Company: PCG-PB
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001004980-25-000010
Chunk: 153

Company: PG&E Corp
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 153
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 perpetuity.  As the Utility cannot estimate a settlement date or range of potential settlement dates for these assets, reasonable estimates of fair value cannot be made.  As such, ARO liabilities are not recorded for retirement activities associated with substations, certain hydroelectric facilities; removal of lead-based paint in some facilities and certain communications equipment from leased property; and restoration of land to the conditions under certain agreements.To estimate its liability, the Utility uses a discounted cash flow model based upon significant estimates and assumptions about future decommissioning costs, escalation rates, credit-adjusted risk-free rates, and estimated decommissioning dates.  For generation facilities, the Utility uses a probability-weighted, discounted cash flow model.  For nuclear generation facilities, the model also considers multiple decommissioning start-year scenarios.  The estimated future cash flows are discounted using a credit-adjusted risk-free rate that reflects the risk associated with the decommissioning obligation.  The Utility performs detailed cost studies of its nuclear generation facilities in conjunction with the NDCTP, most recently performed in 2021, and updates its nuclear AROs accordingly, unless circumstances warrant more frequent updates, based on its annual evaluation of cost escalation factors and probabilities assigned to various scenarios.  The decommissioning cost estimates are based on the plant location and cost characteristics for the Utility’s nuclear power plant.  Actual decommissioning costs may vary from these estimates as a result of changes in assumptions such as decommissioning dates; regulatory requirements; technology; and costs of labor, materials, and equipment.  The Utility recovers its revenue requirements for decommissioning costs through rates using a non-bypassable charge that the Utility expects will continue until those costs are fully recovered.

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The total nuclear decommissioning obligation was $4.0 billion as of December 31, 2024 and December 31, 2023 based on the cost study performed as part of the 2021 NDCTP.  As of December 31, 2024, the Utility recorded a $222 million reduction to the nuclear decommissioning ARO to reflect the NRC’s decision to grant DCPP’s extended operations until 2030.  The Utility’s ARO could be materially impacted if the Utility does not receive the required federal and state licenses, permits, and approvals.

Disallowance of Plant CostsPG&E Corporation and the Utility record a charge when it is both probable that costs incurred or projected to be incurred for recently completed plant will not be recoverable through rates charged to