In its first major investment since building the $5.5 billion Diablo Canyon nuclear plant in the 1980s, Pacific Gas & Electric says it will soon request $706 million for new steam generators for the plant. The request will be filed at the California Public Utilities Commission and be the first time the nuclear plant?s capital additions will be eyed on their own. With the notable exception of two rate settlements on the plant, Diablo Canyon?s spending has historically been folded into the enormous triennial general rate cases for the utility. Thus, the ongoing costs of the nation?s most expensive nuclear plant have been barely differentiated in a sea of other costs for the utility. ?The first big test of the economics of future operation may well be the steam generator and other capital additions slated for Diablo,? said Bob Finkelstein, The Utility Reform Network executive director. ?I suspect we?ll learn a lot about the cost-effectiveness of the plants.? According to PG&E, the change in proceedings is due to a stipulation in its current ?cost of service ratemaking? agreement with the CPUC. ?This is how large projects get funded, just like a new power plant or transmission line,? according to the utility. In a change from the past, the cost of new steam generators may no longer break nuclear power?s competitiveness. ?It used to be that steam generators were a huge-ticket item. You could close a plant over it?like Trojan,? said Bill Marcus, principal at JBS Energy. The Trojan nuclear plant near Rainier, Oregon, was shut down in 1993 because of a steam generator tube leak. Another decade of experience and replacement manufacturing has brought down the cost of steam generators, according to Marcus. The need for new steam generators at Diablo could be obviated by economics if the CPUC proceedings find the investment isn?t worth the payoff. There is also a chance that steam generator investment could be made moot by a separate regulatory proceeding. Diablo?s twin units are licensed to 2021 for Unit 1 and 2025 for Unit 2. However, the units are running out of room for spent fuel. PG&E has an application at the Nuclear Regulatory Commission (NRC) to build above-ground spent-fuel storage on site. In the unlikely case the NRC denies that application, the plant would have to shut down because there would be nowhere to put the high-level radioactive waste. Thus, no new steam generators would be required.