IX. Reasonableness Review-SGRP

In this application, SCE is requesting that the Commission pre-approve the SGRP. SCE intends this to mean that, if granted, the Commission would not be able to disallow construction costs or their recovery in rates on the grounds that SCE's decision to implement the SGRP was unreasonable. SCE represents that it will submit the incurred costs for a reasonableness review, and that the Commission would not be relinquishing its authority to review the reasonableness of recorded costs and construction practices. Specifically, SCE proposes to file an application to establish the reasonableness of the SGRP construction costs, excluding the costs of removal and disposal of the original steam generators, six months after SONGS returns to commercial operations. In addition, SCE proposes to file an application to establish the reasonableness of the costs of removal and disposal of the original steam generators six months after the last removal and disposal costs are incurred.

TURN states that it would be willing to participate in a reasonableness review when the SGRP is complete. However, it would prefer that the Commission adopt up-front and transparent standards for the review.

Aglet states that SCE should not be allowed to recover any SGRP costs in rates without a reasonableness review.

ORA supports a mandatory reasonableness review of SGRP costs.

The effect of SCE's request for pre-approval of the SGRP is that the Commission would not be able to disallow construction costs or their recovery in rates on the grounds that SCE's decision to implement the SGRP was unreasonable. SCE has not requested an exemption from a reasonableness review, and we will not grant one. As for pre-approval, our evaluation of the cost-effectiveness of the SGRP is based on the information in the record at this time. It is possible that subsequent developments could make it unreasonable to continue with the SGRP. That would be a reasonableness review issue.