III. PG&E's Request

In this application, PG&E requests that the Commission approve the replacement of Diablo's eight steam generators. Specifically, PG&E requests that the Commission:

1. Determine that $706 million is a reasonable and prudent cost for replacement of the steam generators;⁶

2. Authorize PG&E to recover the costs, up to $706 million, without further reasonableness review;

3. Authorize PG&E to seek recovery in rates of any amounts above $706 million, subject to an after-the-fact reasonableness review of the additional costs;

4. Authorize PG&E to record the revenue requirement associated with SGRP plant additions for each unit equal to or less than $706 million in the UGBA as of the date of operation of each unit;

5. Authorize PG&E to include the revenue requirement associated with each unit in rates on January 1 of the year following commercial operation of each unit;

6. Authorize PG&E to record in the UGBA the revenue requirement, if any, associated with plant additions above $706 million ($326 million for Unit 1 and $380 million for Unit 2) as of the date of operation of each unit. PG&E would be at risk for these revenue requirements, and would only be allowed to include them in rates if such costs were ultimately found to be reasonable and prudent by the Commission; and

7. Approve modifications to the UGBA to allow for the recording of the above revenue requirements.