SEMPRA ENERGY 10-K 2010
Documents found in this filing:
SAN ONOFRE UNIT NO. 1 DECOMMISSIONING AGREEMENT
SOUTHERN CALIFORNIA EDISON COMPANY AND
SAN DIEGO GAS & ELECTRIC COMPANY
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
SAN ONOFRE UNIT NO. 1 DECOMMISSIONING AGREEMENT
PARTIES: The parties to this San Onofre Decommissioning Agreement
RECITALS: This Agreement is made with reference to the following
The Parties entered into the San Onofre Ownership Agreement
on October 5, 1967, the San Onofre Operating Agreement on June 1, 1966 and
pursuant to CPUC Decision 92-08-036 dated August 11, 1992.
The Parties entered into the Second Amended San Onofre
Operating Agreement on February 26, 1987 which provides for, among other
things, (i) matters relating to the operation and maintenance of and capital
improvements to SONGS Unit 1, SONGS Units 2 and 3, and the SONGS
sharing of costs thereof.
The Parties now desire to enter into this Decommissioning
Agreement, to provide for the rights, duties, and obligations of the Parties, as
tenants in common, with respect to Decommissioning Work and sharing of costs
thereof for SONGS Unit 1.
AGREEMENT: In consideration of the terms and conditions contained in
this Agreement, the Parties agree as follows:
DEFINITIONS: Unless otherwise defined herein, terms used herein with
EFFECTIVE DATE: When executed by both Parties this Agreement shall
become effective as of the date set forth in Section 26 hereof.
As a means of securing effective cooperation and interchange of
information and of providing consultation on a prompt and orderly basis
between the Parties in connection with various administrative and technical matters which may arise from time to time in connection with the terms and conditions of this Agreement, the Parties hereby establish the following bodies and representatives, which shall have the functions and responsibilities
A Decommissioning Executive Board consisting of a
management representative of each Party, and an alternate management
The chairman of the Decommissioning
Executive Board shall be a representative of the Decommissioning Agent. The
chairman shall be responsible for calling meetings and establishing agendas,
including meetings and agenda items, respectively, requested by any committee representative.
Within thirty (30) days after the
execution of this Agreement, each Party shall designate its representative and
The Decommissioning Executive Board
shall have the right to establish ad hoc committees when necessary. The duties
A Decommissioning Project Team consisting of
representatives from each Party.
Within thirty (30) days after the
execution of this agreement, the Parties shall designate their representatives to the Decommissioning Project Team, including telephone numbers. The Parties will inform each other of any changes in their Decommissioning Project Team representatives within thirty (30) days.
A fiscal representative shall be appointed
to the Decommissioning Project Team by each Party to serve as a contact on all
("A&G") expense accounting, and other fiscal matters. The fiscal
representatives shall meet separately no less than once each year. The fiscal representative shall review and approve procedures developed by the
Decommissioning Project Team pursuant to Section 8.2.8.
Exhibit B contains an acceptable interim
set of principles for the allocation methodology and shareable costs included in
the Decommissioning Executive Board for resolution should be provided
describing in detail an explanation of differing positions, the advantages and
disadvantages of each position, and any reasonable compromise of such different
positions. During the resolution process, the prior allocation methodology shall remain in effect.
A decommissioning representative shall
be appointed to the Decommissioning Project Team by SDG&E to be the primary
representative. One of the purposes of providing the decommissioning
representative with access to Unit 1, as provided herein, is to assist SDG&E to
correspondence to the same extent as the project team members except for
records includes names of employees, work title, work location, and listing per pay period of hours spent on Decommissioning Work.
The decommissioning representative may
attend and participate in any decommissioning project activities, including but
not limited to, engineering, design review, request for proposal, bid evaluation, pre-construction, construction, environmental, safety, procurement, cost, and
Except as provided for in Sections 10.5 and 18.2, the
Decommissioning Agent under this Agreement shall be SCE or its assignee. The
If the Decommissioning Project Team fails to agree while
performing the functions and duties pursuant to this Agreement, then such
disagreement shall be referred to the Decommissioning Executive Board for
Neither the Decommissioning Executive Board,
Decommissioning Project Team, nor the Decommissioning Agent, shall have
authority to amend, modify, or alter any of the provisions of this Agreement.
DECOMMISSIONING FUNDING REQUIREMENTS:
Decommissioning Cost Estimate:
The updated Unit 1 Decommissioning Cost Estimate shall
become temporarily effective for interim use on the date it is submitted to the
CPUC, and shall become finally effective, including any modifications by the CPUC, on the date it is adopted in a CPUC decision.
The Decommissioning Cost Estimate is intended to be
used primarily to establish the level of funding which the Parties are required to provide pursuant to Section 7 hereof and is not intended to create any obligation or
commitment to perform or conduct Decommissioning Work in compliance
The sole remedy for resolving disputes relating to the
Decommissioning Cost Estimates shall be through the dispute resolution process set forth in Sections 22.214.171.124 and 8.1.4 hereof, including arbitration pursuant to Section -11 hereof.
Annually Adjusted Decommissioning Cost Estimate:
By March 1 of each year, the Decommissioning Agent shall
submit to each Party an Annually Adjusted Decommissioning Cost Estimate,
Annual Decommissioning Funding Status Reports:
By March 1 of each year, each Party shall submit to
the Decommissioning Agent, the Liquidation Value of its Decommissioning Trust Funds as of December 31 of the previous year.
