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Mitsubishi blamed in nuclear plant closure

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POSTED July 18, 2013 9:56 p.m.

LOS ANGELES (AP) — Southern California Edison took an initial legal step Thursday to try to collect millions, or possibly billions, of dollars in damages from the company that built defective equipment that pushed the seaside San Onofre nuclear power plant into early retirement.

In legal documents, the company claimed Mitsubishi Heavy Industries Ltd. and Mitsubishi Nuclear Energy Systems are liable for defective steam generators that were installed at the plant in a $670 million overhaul in 2009 and 2010, along with costs ranging from buying replacement power to the investment in the now-shuttered plant that the company earlier estimated at over $2 billion.

"In short, Mitsubishi totally and fundamentally failed to deliver what it promised," said a letter to Mitsubishi from Edison's lawyers.

A Mitsubishi statement called the filing an "expected part of the contract process" but did not address any of its allegations.

The action represents an early step in what could be a protracted battle over blame for the plant's closure and who should cover the losses.

The twin-reactor plant was shut down in January 2012, after a small radiation leak led to the discovery of unusual damage to hundreds of virtually new tubes that carried radioactive water in the generators. Edison announced last month it would close the plant for good, surrendering in a costly and drawn-out fight over whether it was too damaged to operate safely.

In a separate case, state utility regulators are considering who should pay for Mitsubishi's replacement generators, ratepayers or shareholders. A decision could be months, or years, away. Any money Edison recovers from Mitsubishi could reduce the exposure of ratepayers.

"The more they can get from Mitsubishi, that's less they will be asking from ratepayers," said Mark Pocta, a manager with the state Division of Ratepayer Advocates, an independent arm of the Public Utilities Commission.

The filing, known as a notice of dispute, begins a 90-day negotiation under the contract between the two companies. If that fails, SCE said it intends to initiate binding arbitration against Mitsubishi to recover damages.

"Our action is about making sure that Mitsubishi takes responsibility for providing the defective steam generators that led to the closing of (the plant)," Ron Litzinger, president of SCE, said in a statement.

Edison said Mitsubishi agreed to design and build four generators that would operate for 40 years, but "many of Mitsubishi's representations and promises were false."

Majority owner Edison and co-owners San Diego Gas & Electric and the city of Riverside "continue to incur significant financial harm as a result of Mitsubishi's total and fundamental failure to meet its obligations," the filing said.

The company said Mitsubishi promised to address the very problems that ended the plant's life — badly vibrating generator tubes that cause premature wear.

 

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