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 Application of Pacific Gas and Electric Company for Approval of Ratepayer Funding to Perform Additional Seismic Studies Recommended by the California Energy Commission. A (Filed COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E ON THE PROPOSED DECISION OF ALJ BARNETT DOUGLAS K. PORTER WALKER A. MATTHEWS III ANGELICA MORALES Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: Facsimile: Dated: July 12,

2 TABLE OF AUTHORITIES California Statutes Title 20, California Code of Regulations, (Rules of Practice and Procedure Rule ,6 California Case Authority Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Commission, 461 U.S. 190 ( i

3 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Pacific Gas and Electric Company for Approval of Ratepayer Funding to Perform Additional Seismic Studies Recommended by the California Energy Commission. A (Filed COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E ON THE PROPOSED DECISION OF ALJ BARNETT Pursuant to Rule 14.3 of the California Public Utilities Commission s (Commission Rules of Practice and Procedure (Rules, Southern California Edison Company (SCE respectfully submits the following comments on the June 22, 2010 Proposed Decision (PD of Administrative Law Judge (ALJ Barnett. Attachment A provides a Subject Index of Recommended Changes to the PD. I. INTRODUCTION AND STATEMENT OF INTEREST The PD grants Pacific Gas & Electric Company s (PG&E request for approval of funding to perform certain seismic studies for the Diablo Canyon Power Plant (Diablo Canyon, as recommended by the California Energy Commission (CEC in the CEC s November 2008 report titled, An Assessment of California s Nuclear Power Plants: AB 1632 Report (AB 1632 Report. 1 In addition, the PD provides that the Commission will convene its own Independent Peer Review Panel (IPRP to conduct a peer review of PG&E s study plan and completed seismic studies. 2 The PD further provides that PG&E shall be responsible for implementing all 1 Proposed Decision (PD, Ordering Paragraph Nos PD at pp

4 measures recommended by the IPRP regarding the study scope and the adequacy of PG&E s findings. 3 The CEC also recommended in its AB 1632 Report that SCE perform the same type of seismic studies for San Onofre Nuclear Generating Station (SONGS. In response to this recommendation, SCE agreed to evaluate the extent to which new research should be performed. In a June 25, 2009 letter to SCE, Commission President Peevey also provided direction to SCE regarding the CEC s AB 1632 Report. The letter notified SCE of the Commission s intent to use the CEC s AB 1632 Report as input and information to the Commission s license renewal review and decision for SONGS. SCE will soon be submitting a request for funding to perform certain seismic research projects. Presumably, given the Commission s direction on these matters, the IPRP process set forth in the PD also could apply to SCE s future seismic research projects for SONGS. Therefore, SCE has an interest in the outcome of this proceeding, and respectfully submits these comments. II. SUMMARY OF COMMENTS SCE generally supports the PD, but has some concerns with the IPRP process set forth in the PD. PG&E stated in its application that it would ensure that the studies would undergo vigorous internal and external review, which would include review by the Nuclear Regulatory Commission (NRC and PG&E s external seismic advisory board. 4 The IPRP is therefore not necessary, and may be wholly duplicative, given that PG&E s proposed peer review process, by acknowledged experts with seismic and nuclear plant operations experience, is more than sufficient to review the study results and provide any follow-up recommendations. In addition, the Commission should make sure that the IPRP does not issue any recommendations that conflict with or have the potential to conflict with the NRC s exclusive jurisdiction over safety- 3 PD at pp Application at p. 9. 2

5 related issues for nuclear power plants. Further, the Commission should implement a process that ensures it receives and considers input from stakeholders who have expertise on nuclear plant operations and seismic requirements for nuclear power plants (i.e. PG&E and SCE before PG&E is required to implement any of the IPRP s recommendations. To address these specific concerns and make sure the IPRP s recommendations do not conflict with the NRC s jurisdiction over safety-related issues, SCE respectfully urges the Commission to make the following modifications to the PD: Composition of IPRP The IPRP should include at least one member who possesses substantial experience in nuclear plant operations and knowledge of seismic requirements for nuclear power plants, including possessing specific, detailed knowledge of NRC regulations and the demarcation between safetyrelated and non-safety-related issues for nuclear power plants. Workshops The Commission should schedule workshops as part of the IPRP process for reviewing the final results of the seismic studies. Comments on IPRP Recommendations The Commission should provide interested parties an opportunity to submit written comments on recommendations made by the IPRP before the Commission requires PG&E to implement the recommendations. The Commission should make the final decision on the IPRP recommendations and any disputes. SCE further explains the reasons why the Commission should make these modifications in the section below. III. DISCUSSION A. The Commission Should Seek a Broader Range of Input to the IPRP. While SCE does not believe the IPRP is necessary, given that PG&E has indicated in its application that the seismic studies will be reviewed by the NRC and PG&E s external advisory board, the Commission should seek a broader range of input should the Commission decide to convene the IPRP. It is well established that the federal government, through the NRC, has exclusive jurisdiction over the radiological safety aspects involved in the operation of a nuclear power 3