By March 31 of each year, the Decommissioning Agent
shall submit to each Party an Annual Decommissioning Funding Status Report that compares each Party's Annual Trust Fund Liquidation Balance to its respective Decommissioning Cost Share of the Annually Adjusted Decommissioning Cost Estimate.
Maintenance of Trust Funds For Decommissioning Costs:
Each Party shall maintain in its Decommissioning
Trust(s) no less than its Decommissioning Cost Share of the current
Annually Adjusted Decommissioning Cost Estimate as defined in Section
7.2 to ensure availability of necessary funds for payment of Decommissioning Costs.
The right of any Party pursuant to this Section 7 to
maintain a minimum of its share of the current Annually Adjusted
Decommissioning Cost Estimate in its Decommissioning Trust(s) shall not relieve any Party from any and all obligations to pay its Decommissioning Cost Share of Decommissioning Costs.
As long as SDG&E or SCE is a Party to this Agreement,
SCE. If either Party assigns its Ownership Share of San Onofre Unit 1
pursuant to Section 18 herein, Sections 7.5 through 7.7 shall apply to any third party assignee of SCE or SDG&E's Ownership Share(s).
By March 31 of each year, the Decommissioning
Agent shall notify the Decommissioning Executive Board if either Party's
Annual Decommissioning Funding Status Report indicates that the balance in
A Cure Plan is a plan to be proposed by a Party that
has been declared to be underfunded, which commits that Party to a method of depositing in its Decommissioning Trust Fund(s) an amount that brings the cumulative balance in its Decommissioning Trust Fund(s) to at least its
Decommissioning Cost Share of the Annually Adjusted Decommissioning Cost
Estimate as defined in Section 7.2 hereof that is in effect at the end of the
prescribed time period, within a commercially reasonable period, and of paying
If the Decommissioning Executive Board, without the
vote of the underfunded Party, reasonably approves the Cure Plan proposed in Section 7.5.2, the Cure Plan shall become binding upon that Party.
The Cure Plan terminates when a Party's
Decommissioning Trust Fund balance is no less than the amount described in Section 7.5.2.
If an underfunded Party fails to deposit an amount that brings
the cumulative balance of its Decommissioning Trust Fund(s) to at least its
Decommissioning Cost Share of the current Annually Adjusted
Decommissioning Cost Estimate within the time period prescribed by the Cure
Decommissioning Executive Board or any Party and irrespective of the pendency
The Parties agree to renegotiate in good faith the applicable
provisions of this Section 7 due to changed circumstances resulting from the following events:
Severe, unforeseen, and uncontrollable stock/bond
market fluctuations cause a Party's actual funding balance in its respective
Decommissioning Trust Fund(s) to fall below its Ownership Share of the
7.7.1, such a fluctuation shall be deemed to have occurred following a negative
1926 to the most current year. Expected returns for,each Party shall be derived using the expected SBBI returns from the various asset classes in accordance
RESPONSIBILITIES FOR DECOMMISSIONING WORK: In addition to
this Section 8 in connection with the performance and completion of Decommissioning Work for Unit 1 as follows:
Decommissioning Executive Board:
The Decommissioning Executive Board shall:
Exercise general supervision over the
Decommissioning Project Team and the Decommissioning Agent with respect to this Agreement.
Delegate to the Decommissioning Project
Team and Decommissioning Agent such authorities, duties, and responsibilities as the Decommissioning Executive Board may determine to be appropriate and consistent with this Agreement. The delegation of such authorities, duties, and responsibilities not described herein shall be in writing.
Meet at least twice per year.
Require the Decommissioning Agent to
present certain matters to the Decommissioning Executive Board for its
approval or action. The chairman of the Decommissioning Executive Board
shall use best efforts to provide to the Decommissioning Executive Board by at
least fourteen (14) calendar days in advance of any meeting, a proposed agenda
approval shall not be unreasonably withheld and each representative shall
Review and approve the Annual
Decommissioning Funding Status Reports submitted pursuant to Section 7.3 hereof.
Approve the Annual Decommissioning
Activities Plan for the Decommissioning Work submitted pursuant to Section
8.2.3 hereof, and any revisions thereto by unanimous vote, except as provided in
Approve any cumulative annual changes
forecasted to exceed 10% of the approved annual Decommissioning Work budget
prior to expenditure by unanimous vote, except as provided in Sections 7.6 and
Approve any settlement of (i) claims
exceeding $250,000 for or against any of the Parties pursuant to Sections 8.3.19 or 8.3.20 hereof, and (ii) threatened or pending actions or claims pertaining to regulatory enforcement or equitable relief regardless of the amount or potential amount of the claim.
To accommodate changed circumstances or matters
not contemplated by the Parties at the time of the execution of this Agreement,
have the authority to determine other matters consistent with this Agreement
which shall be approved or otherwise acted upon by the Decommissioning
Executive Board. The Decommissioning Executive Board shall promptly act
upon any proposal made by any Party.
Unless otherwise agreed by the Decommissioning
Executive Board, the Decommissioning Executive Board shall enforce the
following procedure with respect to matters to be approved, modified, or acted
upon by the Decommissioning Executive Board pursuant to Sections 126.96.36.199, 8.1,
8.4.4, and 10.2.1.
If a payment is made under protest, or an
amount is disputed as a result of an audit, the matter shall first be submitted to the fiscal representatives to determine if the matter can be resolved within
If the Decommissioning Executive Board fails to
approve or act upon a payment made under protest or any other matter
contemplated by Sections 188.8.131.52, 8.1, 8.4.4. and 10.2.1, and the
Decommissioning Executive Board does not agree that the matter should be resubmitted, a dispute shall exist.
