VIII. TURN's Cost-Effectiveness Modeling

TURN performed its own cost-effectiveness modeling of Diablo with and without the SGRP. It used mostly PG&E's assumptions, with the exceptions of O&M costs, capacity factors, the timing of plant closure, and the possibility of a one-year outage. No adjustments were made for replacement energy costs, or the regulatory treatment of post-shutdown unrecovered plant investments.

Nineteen scenarios were run. The SGRP was cost-effective in twelve, and not in seven. TURN's analysis showed the benefits of the SGRP to be questionable if Diablo closes prior to the end of its license life, assuming the SGRP is performed, or under a combination of low capacity factors, high O&M costs, or if Diablo were to operate past 2017 without the SGRP. Based on these results, TURN recommends that PG&E be required to run its model with the adjustments it recommends, and assign wider ranges of variability to the capacity factor, O&M costs, capital additions, and the potential for an extended outage. MFP supports the use of TURN's model.

TURN's model yields results generally similar to PG&E's model when the same or similar inputs are used. Therefore, TURN's model tends to support the validity of PG&E's model. TURN's scenarios were intended to analyze the sensitivity of the cost-effectiveness of the SGRP to various input assumptions. Since TURN did not assess the probability of any particular scenario, its calculations are of limited use in assessing the most likely cost-effectiveness outcome of the SGRP.