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In connection with its year-end financial statements, SCE will record an accrued liability of $143 million for the present value of this obligation. As of December 19, 2017, SDG&E’s regulatory asset was approximately $151 million. Additionally, under the Utility Shareholder Agreement, SCE will pay SDG&E the amounts it would have received under the Prior Settlement Agreement but will not receive under the Revised Settlement Agreement. Regulatory assets recorded under the Prior Settlement Agreement that are no longer probable of recovery through future rates will be written off and regulatory liabilities for amounts not required to be refunded to customers will be reversed in SCE's year-end financial statements. GAAP also requires that amounts collected that are probable of refund to customers be recorded as regulatory liabilities. Under the Prior Settlement Agreement, generally accepted accounting principles (“GAAP”) required that previously incurred costs related to San Onofre Units 2 & 3 be reflected as a regulatory asset to the extent that management concluded the costs were probable of recovery through future rates. SCE intends to sell its nuclear fuel inventory as In the Revised Settlement Agreement, SCE retains the right to sell its stock of nuclear fuel and not share such proceeds with customers, as was provided in the Prior Settlement Agreement. SCE also will retain $47 million of proceeds received in 2017 from arbitration with Mitsubishi Heavy Industries (“MHI”) over MHI’s delivery of faulty steam generators. SCE will retain amounts collected under the Prior Settlement Agreement before the Cessation Date. The Utilities will refund to customers San Onofre-related amounts recovered in rates after the Cessation Date. If that request is not approved by the CPUC, the Cessation Date is estimated to be April 21, 2018.
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If that request is approved by the CPUC, the Cessation Date is estimated to be December 19, 2017. Department of Energy (“DOE”) related to DOE’s failure to meet its obligation to begin accepting spent nuclear fuel from San Onofre.
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SCE has previously requested the CPUC to authorize SCE to reduce the San Onofre regulatory asset by applying $72 million of proceeds received from litigation with the U.S. If the Revised Settlement Agreement is approved by the CPUC, the Utilities will cease rate recovery of San Onofre costs as of the date their combined remaining San Onofre regulatory assets equal $775 million (the “Cessation Date”).
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The Revised Settlement Agreement was the result of multiple mediation sessions in 2017 and January 2018 and was signed on Janufollowing a settlement conference in the OII, as required under CPUC rules. If approved by the CPUC, the Revised Settlement Agreement will also result in the dismissal of a federal lawsuit currently pending in the 9th Circuit Court of Appeals challenging the CPUC’s authority to permit rate recovery of San Onofre costs. If approved by the California Public Utilities Commission (“CPUC”), the Revised Settlement Agreement will resolve all issues under consideration in the OII and will modify the prior settlement agreement approved by the CPUC in November 2014 (“Prior Settlement Agreement”). (“SDG&E”), the Alliance for Nuclear Responsibility, the California Large Energy Consumers Association, California State University, Citizens Oversight dba Coalition to Decommission San Onofre, the Coalition of California Utility Employees, the Direct Access Customer Coalition, Ruth Henricks, The Office of Ratepayer Advocates, The Utility Reform Network, and Women’s Energy Matters (together, the “Parties”) entered into a settlement agreement ("Revised Settlement Agreement") in the San Onofre Nuclear Generating Station Units 2 and 3 (“San Onofre”) Order Instituting Investigation proceeding (“OII”). On January 30, 2018, Edison International's subsidiary, Southern California Edison Company (“SCE”), San Diego Gas & Electric Co.