In the event of a dispute, the chairman of the
Decommissioning Executive Board shall designate a Party to prepare a written
Decommissioning Executive Board representative by certified mail, return
Upon receipt by all members of the Decommissioning
Executive Board of such written statements, the Decommissioning Executive
Board shall use its best efforts to resolve such dispute. If the Decommissioning
The Decommissioning Project Team Shall:
Develop and carry out practices and procedures for
conducting the Decommissioning Project.
Work with, provide recommendations to and otherwise
assist the Decommissioning Agent to develop accounting, financial, and funding
as required by this Agreement.
On or before December 10 of each year, develop and
submit to the Decommissioning Executive Board an Annual Decommissioning
and applicable federal and state law with respect to the performance of
With respect to the Decommissioning
Work to be undertaken, (i) a milestone schedule for performance and completion
activities anticipated to be performed by resources of the Decommissioning
Agent and by contractors; (iii) a forecast of cash requirements for such work by month; and (iv) a description of the schedule and cost control systems to be utilized in the management of such work.
Identification of regulatory
authorizations, permits, licenses, or approvals which must be obtained under
applicable laws to perform and complete Decommissioning Work.
Such other matters as may be required by
this Agreement, other applicable agreements, and applicable federal and state
laws with respect to the performance of Decommissioning Work or any elements
Any other elements which the
Decommissioning Executive Board may require.
On or before March 1 of each year, prepare and submit
to the Parties an Annual Decommissioning Activities Report. This report should
the Decommissioning Work scheduled to be completed during the year and the
Promptly notify the Decommissioning Executive Board
if the approved annual Decommissioning Work budget will be exceeded by more
Cooperate to provide preliminary budget information
if requested by any party for the next calendar year prior to December 10 of any year, with the best information available at the time of the request.
Prepare recommendations covering matters to be
reviewed and acted upon by the Decommissioning Executive Board pursuant to Section 8.1.
Develop procedures in accordance with Section 184.108.40.206
for (i) the accounting of the Decommissioning Costs, (ii) the timing and
frequency of the advancement by the Parties of funds to the Decommissioning
Agent when required to pay such Decommissioning Costs, (iii) the establishment of accounts for holding such funds as are advanced by the Parties, and
Provide a report to the SDG&E fiscal representative
semi-annually which identifies and describes all major Decommissioning Work
resources of the Decommissioning Agent in lieu of contractor resources. These
Pursuant to Sections 8.3.19 and 8.3.20, review
proposed settlements regarding (i) threatened or pending litigation and/or
claims, regardless of the nature of the litigation or claim, which exceed or have the potential to exceed $250,000, and (ii) threatened or pending actions or claims pertaining to regulatory enforcement or equitable relief regardless of the
amount or potential amount of the claim. Copies of all claims, complaints, and
settlement proposals shall be provided to the Decommissioning Executive Board
members and a meeting of the Decommissioning Executive Board shall promptly be called to discuss such matters at the request of any member.
Perform such other functions and duties in connection
with the Decommissioning Work as may be delegated the Decommissioning
The Decommissioning Agent Shall:
Provide the Parties with all written statistical and
administrative reports, accounting records, written budgets, pleadings, internal or third party audit reports, information and other records relating to
Maintain all records and documents required by the
NRC, any other regulatory authority, or other applicable federal or state law in the performance of Decommissioning Work.
Provide triennial updates to the Decommissioning
Cost Estimate, as defined in Section 7.1 hereof, in conjunction with the Nuclear
The updated Decommissioning Cost Estimate shall become temporarily effective for interim use on the day after it is submitted to the CPUC, and shall become finally effective, including any modifications by the CPUC, on the date it is
As soon as practicable, but no later than
thirty (30) days after the effective date of each CPUC decision on the NDCTP, send a revised copy of the Decommissioning Cost Estimate to each Party.
Assist in developing the level of required
funding for each Party unless otherwise directed by the Decommissioning Executive Board.
By March 1 of each year, submit to each Party an
Annually Adjusted Decommissioning Cost Estimate pursuant to Section 7.2
hereof, consisting of the amount of the most recent triennial Decommissioning Cost Estimate, less the amount expended for Decommissioning Work during the calendar year(s) after that cost estimate was approved, and adjusted for
By March 31 of each year, submit to each Party an
Annual Decommissioning Funding Status Report pursuant to Section 7.3 hereof that compares each Party's Annual Trust Fund Liquidation, Balance to its
Furnish from its own resources or contract for and
obtain from any other sources, including either Party, the services and studies
necessary for performance of Decommissioning Work. Either Party may
Decommissioning Agent's procurement policies, unreasonably deny addition of such contractor to its qualified bidders list.
The Decommissioning Agent shall not reassign its
employees to activities other than Decommissioning Work if such reassignments
Negotiate, execute, administer, perform, and enforce
contracts, including warranties and other remedies provided therein, in the
name of the Decommissioning Agent, acting as agent for all of the Parties, for Decommissioning Work, subject to the Decommissioning Agent's duty to notify the Parties concerning legal claims as set forth in Section 8.3.21 hereof.
Keep the Parties fully and promptly informed of any
known default under this Agreement and submit to the Parties any recommendations for amendments of this Agreement.
Carry out and follow the practices, procedures, and
directions of the Decommissioning Executive Board or the Decommissioning Project Team pursuant to Section 8 hereof.
