Utility Southern California Edison (SCE) said Monday it would receive the lion’s share of a $125 million decision against Mitsubishi Heavy Industries over the failure of two replacement steam generators that in 2013 forced the permanent closure of the San Onofre Nuclear Generating Station (SONGS).
SCE co-owned SONGS with San Diego Gas & Electric and the city of Riverside. All three entities were parties to the arbitration with Mitsubishi Heavy Industries, the provider of the steam generators, before the International Chamber of Commerce International Court of Arbitration.
The arbitration body ruled 2-1 only in support of SCE’s claim that Mitsubishi Heavy Industries was in breach of contract over the steam generators, dismissing other claims. “The tribunal found that damages were subject to contractual limitations on liability,” according to an SCE 8-K fiing with the U.S. Securities and Exchange Commission. “Accordingly, the tribunal awarded the claimants $125 million (SCE’s share $98 million) in damages, in addition to $45 million previously paid by MHI (SCE’s share $35 million). In addition, the tribunal ordered the claimants to pay MHI $58 million for legal costs (SCE’s share $45 million). The tribunal rejected MHI’s counterclaims.”
Southern California Edison said its net recovery is roughly $52 million. It noted that one of three arbitration panel members stated in a concurring and dissenting opinion that the claimants had made a case for collecting more than $1 billion due to the steam generators’ failure.
Parties to ICC arbitration can challenge the award in some instances, SCE said. The utility is still assessing the decision.
“We had hoped the award would more accurately reflect the true magnitude of damage caused by Mitsubishi’s defective steam generators,” SCE President Ron Nichols said in a press release. “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.”
Southern California Edison in December announced that an AECOM-EnergySolutions partnership would be the general contractor for the $4.4 billion decommissioning of SONGS.