6 plant. 5 State government jurisdiction over a nuclear power plant is generally limited to the economic aspects of the operation of the plant, including, for example, the need for its generating capacity, land use, and ratemaking. 6 In light of these strict jurisdictional lines, the Commission should make two modifications to the PD to ensure that the IPRP process does not conflict with the NRC s exclusive jurisdiction over safety-related issues for Diablo Canyon. 1. The Commission Should Seek Input from at Least One Expert Who Possesses Substantial Experience in Nuclear Plant Operations and Nuclear Regulatory Requirements. First, the Commission should add to the IPRP at least one member who possesses substantial experience in nuclear plant operations and who has specific, detailed knowledge of NRC regulations, including the demarcation between safety-related and non-safety-related systems, structures and components of nuclear power plants. As currently proposed in the PD, the IPRP will consist of a combination of the Public Utilities Commission, the California Energy Commission, the California Geologic Survey, the California Coastal Commission, and the California Seismic Safety Commission. 7 Although these agencies certainly possess expertise on either economic or seismic issues generally, none of these agencies likely possess sufficient experience in nuclear plant operations or knowledge of NRC regulatory requirements (and the scope of NRC s jurisdiction over safety-related issues to make informed recommendations about seismic studies for Diablo Canyon. This valuable (and necessary knowledge base is missing from the proposed IPRP, and should be included to ensure that the IPRP makes informed recommendations that do not conflict with the NRC s exclusive jurisdiction over safety-related issues. To put it another way, the proposed purpose of the IPRP 5 See Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Commission, 461 U.S. 190, (1983 (noting that the NRC s prime areas of concerns are national security, public health, and safety. 6 Id. 7 PD at pp

7 is to provide recommendations regarding seismic studies for a nuclear power plant, Diablo Canyon. It is straightforward logic that the IPRP should consist of members who not only have experience with seismic issues, but also have experience with nuclear power plant operations, including NRC regulations and the demarcation between safety-related and non-safety-related seismic issues. Including at least one IPRP member with significant experience with both seismic and nuclear plant operations will ensure that the IPRP is appropriately positioned to make recommendations regarding seismic issues for Diablo Canyon. 2. The Commission Should Convene Workshops as Part of the IPRP Process. Second, for related reasons, the Commission should consider convening workshops as part of the IPRP process for reviewing the results of the seismic studies. PG&E and SCE have significant experience with the specific seismic issues for their respective plants, which both have been in operation for more than 20 years. The Commission should therefore seek PG&E s and SCE s input in the development of any recommendations by the IPRP. Further, PG&E and SCE are knowledgeable on NRC regulations and the scope of the NRC s jurisdiction over safetyrelated issues, and will be able to advise the IPRP as to whether their proposals conflict with or have the potential to conflict with the jurisdiction of the NRC. PG&E and SCE can provide this needed input during workshops with the IPRP once PG&E completes its proposed seismic studies. B. The Commission Should Modify the IPRP Process Provided in the PD. The PD provides the following requirement for the IPRP process: PG&E shall be responsible for implementing all measures recommended by the IPRP regarding the study scope and the adequacy of PG&E s findings. Compliance with such recommendations shall be timely and not unduly delay the implementation of the seismic studies. 8 8 PD at pp