Sell, transfer and convey, or otherwise dispose of, for
and on behalf of all Parties, on commercially reasonable terms, conditions, and
the Decommissioning Executive Board; provided that prior to the effective date
The net proceeds, if any, received from any such
sale, transfer, conveyance or other disposal (after deduction of all costs
associated with such sale, transfer and conveyance, or other disposal, including without limitation the costs of removal, preparation and delivery of such
The Parties' rights to proprietary rights
used or developed by contractors or subcontractors in the performance of
Decommissioning Work are specified in Exhibit C.
Purchase, rent, or otherwise procure in accordance
with the Decommissioning Agent's procurement policies and procedures outlined
materials, and supplies purchased for the performance of Decommissioning
Work shall vest on delivery in the Parties as tenants in common with undivided
Comply with, (i) any and all laws applicable to the
performance of Decommissioning Work including without limitation all
applicable laws, rules, and regulations relating to the public health and safety, industrial safety, protection of the environment, workers' compensation laws, and nondiscriminatory employment practices, and (ii) the terms and conditions of any applicable agreements, permits, or licenses relating to Unit 1.
Receive, deposit, invest, and expend the funds
advanced to the Decommissioning Agent in accordance with the policies,
procedures and practices established by the Decommissioning Project Team pursuant to Section 8.2.8 hereof and the Master Trust Agreement.
Maintain records of monies received and expended,
obligations incurred, credits accrued in the conduct of Decommissioning Work, and of contracts entered into in the performance of such Decommissioning Work as may be necessary or useful in carrying out this Agreement or required to
Invoice the other Party to this Agreement during the
second half of each calendar month for expected Decommissioning Costs to be
invoice charges including, but not limited to, purchase order details, vendor
progress reports, contractor invoices, and Decommissioning Agent man-hour
listing. These documents shall be available for review in the Decommissioning Project Team office.
Suffer no liens to remain in effect unsatisfied against
Unit 1 (other than the liens permitted under the San Onofre Agreements, liens
Unless otherwise specified by the Decommissioning
Executive Board, procure and maintain in force, insurance against such risks, hazards, and perils of the Decommissioning Work in such amounts and with such deductibles as may be required by (i) applicable laws, or (ii) the Annual Decommissioning Activities Plan.
Assist any insurer in the investigation, adjustment
and settlement of any loss or claim covered by insurance against such risks, hazards, and perils of the Decommissioning Work.
Present, prosecute, and settle claims against insurers
and indemnitors providing insurance against such risks, hazards, and perils of
that any such loss, damage, or liability is not covered by insurance or by any
indemnity agreement, present, prosecute, and settle claims therefor against any
with respect to threatened or pending actions or claims pertaining to regulatory
enforcement or equitable relief regardless of the amount or potential amount of the claim, without review by the Decommissioning Project Team and the consent and approval of the Decommissioning Executive Board.
Subject to the provisions of Section 10 hereof and the
Annual Decommissioning Activities Plan(s), or as otherwise directed by the
Decommissioning Executive Board or as hereinafter provided in this
Section 8.3.20, investigate, adjust, defend, and settle claims against any Party
under or pursuant to this Agreement, including, but not limited to, any claim
resulting from death or injury to persons or damage to property, when said
claims are not covered by valid and collectible insurance carried by any Party,
and whenever and to the extent reasonable, present and prosecute claims
against any third party, including insurers, for any costs, losses, and damages
transaction or incident that is settled for more than $250,000, or any threatened
or pending actions or claims pertaining to regulatory enforcement or equitable
relief. The Decommissioning Agent shall obtain review by the Decommissioning Project Team and approval of the Decommissioning Executive Board before any said claim or combination of said claims against or on behalf of any or both
Before identifying SDG&E as a named Plaintiff in a
lawsuit, the Decommissioning Agent must secure that Party's prior written
Keep the Parties fully and promptly advised of
material changes in conditions or other material developments affecting the
any notices given or received pursuant to this Agreement.
Upon the request of any Party, provide such Party,
without direct charge therefor, a copy or copies of any report, record, list, budget, manual, accounting or billing summary, classification of accounts, or other
documents or revisions of any of the aforesaid items, all as prepared in accordance with this Agreement.
Be responsible for (i) preparing and filing any reports,
notices, or documents required to be filed with the NRC or any other regulatory
Provide information to assist the Parties in preparing
filings to regulatory or taxing authorities concerning Decommissioning Work or
The Decommissioning Agent shall keep written
minutes and records of Decommissioning Executive Board meetings.
Perform such other duties, responsibilities, and
obligations which may be assigned to it by the Decommissioning Executive Board.
Each Party shall:
Pay its Ownership Share for (i) Decommissioning
Work and (ii) liabilities and obligations associated with or at any time arising from or in connection with the Decommissioning Work.
Advance funds or cause funds to be advanced from
their respective trusts for the payment of Decommissioning Costs in accordance with procedures established pursuant to Section 8.2.8 hereof by the
Provide to the Decommissioning Agent such
certificates, documentation, or other information as may be reasonably required
to permit the Decommissioning Agent to prepare and file any application with or
report to the NRC or any other regulatory authority including reports on the status of Decommissioning Trust Funds; and, except as provided in Section 8.3.25 hereof, obtain at its own expense its required authorizations and approvals, if any, relating to its participation in the Decommissioning Work from federal, state, or local regulatory authorities having jurisdiction to issue such authorizations and approvals, and keep the Decommissioning Agent informed of the status of its applications therefore.
