The CPUC’s Role in San Onofre Nuclear Plant Decommissioning Presentation to the California State Senate August 13, 2013 Edward Randolph Director, Energy Division California Public Utilities Commission (CPUC)

2 Nuclear Decommissioning Decommissioning activities and cost estimates for all utilities are reviewed during the Nuclear Decommissioning Cost Triennial Proceeding. The Nuclear Decommissioning Cost Triennial Proceeding allows the CPUC to: –Review and approve the schedule for decommissioning activities. –Review and set investment guidelines for decommissioning trust funds. –Review expected decommissioning costs, and set customer decommissioning charges that are included on customer bills as a separate line item. Current rates: –SCE: $ /kwh –SDG&E: $ /kWh –PG&E: $ /kWh Hearings for the 2012 application (A ) will be held October 21-25, 2013.

3 Nuclear Decommissioning Trust Funds D established decommissioning trust funds for all CA nuclear units, as well as fund guidelines and management fees. (1987) A five-member committee with a 5-year term is appointed to oversee management of each utility’s fund. Two officers/directors are nominated and confirmed by the utility, while the other three are not affiliated with the company but are nominated by the company and confirmed by the CPUC. The committee appoints fund manager. Trust fund guidelines allow the trust to invest in a mix of equity shares and bonds. Utilities withdraw money from the trust funds for approved decommissioning activities following CPUC approval. Funds cover San Onofre Units 1, 2, and 3; Diablo Canyon Units 1 and 2; and Humboldt.

4 Decommissioning Trust Funds Total balance for Units 2 and 3 of San Onofre: $3.486 billion (not including City of Riverside) Total balance for all three units: $3.792 –SCE maintains trust funds for its 78.2% ownership of San Onofre Balance for units 2 and 3 as of June 2013: $2.738 billion Unit 1 balance: $206 million –SDG&E maintains trust funds for its 20% ownership of San Onofre Balance for units 2 and 3 as of June 2013: $748 million Unit 1 balance: $100 million PG&E decommissioning trust fund balances: Humboldt Bay: $289 million Diablo Canyon Unit 1: $975 million Diablo Canyon Unit 2: $1.228 billion

5 San Onofre Units 2 and 3 Decommissioning Plans SCE submitted plans and estimated costs for Units 2 and 3 decommissioning on July 22, 2013 as part of the 2012 Nuclear Decommissioning Cost Triennial Proceeding (A ) to reflect the premature shutdown of SONGS. SCE currently anticipates Units 2 and 3 decommissioning activities to commence in mid-2015 and cost $4.058 billion (2011 dollars; total cost between SCE and SDG&E, excluding City of Riverside).

6 San Onofre Unit 1 Decommissioning San Onofre Unit 1 began operation in 1968 and was retired on November 30, Decommissioning activities commenced at Unit 1 in As of June 30, 2013: –Decommissioning activities ~90% complete; $800 million withdrawn from Unit 1 Decommissioning Trust Fund –Estimated $182 million in remaining work –Unit 1 Trust Fund balances: SCE: $206 million SDG&E: $100 million

7 Issues in the Open Nuclear Decommissioning Cost Triennial Proceeding (A ) Sufficiency of Trust Fund Balances in light of recent decommissioning cost estimates Uncertainty in forecasting of projected decommissioning activities, both in terms of time and cost –PG&E’s Humboldt Bay Power Plant an instructive example Appropriate contingency factors that should be built into decommissioning cost estimates How long spent fuel should be kept in wet pools before transfer to Independent Spent Fuel Storage Installation (ISFSI) and how that decision would affect timeline and cost of decommissioning How provisions in the land leasing agreement with the US Navy may affect decommissioning

8 Contact information Ed Randolph: Gurbux Kahlon: