Edison May Have to Give Refunds Over San Onofre Shutdown

The utility's parent company, which posted weak financial results on Tuesday, may have to pay refunds or lower rates if its troubled San Onofre plant is not back on line by November.

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California law requires utilities to file a report with the Public Utilities Commission any time a nuclear reactor has been out of service for nine months. The commission then considers whether customers have overpaid for costs and profits that were meant to be associated with running the reactor.

The company also backed away from estimates that the plant might be operational again later this year, saying that it would not be started up until it was safe.

"At this juncture, we’re just trying to do this in the most disciplined, systematic, step by step approach," Edison International Chief Financial Officer William J. Scilacci said. "At this point, of course all options are on the table."

Scilacci's remarks were part of a presentation to Wall Street analysts about Edison International's financial performance for the second quarter of this year.

At San Onofre, he said, the company is focusing on getting one of the reactors back up, likely operating at only a portion of its capacity and only if that can be done safely. But no final decisions have been made, Scilacci said.

Prior estimates of when the plant might begin operating again were “rough,” the company said in its presentation.

The company shut off one of the San Onofre plant’s reactors in January, when they discovered a leak in one of its steam generator tubes. The other unit was shut off later that month for maintenance.

Shutting down San Onofre, the company said, had cost $48 million for inspection and repair, and $117 million buying energy from other sources to replace what would have been generated locally had San Onofre been open.

Earnings at Edison International, which owns Southern California Edison, were down significantly over last year during the second quarter of 2011. The company blamed the drop on a delay in a request it has made to increase rates, and troubles at its Edison Mission Group subsidiary.

The Edison Mission Group sells energy and capacity on the open market, among other activities, and is not a regulated public utility. One of its divisions, Edison Mission Energy, or EME, is not expected to have enough money to pay debts that are due in 2013, and may need to file for bankruptcy.

Edison Mission Energy may also be sold, the company said.

Basic earnings at Edison International dropped from $176 million to $74 million during the three-month period ending June 30, according Edison’s filing with the federal Securities and Exchange Commission.

Broken out separately, however, Southern California Edison was profitable, the company said.

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