VII. Assignment of Proceeding

Geoffrey F. Brown is the Assigned Commissioner and Bertram D. Patrick is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. The purpose of this proceeding is to update the previously adopted decommissioning cost estimates for HPPP currently being amortized through rates in the TCBA.

2. The decommissioning cost of HPPP is a transition cost and the Commission decided that transition costs should be estimated and accounted for in a net present value calculation to be recovered through the TCBA.

3. The Commission has adopted this methodology for recovery of decommissioning costs in the previous Wave 1 and Wave 2 power plant sales.

4. Although the HPPP is slated to be closed, rather than divested per se, the cost recovery of decommissioning costs is similar to that of divested plants.

5. PG&E's estimate of environmental and non-environmental decommissioning costs for HPPP is approximately $65.1 million NPV.

6. PG&E's estimate was prepared in accordance with generally accepted industry, state, and federal regulatory standards, and the same methodology was used to prepare Phase II ESAs for PG&E's Wave 1 and Wave 2 power plant divestitures.

7. While PG&E includes the costs for bay sediment testing in its estimate of environmental costs, it proposes to collect the cost for remediation of bay sediments through the HSM.

Conclusions of Law

1. Funds for the environmental decommissioning of Hunters Point Power Plant (HPPP) should be amortized through rates in the Transition Cost Balancing Account. Implementing a one-way balancing account for the HPPP decommissioning funds eliminates the potential for perverse incentives regarding how the contributions made by ratepayers to pay for the cleanup of HPPP are used.

2. PG&E's secondary proposal, to recover HPPP environmental decommissioning costs from the HSM, should be rejected.

3. The evidence fully supports the conclusion that PG&E's decommissioning estimate is based on sound practices to determine the amount of remediation expected at HPPP.

4. Since the purpose this proceeding is to adopt a cost estimate, not a remediation plan, further sampling and investigation is not necessary at this time.

5. PG&E's estimate of HPPP decommissioning costs has been shown to be reasonable and it conforms to with generally accepted industry, state, and federal regulatory standards. Therefore, it should be adopted for inclusion in the TCBA for purposes of recovery of transition costs.

6. The Commission's decision in this proceeding does not prescribe site remediation measures or dictate clean-up levels that will eventually be required for HPPP.

7. Actual site remediation and clean-up levels for HPPP will be determined by the Lead Agency and other regulatory agencies in a public forum when decommissioning actually occurs.

8. As a ratemaking proceeding, this proceeding is not a "project" under CEQA, and the exemption under Pub. Res. Code § 21080(b)(8) applies to this proceeding.

ORDER

IT IS ORDERED that:

1. Pacific Gas and Electric Company's (PG&E) environmental and non-environmental decommissioning cost estimate totaling approximately $65.1 million for Hunters Point Power Plant (HPPP) is adopted for inclusion in the Transition Cost Balancing Account.

2. PG&E shall establish a one-way balancing account for the HPPP decommissioning funds. Funds remaining in the balancing account after the completion of the decommissioning project shall be refunded to ratepayers.

3. PG&E's secondary recommendation to recover HPPP environmental decommissioning costs from the HSM is denied.

4. PG&E may seek recovery of future sediment remediation costs related to HPPP through the Hazardous Substance Mechanism.

5. Application 99-09-006 is closed.

This order is effective today.

Dated , at San Francisco, California.

