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Insurer to pay $400 million over nuclear plant losses

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Wilmington, Delaware-based insurer, Nuclear Electric Insurance Ltd., has agreed to pay a settlement amount of $400 million for losses caused by the closing of San Onofre, California nuclear plant, Edison International said in a statement.

On Jan. 31, 2012, a nuclear reactor at the San Onofre Nuclear Generating Station had one of its steam generators, designed and manufactured by Mitsubishi, experience a radioactive coolant leak. The reactor was shut down immediately and permanently. During an investigation it was discovered that the generator leak had been caused by excessive tube wear, according to previous news releases.

The San Onofre nuclear plant is owned by Southern California Edison, San Diego Gas & Electric Co. and the city of Riverside, California. SCE president Pedro Pizarro, said in a statement that 95% of the net insurance proceeds will benefit customers who suffered price increases due to the need to import electricity to make up for the shutdown, allocating $312.8 million to SCE, $80 million to San Diego Gas & Electric, and $7.16 million to the city of Riverside.

In October 2013, SCE submitted a request for arbitration against Tokyo-based Mitsubishi Heavy Industries Ltd. and Arlington, Virginia-based Mitsubishi Nuclear Energy Systems Inc. for the defective generators, according to an Edison International statement. The U.S. Nuclear Regulatory Commission later confirmed flaws in how Mitsubishi used its computer codes to design the steam generators, which caused the generators to perform inaccurately, leading to excess wear that resulted in the tube leak.

According to a statement in 2012 from the U.S. Energy Information Administration, the shutdown forced California to import more electricity, raising the cost. The shutdown also affected the area's natural gas market.