BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ) ) ) ) )

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1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Joint Application of Southern California Edison Company (U 338-E and San Diego Gas & Electric Company (U 902-E For the 2018 Nuclear Decommissioning Cost Triennial Proceeding. A (Filed March 15, 2018 SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E AND SAN DIEGO GAS & ELECTRIC COMPANY S (U 902-E UPDATED JOINT PREHEARING CONFERENCE STATEMENT ON BEHALF OF VARIOUS PARTIES IN THE 2018 NUCLEAR DECOMMISSIONING COSTS TRIENNIAL PROCEEDING WALKER A. MATTHEWS III ELIZABETH C. BROWN Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: ( walker.matthews@sce.com ALLEN K. TRIAL Attorney for SAN DIEGO GAS & ELECTRIC COMPANY 8330 Century Park Court, CP32a San Diego, CA Telephone: ( Facsimile: ( Atrial@semprautilities.com Dated: November 13, 2018

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Joint Application of Southern California Edison Company (U 338-E and San Diego Gas & Electric Company (U 902-E For the 2018 Nuclear Decommissioning Cost Triennial Proceeding. A (Filed March 15, 2018 SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E AND SAN DIEGO GAS & ELECTRIC COMPANY S (U 902-E UPDATED JOINT PREHEARING CONFERENCE STATEMENT ON BEHALF OF VARIOUS PARTIES IN THE 2018 NUCLEAR DECOMMISSIONING COSTS TRIENNIAL PROCEEDING Pursuant to the direction provided by Administrative Law Judge (ALJ Darcie L. Houck during the August 20, 2018 Pre-Hearing Conference (PHC, as modified by ALJ Houck s ruling of September 17, 2018 (September 17 th Ruling extending the deadline for submission, Southern California Edison (SCE(U 338-E and San Diego Gas & Electric Company (SDG&E(U 902-E (collectively referred to as the Utilities jointly submit this Updated Joint Prehearing Conference Statement (Updated Statement on behalf of the Parties identified below who have reviewed and approved this Updated Statement. In accordance with the September 17 th Ruling, the Updated Statement is being submitted within fourteen days of the proposed decision (PD for Phases 2 and 3 of Application (A (2015 NDCTP. I. UPDATED JOINT CASE MANAGEMENT STATEMENT On July 31, 2018, ALJ Houck issued a ruling (July 31 st Ruling directing the parties to meet and confer and use their best efforts to prepare a mutually acceptable proposed procedural schedule, identify the issues recommended by the parties to be included as part of the scope of 1

3 the proceeding, and identify any other matters that will assist in resolving the issues raised by parties in this proceeding. 1 During the August 20, 2018 PHC, ALJ Houck offered the Parties the opportunity to update their Joint Prehearing Conference Statement with any additional issues or updates to the schedule prior to issuing the scoping memo, based upon the PDs findings on various issues. (See August 20th Transcript, pp As discussed below, the Utilities have met and conferred with the Public Advocate s Office of the Public Utilities Commission (Cal Advocates, The Utility Reform Network (TURN, and Alliance for Nuclear Responsibility (A4NR. A. Meet and Confer Participants On November 9, 2018, the following representatives for the Parties met and conferred via a teleconference on the issues identified in the Ruling: NAME Walker Matthews Elizabeth Brown Jose Perez Allen Trial Sue Garcia Truman Burns John Geesman Matthew Freedman Bruce Lacy PARTY SCE SCE SCE SDG&E SDG&E Cal Advocates A4NR TURN TURN B. Proposed Schedule proceeding. The Parties discussed and respectfully propose the following procedural schedule for this Event Date Workshops August 20-21, 2018 Utilities To File Supplemental Testimony September 21, 2018 Pre-Hearing Conference TBD Intervenor Testimony December 14, July 31 st Ruling p. 1. 2

