VIII. Comments on Proposed Decision
The proposed decision of the ALJ in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(d) and Rule 77.1 of the Rules of Practice and Procedure. Comments and/or reply comments were filed by PG&E, Southern California Edison Company, Aglet Consumer Alliance, and jointly by San Luis Obispo Mothers for Peace, Greenpeace, Sierra Club, Public Citizen, and Environment California (collectively MFP).
MFP raises a number if issues that have already been addressed in the Final EIR and we will not repeat them here. In addition, MFP states that we misunderstood its recommendation regarding security measures in our interim decision in this proceeding and that our conclusions regarding its recommendation are, therefore, wrong. MFP's representations regarding the interim decision should have been addressed in its comments on the PD for the interim decision. However, MFP failed to do so. Nevertheless, we will address them herein.
In its exhibits regarding enhanced security requirements, MFP presented three scenarios to illustrate its estimates of the resulting security costs. MFP states that we misunderstood its first and second scenarios. It, therefore, concludes that our decision not to adopt its recommendation was erroneous.
MFP's first scenario assumes that Diablo will stay in operation. In D.05-02-052, we stated that this scenario corresponds to both the case where the SGRP is performed and where it is not performed unless it is known at the time the enhanced security requirements are put into effect that neither Diablo unit will continue in operation for more than three years. MFP states that our understanding of its first scenario is incorrect. It says that this scenario applies only if the SGRP is performed and Diablo continues in operation for 15 years.
MFP's exhibit includes tables that show cumulative costs for each scenario. Its Table A shows the cumulative costs for its first scenario over a 15 year period. However, its exhibit states that "In the scenario underlying Table A, the Diablo reactors would continue to operate for a number of years after 2004." Its exhibit also states that "Each scenario begins in year X, which is the year of initiation of a program of enhanced-defense measures. Year X might be 2006, 2007, or some later year." Therefore, MFP's first scenario does not assume that operations would continue for 15 years. MFP's exhibit merely shows cumulative costs if Diablo operated for 15 years. In addition, the record shows that there is no absolute certainty as to when Diablo would shut down without the SGRP. Therefore, it is possible that Diablo could continue to operate without the SGRP for more than three years after enhanced security requirements are imposed. As a result, it does not follow that MFP's first scenario applies only if the SGRP is performed and Diablo continues in operation for 15 years.
MFP's third scenario assumes that Diablo continues in operation for three years after initiation of the enhanced security requirements, and then shuts down. Therefore, we reasonably concluded that MFP's first scenario only applies if its third scenario does not apply. As a result, MFP's first scenario would apply if Diablo operates more than three years after initiation of the enhanced security requirements. For the above reasons, MFP's argument that we misunderstood its first scenario is incorrect.
In the interim decision, we stated that MFP's second scenario assumes that Diablo is permanently shutdown when the enhanced security requirements are put into effect. Therefore, a lesser level of enhanced security requirements is assumed to be put into effect to safeguard spent fuel. We then concluded that this scenario is unlikely. MFP states that its second scenario was intended to show enhanced security costs for spent fuel only, and that it was not intended to represent a likely scenario. It, therefore, concludes that we misunderstood this scenario.
Our representation of the second scenario is accurate. In addition, the fact that MFP did not intend it to be a likely scenario does not make our determination that the second scenario is unlikely wrong. Therefore, MFP's argument that we misunderstood its second scenario is incorrect.
As discussed above, the interim decision does not reflect a misunderstanding of MFP's recommendations regarding enhanced security requirements and we see no reason to change our conclusion in the interim decision not to adopt MFP's recommendations.
In our interim decision, we placed a cap on the SGRP costs. We also noted that nothing prevents PG&E from filing a petition to modify the final decision in this proceeding if a force majeure or other events beyond its control were to occur. PG&E recommends that such language should be included in an ordering paragraph in this decision to avoid any unnecessary confusion between this decision and the interim decision.
Our statement in the interim decision that nothing prevents PG&E from filing such a petition was merely an acknowledgement that any party can file a petition to modify a decision. The filing of such a petition does not mean that it will necessarily be granted. This language was not intended to modify the cap or authorize such a petition. For that reason, it was not included as an ordering paragraph in the interim decision, and we do not include it herein.
PG&E recommends that this decision allow the Commission's Executive Director to authorize PG&E to implement the SGRP's transport phase using the other alternative evaluated in the Final EIR because it was found to have no immitigable effects.
The Final EIR finds that, due to the long time between publication of the Final EIR and the arrival of the replacement steam generators, it may be necessary for PG&E to utilize a different alternative than the one approved herein. The Final EIR states that PG&E would need to request the Commission's approval of the change. This might require an addendum to the Final EIR, or a supplemental EIR. The appropriate vehicle for such a request is a petition to modify this decision. Assuming that it has a good reason for its request, PG&E should be able to obtain approval in a timely manner. This will also allow other parties to be heard regarding the change. Therefore, we see no reason to adopt PG&E's request.
PG&E states that the PD is incorrect in its statement that all dollars are stated in 2003 dollars unless otherwise specified. It states that all dollars are in nominal dollars unless otherwise specified. In the PD, the NPV amounts are all in 2003 dollars. However, that is not the case for the $706 million SGRP costs, or the $815 Million cap.
PG&E's Exhibit PG&E-1 explains the derivation of the $706 million SGRP cost estimate.21 It explains that the cost estimate for the installation of the steam generators and the owner's costs are expressed in January 2004 dollars and escalated for 58 months at a monthly escalation rate of 0.226%. For the replacement steam generator costs, no escalation was applied because PG&E expected to obtain a fixed price contract. Subsequently, PG&E signed a fixed price contract for fabrication of the replacement steam generators. However, it did not revise its cost estimate. Therefore, the $706 million SGRP cost is in November 2008 dollars. Since the $815 million cap was calculated as a 15% increase in the $706 million estimate, it too is in November 2008 dollars. We have made the necessary changes herein to reflect these facts.22
21 The SGRP cost estimate consists of steam generator installation costs, owner's costs and replacement steam generator costs.
22 This error also appeared in D.05-02-052.
