• Kyodo


A California electric utility formally initiated a dispute Thursday with Mitsubishi Heavy Industries Ltd. over defective steam generators at the San Onofre nuclear power plant, which was retired early.

Southern California Edison, known as SCE, claims that Mitsubishi Heavy and Mitsubishi Nuclear Energy Systems made a “total and fundamental” breach of contract and are liable for a laundry list of damages.

Under its warranty, MHI said the four generators would operate reliably for 20 years, but SCE took the plant offline in January 2012 when one of the steam generators experienced a radioactive coolant leak after less than a year of operation, according to the utility.

The leak led to the discovery of tubes that were wearing thin. A 2012 investigation by the U.S. Nuclear Regulatory Commission found that Mitsubishi had used the wrong computer model to predict the flow of steam through the tubes, and that support structures were rubbing against the tubes and causing wear.

In its dispute notice issued Thursday, the utility claims the contract specified that such tubewear would be prevented. The notice also alleges MHI “misrepresented its ability to design and fabricate” the steam generators.

The utility said Mitsubishi promised to repair the steam generators in its warranty but had only come up with “conceptual” plans to do so 16 months after the leak was discovered.

The warranty capped Mitsubishi’s liability at $138 million. But it made an exception for gross negligence, SCE said. The utility argued that Mitsubishi’s mistakes amounted to gross negligence and that the manufacturer should pay for all damages resulting from the shutdown.

SCE did not spell out the amount it seeks. But it blamed the equipment problems for a litany of expenses well beyond the cost of the steam generators.

The utility claims MHI should be held liable for the cost of replacement power during the outage, the lost value of the plant itself, and other damages.