Jointly conduct or provide for the Audit not more than
once annually of the books and records of the Decommissioning Agent and/or
any contractor under a time and materials or cost reimbursement contract with
Annual Decommissioning Activities Reports prepared pursuant to Section 8.2.4
Such audits shall be conducted (i) during normal
business hours, (ii) so as not to interfere with normal business activities, and (iii) only after reasonable notice is given.
Decommissioning Agent agrees to fully cooperate
with any such audits, and to respond in writing within 60 days to information
requests. Responses shall include the information requested, the date the
information will be provided, or the reasons the information will not be
provided. If the Decommissioning Agent fails to respond within 60 days to an information request, the requesting Party may submit the matter to the fiscal representatives for resolution in accordance with Section 8.1.3.
If an audit reflects errors or omissions, appropriate
billing adjustments shall be made, including interest at the rate set forth in Section 12.
If, as the result of the dispute resolution process
contemplated in this Agreement, it is determined that a charge is not
sufficiently supported to allow a Party to determine. the nature and character of Decommissioning Costs directly or indirectly billed to a party, the
220.127.116.11 This right to audit shall extend during the term of this
Agreement and for three (3) years thereafter. Decommissioning Agent agrees to
retain all necessary records and documentation for the entire length of this audit
As used in this Section 9, the following terms shall have the
following meanings, exclusively:
"Damage" means any loss, damage, cost, charge, or
expense resulting from the performance of Decommissioning Work or arising
from the performance or non-performance by a Party or the Parties of any of the
provisions of this Agreement.
"Uninsured Damage" means Damage not paid for by
valid and collectible insurance.
Except as permitted under Section 9.3 hereof, neither Party
shall be liable to the other Party for Uninsured Damage resulting from a Nuclear Incident.
Neither Party, its directors, officers, or employees shall be
obligated to discharge any aggregate liability to the other Party in excess of
Decommissioning Work or performance or non-performance by a Party or the
Parties of any of the provisions of this Agreement.
Each Party expressly releases the other Party, its directors, officers and
employees from any such aggregate liability in excess of $10 million per
occurrence obtained against a Party, its directors, members of its governing
levy, or otherwise enforce such a judgment, or record or effect a judgment lien,
against the other Party, its directors, officers, or employees for any part of such
aggregate judgment in excess of $10 million per occurrence.
A claim by any Party based on Willful Action must be perfected
by filing suit in a court of competent jurisdiction.
Subject to Sections 9.2 through 9.4 hereof and except for
Uninsured Damage resulting from Willful Action (and not resulting from or
arising out of a Nuclear Incident), neither Party, its directors, officers, or
employees shall be obligated to discharge any liability to the other Party, for any
Subject to Sections 9.2 through 9.4 hereof and except for
liability for Uninsured Damage resulting from Willful Action (and not resulting from or arising out of a Nuclear Incident), the Parties shall, as provided in
The costs and expenses of discharging liability of one
or both of the Parties for any direct, indirect, or consequential Uninsured
Damage of any kind or nature suffered by any party other than a Party, whether
or not resulting from the negligence of a Party, its directors, members of its
governing bodies, officers and employees, or any other person or entity whose
negligence would be imputed to a Party; and
The costs and expenses incurred in settlement of
injuries and damages claims, including attorneys' fees and the cost of labor and
For purposes of sharing costs and recovery amounts among the
Parties pursuant to Section 9, such sharing shall be in proportion to their.
Ownership Shares in the facilities or land areas which give rise to the damage referred to therein.
The provisions of this Section 9 shall not be construed so as to
relieve any insurer of its obligation to pay any insurance proceeds in accordance with the terms and conditions of valid and collectible insurance policies.
The aggregate liability limit of $10 million referenced in
Section 9.3 shall not apply to the failure or refusal, willful or otherwise, of any
Party to meet its obligations under Sections 8.4.1 through Section 8.4.3.
The rights of a Party found to be in default, pursuant to
Section 7.6 hereof, to be represented on and participate in the actions of the
Decommissioning Executive Board and all bodies hereunder shall be suspended until such time as (i) the underfunded Party deposits an amount that brings the cumulative balance of its Decommissioning Trust Fund(s) to at least its
In addition to the provisions of Section 10.1 hereof for defaults
by a Party, the following procedure shall be followed in dealing with payment
defaults under this Agreement:
If a Party does not pay all of its Decommissioning
Cost Share of Decommissioning Costs incurred to Section 8.4.1 hereof, or does
If a Party in default does not remit unpaid
balances within twenty-five (25) calendar days of its receipt of written notice as
above the Bank of America National Trust and Savings Association reference
rate, or such other reasonable rate as agreed upon by the Decommissioning
Project Team, until the default is cured by full payment of such unpaid balances, plus interest; provided that such interest rates shall not exceed the maximum legal contractual rate of interest.
If a default which has not been submitted to
arbitration pursuant to Section 11 hereof, continues for 120 days after the date
both Parties, suspend the right of the Party in default to approve matters
submitted to the Decommissioning Executive Board pursuant to this Agreement
The suspension of any rights of a Party in default
under Section 10.2.3 hereof shall be terminated and its full rights hereunder restored when all of its defaults have been cured.
If the Decommissioning Agent is required to make
payment to a Party pursuant to an arbitration award or a final judgment
entered against the Decommissioning Agent arising out of a dispute relating to a requested, advance or payment to the Decommissioning Agent, and the
judgment, such failure to pay shall be deemed to be a default under this
Agreement. In the event the Decommissioning Agent so defaults, interest on
any such amounts due shall continue to accrue at Bank of America National
the Decommissioning Project Team, until such default is cured by full
reimbursement of such amounts, plus interest; provided that such interest rates shall not exceed the maximum legal contractual rate of interest.
