10. Assignment of Proceeding

Timothy Alan Simon is the assigned Commissioner and Melanie M. Darling is the assigned ALJ in this proceeding.

Findings of Fact

1. Future decommissioning cost estimates submitted to the Commission should contain the cost drivers set forth in Section 4.1 because they will impact the cost of decommissioning.

2. The primary reason that the decommissioning cost estimate for SONGS 2 and 3 is much higher than for other nuclear plants is the anticipated costs of extra site restoration required by the U.S. Navy and State lands Commission leases to SCE.

3. Other reasons for the high cost estimate for SONGS 2 and 3 include personnel severance costs necessary to comply with the California Nuclear Facility Decommissioning Act of 1985, NRC-related security requirements, and the cost of removal and disposal of large components.

4. The SONGS and Diablo Canyon cost estimates assume a 12-year storage period for spent nuclear fuel, rather than the five-year period assumed by the non-California sites.

5. The SONGS cost estimate assumes more than twice as many total man-hours for decommissioning as similar nuclear plants, primarily based on large volumes of waste expected due to the full site restoration requirements of the Navy and State Lands Commission leases.

6. Decommissioning cost estimates have not consistently considered emerging radiological issues, the potential presence of tritium and carbon 14 at the time of decommissioning, or whether the EPA and/or state agencies are likely to lower acceptable levels for various contaminants in the future.

7. The potential to reduce future decommissioning costs would be improved if the utilities operate the plants to minimize end-of-life contamination levels and uncontained environmental releases.

8. The potential to reduce future decommissioning costs would be improved if utilities incorporate economies of scale when decommissioning a two-unit site.

9. The potential to reduce uncertainty with future decommissioning costs would be improved if utilities identified the extent of present radionuclides that could impact NRC license termination and state or other standards for site restoration.

10. The potential to reduce uncertainty with future decommissioning costs would be improved if utilities minimized stored LLRW to be disposed of during decommissioning.

11. There are assumptions that should be reasonably consistent between SONGS and Diablo Canyon cost estimates, including DOE spent fuel performance, waste management costs and options, state requirements for labor termination, federal and state requirements for site restoration.

12. Utilities could mitigate the added costs arising from inherent risks related to future decommissioning by (1) use of performance risk contingency, (2) conservative assumptions for cost escalation and rates of return, and (3) periodic reassessment of costs.

13. The Panel's recommendations set forth in Section 5 will improve the accuracy, transparency, and comparability of the decommissioning cost estimates submitted to the Commission.

14. If utilities provided a summary of key information with the NDCTP applications that included key information about assumptions, results, and forecasted returns for the trust funds, transparency of the applications would be improved and costs of the review proceedings may decrease.

15. In order for the Commission to adequately and promptly review how closely actual costs are following estimated costs during the major decommissioning phase of a nuclear plant, the utility should provide particular information about these expenses to the Commission through a common Advice Letter process and format agreed to by the Commission's Energy Division.

16. The $275,000 approved in D.10-07-047 for the work of the Independent Panel was reasonable and results in a material contribution to the Commission's evaluation and review of nuclear decommissioning costs now and in the future.

Conclusions of Law

1. The Panel's recommendations in Section 5 of the decision should be adopted, with the additional information required in Common Summary format set forth in Attachment A to this decision.

2. The Commission should establish the Advice Letter Process set forth in Attachment B for utilities to notify the Commission of decommissioning activities, expenses, and trust fund reimbursements related to nuclear decommissioning. It is reasonable to first apply the process to PG&E, which has the only active decommissioning project within the Commission's jurisdiction, so the Commission may evaluate its efficacy for future decommissioning projects.

3. In addition to the information set forth in Appendix E to the Final Report, the utilities should include the following information in the common summary format attached to their future NDCTP applications:

· Dollar-year used in the estimate;

· Escalation rate for LLRW burial costs;

· Average time fuel will spend in wet storage;

· Escalation rate for labor rates;

· Balances in each trust fund at the end of the preceding quarter;

· Assumed rate of return for equity investments;

· Assumed rate of return for fixed income investments; and

· Overall combined after-tax rate of return per trust fund.

4. The utilities may seek reimbursement from their respective trust funds for their share of the $275,000 cost of the Final Report by the Independent Panel.

ORDER

IT IS ORDERED that:

1. The recommendations of the Independent Panel are approved and Southern California Edison Company, San Diego Gas & Electric Company, and Pacific Gas and Electric Company shall incorporate them into future nuclear decommissioning cost estimates submitted to the Commission.

2. Southern California Edison Company, San Diego Gas & Electric Company, and Pacific Gas and Electric Company shall agree on a common summary format to identify the key information from their nuclear decommissioning cost estimates and proposed revenue requirements as listed in Attachment A, and attach it to their applications in future Nuclear Decommissioning Cost Triennial Proceedings.

3. Pacific Gas and Electric Company shall adhere to the Advice Letter Process set forth in Attachment B to notify the Commission of decommissioning activities, expenses, and trust fund reimbursements related to nuclear decommissioning of the Humboldt Bay nuclear power plant. During the major decommissioning phase, Pacific Gas and Electric Company shall file the Advice Letters at least once during each calendar year.

4. Southern California Edison Company, San Diego Gas & Electric Company, and Pacific Gas and Electric Company may be reimbursed by their respective trust funds for their share of the $275,000 cost of the Final Report by the Independent Panel.

5. Application (A.) 09-04-007 and A.09-04-009 remains open.

This order is effective today.

Dated July 14, 2011, at San Francisco, California.

ATTACHMENT A

INFORMATION TO BE INCLUDED IN

COMMON SUMMARY FORMAT FOR DECOMMISSIONING COST ESTIMATES SUBMITTED IN NDCTP

Assumptions:

· $ year used in estimate

· DOE performance (common)

· State severance requirements (common)

· Alternatives and pricing for LLRW burial (common)

· Escalation rate for LLRW burial

· Extent of site and building contamination

· LLRW and hazardous waste on site at beginning of

· Average time fuel will spend in wet storage

Results:

· Craft and non-craft labor hours, total , and by period

· Security labor hours, total and by period

· Average craft, non-craft and security labor rates

· Escalation rate for labor rates

· LLRW handled, and removed from site

· Clean waste handled, and all waste removed from site

· Major "activity" and "period" costs that are comparable between

Trust Fund Forecasts

· Balances in each trust fund at the end of the preceding quarter

· Assumed rate of return for equity investments

· Assumed rate of return for fixed income investments

Overall combined after-tax rate of return per trust fund

(END OF ATTACHMENT A)

ATTACHMENT B

Information to be Included in Nuclear Trust Fund

Disbursement Advice Letter Filings

Future advice letter filings will continue to be made on a periodic basis and in the general format used for previous advice letters for Humboldt Bay Power Plant Unit 3. Humboldt Bay Power Plant Unit 3 advice letters will be made under Tier 2, and will request approval for anticipated Trust Fund disbursements. In addition, each advice letter will contain the following information:

· Summary of Previous Advice Letter Approvals and Trust Withdrawals

· Anticipated Disbursements

· Comparison Chart

As is the case presently, during the calendar year, PG&E would be able to seek reimbursement from the Trusts for up to the total amount authorized, i.e., PG&E could withdraw funds for a particular activity in excess of the annual request for that activity so long as the total disbursements were within the advice letter authorization. Any such variances would be identified in the next advice letter.

The format for the above information will be in the form of an excel spreadsheet, with the exception of any explanation, which will be in a narrative attachment.

(END OF ATTACHMENT B)

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