Dive Brief:

• Customers of Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) will get $1.4 billion in savings, including $600 million in direct refunds, if state regulators approve a settlement of disputed costs from the shuttered San Onofre Nuclear Generating Station (SONGS).
• The deal makes shareholders, not ratepayers, responsible for post-shutdown costs of steam generators installed in 2009 and 2010 that proved highly defective and forced the shutdown of the 2,200-MW plant in 2012. Majority owner SCE decided last year not to try repairing and reopening the station.
• The companies will, however, be able to charge ratepayers for a limited time for replacement power and other plant investments besides the defective generators.

Dive Insight:

The SONGS shutdown not only created a huge problem for the utility owners, who have said they will keep pursuing cost recovery from the generator manufacturer, Mitsubishi Heavy Industries, and from insurers, but the closure also cut a huge power source out of Southern California’s energy mix.

In a power replacement plan approved recently, SCE will look to obtain from 500 MW to 700 MW of new capacity, at least 400 MW of it from renewables, efficiency and other “preferred resources.” SDG&E was authorized to procure from 500 MW to 800 MW, at least 200 MW of it from preferred sources. More wrangling will occur, however, as there are still years-long plant-decommissioning processes to come, and likely disputes over responsibility for those costs.