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Table 1: PG&E's Generation Fixed Costs,2011-201626 (Nominal $ Million) 2011 2012 2013 2014 2015 2016 Generation Fixed Costs 1,400 1,530 1,550 1,710 1,860 1,840 Annual Cost Increase 9% 1% 10% 9% -1% MRW made adjustments to this GRC forecast to account for the likely retirement of the Diablo Canyon nuclear units at the end of the units' current licenses in 2024 and 2025. As of April 2015, PG&E was undecided as to whether it would pursue a license extension for the Diablo Canyon units.27 There is ample reason for this uncertainty. For example, the CPUC has stated that PG&E will be required to present a thorough assessment of the cost-effectiveness of relicensing, including a number of studies exploring reliability, security, and safety implications;28 PG&E will also be required to undertake a massive cooling system modification project before operating the nuclear plant past 2024 (per state regulations implementing the Federal Clean Water Act, Section 316(b));29 an independent panel of peer reviewers to recent federal- and state- required PG&E seismic studies has unresolved concerns over these studies;30 and the U.S. Nuclear Regulatory Commission is requiring PG&E to conduct additional earthquake hazard analysis because initial post-Fukushima studies showed a hazard level above the original design basis for the plant.3 t Given the uncertainties surrounding the continued operation of the plant, MRW assumed in the base case that the Diablo Canyon units would be shut down at the end of their current licenses. In an alternate relicensing scenario, MRW included costs for the cooling system modification project that would be required.32 To estimate annual ratepayer costs from this project, we conservatively used PG&E's $4,489 million cost estimate for a closed cycle cooling system,33 262011-2013:CPUC Decision 11-05-018,pages 2 and 15;and 2014-2016:CPUC Decision 14-08-032, Appendix C,Table 1 and Appendix D,Table 1. 27 California Energy Commission."2015 Integrated Energy Policy Report,"February 24,2016("2015 IEPR"), pages 177-178.http://www.energy.ca.gov/2015_energypolicy/ 28 2015 IEPR,page 178. 29 California State Water Resources Control Board."Fact Sheet: Once-Through Cooling Policy Protects Marine Life And Insures Electric Grid Reliability," http://www.swrcb.ca.gov/publications_forms/publications/factsheets/docs/oncethroughcooling.pdf 30 2015 IEPR,pages 180-183. 312015 IEPR,page 184. 32 California State Water Resources Control Board."Fact Sheet:Once-Through Cooling Policy Protects Marine Life And Insures Electric Grid Reliability," 33 Subcommittee Comments on Bechtel's Assessment of Alternatives to Once-Through-Cooling for Diablo Canyon Power Plant.November 18,2014,page 10. C-3