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TheStreet Open House

SCE Demands That Mitsubishi Heavy Industries Reimburse For Expenses Incurred Because Of Mitsubishi’s Failed San Onofre Replacement Steam Generators

Southern California Edison (SCE) today criticized Mitsubishi Heavy Industries (Mitsubishi) for “stonewalling” and made public its demand that Mitsubishi reimburse SCE for expenses incurred in responding to fundamental defects in the San Onofre replacement steam generators (RSGs) that Mitsubishi designed and manufactured. SCE’s demand follows the Sept. 23 findings from the Nuclear Regulatory Commission that Mitsubishi’s replacement steam generators failed because of a flaw in the computer code that Mitsubishi used to design and manufacture them.

According to SCE’s Sept. 27 letter to Mitsubishi, available at www.songscommunity.com/docs/edisoninvoices.pdf, “Edison spent over $140 million investigating the cause of excessive tube wear in the RSGs following a tube leak in one of the Unit 3 RSGs, plugging damaged tubes in all four RSGs, and attempting to restart Unit 2 after both Units were shut down due to the RSG defects.” SCE’s letter states that “it is simply incredible for Mitsubishi to assert that only $7.6 million of those expenses are Mitsubishi’s responsibility.”

SCE’s letter also maintains that, although Mitsubishi claims that “it has still not received sufficient documentation to recognize its warranty obligations,” the facts demonstrate otherwise. According to the letter, “Edison has gone well beyond its obligations to provide documentation supporting its costs,” including:

  • “Mitsubishi employees [were] present at the plant and involved in much of the activity described in these invoices”;
  • “Edison has provided Mitsubishi with several thousand pages of detailed backup documents supporting the charges”;
  • “Edison employees have spent hundreds of hours responding to Mitsubishi’s ongoing demands for information, including by creating specialized reports for Mitsubishi”; and
  • “The documentation Edison has provided far exceeds the level of detail that is customary in the industry — and far exceeds any backup that Mitsubishi has ever provided Edison in support of any charges it is claiming.”

The SCE letter concludes that “Mitsubishi’s actions have made it clear that no reasonable level of documentation will ever be sufficient to support payment in its view. We are therefore unwilling to engage in yet another time-consuming effort, only to face continued stonewalling by Mitsubishi.”

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