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W A T E R E N E R G Y I I F F RIVERSIDE PUBLIC UTILITIES I. Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: November 16, 2012 ITEM NO; 9 SUBJECT: AMENDMENT OF LEASE NO. PRC 6785.1 BETWEEN THE STATE OF CALIFORNIA STATE LANDS COMMISSION AND THE CITY OF RIVERSIDE, SAN DIEGO GAS AND ELECTRIC AND SOUTHERN CALIFORNIA EDISON ISSUE: That the Board of Public Utilities consider approval of the State Lands Commission Lease Amendment PRC 6785.1 ("Lease") between the State of California ("State") and the City of Riverside ("Riverside"), San Diego Gas and Electric Company ("SDG&E") and Southern California Edison Company ("SCE") to meet state regulatory requirements. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the Amendment to the Lease No. PRC 6785.1 between the State of California State Lands Commission and the City of Riverside to allow for installation, use and maintenance of Large Organism Exclusion Devices at the San Onofre Nuclear Generating Station to meet new regulatory requirements for once-through-cooling coastal power plants; 2. Authorize the City Manager, or his designee, to execute the Amendment to the Lease Agreement; and 3. Authorize the City Manager, or his designee, to execute any future amendments to the State Lands Commission Lease No. PRC 6785.1. BACKGROUND: The San Onofre Nuclear Generating Station ("SONGS") is comprised of three generating units: Unit 1 which permanently ceased operation in 1992 and is jointly owned by SCE and SDG&E; and Units 2 and 3 which are currently owned by SCE, SDG&E and Riverside. In accordance with the joint agreement governing SONGS ownership, Riverside holds a 1.79% interest in all plant facilities of Units 2 and 3, and a 1.49% interest in facilities which are common to all three units. Riverside and the other owners of SONGS are parties to Lease No. PRC 6785.1 with the California Lands Commission. The Lease provides for the use of four parcels of State lands for cooling water conduits, environmental monitoring buoys, construction areas and sand disposal, as required by State regulations. In March 2001, the Riverside Public Utilities Board approved an amendment to the State Lands Commission Lease which allowed for an extension through February 2023. New regulations imposed by the State Water Resources Control Board (SWRCB) related to once- through-cooling stations (power plants in coastal regions) will require installation of new marine mitigation equipment. In order to install the equipment, the State Lands Commission is requiring a Second Amendment to the Lease to allow for the installation, use and maintenance of two Large Organism