The rights and remedies of the Parties set forth in
this Section 10 shall be in addition to the rights and remedies of the Parties set forth in this or any other of the San Onofre Agreements.
Nothing in this Section 10 shall affect (i) the right
of a Party to dispute any advance or payment made by such Party or (ii) the obligation of such Party to pay such disputed amount.
Nothing in this Section 10 shall affect the right of a Party to
bring an action against a defaulting Party pursuant to the requirements of
(i) other applicable agreements, (ii) California Public Utilities Code
Sections 8321 through 8330 as they may be amended from time to time, (iii) the regulatory requirements of the NRC, or (iv) any state or federal law or
No Party shall be responsible for any consequences arising from
or relating to any other Party's failure to make payments under this Agreement.
In the event the Decommissioning Agent defaults for any
reason, the other Party shall have the option of acting as Decommissioning
Agent until such default has been cured.
If the Parties are unable to reach agreement with respect to a
matter herein specified to be approved, established, determined, or resolved by
dispute. Pending the final decision of the arbitrator, the Decommissioning
Sections 10 and 12 hereof.
The Party calling for arbitration shall give written notice to the
other Party to the dispute, setting forth in such notice in detail the issues to be arbitrated, and within ten days from receipt of such notice the other Party to the dispute shall specify in detail additional related issues to be arbitrated.
Within twenty (20) days after the date of receipt of the initial
notice of arbitration, the Parties to the dispute, acting through their respective
more than there are Parties involved in the dispute. The arbitrators selected
above, if any, and all arbitrators on such list shall be available to serve and shall
officer, member of the governing body, employee, or is a shareholder of any of
notices prepared pursuant to Section 11.2 hereof.
The arbitrator shall consider evidence submitted by the Parties
and may call for additional information. The Parties shall use their best efforts to furnish such additional information. The decision of the arbitrator shall be
Except as otherwise provided herein, the arbitration shall be
governed by the rules of practice and procedure of the American Arbitration
Association from time to time in force, except that, if such rules and practice as
The fees and expenses of the arbitrator and the American
Arbitration Association (or similar organization) shall be shared equally by the
Parties to the dispute, unless the decision of the arbitrator shall specify some
other apportionment of such fees and expenses. All other expenses and costs of the arbitration shall be borne by the Party incurring the same.
ACTIONS PENDING RESOLUTION OF DISPUTES: If a dispute should
AGREEMENT TERMINATION DATE:
This Agreement shall continue in force and effect until the date
terminated by the Decommissioning Executive Board upon release of the facility
After the Agreement Termination Date, each Party
shall possess the surviving rights as described in Section 13.1.1 hereof, and shall be subject to and obligated to fully satisfy the surviving obligations as defined in Section 13.1.2 hereof; and
Any obligation of any Party to another Party under
any provision of this Agreement or under any other San Onofre Agreement,
The rights of each Party under any San Onofre
Agreement shall survive after the Agreement Termination Date.
The rights of such Party in any
unexpended balance of any fund or reserve established at any time by the
Parties for the payment of any liability or obligation pursuant to any San Onofre
Agreement(s) or any insurance policy providing Decommissioning Insurance or
any Party self-insured arrangement which, as of the Agreement Termination
Agreement Termination Date against the Parties related to Unit 1, either or
both Parties, or the Decommissioning Agent with respect to any
Decommissioning Work, (ii) any contingent liability for workers' compensation,
refund or otherwise payable to the Decommissioning Agent, or the Parties
Insurers, Inc. under its Nuclear Liability Policy or Master Workers Policy that
Limited or any other nuclear property insurer as may become payable to the
Decommissioning Agent, or the Parties, (v) any proceeds paid or payable under
any nuclear property insurance policy and held in trust or otherwise for reactor stabilization and decontamination or (vi) any liability for other claims of any nature as may be asserted subsequent to the Agreement Termination Date
The rights and interests of any Party in
any real, personal, tangible or intangible property or assets or rights therein of Unit 1, which is not distributed to the Parties on or before the Agreement
The surviving obligations of each Party shall include:
The obligations of such Party under any
San Onofre Agreement(s) that shall continue to be in force and effect after the Agreement Termination Date;
Such Party's share, equal to its
Ownership Cost Share, of any liability identified in Section 18.104.22.168 hereof for which no fund or reserve is established on or prior to the Agreement
Termination Date or which is in excess of any fund or reserve established on or
prior to the Agreement Termination Date.
Each Party represents and warrants that it has obtained all
necessary approvals to enter into this Agreement, and that it has legal authority to enter into and be bound by all of its undertakings as provided for in this
If practicable, each Party shall furnish the other Party with the
opportunity to review filings in joint proceedings relating to Unit 1 before they
are submitted to the CPUC; provided, however, neither Party shall be obligated
includes trade secrets or information relating to patents or copyrights provided,
would affect the Party's competitive position; (vi) is subject to the attorney-client
or attorney work product privilege; or (vii) is any combination of the foregoing.
UNCONTROLLABLE FORCES: No Party shall be considered to be in
sabotage, government priorities, restraint by court order or public authority, and
action or non-action by or failure to obtain the necessary authorizations or
approvals from any government agency or authority, which by exercise of
reasonable diligence and foresight such Party could not reasonably have been
RELATIONSHIP OF PARTIES:
The covenants, obligations, and liabilities of the Parties are
intended to be several and not joint or collective, and nothing herein contained
No Party shall be under the control of, or shall be deemed to control, another Party. With respect to this Agreement, neither Party shall have a right or power to bind the other Party without its express written consent, except as expressly provided in this Agreement.