8 While the PD encourages informal resolution for any dispute that arises after the IPRP issues a recommendation, 9 this process deviates substantially from the Commission s typical practice for providing due process, which would usually give PG&E and other interested parties (including SCE the opportunity to provide comments on the recommendations before PG&E is obligated to implement them. To provide due process here, the Commission should modify the PD to allow interested parties to submit to the Commission written opening and reply comments on the recommendations made by the IPRP before they become required. To provide parties sufficient time to submit comments, the timing of these comments should be consistent with the requirements contained in Commission Rule The Commission should make the final decision on the IPRP recommendations and any disputes. This process is particularly warranted given the complex seismic and nuclear operations issues involved, and the substantial costs that could result from the IPRP s recommendations. Interested parties should be able submit comments on recommendations that could have cost consequences. Further, the process is also generally consistent with the process used by the CEC in preparing the AB 1632 Report that recommended the seismic studies at issue here. What is more, the process will clarify that the Commission is not ceding regulatory authority to the IPRP or other regulatory agencies, particularly on issues pertaining to the cost of or (costeffectiveness of implementing any recommendations. Cost issues should solely be the purview of the Commission. IV. CONCLUSION For the reasons discussed above, SCE respectfully urges the Commission to make the following modifications to the PD: Composition of IPRP The IPRP should include at least one member who possesses substantial experience in nuclear plant operations and knowledge of 9 PD at pp

9 seismic requirements for nuclear power plants, including possessing specific, detailed knowledge of NRC regulations and the demarcation between safetyrelated and non-safety-related issues for nuclear power plants. Workshops The Commission should schedule workshops as part of the IPRP process for reviewing the final results of the seismic studies. Comments on IPRP Recommendations The Commission should provide interested parties an opportunity to submit written comments on recommendations made by the IPRP before the Commission requires PG&E to implement the recommendations. The Commission should make the final decision on the IPRP recommendations and any disputes. DOUGLAS K. PORTER WALKER A. MATTHEWS III ANGELICA M. MORALES /s/ Walker A. Matthews, III By: Walker A. Matthews, III July 12, 2010 Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: Facsimile:

10 Attachment A SUBJECT INDEX OF RECOMMENDED CHANGES TO PROPOSED DECISION

11 SUBJECT INDEX OF RECOMMENDED CHANGES TO PROPOSED DECISION Pursuant to Rule 14.3 (b of the Commission s Rules of Practice and Procedure, SCE submits the following proposed changes to the Proposed Decision: A. Proposed Changes to Text of Decision 1. The Commission should modify the paragraph on pages 9-10 of the PD as follows: In addition to PG&E s proposal to employ outside consultants and subject its seismic studies to peer review, this Commission will convene its own Independent Peer Review Panel (IPRP. The panel will consist of one of more of (1 the Public Utilities Commission, (2 one or more of the, the California Energy Commission, the California Geologic Survey, the California Coastal Commission, and the California Seismic Safety Commission, and (3 at least one member who possesses substantial experience in nuclear plant operations and knowledge of seismic requirements for nuclear power plants, including possessing specific, detailed knowledge of Nuclear Regulatory Commission (NRC regulations and the demarcation between safetyrelated and non-safety-related issues for nuclear power plants. The panel will conduct a peer review of the seismic studies including independently reviewing and commenting on the study plan and completed study findings. Our order in this application will require PG&E to submit its study plans and completed study findings to the IPRP for review prior to implementation. The IPRP will issue recommendations on the study plans and completed study findings. Interested parties will be allowed to submit to the Commission written opening and reply comments on the recommendations made by the IPRP before they become required. To provide parties sufficient time to submit comments, the timing of these comments will be consistent with requirements contained in Commission Rule In addition, the Commission will schedule workshops as part of the IPRP process for reviewing the final results of the seismic studies. The Commission will make the final decision on the IPRP s recommendations and any disputes. PG&E shall be responsible for implementing all measures recommendationsed by the IPRP approved by the Commission regarding the study scope and the adequacy of PG&E s findings. Compliance with such recommendations shall be timely and not unduly delay the implementation of the seismic A-1

12 studies. Should a dispute arise it should be resolved informally but if that is not attainable the The Commission has authority (i to halt any activity associated with the seismic studies if it is determined to be a substantive deviation from PG&E s proposal or the recommendations foof the IPRP approved by the Commission and (ii to halt the associated rate recovery. B. Proposed Changes to Order 1. The Commission should modify Ordering Paragraph No. 6 as follows: 6. Pacific Gas and Electric Company shall provide the Independent Peer Review Panel with its seismic study plan and completed study findings prior to implementation. Within 30 days of receipt, the panel is expected to provide its written comments to Pacific Gas and Electric Company and the service list for this proceeding. Interested parties will be allowed to submit to the Commission written opening and reply comments on the recommendations made by the IPRP before the Commission requires PG&E to implement the recommendations. To provide parties sufficient time to submit comments, the timing of these comments will be consistent with the requirements contained in Commission Rule The Commission will make the final decision on the recommendations and any disputes. A-2

