SCE Settles With Insurer Over San Onofre Closure

Southern California Edison said it had reached a settlement with Nuclear Electric Insurance Limited (NEIL) over losses caused by the shutdown of the San Onofre nuclear power plant and said 95 percent of the $400 million deal would go to customers in the form of reduced bills starting in 2016.

The electric bills for customers will go down 2 percent to 2.5 percent beginning in January, said the company, which is still going after a settlement with Mitsubishi Heavy Industries, (MHI), which has said SCE is pursuing a $7.6 billion claim for the loss of the power plant.

The plant was shuttered after failures of replacement steam generators furnished by MHI. One of the replacement generators had a leak in January 2012.

SCE President Pedro Pizarro said the deal with NEIL “represents a good outcome that is in the best interest of our customers.” San Diego attorney Michael Aguirre, however, has called the deal a “phantom recovery” and is pushing for the utility to send a rebate to customers. Reporters have also challenged SCE on the size of the settlement, which is less than half the $835 million received by Duke Energy from NEIL over the loss of the Crystal River nuclear power plant, which ran into similar troubles. Underscoring the discrepancy, reported the Los Angeles Times, Crystal River is a plant with one reactor, while San Onofre has two.

Aguirre also says 100 percent of the $400 million should go to customers. In the deal, SCE, the plants majority owner, will receive $312.8 million, while minority owners San Diego Gas & Electric and the city of Riverside will receive $80 million and $7.16 million, respectively.

Whatever the plant owners receive from MHI will be split 50-50 between the owners and customers, the Times reported.

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