The Parties hereby elect to be excluded from the application of
Subchapter "K" of Chapter 1 of Subtitle "A" of the Internal Revenue Code of
1986, or such portion or portions thereof as may be permitted or authorized by the Secretary of the Treasury or the Secretary's delegate insofar as such
NO THIRD PARTY BENEFICIARIES: This Agreement is for the sole
benefit of the Parties, and shall not be construed as granting rights to any
person or entity other than the Parties or imposing obligations on any Party to
any person or entity other than the other Party.
Any assignment by a Party of its interest in this Agreement
which is made without the written consent of the other Party shall not relieve the assigning Party from primary liability for any of its duties and obligations hereunder, and in the event of any such assignment the assigning Party shall continue to remain primarily liable for payment of any and all money due the other Party hereunder and for the performance and observance of all other
In the event SCE assigns all or a part of its interest in this
agreement, SDG&E shall have the option of becoming the Decommissioning
SDG&E assigns all or a part of its interest in this Agreement, SCE's assignee shall have the option of becoming the Decommissioning Agent.
Whenever an assignment of a Party's interest in this Agreement
is made with the written consent of the other Party, the assigning Party's
assignee shall expressly assume in writing the duties and obligations hereunder of the assigning Party, and within thirty (30) days after any such assignment and assumption of duties and obligations, the assigning Party shall furnish or cause to be furnished to the other Party a true and correct copy of such
NOTICES: All notices under this Agreement shall be in writing and shall
Southern California Edison Company c/o Secretary
2244 Walnut Grove Avenue
Rosemead, California 91770
San Diego Gas & Electric Company c/o Secretary
8306 Century Park Court
San Diego, California 92123-1593
By notice sent to the other Party, any Party may designate different persons or different addresses for the giving of notices. hereunder.
GOVERNING LAW: This Agreement shall be interpreted under,
governed by, and construed under the laws of the State of California or the laws of the United States, as applicable, as if executed and to be performed wholly within the State of California.
CAPTIONS AND HEADINGS: All captions and headings appearing in
this Agreement are inserted for reference and shall not govern the
interpretation of the provisions of this Agreement.
NON-WAIVER: Any waiver at any time by any Party of its rights with
EXECUTION OF COUNTERPARTS: This Agreement may be executed
Agreement may be detached from any counterpart of this Agreement without
attached to it one or more signature pages.
INTEGRATION CLAUSE: This Agreement, each Exhibit and Schedule
condition or warranty not contained in this Agreement, and the Exhibits hereto shall be binding on the parties hereto or have any force or effect whatsoever with respect to the subject matter herein and therein.
SEVERABILITY CLAUSE: If any provision of this Agreement or the
application thereof shall not be affected and shall be enforceable to the fullest
extent permitted by law.
SIGNATURE CLAUSE: The Parties have caused this Agreement to be
executed as of the 23rd day of March, 2000.
Unless otherwise defined therein, terms used in the Decommissioning Agreement
forth in this Exhibit A.
Administrative and General (A&G): Includes all charges from A&G
Project as described in Exhibit B.
Agreement: The San Onofre Unit 1 Decommissioning Agreement
between Southern California Edison Company and San Diego Gas & Electric
Company including all exhibits and attachments thereto, as such agreement may be amended from time to time.
Agreement Termination Date: This Agreement shall continue in force
Annual Decommissioning Activities Plan: The plan and budget for the
Annual Decommissioning Activities Report: A comparison of the
Decommissioning Work scheduled to be completed during each calendar year and
its budgeted cost with the work actually completed and its actual cost, and a
description of any material work scope or cost element changes that occurred during
Annual Decommissioning Funding Status Report: A report prepared
dollar balance in its Decommissioning Trust Funds to the dollar cumulative balance
to that Party's Ownership Share of the current Annual Adjusted Decommissioning Cost Estimate.
Annual Trust Fund Liquidation Balance: The liquidation value of its
8. Annually Adjusted Decommissioning Cost Estimate: That
Commission or CPUC: The California Public Utilities Commission or
Cure Plan: A Cure Plan is a plan, to be proposed by a Party that has
Section 7 of the Decommissioning Agreement, that is in effect at the end of the
prescribed time period, within a commercially reasonable period, and of paying its
Decommissioning Cost Share of all Decommissioning Costs during the period.
Decommissioning A ent: The Party responsible for Decommissioning
Decommissioning Cost Estimate: A Unit 1 site specific estimate of
expenses, applicable labor loading charges, administrative and general expenses of
the Decommissioning Agent as adopted by the Decommissioning Executive Board, and contingency for the uncertainties likely to be encountered when
Decommissioning Costs: The costs and obligations incurred in the
excluding any expenses incurred by any Party in administering, managing, and investing monies in its Decommissioning Trust Fund(s).
Decommissioning Cost Share: Each Party's share of the Decommission
Decommissioning Executive Board: The board established pursuant to
Decommissioning Project Team: The organization established by SCE
Decommissioning Trust Fund: The fund or funds, held by an
Independent Trustee, in which each Party shall establish, accumulate, and
maintain monies for its Decommissioning Cost Share of the Decommissioning Work in accordance with the Decommissioning Agreement.