4 Event Date All Party Supplemental Testimony Regarding Nuclear Fuel Contract Cancellation Costs TBD (see note below SONGS Tour January 22, 2019 Rebuttal Testimony February 1, 2019 PHC TBD (as necessary Evidentiary Hearings February 25-27, 2019 Post-hearing Opening Brief April 12, 2019 Post-hearing Reply Brief May 17, 2019 Note Decision (D deferred the reasonableness determination on SONGS 2&3 nuclear fuel contract cancellation costs to the 2018 NDCTP to allow for a more complete record given the issuance of Decision (D D further provided that Parties may submit limited supplemental testimony and briefing as to whether and if so how D impacts the determination of what should be deemed a reasonable expense to ratepayers for nuclear fuel cancellation costs. 3 The Parties will be prepared at the PHC to discuss the timing and format of this supplemental testimony or briefing. C. Scope of Proceeding 1. Recommended Scope Issues All Parties agree that the issues to be considered in this proceeding should include the reasonableness of: (1 the 2017 SONGS 1 Decommissioning Cost Estimate (DCE; (2 the 2017 SONGS 2&3 DCE; ( SONGS 1 decommissioning expenses; ( SONGS 2&3 decommissioning expenses; (5 the Utilities compliance with prior Commission decisions in the Nuclear Decommissioning Costs Triennial Proceeding (NDCTP; (6 each Utility s financial analyses and calculated customer contribution levels for their respective SONGS 1 and SONGS 2&3 nuclear decommissioning trusts (NDTs; and (7 status of the Utilities litigation against the government for recovery of damages related to the Department of Energy s (DOE failure to pick up SONGS spent fuel for offsite storage. 2 D , pp D , p. 44 and Ordering Paragraph No. 7. 3

5 In regard to the issues all Parties have agreed should be within the scope of this proceeding, Intervenors have expressed that they will likely focus on the following: a Cal Advocates Cal Advocates states that it expects the contested issues to include the reasonableness of the SONGS 1 and SONGS 2&3 DCEs, and the Utilities decommissioning costs incurred during Cal Advocates also expects that the treatment of the SONGS 1, 2&3 offshore conduits will be an issue, as they were in A b TURN TURN states that it intends to thoroughly review the revised DCEs for SONGS 1 and SONGS 2&3 with a special focus on the arrangement between the SONGS owners and the Decommissioning General Contractor. TURN will also review approximately $312 million in decommissioning expenses incurred at SONGS 1 and 2&3 that has been submitted for a finding of reasonableness. 6 TURN intends to evaluate this spending consistent with the milestone framework proposed by parties in A TURN will also evaluate the treatment of Department of Energy Litigation and Claims Proceeds and trust fund return assumptions. 8 c A4NR A4NR questions the prudence of SCE s decisions that have impacted the decommissioning schedule with inadequate consideration of the impact on decommissioning costs. For the reasons stated in A4NR s Protest, A4NR believes that the utility testimony served to date has not met the utilities burden of proof that certain of the DCE cost assumptions are reasonable. A4NR has essentially completed its discovery, and anticipates raising other issues in its direct testimony that challenge the reasonableness of certain DCE cost assumptions. 4 ORA Protest, p Id. 6 TURN Protest, p Id. 8 Id. 4

6 2. Disputed Scope Issues a Palo Verde DCE (1 TURN s Position TURN asserts that the application fails to include any updated information about the anticipated costs or schedule for decommissioning the Palo Verde Nuclear Generating Station (PVNGS. SCE should be directed to identify the timing of any anticipated developments or updates that would affect the estimated costs of decommissioning. To the extent that the Commission adopts adjustments to the PVNGS DCE in A , as proposed in the pending Phase 2/3 PD, those revisions should be reflected in a revised cost estimate submitted into the record of this proceeding. (2 SCE s Position SCE believes that there is no need to review a Palo Verde DCE update in the 2018 NDCTP given that SCE so recently submitted the 2016 Palo Verde DCE for the Commission s review in A SCE will revise the 2016 Palo Verde DCE to incorporate any changes directed by the Commission once a final decision is issued for 2015 NDCTP Phase 2/3. SCE proposes to submit the revised 2016 Palo Verde DCE in a Tier 1 advice letter or other filing directed by the Commission demonstrating compliance with the final decision. SCE believes the revised 2016 Palo Verde DCE should not be further reviewed. SCE anticipates that the next update to the Palo Verde DCE will be completed in late 2019/early 2020, and SCE proposes submitting it for review in the 2021 NDCTP. b Reasonableness of DOE Litigation Activities (1 TURN s Position TURN asserts that the Commission should clarify that the reasonableness of actions taken in the DOE litigation pursued by SCE and SDG&E should be reviewed in future NDCTPs. 5

