Monday, July 22, 2013

San Onofre Owner Starts Legal Action Against Mitsubishi

Norris McDonald at SONGS in 2005
Southern Califronia Edison Company (SCE) has started legal action against Mitsubishi Heavy Industries, the manufacturer of steam generators whose failure forced the permanent closure of the San Onofre nuclear power plant. The plant is on the northern San Diego County coast.  Rosemead, California-based SCE is filing a formal Notice of Dispute with Mitsubishi Heavy Industries of Japan and its United States subsidiary Mitsubishi Nuclear Energy Systems.

Edison is the senior partner at the massive nuclear plant. Juniors include San Diego Gas & Electric and the city of Riverside's electric utility.  SCE's action is about making sure that Mitsubishi takes responsibility for providing the defective steam generators that led to the closing of SONGS" -- the San Onofre Nuclear Generating Station.

In the notice, Edison alleges that Mitsubishi manufactured "a lemon" and could not fix
"defects in its product because they were so fundamental and pervasive."  Mitsubishi does not dispute that the generators failed after being installed as part of a repowering project designed to prolong the life of a facility that provided electricity for over 1.4 million homes in Southern California. Mitsubishi Nuclear concedes that a previously unknown phenomenon caused the pipes to vibrate and leak, preventing the plant from producing energy.

The contractual dispute is over who is responsible for the problem and how much financial liability is involved.  Damages related to the failed steam generators likely will top $2 billion, according to Edison's most recent business update on costs associated with San Onofre.

Edison's notice opens a 90-day window for the two sides to resolve the the problem. If that is unsuccessful, Edison would initiate a binding-arbitration proceeding against Mitsubishi as stipulated in the original contract with the Japanese firm. (L.A. Times, 7/18/2013)

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