VIII. Independent Board of Consultants
The scoping ruling required PG&E to supplement its application to address Ordering Paragraph 7 in D.00-02-046, 8 for the consideration of an "Independent Board of Consultants" to oversee the decommissioning of Humboldt Unit 3:
At least six months before the date that full scale decommissioning of Humboldt Bay Unit 3 begins, and no later than 30 days after any order of the Nuclear Regulatory Commission authorizing an on-site dry cask storage plan, PG&E shall file an application before this Commission to initiate consideration of the establishment of an Independent Board of Consultants to oversee the decommissioning of Humboldt Bay Unit 3. Until such time as an Independent Board of Consultants is established, PG&E shall continue outreach efforts to ensure that the Redwood Alliance and the Eureka community are kept informed about the status of the plant and decommissioning of it." (Mimeo., D.00-02-046, p. 543.)
The issue was in the scoping ruling and PG&E was required to supplement its prepared testimony, as a result of Fielder's timely protest. PG&E proposed in its supplemental testimony that no committee was necessary. Fielder formerly represented the Redwood Alliance, which he asserts is essentially defunct at this time. He pursued the issue of an Independent Board of Consultants as an interested customer.
A. PG&E's Position
PG&E opposes an Independent Board of Consultants. PG&E argues first that it plans to contract for the decommissioning of Humboldt Unit 3 with established firms that have appropriate experience in decommissioning work. Second, PG&E asserts that subsequent decommissioning activities for Humboldt Unit 3 are "rather straight forward . . . with little room for deviation."9 PG&E suggests that the Nuclear Regulatory Commission determines all requirements for radioactive material disposal and site release for other use. Therefore, there is only limited discretion for PG&E and its contractors.
PG&E argues it applies economical and efficient methods to ensure prudent decisionmaking and oversight of decommissioning expenditures. PG&E's current practice is to maintain separate accounting orders to record the costs of the dry cask storage activities and related transactions with the decommissioning trusts. This separate accounting facilitates monitoring by the Commission staff. PG&E also proposes community outreach on the decommissioning effort.
PG&E points out that it must submit an updated decommissioning cost estimate for any remaining decommissioning activities in subsequent triennial reviews. In addition, PG&E must submit a comparison of the most recently completed Humboldt Unit 3 decommissioning work, and the costs incurred, to the previous forecast of Humboldt Unit 3 decommissioning cost estimate. PG&E must persuasively demonstrate that material variances are reasonable. PG&E is therefore opposed to an Independent Board of Consultants that it believes would not be cost effective and would add to decommissioning expenses payable by the trusts. (See Ex. 6, pp. 7-2 - 7-4.)
B. Fielder's Position
Fielder cites to Pub. Util. Code §§ 1091 - 1102 which provides for a construction project board of consultants and argues that decommissioning is very similar to large-scale construction in that decommissioning is also a complex project. (Fielder Reply Brief, p. 2, and footnote 1.) Fielder suggests the Diablo Canyon Independent Safety Committee (Diablo Safety Committee) also serves as a model, at least for budgetary purposes.10 Fielder argues that PG&E's estimates for Humboldt's decommissioning are inflated and that without an independent board, PG&E will be deemed prudent while spending too much. Additionally, Fielder argues that intervenors, including DRA, lack the expertise to effectively challenge PG&E's cost estimates or actual decommissioning costs in the triennial reviews.
C. Discussion
We agree in principle with Fielder on the necessity to ensure that PG&E uses sufficient well-trained and experienced personnel to plan and direct the complex task of decommissioning a retired nuclear generating facility. PG&E is primarily an operating gas and electric distribution utility and not primarily an architect-engineer continuously engaged in complex construction and removal projects. This is also true for Edison and SDG&E; therefore our findings, below, are applicable to them as well, on the need for engaging and using sufficient well-trained and experienced personnel suitable to decommissioning a retired nuclear generating facility.
The Diablo Safety Committee is not an appropriate model: it is an after-the-fact investigative body that may be an incentive for safe operations (or deterrent to unsafe operations) but it does not immediately affect or control operating decisions.
The Diablo Canyon Independent Safety Committee ("DCISC") was established as a part of a settlement agreement entered into in June 1988 between the Division of Ratepayer Advocates of the California Public Utilities Commission ("PUC"), the Attorney General for the State of California, and Pacific Gas and Electric Company ("PG&E") concerning the operation of the two units of PG&E's Diablo Canyon Nuclear Power Plant ("Diablo Canyon"). The agreement provided that:
An Independent Safety Committee shall be established consisting of three members, one each appointed by the Governor of the State of California, the Attorney General and the Chairperson of the California Energy Commission, respectively, serving staggered three-year terms. The Committee shall review Diablo Canyon operations for the purpose of assessing the safety of operations and suggesting any recommendations for safe operations. Neither the Committee nor its members shall have any responsibility or authority for plant operations, and they shall have no authority to direct PG&E personnel. The Committee shall conform in all respects to applicable federal laws, regulations and Nuclear Regulatory Commission ("NRC") policies. ( http://www.dcisc.org/general_information/general_information.html - the Diablo Safety Committee's website, emphasis added.)
