This excerpt taken from the PCG 8-K filed Nov 18, 2005.
Diablo Canyon Steam Generator Replacement Projects
On November 18, 2005, the California Public Utilities Commission (CPUC) voted to approve Pacific Gas and Electric Company's (Utility) application to replace the turbines, steam generators and other equipment at the two nuclear operating units at the Utility's Diablo Canyon nuclear power plant, referred to as the Steam Generator Replacement Project (SGRP). The CPUC also certified the environmental impact report (EIR) with respect to the SGRP as final. The EIR found that, for the SGRP as a whole, there are no environmental impacts that are significant, provided certain mitigation measures are implemented.
In voting to approve its final decision, the CPUC adopted the findings it made in its February 24, 2005 interim decision that the SGRP is cost-effective, that the Utility’s projected cost of $706 million (as adjusted for actual inflation and cost of capital) is a reasonable estimate of the SGRP cost, and that the Utility cannot recover costs in excess of $815 million (as adjusted for actual inflation and cost of capital). The CPUC also adopted its earlier findings that (i) if the costs did not exceed $706 million, the CPUC did not intend to conduct an after-the-fact reasonableness review of the SGRP costs but that such a review was not precluded, and (ii) if the cost exceeds $706 million (as adjusted for actual inflation and cost of capital) or the CPUC later finds that it has reason to believe the costs may be unreasonable regardless of the amount, the entire SGRP cost will be subject to a reasonableness review.
The majority of the projected capital costs for the SGRP will be expended over the 2007-2009 period as the Utility plans to replace the steam generators in Unit 2 in 2008 and in Unit 1 in 2009.
Dated: November 18, 2005