06-12-2017 BPU RPT 14 - Laserfiche WebLink

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J � P U B L I C U T I L I T I E S BOARD OF PUBLIC UTILITIES RIVERSIDE PUBLIC UTILITIES Board Memorandum DATE: JUNE 12, 2017 ITEM NO: 14 SUBJECT: UPDATE ON THE DECOMMISSIONING STATUS OF SAN ONOFRE NUCLEAR GENERATION STATION, USE OF SETTLEMENTS AND COST RECOVERIES OF $11,244,000 TO PARTIALLY DEFEASE EXISTING DEBT, RETENTION OF FINANCING TEAM FOR DEBT DEFEASANCE TRANSACTION, AND TRANSFER OF $11,244,000 FROM UNDESIGNATED RESERVES TO A BOND DEFEASANCE DESIGNATED RESERVE ISSUES: Receive an update on the decommissioning status of the San Onofre Nuclear Generating Station and recommend that the City Council approve the use of settlements and cost recoveries of $11,244,000 to partially defease existing debt, retain the financing team for the debt defeasance transaction and approve the transfer of $11,244,000 to a designated reserve for bond defeasance. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: Receive and file the update on the status of the decommissioning of San Onofre Nuclear Generation Station; 2. Authorize the use of settlements and cost recoveries received of $11,244,000 to partially defease existing debt; 3. Retain the various financing team members for the debt defeasance transaction, as outlined in the report below; 4. Authorize the City Manager, or his delegate, to execute individual agreements with each financing team member that will be negotiated closer to the actual defeasance of the bonds, for not to exceed $65,000; and 5. Establish a bond defeasance designated reserve account within the Electric Fund, as determined by the Finance Department, and authorize the transfer of settlements and cost recoveries received of $11,244,000 to the designated reserve for bond defeasance. BACKGROUND: Riverside owns 1.79% of the San Onofre Nuclear Generating Station (SONGS) Units 2 and 3 located in Camp Pendleton in San Diego County, near the City of San Clemente. Units 2 and 3 commenced operation in 1983 and 1984, respectively. While operational, SONGS Units 2 and 3 provided approximately 39 megawatts of capacity and approximately 15 percent of the City's annual energy requirement. The other co-owners are Southern California Edison (SCE), San Diego Gas & Electric Company, and the City of Anaheim; the co-owners lease the land on which SONGS is located from the Department of Navy. The operation of SONGS is governed by the Nuclear Regulatory Commission (NRC), which issues a license for such operation. SCE is the operating agent of SONGS and is the primary NRC license holder.