2. The California Energy Commission`s (CEC) Assembly Bill (AB) 1632 Report

In 2006, the California legislature enacted AB 1632 (Blakeslee, Chapter 722, Statutes of 2006), which was codified as Public Resources Code Section 25303. AB 1632 directed the CEC to: assess the potential vulnerability of California's largest baseload power plants, Diablo Canyon Power Plant (DCPP or Diablo Canyon) and San Onofre Nuclear Generating Station, to a major disruption due to a major seismic event or plant aging; assess the impacts of such a major disruption on system reliability, public safety, and the economy; assess the costs and impacts from nuclear waste accumulating at these plants; evaluate other major issues related to the future role of these plants in the state's energy portfolio; and include the assessment in the CEC's "2008 Integrated Energy Policy Report Update" (2008 IEPR Update). In response to AB 1632, as part of its 2008 IEPR Update released in November 2008, the CEC issued the AB 1632 Report.

In PG&E's 2007 general rate case decision, the Commission directed PG&E to address and incorporate the recommendations from the AB 1632 Report into its Diablo Canyon license renewal feasibility study. (Decision 07-03-044, Conclusion of Law No. 11.) PG&E has filed Application (A.) 10-01-022 addressing the Diablo Canyon license renewal feasibility study and the AB 1632 Report recommendations related to license renewal. PG&E has filed this application to address the CEC's recommendation that PG&E perform additional seismic studies using a specific technology because the estimated $16.73 million cost of these additional seismic studies was not included in the cost estimates presented in the 2007 or 2011 general rate cases.

PG&E has an existing, ongoing commitment in connection with the operating licenses for Diablo Canyon issued by the Nuclear Regulatory Commission (NRC) to fund and implement a Long Term Seismic Program (LTSP). The purpose of the LTSP is to continuously study and update the state of knowledge regarding the seismic hazards affecting DCPP. The LTSP ensures that seismic hazards are continuously assessed by PG&E and the NRC and thus ensures the safe operation of Diablo Canyon. PG&E calls upon expertise, both internally and in the industry, to perform the data collection and analyses for the LTSP. PG&E is currently working on an update to the LTSP and has included the costs associated with this effort (to be incurred after January 1, 2011) in its 2011 general rate case application (A.09-12-020). In its AB 1632 Report, the CEC acknowledged the studies PG&E plans to undertake pursuant to the LTSP, but recommended that PG&E undertake additional seismic studies. More specifically, the CEC recommended that PG&E use three-dimensional (3-D) seismic reflection mapping and other advanced geophysical techniques to explore fault zones near DCPP. The results will be integrated with PG&E's LTSP Update and will help further characterize the seismic hazard at Diablo Canyon. For example, the additional studies will examine the location and geometry (segmentation, length, width, and down dip) of fault zones near DCPP and their rates of motion. PG&E estimates the total cost to implement these studies and investigations at $16.73 million over a three-year period from 2011 to 2013.