VI. Conclusion

As discussed above, we have adopted the following modifications to PG&E's calculation of the decommissioning cost revenue requirements:

· A 24% turnover rate for equities in the qualified trusts.

· A 29% turnover rate for equities in the non-qualified trusts.

· A 10.5% pre-tax return on equities.

· A 6.0% pre-tax return on fixed assets.

· Escalation rates, except for LLRW burial costs, based on the most recent DRI forecasts in the record, using weighted averages, and no separate contingency factor.

· A 7.5% escalation rate for LLRW burial costs.

· LLRW burial costs of $200 per cubic foot.

· Contingency factors of 35% for Diablo Canyon, and 25% for Humboldt.

Based on the above modifications to the decommissioning cost calculation for Diablo Canyon, we find that its decommissioning trusts are fully funded. Therefore, we will not authorize a revenue requirement for Diablo Canyon decommissioning. Based on the above modifications to the decommissioning cost calculation for Humboldt, we adopt an annual revenue requirement of $18.450 million for Humboldt decommissioning for 2003. We also adopt an annual revenue requirement for Humboldt SAFESTOR O&M of $8.254 Million. This results in an overall annual revenue requirement of $26.704 million.

In addition to the above, we find that PG&E's $0.95 million expenditure for Humboldt decommissioning costs incurred above the $15.7 million authorized in Resolution E-3503 was reasonable, and PG&E should be allowed to use Humboldt decommissioning trust funds to pay for them. We also find that the $3.5 million and $3.85 million Humboldt decommissioning projects authorized in Resolution E-3737 should be reviewed for reasonableness in the next NDCTP, after they have been completed.

This decision should be effective immediately.