San Diego Gas & Electric (SDG&E) reached a settlement on Thursday with Southern California Edison (SCE), The Utility Reform Network (TURN) and the California Public Utilities Commission (CPUC) Office of Ratepayer Advocates (ORA) over the costs associated with the closing of San Onofre Nuclear Generating Station (SONGS).
If approved, the settlement would resolve the CPUC's inquiry into the retirement of SONGS. SCE, the majority owner and operator, decided to close the plant and seek approval to decommission the facility.
The settlement calls for SDG&E and SCE to refund money for the replacement of steam generators collected since February 2012.
"The settlement ensures that customers will not have to pay for San Onofre's faulty steam generators post-shutdown and also allows shareholders to recoup the majority of their non-steam generator investment in the plant, which provided clean, reliable, low-cost energy to the region for more than 40 years," Jeffrey W. Martin, CEO of SDG&E, said.
As part of the settlement, SDG&E will be able to recover costs of replacement power while SONGS was not operational. The refund for the steam generators and the reduction in rate base is $121 million for 2013 and 2014.
SDG&E said it will pursue cost recovery from the manufacturers of the steam generators, Mitsubishi Heavy Industries Ltd. (MHI), as well as its insurance companies.
As a 20-percent owner of the shuttered nuclear plant, SDG&E is entitled to 20 percent of any recoveries.
CPUC is expected to announce its decision in the second quarter of this year.