operation and maintenance expense at the plants,
which employ 1,500 people are roughly equal whether it is running or
not, he said, and if the plant could not reopen by December, retiring it
would be cheaper.
The company has $2.7 billion saved up for decommissioning, which is
about 90 percent of what is required, he said. Edison shares ownership
with San Diego Gas & Electric, which owns 20 percent, and the city
of Riverside, which owns 1.79 percent.
Edison has about $2.1 billion invested in the plant, the fuel and
related assets. Division of costs between Edison’s shareholders and
ratepayers, its insurers and Mitsubishi Heavy Industries, which supplied
the heat exchangers, has not been determined.
As for the plant’s workers, the closure will be felt in the area. “When
1,100 people lose their jobs, there will certainly be an impact,” said
Bob Baker, the mayor of the nearby city of San Clemente. “San Onofre
changed San Clemente when it opened, and it’s going to change San
Clemente now that it’s closing.”