NUCLEAR ENERGY:

Boxer push on San Onofre sparks new Calif. probe

The California Public Utilities Commission will investigate whether a nuclear plant owner withheld information and misled on safety, scrutiny that comes as the agency decides who will pay more than $1 billion in related costs.

CPUC said it would take a close look at document that Sen. Barbara Boxer (D-Calif.) released yesterday, which she said contained "extremely disturbing" information about the San Onofre Nuclear Generating Station (SONGS) and operator Southern California Edison Co. (SCE).

In a 2004 letter that Boxer obtained, SCE Vice President Dwight Nunn expressed concerns about the stability of generators planned as replacements at San Onofre. One of those units leaked a small amount of radioactive fluid in January 2012.

Boxer planned to release an additional letter from SCE. The company instead released that 2005 document yesterday. It also discusses safety concerns.

"We are considering whether Edison had a duty to disclose the letters earlier," CPUC Executive Director Paul Clanon said in a statement. "More importantly, we need to investigate whether Edison took unnecessary risks, or tried to evade regulatory oversight, when the steam generators were replaced."

Clanon said the issues would be "vigorously pursued," as part of an ongoing, comprehensive CPUC investigation into San Onofre. One part of that inquiry is whether SCE can charge ratepayers for the $671 million it spent on the steam generators, which were installed in 2010 and 2011 and were supposed to last 40 years.

SCE also is seeking to have ratepayers pick up the cost of repairs to the units and replacement power purchased in the interim. The two are estimated at about $300 million.

SCE said that the letters in question, both written to steam generator maker Mitsubishi Heavy Industries (MHI), show that the utility acted prudently.

"We take very seriously our responsibility to ensure we protect the public's health and safety," said Pete Dietrich, SCE senior vice president and chief nuclear officer. "These documents demonstrate the type of careful oversight that SCE exercised during the replacement steam generator project."

But CPUC's statements widen the number of groups potentially looking into the letter Boxer released. The senator yesterday said that she was asking the Department of Justice to investigate whether SCE misled federal authorities when it said it was replacing steam generators with similar equipment (Greenwire, May 28).

Boxer referred the letter to DOJ "because it appears to involve misrepresentation," a top Boxer aide said yesterday. There are a number of laws, the aide said, dealing with false representations to federal government. Violations are felony offenses.

"We are aware of the letter," DOJ spokesman Wyn Hornbuckle said yesterday. "We'll decline to comment."

Boxer aides also spoke with CPUC and said that the agency is "taking the letter very, very seriously." The senator said that she planned to write a letter to CPUC and the Nuclear Regulatory Commission about the Nunn correspondence.

The plant, located in north San Diego County, has been shuttered since the leak. It was blamed on vibrations that caused unusually heavy tube wear in the generators. SCE has asked NRC for approval to restart the Unit 2 generator and run it at 70 percent capacity for five months. Boxer yesterday repeated her call for NRC to block a restart until all related investigation by the agency is complete.

"Now that there is this leakage, [SCE] acts as if it's no big deal the plant should be restarted" at 70 percent capacity, Boxer said. "I am extremely worried about the situation."

SCE said NRC should follow the rules.

"In response to Senator Boxer's statement, we believe that the determination for restart must be made based on technical merits, through the established nuclear regulatory process," Dietrich said.

'Tell the truth'

In the 2004 letter, Dunn said that the replacement generators would be "one of the largest" ever built for the United States. He also said that "it will require Mitsubishi Heavy Industries to evolve a new design."

Boxer said that could indicate that the utility withheld information when it replaced the generators in order to avoid a license amendment. That would have triggered an in-depth review with court-like hearings. Instead, SCE used a regulation allowed when making "like for like" changes in equipment.

"The letter clearly states that the project was not like for like," Boxer said during a phone call with reporters. "That is clearly stated right out there explicitly."

"That is extremely disturbing that they would do a self-certification that this is 'like for like' when it wasn't," Boxer added. "It's very serious, deceiving the public, deceiving the regulators."

SCE has said that there is a misinterpretation of "like for like" and that it does not have to be an exact replacement.

Boxer called SCE's statements "gobbledygook."

"Any machinations to get out of their own words, it's not going to work," Boxer added. "It defies common sense, and it's embarrassing. They ought to just tell the truth."

SCE released yesterday a letter that Dunn wrote in 2005 to a MHI general manager in Japan. In it, the utility vice president said that he was concerned about excessive generator wear. He said that all plants with large steam generators "report significant number of wear indications after as little as one cycle of operation.

"This is of a great concern to Edison, because our steam generators are one of the largest in the Industry," Dunn wrote. "Therefore, I have asked for a special joint MHI/SCE team to be formed."

The team was supposed to evaluate "industry experience related to tube wear, identify all factors that may cause such wear, and identify all design and fabrication parameters which can be controlled to prevent wear from occurring."

Boxer and Rep. Ed Markey (D-Mass.) in February said they had seen a document that showed SCE and MHI were concerned about excessive vibration. The companies formed the "Anti-Vibration Bar Design Team," a person familiar with that document told Greenwire (E&E Daily, Feb. 8).

The companies, according to Markey, considered making changes to the design but decided not to implement any of them in order to avoid potentially triggering a license amendment.

SCE has said that there were other reasons -- some of them based in safety -- for not making the modifications.

The utility yesterday said that the letters "emphasize the importance of careful attention to the design of the steam generators." It added that "the letters identify a number of design issues that SCE asked MHI to focus on to ensure that design flaws were not inadvertently introduced."

'Bombshell'

CPUC last October launched its multiphase investigation into San Onofre. It is looking at whether charges related to the shuttered plant should be removed from power rates. If that happened, customers could receive refunds for SONGS-related costs collected since Jan. 1, 2012. San Onofre costs included in customers' rates are about $1.1 billion annually.

Regulators also could challenge whether Edison and SDG&E made reasonable purchases of "energy, capacity and other related services" to replace the power San Onofre would have generated.

Part three of the investigation is the issue of the $671 million that Edison spent on the steam generators and who will foot the bill. That is not expected to be addressed until next year.

"They paid for perfect steam generators and they've got damaged ones, Edison and by extension ratepayers," said Truman Burns, program and project supervisor at the Division of Ratepayer Advocate, the consumer arm of CPUC.

Burns declined to comment on the letter Boxer released until CPUC looks at it during its investigation.

CPUC called the information from Boxer "very pertinent" to ongoing investigations by the agency and NRC.

"A preliminary review of our records suggests the letters referenced by Senator Boxer were not provided by Edison either to the CPUC itself or to the parties participating in our investigation into the SONGS outage," the statement added. "We asked Edison immediately to release the letters to the parties in the CPUC's proceeding."

Damon Moglen, a spokesman for Friends of the Earth, called the SCE letter that Boxer released "a bombshell in the true meaning of it."

"This is a smoking gun when it comes to culpability," he added. "We'll see what the [California] PUC does with it."

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