ALJ/JPO/jt2 Mailed 7/3/2006

Decision 06-06-057 June 29, 2006

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application Pacific Gas and Electric Company (U 39 E) for authority to increase revenue requirements to recover the costs to replace steam generators in Units 1 and 2 of the Diablo Canyon Power Plant.

Application 04-01-009
(Filed January 9, 2004)

OPINION GRANTING INTERVENOR COMPENSATION TO THE UTILITY REFORM NETWORK FOR SUBSTANTIAL CONTRIBUTIONS
TO DECISION 05-02-052 AND DECISION 05-11-026

Table of Contents

Title Page

OPINION GRANTING INTERVENOR COMPENSATION
TO THE UTILITY REFORM NETWORK FOR SUBSTANTIAL CONTRIBUTIONS TO DECISION 05-02-052 AND
DECISION 05-11-026 1 1

1. Background 2 2

2. Requirements for Awards of Compensation 3 3

3. Procedural Issues 4 4

4. Substantial Contribution 5 5

4.1 Category 2, Westinghouse 6 6

4.2 Category 3, Rate 7 7

4.3 Category 4, Cost-Effectiveness 8 8

5. Reasonableness of Requested Compensation 12 12

5.1 Hours and Costs Related to and Necessary for
Substantial Contribution 13 13

5.2 Market Rate Standard 16 16

5.3 Productivity 18 18

5.4 Direct Expenses 18 18

6. Award 18 18

7. Waiver of Comment Period 20 20

8. Assignment of Proceeding 20 20

Findings of Fact 20 20

Conclusions of Law 20 20

ORDER 21 21

Appendix

OPINION GRANTING INTERVENOR COMPENSATION TO THE UTILITY REFORM NETWORK FOR SUBSTANTIAL CONTRIBUTIONS
TO DECISION 05-02-052 AND DECISION 05-11-026

This decision awards The Utility Reform Network (TURN) $106,689.35 in compensation for its substantial contributions to Decision (D.) 05-02-052 and D.05-11-026. This is a decrease of $63,099.70 from the amount requested. This proceeding is closed.

1. Background

Diablo Canyon Power Plant (Diablo) is a nuclear power plant owned and operated by Pacific Gas and Electric Company (PG&E) consisting of two units, Unit 1 and Unit 2, with a capacity of approximately 2,260 megawatts (MW). Each unit has four steam generators manufactured by Westinghouse Electric Corporation (Westinghouse). In each steam generator, the heat from water circulated through the reactor is used to turn another stream of water into steam that is used to run the turbines that drive the electric generators.

Diablo is currently licensed by the Nuclear Regulatory Commission (NRC) to operate until 2024 (Unit 1) and 2025 (Unit 2).¹ PG&E estimated that Diablo will likely shut down because of the degradation of the steam generators in 2013 (Unit 2) and 2014 (Unit 1). As a result, PG&E requested approval in this application for its steam generator replacement program (SGRP).

Hearings were held from September 20 through October 1, 2004. The application was submitted upon the receipt of reply briefs on November 9, 2004. On February 24, 2005, the Commission adopted D.05-02-052, an interim decision which presented the Commission's preliminary findings as to the cost-effectiveness of the SGRP. The proceeding remained open to consider the results of the environmental review pursuant to the California Environmental Quality Act (CEQA). On November 18, 2005, the Commission adopted D.05-11-026, which approved the SGRP with specified conditions, and certified the Final Environmental Impact Report (Final EIR) pursuant to CEQA.

¹ This assumes recapture of the approximately three years of operating license for Unit 1 consumed prior to fuel loading and full-power operation. PG&E forecasts an 80% probability of NRC approval of its request for recapture.