10. Assignment of Proceeding

Nancy E. Ryan is the assigned Commissioner and Robert Barnett is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. PG&E should proceed with the additional seismic studies recommended by the CEC in its AB 1632 Report.

2. PG&E is authorized to recover in rates its actual costs associated with the additional seismic studies over the three-year period 2011-2013 as described in the application, up to a cap of $16.73 million.

3. The annual estimates of expense for these additional seismic studies are:

2011 $2.63 Million

2012 $11.78 Million

2013 $2.32 Million

Conclusions of Law

1. PG&E should proceed with, and recover the costs in rates of performing the additional seismic studies recommended by the CEC in its AB 1632 Report.

2. PG&E's ratemaking proposal for recovery in rates of its actual cost of performing the additional seismic studies, including establishment of a DCSSBA, is reasonable, up to a cap of $16.73 million.

3. It is reasonable to provide for independent peer review of the study plans and of the findings/results of the seismic studies approved and funded through this decision. Therefore, the Commission will convene its own IPRP to conduct a review and provide written comments on the study plans prior to implementation and to conduct a review and provide written comments on the findings and/or results of the studies.

4. The scope and authority of the IPRP is limited to review and comment on the study plans for the seismic studies approved and funded through this decision prior to implementation of those studies and to review and comment on the findings and/or results of the seismic studies approved and funded through this decision.

ORDER

IT IS ORDERED that:

1. Pacific Gas and Electric Company is authorized to establish a Diablo Canyon Seismic Study Balancing Account to record and recover its actual costs of conducting the seismic studies, including its costs associated with the Independent Peer Review Panel, up to a cap of $16.73 million.

2. Pacific Gas and Electric Company shall commence recovery of costs over a three-year period based upon the $16.73 million estimate and annually true-up its generation rates based upon actual costs as recorded in the Diablo Canyon Seismic Study Balancing Account, up to a cap of $16.73 million.

3. Costs recorded to the Diablo Canyon Seismic Study Balancing Account include costs for the activities which reflect Pacific Gas and Electric Company's implementation of the California Energy Commission Assembly Bill 1632 Report recommendation that Pacific Gas and Electric Company perform additional seismic studies using off-shore seismic imaging.

4. Costs recorded to the Diablo Canyon Seismic Study Balancing Account shall be recovered in the Utility Generation Balancing Account, or its successor, as part of the Annual Electric True-up for recovery through CPUC-jurisdictional rates.

5. Pacific Gas and Electric Company shall begin recovery of $2.63 million, plus an allowance for Uncollectibles and Franchise Fees, in the Utility Generation Balancing Account starting on January 1, 2011. Pacific Gas and Electric Company shall track the difference between the $2.63 million and the actual expenditures in the Diablo Canyon Seismic Study Balancing Account. In 2012, the amount to be collected in the Utility Generation Balancing Account shall be revised to $11.78 million, plus the balance in the Diablo Canyon Seismic Study Balancing Account at the end of 2011, and an allowance for Uncollectibles and Franchise Fees. In 2013, the amount collected in the Utility Generation Balancing Account shall be revised to $2.32 million, plus the balance in the Diablo Canyon Seismic Study Balancing Account at the end of 2012 and an allowance for Uncollectibles and Franchise Fees. Any amounts in the Diablo Canyon Seismic Study Balancing Account at the end of 2013 and subsequent years shall be transferred to the Utility Generation Balancing Account annually as part of the Annual Electric True-up proceeding.

6. Pacific Gas and Electric Company shall provide the Independent Peer Review Panel with its seismic study plans prior to implementation of the seismic studies. The Independent Peer Review Panel shall review and provide Pacific Gas and Electric Company written comments on the study plans within 30 days of receipt.

7. Pacific Gas and Electric Company shall provide the Independent Peer Review Panel the findings and/or results associated with the seismic studies upon finalizing those findings and/or results. The Independent Peer Review Panel shall review and provide Pacific Gas and Electric Company written comments on those findings and/or results within 30 days of receipt.

8. Pacific Gas and Electric Company is authorized to file a motion to reopen this Application when it believes the seismic studies costs authorized by this decision will exceed $16.73 million.

9. Application 10-01-014 is closed.

This order is effective today.

Dated August 12, 2010, at San Francisco, California.

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