Closing of nuke helps Edison to higher earnings

SNL Generation Markets Week (2013-11-05) Eric Wolff

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Closing of nuke helps Edison to higher earnings

Eric Wolff

5 November 2013

SNL Generation Markets Week

GMW

The closure of the San Onofre nuclear generating station relieved Edison International subsidiary Southern California Edison Co. of substantial costs, helping the company post higher third-quarter earnings, executives said during a quarterly conference call Oct. 29.

The nuclear plant stopped running in January 2012 due to tubal wear in steam generators and closed in June 2013. The retirement allowed Edison to stop conducting some of the operations and maintenance that had to be performed even while the reactor was offline. The company also said it expects higher revenue from ratepayers. Also, a delay in raising rates in 2012 due to dilatory regulators suppressed earnings in 2012.

"Creating long-term value at Edison International involves three major efforts," Edison Chairman, President and CEO Theodore Craver Jr. said during the call. "Resolving uncertainties relating to our San Onofre nuclear plant and Edison Mission Energy, growing our earnings and dividends, and preparing for transformative change in our industry."

Edison International reported third-quarter core earnings of $463 million, or $1.42 per share, compared with core earnings of $326 million, or $1.00 per share, in the third quarter of 2012. So Cal Ed posted third-quarter basic and core earnings of $1.46 per share, compared to $1.11 per share in the third quarter of 2012. So Cal Ed reported earnings of $477 million in the third quarter of 2013, up from $363 million in the prior-year quarter.

So Cal Ed is trying to recover costs from SONGS on multiple fronts. On Oct. 16, the utility submitted a request for arbitration to the International Chamber of Commerce against Mitsubishi Heavy Industries Ltd., the Japanese firm that built replacement generators, seeking at least $4 billion. And the California Public Utilities Commission consolidated all aspects of Edison's cost recovery from SONGS into a four-phase proceeding. Executives hope the first phase will be complete by the end of 2013 and that all four phases will wrap up by the end of 2014.

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