7 (2 Utilities Position The Utilities have submitted the required testimony regarding the status of DOE litigation activities. The scope of future NDCTPs should not be determined on a prospective basis without consideration of what future circumstances may exist. Rather the scope of future NDCTPs should be determined based on the circumstances that exist when the Utilities submit applications to initiate those proceedings. c SCE s Recording Practices Of Staff Time To Undistributed Activities (1 TURN s Position In A , TURN proposed that SCE reevaluate its practice of recording disproportionate amounts of staff time to Undistributed Activities. The pending Phase 2/3 Proposed Decision agrees that TURN s proposal should be adopted on a going forward basis and directs SCE to meet with Energy Division staff and interested parties to address how it will provide better guidance to staff to ensure that future record keeping reflects support for Distributed activities. 9 Although TURN intends to participate in these meetings, there is no assurance that SCE will resolve TURN s concerns about the adequacy of the additional staff guidance and the portion of staff costs allocated to distributed projects. To the extent that TURN, SCE and other parties fail to reach agreement, the Commission should permit additional testimony or comments in this proceeding addressing unresolved issues. Any disputes should be resolved either as part of the primary decision in this case or through a supplemental decision or ruling. (2 Utilities Position The Utilities will adhere to the requirements of the final decision for A and plan to hold meetings with Energy Division and interested parties in early 2019 to discuss this issue. The Utilities are hopeful that the issue can be resolved in these meetings. TURN proposes that in the event the Parties are unable to resolve the issue, the Commission should permit 9 Phase 2/3 Proposed Decision, A , page 43. 6

8 additional testimony or comments in this proceeding. However, the proposed schedule for the timing of the 2018 NDCTP, with evidentiary hearings scheduled in late February and posthearing briefing scheduled in April-May, 2019, will not allow sufficient time for this issue to be addressed in this proceeding. The Utilities recommend that the Commission allow the meet and confer process to unfold prior to making any scope or schedule decisions in the 2018 NDCTP regarding this issue. The Utilities will keep the Commission apprised on the Parties progress on this issue, as directed by Energy Division. d Timing Of Substructure Removal (1 A4NR s Position As noted above, A4NR will argue that the Utilities application and accompanying testimony provide inadequate support to find reasonable the 2017 DCEs for SONGS 1 and SONGS 2&3. A4NR has indicated that they have specific concerns regarding the alleged likely material impact on both DCEs of assumptions about the timing of removal of subsurface structures. 10 (2 Utilities Position While the Commission is responsible for reviewing the reasonableness of DCEs, the Commission is not the proper agency to consider issues related to the timing of the removal of SONGS subsurface structures. The removal of subsurface structures is a decision the U.S. Navy will make as the landowner. A4NR also misunderstands the timing issues, as the land will not be returned to the Navy until decommissioning is completed, which is forecast to occur in Consequently, any A4NR objection regarding the timing of the removal of SONGS subsurface structures assumed in the DCEs should be deemed to be beyond the scope of this proceeding. D. Other Matters Relevant to Resolving The Issues Raised By Parties in This Proceeding 10 A4NR Protest, p. 1. 7

9 The Utilities held a two-day workshop for August 20-21, 2018 to provide an overview of the approach used to develop the 2017 SONGS 2&3 DCE submitted for the California Public Utilities Commission s (CPUC review in the 2018 NDCTP, and explain the alignment of the Utilities showing submitted for this proceeding to the reasonableness review framework proposed by parties in A (2015 NDCTP. In addition, the parties have engaged in discovery. The Commission s determination of the issues to be within the scope of this proceeding will provide necessary guidance regarding the scope of any remaining discovery. Respectfully submitted, WALKER A. MATTHEWS III ELIZABETH C. BROWN ALLEN K. TRIAL /s/ Walker A. Matthews By: Walker A. Matthews III /s/ Allen K. Trial By: Allen K. Trial Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: ( walker.matthews@sce.com Attorney for: SAN DIEGO GAS & ELECTRIC COMPANY 8330 Century Park Court, CP32D San Diego, CA Telephone: ( Facsimile: ( Atrial@semprautilities.com Dated: November 13,

10 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Joint Application of Southern California Edison Company (U 338-E and San Diego Gas & Electric Company (U 902-E For the 2018 Nuclear Decommissioning Cost Triennial Proceeding Application No (Filed March 15, 2018 CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E AND SAN DIEGO GAS & ELECTRIC COMPANY S (U 902-E UPDATED JOINT PREHEARING CONFERENCE STATEMENT ON BEHALF OF VARIOUS PARTIES IN THE 2018 NUCLEAR DECOMMISSIONING COSTS TRIENNIAL PROCEEDING on all parties identified on the attached service list(s A Service was effected by one or more means indicated below: Transmitting the copies via to specified parties who have provided an e- mail address. Placing the copies in sealed envelopes and depositing such copies in the United States mail with first-class postage prepaid to the offices of the Commissioner(s or other addressee(s. ALJ Darcie Houck California Public Utilities Commission Division of ALJs 300 Capitol Mall, Suite 518 Sacramento, CA Executed on November 13, 2018, at Rosemead, California. /s/ Edith Leon Edith Leon Legal Administrative Assistant SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770

