XV. Affirmation of Previous ALJ Rulings

On August 12, 2004, PG&E filed motions to strike the pre-filed testimonies of Jay Namson and Gordon Thompson on behalf of MFP. It also filed a motion to strike the testimony of Gary Ackerman on behalf of Western Power Trading Forum (WPTF). By a ruling dated August 31, 2004, the ALJ granted the motions to strike the testimonies of Namson and Ackerman, and denied the motion to strike Thompson's testimony.

Namson's testimony argued that a seismic retrofit of Diablo may be necessary to accommodate large reverse or thrust fault earthquakes, and that PG&E should be ordered to analyze the costs of such a retrofit for consideration in this proceeding. Namson effectively asked that this proceeding be suspended while his recommended seismic review is conducted. According to Namson, such an analysis would be an extensive undertaking. PG&E argued that Namson's testimony should be stricken because seismic issues are not within the Commission's jurisdiction. It also represented that the testimony is speculative and irrelevant.

Imposition of seismic requirements for Diablo is not within the Commission's jurisdiction. Therefore, the Commission does not have the authority to order any changes to the plant if such a review found that any changes were needed. The only way a seismic retrofit will be performed, if one is needed, is if the NRC orders it. Nothing in Namson's testimony suggested that the NRC is likely to order such a study, much less require a retrofit.

Namson's testimony included no estimate of: (1) the probability that such a study would be required by the NRC, (2) the probability that a study would recommend a seismic retrofit, (3) the probability that the NRC would require a retrofit if the study recommended one, (4) the cost of the retrofit, (5) when the retrofit would be performed, and (6) whether the retrofit would be required even if the SGRP were not performed. As a result, Namson's testimony did not specifically address the cost-effectiveness of the SGRP, the need for the SGRP, or ratemaking issues. Therefore, it was beyond the scope of this proceeding. As a result, we affirm the ALJ's ruling to strike Namson's testimony. We note that the ALJ's ruling, while it struck Namson's testimony, did not preclude seismic issues from consideration in this proceeding.

Ackerman's testimony argued that PG&E should be ordered to issue a request for proposals (RFP) for alternatives to the SGRP, and that the need for the SGRP should be evaluated considering the results of the RFP. PG&E countered that the testimony is beyond the scope of this proceeding.

Ackerman's testimony made no offer of proof as to what results its proposal would yield. WPTF or its members could have made unsolicited proposals. In addition, WPTF could have evaluated PG&E's estimates of replacement power costs, or made its own estimates of replacement power costs. However, WPTF chose not to do so.

Ackerman's testimony did not address any costs or benefits. Therefore, it did not address the cost-effectiveness of the SGRP, the need for the SGRP, or ratemaking issues. It also did not address issues in connection with the CEQA review. Therefore, Ackerman's testimony was beyond the scope of this proceeding. As a result, we affirm the ALJ's ruling to strike Ackerman's testimony. We note that the ALJ's ruling did not preclude WPTF from presenting testimony regarding alternate proposals to the SGRP.

On August 12, 2004, PG&E filed a motion to strike the pre-filed testimony of Christopher J. Mayer on behalf of the Modesto Irrigation District (MID). Mayer's testimony requested that the Commission exclude municipal departing load customers who have already departed PG&E's distribution service, or who depart prior to successful commercial operation of the first set of replacement steam generators, from liability for any increased nuclear decommissioning revenue requirements attributable to either replacement or attempted replacement of the steam generators and any related extension of Diablo operations facilitated by replacement of the steam generators. Nuclear decommissioning cost revenue requirements, and the allocation to rates thereof, are not within the scope of this proceeding. Therefore, by a ruling dated September 2, 2004, the ALJ granted the motion to strike. We affirm the ALJ's ruling.

On August 23, 2004, PG&E filed a motion for a protective order for materials related to the issue of whether it should have sued, or should sue, Westinghouse regarding the original steam generators, and contract pricing related to the replacement steam generators. On October 13, 2004, the ALJ issued a ruling granting the motion because failure to do so could jeopardize the ability of PG&E to pursue a suit if so ordered, and to negotiate the lowest reasonable price for contracts related to the SGRP, which could result in higher costs to ratepayers. We affirm the ALJ's ruling.