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NUCLEAR DECOMMISSIONING TRUST
INVESTMENTS
The funds in the decommissioning trusts, along with
accumulated earnings, will be used exclusively for
decommissioning and dismantling the Utility’s nuclear
facilities. At December 31, 2010 and 2009, the Utility had
accumulated nuclear decommissioning trust funds with
an estimated fair value of $2.0 billion and $1.9 billion,
respectively, net of deferred taxes on unrealized gains. In
2010 and 2009, the trusts earned $62 million and $63
million in interest and dividends, respectively. All
earnings on the assets held in the trusts, net of authorized
disbursements from the trusts and investment
management and administrative fees, are reinvested.
Amounts may not be released from the decommissioning
trusts until authorized by the CPUC.
At December 31, 2010 and 2009, total unrealized
losses on the investments held in the trusts were $6
million and $8 million, respectively. The Utility
concluded that the unrealized losses were other-than-
temporary impairments and recorded a reduction to the
nuclear decommissioning trusts assets and the
corresponding regulatory liability for asset retirement
costs. There were no individually material unrealized
losses.
The following table provides a summary of available-for-sale investments held in the Utility’s nuclear decommissioning
trusts:
(in millions) Amortized
Cost
Total
Unrealized
Gains
Total
Unrealized
Losses Estimated (1)
Fair Value
As of December 31, 2010
Equity securities
U.S. $ 509 $ 529 $ (2) $ 1,036
Non-U.S. 180 170 (1) 349
Debt securities
U.S. government and agency securities 571 55 (2) 624
Municipal securities 119 1 (1) 119
Other fixed income securities 65 1 – 66
Total $ 1,444 $ 756 $ (6) $ 2,194
As of December 31, 2009
Equity securities
U.S. $ 344 $ 425 $ (1) $ 768
Non-U.S. 182 163 (1) 344
Debt securities
U.S. government and agency securities 656 52 (4) 704
Municipal securities 89 1 – 90
Other fixed income securities 108 2 (2) 108
Total $ 1,379 $ 643 $ (8) $ 2,014
(1) Excludes taxes on appreciation of investment value.
The debt securities mature on the following schedule:
As of December 31, 2010 (in millions)
Less than 1 year $37
1–5 years 349
5–10 years 215
More than 10 years 208
Total maturities of debt securities $ 809
The following table provides a summary of the activity for the debt and equity securities:
Year Ended December 31,
(in millions) 2010 2009 2008
Proceeds from sales and maturities of nuclear decommissioning trust investments $ 1,405 $ 1,351 $ 1,635
Gross realized gains on sales of securities held as available-for-sale 42 27 30
Gross realized losses on sales of securities held as available-for-sale (11) (55) (142)
96