II. Requests

A. Edison and SDG&E

In A.05-11-008, Edison & SDG&E request the Commission:

(1) find the $298 million (100% share, 2004$) cost of San Onofre Nuclear Generating Station (SONGS) Unit 1 decommissioning work completed between January 1, 2002 and June 30, 2005 is reasonable;

(2) find the updated $309 million (100% share, 2004$) SONGS Unit 1 decommissioning cost estimate for the remaining work is reasonable;

(3) find the updated $3,131 million (100% share, 2004$) SONGS Units 2 & 3 decommissioning cost estimate is reasonable;

(4) raise the Qualified Trust maximum equity percentage to 60%;

(5) raise the cap on investment management fees to 30 basis points;

(6) raise annual compensation retainer for non-company members of the Nuclear Decommissioning Trust Committee to $12,000; and

(7) allow a maximum 20% allocation of the total fixed income portfolio in the Qualified Trust to high yield bonds rated B or higher by Standard and Poors or B2 or higher by Moodys.

In addition, Edison requests the Commission:

(1) find the updated $739 million (Edison's share, 2004$) Palo Verde decommissioning cost estimate is reasonable;

(2) authorize rate recovery of its increased contribution of $57.8 million to its Nuclear Decommissioning Trust Funds for SONGS Units 2 & 3 and for Palo Verde Nuclear Generating Station Units 1, 2, & 3 (Palo Verde) through the Nuclear Decommissioning Cost Charge;

(3) authorize Edison to amend its Decommissioning Trust Agreements (Trust Agreements) to clarify that transfers of nonqualified nuclear decommissioning trust (Nonqualified Trust) assets to the qualified nuclear decommissioning trust (Qualified Trust), pursuant to Internal Revenue Code Section 468A(f), as amended by the Energy Policy Act of 2005, are permissible under the Trust Agreements, and to submit such amendments as may be required for Commission approval via advice letter filing;

(4) approve the transfer of funds from Edison's SONGS and Palo Verde Nonqualified Trusts to the corresponding SONGS and Palo Verde Qualified Trusts, pursuant to Internal Revenue Code Section 468A(f), as amended by the Energy Policy Act of 2005; and

(5) authorize Edison to continue to use the tax benefits associated with deducting SONGS Unit 1 Nonqualified Trust amounts consistent with Ordering Paragraph 9 of Decision (D.) 03-10-015, including the tax benefits that may arise in connection with any transfer of funds from Edison's SONGS Unit 1 Nonqualified Trust to Edison's SONGS Unit 1 Qualified Trust as provided for in Internal Revenue Code Section 468A(f), to continue SONGS Unit 1 decommissioning work.

SDG&E requests the Commission authorize or approve:

(1) rate recovery of SDG&E's increased contributions of $12.05 million, excluding franchise fees and uncollectibles, to its nuclear decommissioning trust funds for SONGS Units 2 & 3;

(2) the use of $5.523 million of the over collection in SDG&E's Nuclear Decommissioning Adjustment Mechanism as a 12-month amortization to the nuclear decommissioning rate effective January 1, 2007;

(3) amending SDG&E's Trust Agreements to clarify that transfers of Nonqualified Trust assets to the Qualified Trusts pursuant to Internal Revenue Code Section 468A(f), as amended by the Energy Policy Act of 2005, are permissible under the Trust Agreements, and to submit such amendments as may be required for Commission approval via advice letter filing;

(4) transferring funds from SDG&E's SONGS Nonqualified Trust to the corresponding SONGS Qualified Trust; and

(5) SDG&E to continue to use the tax benefits associated with deducting SONGS Unit 1 Nonqualified Trust amounts consistent with Ordering Paragraph 9 of Commission D.03-10-015, including any tax benefits that may arise in connection with any transfer of funds from SDG&E's SONGS Unit 1 Nonqualified Trust to SDG&E's SONGS Unit 1 Qualified Trust as provided for in Internal Revenue Code Section 468A(f) to continue SONGS Unit 1 decommissioning work.

B. PG&E

In a separate application, A.05-11-009, PG&E requests the Commission to authorize the collection, through Commission-jurisdictional electric rates, of the following amounts in 2007 through 2009 for decommissioning of Diablo Canyon and Humboldt Unit 3:

(1) $9.491 million and $0 for the Diablo Canyon Nuclear Decommissioning Trusts for Units 1 and 2, respectively (the 2005 revenue requirement is $0);

(2) $14.621 million for the Humboldt Unit 3 Nuclear Decommissioning Trust (the 2005 revenue requirement is $18.443 million);

(3) increase revenue requirements to cover the costs of operating and maintaining (O&M) the Humboldt Unit 3 site in a safe condition (SAFSTOR). Specifically, PG&E is requesting SAFSTOR revenue requirements of $13.232 million in 2007 from the authorized amounts of $10.836 million for 2005. PG&E is also requesting attrition for SAFSTOR expenses for 2008 and 2009;

(4) continue overall decommissioning revenue requirement levels currently in effect for 2005 through 2006, but to apply $12.376 million as revenue requirements attributable to SAFSTOR expenses, while contributing the remainder (after any applicable taxes) to the decommissioning trusts; and

(5) find that PG&E's activities with respect to two completed decommissioning projects-involving asbestos removal and plant systems and structures radiological characterization-were reasonable and prudent.