California regulators will investigate the prolonged outage at the San Onofre nuclear power plant, including whether and how to compensate Southern California residents for its costs.

The California Public Utilities Commission voted unanimously yesterday to consider whether to refund the plant's costs to the customers of Southern California Edison and San Diego Gas & Electric, the utilities that jointly own the majority of the plant. San Onofre has been down since January, after the escape of a small amount of radiation from a steam generator tube.

The decision orders the two utilities to calculate all plant-related expenses incurred since the beginning of 2012, including the cost of power to replace the plant's 2,200 megawatts. The agency will examine whether to remove those charges from power rates and give customers refunds for charges already collected. The utilities have 45 days to submit rate proposals; the investigation is expected to take 18 months total.

San Onofre costs included in rates are about $1.1 billion annually, the CPUC said. The plant powered 1.4 million households.

"It is the beginning of an open inquiry ... to ask questions about what should happen regarding rates and the rate structure, who should pay in terms of the shareholders or the ratepayers," said Commissioner Catherine Sandoval, adding that there are other negotiations going on between the utilities and the generators' manufacturer, Mitsubishi Heavy Industries, as well as at the Nuclear Regulatory Commission.

The CPUC's decision takes place as the NRC considers whether to allow Edison to restart the plant's Unit 2. The utility filed paperwork seeking to run that generator at 70 percent capacity, saying that would prevent the conditions that caused the generators to vibrate, leading to wear on tubes carrying radioactive fluid. Tube degradation in the Unit 3 generator allowed the radiation leak (Greenwire, Oct. 17).

State approves 2 solar thermal contracts

The commission yesterday also voted unanimously to approve two and deny three BrightSource Energy contracts to build solar thermal power plants in the Southern California desert.

The five contracts, which Southern California Edison originally signed in 2009, have been revised to account for siting and technology changes. Some of them are no longer financially competitive with current proposals to help meet the state's requirement of 33 percent renewable energy by 2020.

In allowing Rio Mesa 2 and Sonoran West, CPUC President Michael Peevey cited BrightSource's need to build on the technology used in its Ivanpah project, which is under construction in San Bernardino County and is benefiting from a $1.6 billion Department of Energy loan guarantee (Greenwire, Oct. 24). Rio Mesa 2 is slated to come online in 2015; Sonoran West will follow in 2017 with added capacity in the form of heat storage in molten salts.

Three of the projects -- Siberia 1 and 2 and Rio Mesa 1 -- had their contracts denied. While the Siberia projects and Sonoran West had not begun the permitting process, the Rio Mesa projects are currently before the California Energy Commission. BrightSource will continue to request a 500 MW permit from the CEC, although Rio Mesa 2 will be just 200 MW. Other contracts could eventually fill the rest of the site, a company spokesman said.

Commissioner Mike Florio expressed reservations about the contracts' cost but went along with Peevey's proposal.

"I think our whole push to a cleaner energy future is a risk, and if we're going to get not just to 33 percent but beyond to a truly clean and low-carbon energy system, we're going to have to take some risks like this," he said.

He urged BrightSource to complete both projects. "If this stops at Rio Mesa and we don't ever get to the storage technology, I'm going to be one unhappy camper, so I know you'll do everything you can to make this happen, and I'll be eagerly watching the results."