Regulators drop case that challenged installation of faulty equipment at San Onofre reactors

Federal regulators have closed a case that questioned whether Southern California Edison violated government rules when it installed faulty equipment at the now-closed San Onofre nuclear power plant.

The Nuclear Regulatory Commission ruling Thursday concluded the issue is no longer relevant since the coastal reactors, located between Los Angeles and San Diego, are retired.

In 2012, the environmental group Friends of the Earth asked the agency to review if majority owner Edison misled the NRC when it replaced steam generators in a $670 million overhaul in 2009 and 2010.

The group argued that a series of equipment and design changes to the generators created a significant risk of mechanical problems. It said the company never disclosed the modifications, instead describing it as an exchange of similar equipment.

San Onofre was shut down in January 2012 after a small radiation leak led to the discovery of extensive damage to hundreds of tubes inside the virtually new generators.

The plant never produced electricity again. Edison closed San Onofre for good in 2013 amid a fight with environmentalists over whether the plant was too damaged to restart safely.

William M. Dean, director of the Office of Nuclear Reactor Regulation, wrote that because the plant is permanently closed, it is no longer necessary to rule on issues raised in the case, including whether Edison skirted rules when it installed the equipment.

Edison said it agreed with the ruling. A company statement said a previous NRC review found Edison's evaluations before installation of the generators did not have any bearing on the underlying issues that caused the 2012 tube leak.

The generators each contained nearly 10,000 alloy tubes that carried hot, pressurized water from the reactors. Resembling massive steel fire hydrants, the generators controlled heat in the reactors and operated something like a car radiator.

After the plant was shut down, tests found some generator tubes were so badly eroded that they could fail and possibly release radiation, a stunning finding inside the nearly new equipment.

An NRC investigation found that a botched computer analysis resulted in design flaws that were largely to blame for the unprecedented wear in the tubing.

Costs stemming from the premature demise of the plant are still being sorted out.

Some critics want the California Public Utilities Commission to reopen the case that saddled ratepayers with most of those costs, over $3 billion. Meanwhile, Edison and the company that manufactured the generators, Mitsubishi Heavy Industries, have been locked in a dispute over possible damages.

Earlier this week, Mitsubishi disclosed that Edison had nearly doubled its damage claim to $7.57 billion in a proceeding before the International Chamber of Commerce. Mitsubishi said in a statement that its liability is limited to $137 million by contract, and that Edison's claims are "factually incorrect, legally unsound and inappropriate."