VII. Conclusion

As discussed above, we have adopted the following modifications to SCE and SDG&E's calculations of the decommissioning cost revenue requirements:

· 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.

· A contingency factor of 35% for Palo Verde.

Based on the above modifications to the decommissioning cost calculations, we adopt an annual revenue requirement for SONGS 2&3 for SCE of $21.160 million, respectively. We also adopt an annual revenue requirement for Palo Verde $11.688 million. This results in an overall annual revenue requirement for SCE of $32.848 million.

Based on the above modifications to the decommissioning cost calculations, we adopt an annual revenue requirement for SONGS 2&3 for SDG&E of $6.692 million.

In addition to the above revenue requirements, we find the SONGS 1 decommissioning work completed as of December 31, 2001 ($91 million) reasonable, find the utilities' estimate of SONGS 1 remaining decommissioning work ($531 million) reasonable, and authorize the utilities to use the tax benefits retained in the non-qualified trust fund for SONGS 1 to fund decommissioning work on that plant.

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