13 CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commissioner s Rules of Practice and Procedure, I have this day served a true copy of COMMENTS OF SOUTHERN CALIFORNIA EDISION COMPANY (U 338-E ON THE PROPOSED DECISION OF ALJ BARNETT on all parties identified in the attached service list(s. Transmitting the copies via to all parties who have provided an address. First class mail will be used if electronic service cannot be effectuated. Executed this 19th day of July, 2010, at Rosemead, California. /s/ Raquel Ippoliti Raquel Ippoliti Project Analyst SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Ave. Post Office Box 800 Rosemead, California 91770

14 CPUC - Service Lists - A Page 1 of 2 7/19/2010 CPUC Home CALIFORNIA PUBLIC UTILITIES COMMISSION Service Lists PROCEEDING: A PG&E - FOR APPROVAL FILER: PACIFIC GAS AND ELECTRIC COMPANY LIST NAME: LIST LAST CHANGED: JUNE 22, 2010 DOWNLOAD THE COMMA-DELIMITED FILE ABOUT COMMA-DELIMITED FILES Back to Service Lists Index Parties WALKER A. MATTHEWS, III ALVIN S. PAK SOUTHERN CALIFORNIA EDISON COMPANY SAN DIEGO GAS & ELECTRIC 2244 WALNUT GROVE AVE. 101 ASH STREET, HQ-8C ROSEMEAD, CA SAN DIEGO, CA FOR: SOUTHERN CALIFORNIA EDISON FOR: SAN DIEGO GAS & ELECTRIC ROCHELLE BECKER MATTHEW FREEDMAN EXECUTIVE DIRECTOR THE UTILITY REFORM NETWORK ALLIANCE FOR NUCLEAR RESPONSIBILITY 115 SANSOME STREET, SUITE 900 PO BOX 1328 SAN FRANCISCO, CA SAN LUIS OBISPO, CA FOR: TURN FOR: ALLIANCE FOR NUCLEAR RESPONSIBILITY/SIERRA CLUB/ENVIRONMENT CALIFORNIA RESEARCH AND POLICY CENTER/CALPIRG JENNIFER POST ATTORNEY AT LAW PACIFIC GAS AND ELECTRIC 77 BEALE STREET, B30A SAN FRANCISCO, CA FOR: PACIFIC GAS AND ELECTRIC COMPANY Information Only MRW & ASSOCIATES, LLC ONLY ONLY, CA ANGELICA MORALES SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE ROSEMEAD, CA 91770

15 CPUC - Service Lists - A Page 2 of 2 7/19/2010 FOR: SOUTHERN CALIFORNIA EDISON COMPANY CASE ADMINISTRATION DOUGLAS K PORTER SOUTHERN CALIFORNIA EDISON COMPANY SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE, ROOM WALNUT GROVE AVENUE ROSEMEAD, CA ROSEMEAD, CA WENDY KEILANI CASE ADMINISTRATION SAN DIEGO GAS & ELECTRIC PACIFIC GAS AND ELECTRIC COMPANY 8330 CENTURY PARK COURT, CP32D 77 BEALE STREET, MC B9A SAN DIEGO, CA SAN FRANCISCO, CA FRANCES YEE LAUREN ROHDE PACIFIC GAS AND ELECTRIC COMPANY PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET, MC B10A 77 BEALE STREET, MC B9A SAN FRANCISCO, CA SAN FRANCISCO, CA CALIFORNIA ENERGY MARKETS 425 DIVISADERO STREET, SUITE 303 SAN FRANCISCO, CA State Service ERIC GREENE JONATHAN J. REIGER CALIF PUBLIC UTILITIES COMMISSION CALIF PUBLIC UTILITIES COMMISSION ENERGY DIVISION EXECUTIVE DIVISION AREA 4-A ROOM VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA MARION PELEO ROBERT A. BARNETT CALIF PUBLIC UTILITIES COMMISSION CALIF PUBLIC UTILITIES COMMISSION LEGAL DIVISION DIVISION OF ADMINISTRATIVE LAW JUDGES ROOM 4107 ROOM VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA FOR: DRA TOP OF PAGE BACK TO INDEX OF SERVICE LISTS