There is an inherent conflict between the roles of consultants authorized by a regulator and managers who must account for their actions to a regulator. A consultant is "a person who provides expert advice professionally" whereas, a manager is "a person who manages an organization, group of staff."11 A manager may get conflicting advice from various sources and must make a decision on which advice is best for the circumstances.
If the Commission were to authorize an Independent Board of Consultants, we would have to very clearly delineate: the selection criteria; role and obligations of the board; the mechanical operations of the board; the process to quickly resolve disagreements between PG&E and the board; and, no doubt, numerous other details. Fielder does not provide us with any of these details, and under cross-examination, the sponsoring witness could not suggest any of the details for a viable Independent Board of Consultants framework for us to consider.12 We do not consider §§ 1091 et seq. to be sufficient detailed operating guidelines to integrate a board with PG&E's management. Section 1098, for example, describes an after-the-fact review, including quarterly reports comparing actual to forecast results. These provisions suggest that such a board advises the Commission and does not control or advise PG&E prior to actual activities (for either new construction or dismantling major structures).
In order to satisfy the Commission, the utility must demonstrate that its actions can be deemed "reasonable and prudent." The Commission has found:
The term `reasonable and prudent' means that at a particular time any of the practices, methods, and acts engaged in by a utility follows the exercise of reasonable judgment in light of facts known or which should have been known at the time the decision was made. The act or decision is expected by the utility to accomplish the desired result at the lowest reasonable cost consistent with good utility practices. Good utility practices are based upon cost effectiveness, reliability, safety, and expedition.
A `reasonable and prudent' act is not limited to the optimum practice, method, or act to the exclusion of all others, but rather encompasses a spectrum of possible practices, methods, or acts consistent with the utility system needs, the interest of the ratepayers and the requirements of governmental agencies of competent jurisdiction. (24 CPUC 2d, 486.) (Emphasis added.)
Defining reasonable and prudent as good utility practices is a tautology. To properly manage the decommissioning process, to be reasonable and prudent, by using good utility practices, as required by this Commission, a utility must show (in this narrow instance) that it sought and used personnel who possessed the available and necessary skills, experience and knowledge to perform the task. So to reasonably undertake decommissioning a nuclear generating plant, PG&E (as well as Edison and SDG&E) must employ properly trained experts who have experience relevant to decommissioning a nuclear plant to plan and perform the decommissioning. People with this skill set and experience may or may not be on the typical electric utility's staff. Therefore we expect PG&E to demonstrate in all subsequent decommissioning-related proceedings that throughout the decommissioning of Humboldt (and later for Diablo) it sought out and acquired the services of well-trained and experienced personnel appropriate to the tasks. We expect PG&E to identify, and aggressively pursue employing, the right people for the job. We need not care whether these people are employees of PG&E or contractors: that is an operating decision best resolved by the utility. Edison and SDG&E are also obliged as an integral part of good utility practices to demonstrate that in decommissioning SONGS Unit 1 that they engaged the right people for the job.13
D. Conclusion
An Independent Board of Consultants would obscure PG&E's overriding obligation to properly manage its decommissioning obligations. We are not competent, nor are our processes timely, to referee complex technical disagreements between PG&E's staff and an outside board on decommissioning issues. By contradistinction, the Nuclear Decommissioning Trust Funds' management committees are composed of utility officers and Commission-approved outside experts that explicitly have the responsibility to manage the trust funds' investments. Further, The Diablo Safety Committee does not operate the plant or consult on its management and therefore it is not a good model to justify the Independent Board of Consultants.
The proposed Board of Independent Consultants would not supplant and assume PG&E's responsibilities for decommissioning Humboldt Unit 3. Therefore, it is far preferable that PG&E must demonstrate in subsequent triennial reviews that it engaged as either employees, contractors, or consultants, people trained to plan and perform a decommissioning, and who have experience applicable to decommissioning a nuclear plant. We also find that this obligation applies to Edison and SDG&E in subsequent triennial reviews of decommissioning activities.
8 D.00-02-046 in PG&E's test year 1999 general rate case, A.97-12-020.
9 Ex. 6, p. 7-3.
10 Created as part of the ratemaking settlement for Diablo Canyon in D.88-12-083. (30 CPUC 2d, 189.)
11 Compact Oxford English Dictionary, online, http://www.askoxford.com/?view=uk.
12 The Reply Brief however relies extensively on the analogy of a construction project board as cited to §§ 1091 et seq.
13 This discussion focuses narrowly on the desired skills and experience of certain necessary decommissioning personnel and is not an all-encompassing discussion of the total obligations that comprise reasonable and prudent managerial actions for decommissioning a nuclear power plant.
