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San Onofre nuclear power plant owners may have limited grounds to appeal award

Washington (Platts)--14 Mar 2017 531 pm EDT/2131 GMT


Owners of the now shuttered San Onofre nuclear power plant in California may have limited grounds to appeal an International Chamber of Commerce arbitration panel's decision that awarded them $125 million in damages.

But there is no word whether that would be considered, as the decision is under review, a spokeswoman for Southern California Edison said Tuesday.

The award is a fraction of the $7.57 billion the owners sought in 2015 for damages incurred after replacement steam generators that Mitsubishi Heavy Industries supplied were installed in San Onofre-2 and -3 in in 2009 and 2010, respectively. Problems with the replacement generators led to the units shutdown in 2012 and then permanently closing in 2013 after excessive wear was found in steam generator tubes.

SoCal Ed spokeswoman Maureen Brown noted Tuesday in an email that the owners "are carefully reviewing the award and have not made any decisions about how to apply its proceeds."

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Brown's comments came a day after the ICC International Court of Arbitration notified the owners Monday of the award and ordered them to pay MHI $58 million in legal fees.

"We had hoped the award would more accurately reflect the true magnitude of damage caused by Mitsubishi's defective steam generators," Ron Nichols, president of SoCal Ed, which owns 78.2% of San Onofre, said in an statement from the company, issued Monday. "Unfortunately, the arbitration panel concluded that the contract's prescribed liability limit should be respected and no additional award can be granted despite the harm caused."

Nichols added that one of the three arbitrators had filed a dissenting opinion that said the owners should have been awarded more than $1 billion.

The owners' $7.57 billion claim in 2015 was nearly double the $4 billion they initially sought from MHI when they filed their demand for arbitration with the ICC in 2013. MHI's contract limited its liability to $137 million.

In addition to SoCal Ed's 78.2% ownership stake in San Onfore, San Diego Gas & Electric owns 20%, and the city of Riverside, California, 1.8%. SoCal Ed said a statement Monday it would receive roughly $52 million from the award.

Brown added in her email that a redacted version of the decision would be released after a process is completed where parties can request that confidential or proprietary information be redacted. "We will do our best to complete the process quickly, but it could take several weeks for the redacted decision to be available," she said.

She noted that MHI and the San Onofre owners are subject to a confidentiality order in the proceeding.

--Elaine Hiruo, elaine.hiruo@spglobal.com

--Edited by Valarie Jackson, valarie.jackson@spglobal.com

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