SCE claim rails against Mitsubishi

19 July 2013

Southern California Edison (SCE) claims that Mitsubishi's failure to repair or replace the defective replacement steam generators it supplied led to the premature closure of the San Onofre nuclear power plant. The utility has started proceedings for claiming damages.

Replacement steam generators supplied by Mitsubishi - intended to enable San Onofre units 2 and 3 to continue operating until 2022 - were found to be suffering from excessive wear after less than one year in service. Both units were taken offline in early 2012 only to be closed permanently in June 2013 when SCE could not afford to continue a protracted regulatory process to show that lower power operation would be safe. 

SCE has now issued a notice of dispute and formally started a 90-day dispute resolution process with Mitsubishi, seeking to hold it accountable for supplying defective steam generators. "Such an early retirement is exactly what the steam generator replacement project was designed to avoid," it said, using language clearly intended for a domestic audience of California ratepayers and lawmakers.

The utility alleges that Mitsubishi "totally and fundamentally failed to deliver what it promised." SCE claims that the supplier did not provide components designed to match its requirements. Additionally, it alleges that for over 16 months it demanded Mitsubishi either repair or replace the steam generators, but Mitsubishi "failed to live up to its contractual obligations." SCE invoiced Mitsubishi for the "hundreds of millions of dollars" it had spent on investigating and attempting to repair the steam generators, but Mitsubishi purportedly "refused to even acknowledge responsibility for any of these costs."

SCE claimed that Mitsubishi is "responsible for the enormous harm its failures have caused to California ratepayers, SCE and the other SONGS owners." San Onofre is owned 78% by SCE, 20% by San Diego Gas and Electric (SDG&E) and 2% by the city of Riverside. The plant owners are said to "have incurred and continue to incur significant financial harm". SDG&E alone is considering building a 305 MWe gas-fired plant at a cost to $1.6 billion to partly compensate for the shutdown of San Onofre.

However, SCE noted that it is "not yet possible to determine the full measures of damages caused by Mitsubishi's failure." The total amount, it said, will depend on various factors including the ongoing regulatory inquiries into the outages.

SCE president Ron Litzinger said, "Our action is about making sure that Mitsubishi takes responsibility for providing the defective steam generators that led to the closing of SONGS." SCE hopes to reach a "mutually agreeable resolution as soon as possible" with Mitsubishi, but will initiate binding arbitration against Mitsubishi if it does not.

Mitsubishi Heavy Industries (MHI) received an order from SCE in September 2004 to supply replacement steam generators for units 2 and 3 of the San Onofre Nuclear Generating Station (SONGS) after winning an international bidding competition.

The two steam generators of unit 2 were replaced in 2009, while those of unit 3 were replaced in late 2010. Unit 3 resumed operation in February 2011, but was shut down on 31 January 2012 after workers detected the failure of one of the unit's steam generator tubes. Meanwhile, unit 2 was taken offline on 9 January for a planned maintenance and inspection outage but remained offline.

Researched and written
by World Nuclear News