11 CPUC - Service Lists - A Page 1 of 3 11/13/2018 CPUC Home CALIFORNIA PUBLIC UTILITIES COMMISSION Service Lists PROCEEDING: A EDISON AND SDG&E - F FILER: SAN DIEGO GAS & ELECTRIC COMPANY LIST NAME: LIST LAST CHANGED: OCTOBER 24, 2018 Download the Comma-delimited File About Comma-delimited Files Back to Service Lists Index Parties WALKER A. MATTHEWS, III ALLEN K. TRIAL ATTORNEY AT LAW ATTORNEY SOUTHERN CALIFORNIA EDISON COMPANY SAN DIEGO GAS & ELECTRIC COMPANY 2244 WALNUT GROVE AVENUE / PO BOX CENTURY PARK COURT ROSEMEAD, CA SAN DIEGO, CA FOR: SOUTHERN CALIFORNIA EDISON COMPANY FOR: SAN DIEGO GAS & ELECTRIC COMPANY LAURA J. TUDISCO MATTHEW FREEDMAN CALIF PUBLIC UTILITIES COMMISSION ATTORNEY LEGAL DIVISION THE UTILITY REFORM NETWORK ROOM MARKET STREET, 14TH FLOOR 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA FOR: TURN FOR: ORA JOHN L. GEESMAN ATTORNEY DICKSON GEESMAN LLP 1999 HARRISON STREET, STE OAKLAND, CA FOR: ALLIANCE FOR NUCLEAR RESPONSIBILITY Information Only MRW & ASSOCIATES, LLC ONLY ONLY, CA BRUCE LACY LACY CONSULTING GROUP, LLC 433 WILEY BLVD., NW

12 CPUC - Service Lists - A Page 2 of 3 11/13/2018 CEDAR RAPIDS, IA FOR: TURN LAURA L. KRANNAWITTER CASE ADMINISTRATION CALIF PUBLIC UTILITIES COMMISSION SOUTHERN CALIFORNIA EDISON COMPANY MARKET STRUCTURE, COSTS AND NATURAL GAS 8631 RUSH STREET 320 West 4th Street Suite 500 ROSEMEAD, CA Los Angeles, CA DONALD KELLY, ESQ. CENTRAL FILES EXECUTIVE DIRECTOR SAN DIEGO GAS AND ELECTRIC CO. UTILITY CONSUMERS' ACTION NETWORK 8330 CENTURY PARK COURT 3405 KENYON STREET, STE 401 SAN DIEGO, CA SAN DIEGO, CA EMMA D. SALUSTRO WENDY D. JOHNSON ATTORNEY REGULATORY CASE MGR SAN DIEGO GAS & ELECTRIC COMPANY SAN DIEGO GAS & ELECTRIC COMPANY 8330 CENTURY PARK COURT, CP32D 8330 CENTURY PARK COURT, CP32F SAN DIEGO, CA SAN DIEGO, CA FOR: SAN DIEGO GAS & ELECTRIC COMPANY ROCHELLE BECKER AMIE BURKHOLDER EXECUTIVE DIRECTOR BUCHALTER, A PROFESSIONAL CORPORATION ALLIANCE FOR NUCLEAR RESPONSIBILITY 55 SECOND STREET, STE ONLY SAN FRANCISCO, CA ONLY, CA CASE COORDINATION PACIFIC GAS AND ELECTRIC COMPANY PO BOX ; MC B9A, 77 BEALE STREET SAN FRANCISCO, CA KELSEY PIRO CASE MGR. PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET SAN FRANCISCO, CA MIKE CADE JENNIFER POST BUCHALTER, A PROFESSIONAL CORPORATION PACIFIC GAS & ELECTRIC COMPANY 55 SECOND STREET, SUITE 1700 PO BOX , MAIL CODE B30A SAN FRANCISCO, CA SAN FRANCISCO, CA LINDSEY HOW-DOWNING ATTORNEY LAW OFFICES OF LINDSEY HOW-DOWNING 3060 EL CERRITO PLAZA, NO. 175 EL CERRITO, CA State Service ERIC GREENE TRUMAN L. BURNS CALIF PUBLIC UTILITIES COMMISSION CALIF PUBLIC UTILITIES COMMISSION MARKET STRUCTURE, COSTS AND NATURAL GAS ENERGY COST OF SERVICE & NATURAL GAS BRA AREA 4-A ROOM VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA

13 CPUC - Service Lists - A Page 3 of 3 11/13/2018 DARCIE HOUCK CALIF PUBLIC UTILITIES COMMISSION DIVISION OF ADMINISTRATIVE LAW JUDGES 300 Capitol Mall Sacramento, CA TOP OF PAGE BACK TO INDEX OF SERVICE LISTS