VI. Conclusion

As discussed above, we have adopted the following modifications to PG&E's calculation of the decommissioning cost revenue requirements:

· A 24% turnover rate for equities in the qualified trusts.

· A 29% turnover rate for equities in the non-qualified trusts.

· A 10.5% pre-tax return on equities.

· A 6.0% pre-tax return on fixed assets.

· Escalation rates, except for LLRW burial costs, based on the most recent DRI forecasts in the record, using weighted averages, and no separate contingency factor.

· A 7.5% escalation rate for LLRW burial costs.

· LLRW burial costs of $200 per cubic foot.

· Contingency factors of 35% for Diablo Canyon, and 25% for Humboldt.

Based on the above modifications to the decommissioning cost calculation for Diablo Canyon, we find that its decommissioning trusts are fully funded. Therefore, we will not authorize a revenue requirement for Diablo Canyon decommissioning. Based on the above modifications to the decommissioning cost calculation for Humboldt, we adopt an annual revenue requirement of $18.450 million for Humboldt decommissioning for 2003. We also adopt an annual revenue requirement for Humboldt SAFESTOR O&M of $8.254 Million. This results in an overall annual revenue requirement of $26.704 million.

In addition to the above, we find that PG&E's $0.95 million expenditure for Humboldt decommissioning costs incurred above the $15.7 million authorized in Resolution E-3503 was reasonable, and PG&E should be allowed to use Humboldt decommissioning trust funds to pay for them. We also find that the $3.5 million and $3.85 million Humboldt decommissioning projects authorized in Resolution E-3737 should be reviewed for reasonableness in the next NDCTP, after they have been completed.

This decision should be effective immediately so that the revenue requirements adopted herein can be put into rates as soon as possible.