PG&E 2007 Annual Report Download - page 118

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The following table provides a summary of the fair value, based on quoted market prices, of the investments held in the
Utility’s nuclear decommissioning trusts:
Total Total
Amortized Unrealized Unrealized Estimated
(in millions) Maturity Date Cost Gains Losses Fair Value(1)
Year ended December 31, 2007
U.S. government and agency issues 2008–2037 $ 767 $ 59 $— $ 826
Municipal bonds and other 2008–2049 209 5 — 214
Equity securities 464 682 (7) 1,139
Total $1,440 $746 $(7) $2,179
Year ended December 31, 2006
U.S. government and agency issues 2007–2036 $ 781 $ 34 $ (1) $ 814
Municipal bonds and other 2007–2049 252 7 (1) 258
Equity securities 347 644 — 991
Total $ 1,380 $ 685 $ (2) $ 2,063
(1) Excludes taxes on appreciation of investment value.
The cost of debt and equity securities sold is determined
by specifi c identifi cation. The following table provides a
summary of the activity for the debt and equity securities:
Year ended December 31,
(in millions) 2007 2006 2005
Proceeds received from sales
of securities $830 $1,087 $2,918
Gross realized gains on sales of
securities held as available-for-sale 61 55 56
Gross realized losses on sales of
securities held as available-for-sale (42) (29) (14)
SPENT NUCLEAR FUEL
STORAGE PROCEEDINGS
As part of the Nuclear Waste Policy Act of 1982, Congress
authorized the U.S. Department of Energy (“DOE”) and elec-
tric utilities with commercial nuclear power plants to enter
into contracts under which the DOE would be required to
dispose of the utilities’ spent nuclear fuel and high-level
radioactive waste no later than January 31, 1998, in exchange
for fees paid by the utilities. In 1983, the DOE entered into
a contract with the Utility to dispose of nuclear waste from
the Utility’s two nuclear generating units at Diablo Canyon
and its retired nuclear facility at Humboldt Bay. The DOE
failed to develop a permanent storage site by January 31,
1998. The Utility believes that the existing spent fuel pools at
Diablo Canyon (which include newly constructed temporary
storage racks) have suffi cient capacity to enable the Utility to
operate Diablo Canyon until approximately 2010 for Unit 1
and 2011 for Unit 2.
Because the DOE failed to develop a permanent storage
site, the Utility obtained a permit from the NRC to build
an on-site dry cask storage facility to store spent fuel through
at least 2024. After various parties appealed the NRC’s issu-
ance of the permit, the U.S. Court of Appeals for the Ninth
Circuit issued a decision in 2006 requiring the NRC to
issue a supplemental environmental assessment report on
the potential environmental consequences in the event of a
terrorist attack at Diablo Canyon, as well as to review other
contentions raised by the appealing parties related to poten-
tial terrorism threats. In August 2007, the NRC staff issued
a fi nal supplemental environmental assessment report con-
cluding there would be no signifi cant environmental impacts
from potential terrorist acts directed at the Diablo Canyon
storage facility. On January 15, 2008, the NRC decided to
hold hearings on whether it provided a complete list of the
references upon which it relied to fi nd that there would not
be a signifi cant environmental impact and whether it suffi -
ciently addressed the impacts on land and the local economy
of a potential terrorist attack. It is expected that the NRC
will issue a fi nal decision in the third quarter of 2008.
The Utility expects to complete the dry cask storage
facility and begin loading spent fuel in 2008. If the Utility
is unable to complete the dry cask storage facility, if opera-
tion of the facility is delayed beyond 2010, or if the Utility
is otherwise unable to increase its on-site storage capacity,
it is possible that the operation of Diablo Canyon may
have to be curtailed or halted as early as 2010 with respect
to Unit 1 and 2011 with respect to Unit 2 and continued
until such time as additional safe storage for spent fuel
is made available.