************ APPEARANCES ************ Katherine S. Poole Attorney ADAMS BROADWELL JOSEPH & CARDOZO 651 GATEWAY BLVD., SUITE 900 SOUTH SAN FRANCISCO CA 94080 (650) 589-1660 kpoole@adamsbroadwell.com For: COALITION OF CALIFORNIA UTILITIES James Weil AGLET CONSUMER ALLIANCE PO BOX 1599 FORESTHILL CA 95631 (530) 367-3300 jweil@aglet.org For: AGLET CONSUMER ALLIANCE Donna-Fay Bower Office of Ratepayer Advocates RM. 4205 505 VAN NESS AVE San Francisco CA 94102 (415) 703-1420 dfb@cpuc.ca.gov For: OFFICE OF RATEPAYER ADVOCATES Ronald Liebert Attorney At Law CALIFORNIA FARM BUREAU FEDERATION 2300 RIVER PLAZA DRIVE SACRAMENTO CA 95833 (916) 561-5657 rliebert@cfbf.com For: CALIFORNIA FARM BUREAU FEDERATION Theresa L. Mueller Attorney At Law CITY AND COUNTY OF SAN FRANCISCO CITY HALL ROOM 234 SAN FRANCISCO CA 94102-4682 (415) 554-4640 theresa_mueller@ci.sf.ca.us Norman J. Furuta Attorney At Law DEPARTMENT OF THE NAVY 2001 JUNIPERO SERRA BLVD., SUITE 600 DALY CITY CA 94014-3890 (650) 746-7312 FurutaNJ@efawest.navfac.navy.mil For: FEDERAL EXECUTIVE AGENCIES	Andrew B. Brown ANDREW BROWN Attorney At Law ELLISON, SCHNEIDER & HARRIS 2015 H STREET SACRAMENTO CA 95814 (916) 447-2166 abb@eslawfirm.com For: INDEPENDENT ENERGY PRODUCERS ASSOC. (IEP) Andrew Brown Attorney At Law ELLISON, SCHNEIDER & HARRIS, LLP 2015 H STREET SACRAMENTO CA 95814 (916) 447-2166 abb@eslawfirm.com For: CALIFORNIA DEPT. OF GENERAL SERVICES (DGS) Bruno Gaillard ENRON CORP. 1400 SMITH STREET HOUSTON TX 77002-7327 (713) 853-5106 bgaillar@enron.com For: ENRON CORPORATION Darwin Farrar Legal Division RM. 4107 505 VAN NESS AVE San Francisco CA 94102 (415) 703-1599 edf@cpuc.ca.gov For: CPUC OFFICE OF RATEPAYER ADVOCATES Alan Ramo Esquire. GOLDEN GATE UNIVERSITY SCHOOL OF LAW ENVIRONMENTAL LAW AND JUSTICE CLINIC 536 MISSION ST. SAN FRANCISCO CA 94105 (415) 442-6654 aramo@ggu.edu For: Southeast Alliance for Environmental Justice James W. Mctarnaghen Attorney At Law GOODIN MACBRIDE SQUERI RITCHIE & DAY 505 SANSOME ST. STE. 900 SAN FRANCISCO CA 94111 (415) 765-8409 jmct@gmssr.com
Anne C. Selting Attorney At Law GRUENEICH RESOURCE ADVOCATES 582 MARKET STREET, SUITE 1020 SAN FRANCISCO CA 94104 (415) 834-2300 aselting@gralegal.com For: CITY AND COUNTY OF SAN FRANCISCO Joelle Ogg JOHN & HENGERER 1200 17TH STREET, NW, STE 600 WASHINGTON DC 20036 (202) 429-8812 jogg@jhenergy.com For: SHELL ENERGY Jennifer K. Post MARK HUFFMAN Attorney At Law PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET SAN FRANCISCO CA 94105 (415) 973-9809 jlkm@pge.com For: PACIFIC GAS AND ELECTRIC COMPANY Lise H. Jordan Attorney At Law PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET SAN FRANCISCO CA 94105 (415) 973-6965 lhj2@pge.com Mark R. Huffman LISE H. JORDAN Attorney At Law PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET SAN FRANCISCO CA 94120 (415) 973-3842 mrh2@pge.com For: PACIFIC GAS AND ELECTRIC COMPANY Tom Whelan SAN DIEGO GAS & ELECTRIC COMPANY 8315 CENTURY PARK COURT SAN DIEGO CA 92123 (858) 654-1753 twhelan@sempra.com For: SAN DIEGO GAS & ELECTRIC	Steven C. Nelson TOM WHELAN Attorney At Law SEMPRA ENERGY 101 ASH STREET SAN DIEGO CA 92101-3017 (619) 699-5136 snelson@sempra.com For: SAN DIEGO GAS & ELECTRIC COMPANY James P. Scott Shotwell JANET K. LOHMANN Attorney At Law SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE ROSEMEAD CA 91770 (626) 302-4531 J.P.Shotwell@sce.com For: SOUTHERN CALIFORNIA EDISON COMPANY Janet K. Lohmann Attorney At Law SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE ROSEMEAD CA 91770 (626) 302-3844 janet.lohmann@sce.com For: SOUTHERN CALIFORNIA EDISON Keith Mc Crea Attorney At Law SUTHERLAND, ASBILL & BRENNAN 1275 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20004-2415 (202) 383-0705 kmccrea@sablaw.com For: CALIFORNIA MANUFACTURERS ASSOCIATION ********** STATE EMPLOYEE *********** Kayode Kajopaiye Energy Division, AREA 4-A 505 VAN NESS AVE San Francisco CA 94102 (415) 703-2557 kok@cpuc.ca.gov For: ENERGY DIVISION Bertram D. Patrick Administrative Law Judge Division 505 VAN NESS AV, RM. 5110 San Francisco CA 94102 (415) 703-2740 bdp@cpuc.ca.gov
Maria E. Stevens Executive Division RM. 500 320 WEST 4TH STREET SUITE 500 Los Angeles CA 90013 (213) 576-7012 mer@cpuc.ca.gov Rosalina White Communications & Public Information Divi AREA 2-B 505 VAN NESS AVE San Francisco CA 94102 (415) 703-2074 raw@cpuc.ca.gov For: PUBLIC ADVISOR'S OFFICE ********* INFORMATION ONLY ********** Lulu Weincimer CALIFORNIA ENERGY MARKET NEWSLETTER 9 ROSCOE STREET SAN FRANCISCO CA 94110-5921 luluw@newsdata.com Arthur V. O'Donnell CALIFORNIA ENERGY MARKETS 9 ROSCOE STREET SAN FRANCISCO CA 94110-5921 (415) 824-3222 luluw@newsdata.com For: SELF Susan Rossi Attorney At Law CALIFORNIA POWER EXCHANGE CORPORATION 200 S. LOS ROBLES AVENUE, SUITE 400 PASADENA CA 91101-2482 (626) 685-9857 sdrossi@calpx.com Louise Renne City Attorney CITY AND COUNTY OF SAN FRANCISCO CITY HALL ROOM 234 1 DR. CARLTON B. GOODLETT PLACE SAN FRANCISCO CA 94102-4682 (415) 554-4700 For: the City and County of San Francisco	Alan Ramo MARCIE KEEVER Esquire. GOLDEN GATE UNIVERSITY SCHOOL OF LAW ENVIRONMENTAL LAW AND JUSTICE CLINIC 536 MISSION ST. SAN FRANCISCO CA 94105 (415) 442-6654 aramo@ggu.edu For: Southeast Alliance for Environmental Justice Karen Lindh LINDH & ASSOCIATES 7909 WALERGA ROAD, NO. 112, PMB 119 ANTELOPE CA 95843 (916) 729-1562 karen@klindh.com For: CALIFORNIA MANUFACTURERS ASSOCIATION Marianne Cocard PACIFIC GAS AND ELECTRIC COMPANY MAIL CODE B9A 77 BEALE ST. RM 931 SAN FRANCISCO CA 94105 (415) 973-0375 mlc0@pge.com For: PACIFIC GAS AND ELECTRIC COMPANY Kurt J. Kammerer Executive Director SAN DIEGO REGIONAL ENERGY OFFICE 401 B STREET, SUITE 800 SAN DIEGO CA 92101 (619) 595-5637 kkam@sdenergy.org Judy Peck SEMPRA UTILITIES 601 VAN NESS AVENUE, SUITE 2060 SAN FRANCISCO CA 94102 (415) 202-9986 jpeck@semprautilities.com Andrew Chau Attorney At Law SHELL ENERGY SERVICES COMPANY, L.L.C. 1221 LAMAR STREET, SUITE 1000 HOUSTON TX 77010 (713) 241-8939 anchau@shellus.com
Bruce Foster Regulatory Affairs SOUTHERN CALIFORNIA EDISON COMPANY 601 VAN NESS AVENUE, STE. 2040 SAN FRANCISCO CA 94102 (415) 775-1856 fosterbc@sce.com Rachel Brahinsky THE SAN FRANCISCO BAY GUARDIAN 520 HAMPSHIRE STREET SAN FRANCISCO CA 94110-1417 (415) 255-3100

(END OF APPENDIX A)