Decommissioning Work: All work necessary to meet the requirements
Utilities Code, and any other applicable federal, state, and local regulation,
including but not limited to the following:
Prepare, submit, and prosecute applications or filings required
to perform Decommissioning Work;
Safely remove and dispose of all structures, facilities, and
equipment from the Project Land Areas;
Sell, or transfer and convey all structures, equipment, materials,
or facilities that have net salvage value and are no longer required for construction,
operation, maintenance, or Decommissioning Work; and
Perform Site Restoration in accordance with the Project Land
Grantor: The United States Department of the Navy.
Liquidation Value: The estimated market value of Decommissioning
Trust Fund(s), as determined by a nationally recognized pricing service, less
deferred taxes on unrealized capital gains, accrued taxes, and administrative costs.
Master Trust Agreement: The documents governing the Utilities'
Nuclear Decommissioning Trusts. There are separate Master Trust Agreements for
Nuclear Decommissioning Cost Triennial Proceeding or NDCTP: The
triennial review of nuclear decommissioning cost estimates, contribution levels, and decommissioning work established by the Commission.
Nuclear Fuel: Any source, special nuclear, or by-product material, as
directly from, or as a result of, reprocessing, which is possessed or utilized in
connection with a Unit, or produced or remaining as a result of the operation of such Unit.
Nuclear Incident: As defined in Section 11(q) of the Atomic Energy Act
NRC: The United States Nuclear Regulatory Commission or any
predecessor or successor organization.
Operating Agreement: The Second Amended San Onofre Operating
the operation and maintenance of and capital improvements for each Unit, the
infrastructure, and the common facilities at the San Onofre Nuclear Generating Station.
Ownership Share: The percentage ownership interests of each Party
Prescribed Accounting Practice: Generally accepted accounting
San Onofre Nuclear Generating Station or SONGS: The entire nuclear
Base, Camp Pendleton, California, consisting of Unit 1, Unit 2, Unit 3, the Common Facilities, the Edison Switchyard, the San Diego Switchyard, the Interconnection Facilities, and any Additional Generating Units subsequently constructed or installed.
San Onofre Ownership Agreement: The agreement executed by Edison
SDG&E Designated SONGS 1 Counsel: The in-house or outside
counsel which SDG&E designates in writing to the Decommissioning Agent as its
SONGS 1 counsel. When SDG&E changes its designated SONGS 1 counsel, it
should use its best effort to provide notice of the change within three (3) working days.
SONGS 1 Decommissioning: The process of safely removing and
disposing of all contaminated and non-contaminated equipment, components, and
Uniform System of Accounts: The Uniform System of Accounts
prescribed by the Federal Energy Regulatory Commission for public utilities and licensees subject to the provisions of the Federal Power Act, as amended.
Uninsured Damage: Damage not paid for by valid and collectible
Unit 1: The first nuclear generating unit at the San Onofre Nuclear
Willful Action: Action taken or not taken by a Party at the direction of
its directors, officers, or employees having management or administrative
responsibility affecting its performance under this Agreement, which:
is knowingly or intentionally taken or not taken with conscious
indifference to the consequences thereof or with intent that injury or damage would result or would probably result therefrom;
has been determined by final arbitration award or final judgment
or judicial decree to be a material default under this Agreement and which occurs or
continues beyond the time specified in such arbitration award or judgment or
is knowingly or intentionally taken or not taken with the
knowledge that such action taken or not taken is a material default under this
Agreement. Willful Action does not include any act or failure to act which is merely involuntary, accidental, or negligent.
As used herein, the phrase "employees having management or
administrative responsibility" refers to employees of a Party who are responsible for one or more of the executive or administrative functions of planning, organizing, coordinating, directing, controlling, and supervising such Party's performance under this Agreement; provided, however, that, with respect to employees of the
Decommissioning Agent acting in its capacity as such and not in its capacity as a
Party, the phrase "employees having management or administrative responsibility"
shall refer only to (i) the Decommissioning Project Manager or the employee who has been designated to act and is acting for the Decommissioning Project Manager, and (ii) anyone in the organizational structure of the Decommissioning Agent
A&G PROCESS FOR THE SONGS UNIT 1 DECOMMISSIONING PROJECT
The San Onofre Unit 1 decommissioning project will be charged for SCE
corporate A&G (includes A&G and incremental P&B) costs based on the normal
Corporate Accounting and Recording System (CARS) procedures for allocating such
all capital work orders on a proportional basis. Thus, the decommissioning work
order will receive only its proportional share of the total capital A&G costs of the
Certain accounts within the decommissioning project accounting codes will
NOT be subject to allocation of corporate A&G. Accounts that will fall into this
category are those that will contain direct payments for NRC fees, Nuclear Specific Insurance, and Low Level Radioactive Waste (LLRW) burial.
All payroll taxes and pensions and benefits charges associated with the San
Since Workmen's Compensation Insurance costs are now to be direct billed to
Ownership of Proprietary Rights: The Parties' rights to inventions,
discoveries, trade secrets, patents, copyrights, and other intellectual property and
issued for Decommissioning Work:
Proprietary Rights conceived, developed, or reduced to practice by
contractors or subcontractors in the performance of Decommissioning Work
If Proprietary Rights conceived, developed, or reduced to practice by
if such Proprietary Rights are necessary for the Parties to have complete
If the Decommissioning Work or accompanying information and
documentation includes the Proprietary Rights of others, contractor or
subcontractor shall procure all necessary licenses regarding such Proprietary
Decommissioning Work and accompanying information and documentation.
All such licenses shall be in writing and shall be irrevocable and royalty-free to the Parties.
Joint Ownership of Proprietary Rights: Both Parties shall have an equal and
No Additional Compensation: Nothing set forth in this Exhibit C shall be