May 4, 2012 / 9:52 PM / in 5 years

San Onofre reactors shut "into the summer" - CEO

* Company gives conflicting information on possible return date

* Outage at 2,150-MW plant enters fourth month

* Repair costs now estimated at $55 mln to $65 mln

HOUSTON, May 4 (Reuters) - Damaged reactors at the San Onofre nuclear station in California will likely remain shut into the summer, the chief executive officer of the plant’s majority owner, Edison International, told investors this week.

Both units at the 2,150-megawatt plant halfway between Los Angeles and San Diego have been shut since January following the discovery of premature wear on tubes inside giant steam generators made by Mitsubishi Heavy Industries.

A prolonged shutdown of the nuclear plant could lead to reliability problems across southern California this summer when power demand rises to meet air conditioning demand, the state grid operator has warned.

A small number of damaged tubes in each reactor have been taken out of service after extensive inspections and tests being reviewed by the U.S. Nuclear Regulatory Commission. The significance of the tube degradation led the NRC to issue a letter in late March that requires the utility to seek its approval before restarting either reactor.

Southern California Edison (SCE), which operates the reactors for a group of owners, told the grid operator back in March that it hoped to restart the units in June, and local media reports this week quoted an SCE executive saying the company would seek to restart Unit 2 in mid-June and Unit 3 in July.

However, an NRC spokesman said Friday the utility has not responded to the NRC letter with a proposed timeline to restart the units. The NRC letter spells out specific action SCE must take to ensure that the cause of tube wear is understood and that the issue is addressed going forward.

In a statement, SCE said it is still developing its response to the NRC and that unspecified “restart dates in the preliminary draft are for planning purposes only.”

A spokesman said SCE would not provide any restart dates and Stephen Pickett, SCE’s executive vice president for external relations, who was quoted in a Los Angeles Times report, did not return a phone call seeking clarification Friday.

Ted Craver, chief executive of SCE’s parent, Edison International, told investors earlier in the week that the time required to develop a remediation plan and to obtain NRC approval could possibly “keep one or both of the units off-line into the summer, straining our ability to meet peak electricity demand.”

The California Independent System Operator’s initial 2012 summer outlook calls for peak demand of 46,342 megawatts under normal weather, 3,900 MW below the state’s record summer power use of 50,270 MW set during a July 2006 heat wave.

SCE has spent $20 million so far on the outage and estimated the cost to return the units to service at between $55 million and $65 million, according to its earnings presentation.

In its statement, SCE President Ron Litzinger said the utility “will not make any decision on restart until we are done with the necessary technical analysis.”

The utility spent $30 million in the first quarter to replace its share of the output from the two reactors and expects that replacement power in the warmer second quarter will be “substantially higher,” said Litzinger, SCE president.

Under its warranty, Mitsubishi Heavy Industries, which manufactured the steam generators, is obligated to repair or replace defective items up $137 million, an amount that does not include replacement power, Edison said in a filing with the Securities and Exchange Commission.

Sempra Energy’s San Diego Gas & Electric unit owns 20 percent of the San Onofre station and the City of Riverside, California, has less than a 2 percent stake.

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