California Regulators Weigh Historic Diablo Canyon Decision

Diablo Canyon Nuclear Power Plant, Pacific Gas and Electric Company

The historic Joint Proposal to retire and replace the Diablo Canyon Nuclear Power Plant goes before the California Public Utilities Commission (CPUC) tomorrow at a formal hearing featuring no less than 21 presentations on behalf of an even larger number of parties. Most of them agree that the California’s last nuclear plant should be retired and that customers will benefit from lower-cost, pollution-free alternatives, but they differ strongly on how to do it.

I will represent the Natural Resources Defense Council (NRDC) at tomorrow afternoon's hearing, and I will be proud to join representatives of the plant’s workers, communities, and owner Pacific Gas & Electric (PG&E) in urging the CPUC to approve the Joint Proposal announced in June 2016 and reject an administrative law judge’s recent contention that much of it should be disregarded.

The judge’s proposed decision was issued in response to the landmark agreement among a diverse group of key stakeholders that called for closing the aging Diablo Canyon plant no later than August 2025 and replacing its output with lower-cost emissions-free energy, including energy efficiency, solar, and wind power. The agreement also recommended significant support to communities and workers affected by the shutdown.

Diablo Canyon, located near San Luis Obispo and about 250 miles south of San Francisco, accounts for about 9 percent of California’s in-state power generation, 6 percent of the state’s total electricity mix, and about 20 percent of the electricity for the service territory of PG&E—one of the nation’s largest combination natural gas and electric utilities, serving 16 million people in northern and central California.

Administrative law judge’s proposed opinion

The administrative law judge refers throughout his relatively brief proposed opinion to “PG&E’s proposal,” with one dismissive reference to the fact that “the proposal in the [PG&E] application was referred [to] as a joint proposal.” In fact, it really WAS and is a Joint Proposal, negotiated over many months by numerous parties who historically have disagreed on almost every aspect of Diablo Canyon’s operations and future. They also worked together to defend the Joint Proposal before the CPUC, in briefs and hearings, over the past fourteen months. Yet the proposed decision ignores every submission by several of those parties, including NRDC, Friends of the Earth (FOE), and the Alliance for Nuclear Responsibility, which helps explain why it offers the wrong answer to every key question before the commission.

Specifically, the proposed decision (1) fails to ensure that Diablo Canyon will be fully replaced with zero-carbon resources; (2) makes no specific provision for replacing any part of its output with zero-carbon resources; and (3) disallows most of the Joint Proposal’s recommended retention payments to plant workers and their communities (cutting $277 million out of a seven-year total of $448 million), which are crucial to ensuring the plant’s safe and reliable operation.

Why NRDC is fighting the proposed decision

NRDC is fighting back on every one of these counts. Zero-carbon replacement is a core element of the Joint Proposal, which the proposed decision fails even to acknowledge. The aftermath of the sudden San Onofre nuclear plant retirement in southern California back in 2013 amply demonstrates that closing a nuclear plant without time to transition to clean energy alternatives can result in a significant increase in greenhouse gas emissions, which would undercut California’s leadership on climate solutions and conflict with state policy. Amazingly, the proposed decision says we don’t know “what, if anything, should be done here to ensure that the retirement of Diablo Canyon will not result in an increase in GHG emissions.”

Citing testimony by Shell Energy North America, and totally ignoring NRDC’s and FOE’s extensive submissions, the proposed decision refuses even to authorize acquisition of additional energy efficiency equivalent to one-ninth of Diablo Canyon’s output, starting in 2018. Shell North America is hardly a recognized authority on energy efficiency. For a commission with a longstanding commitment to energy efficiency as California’s highest-priority resource, it is simply incredible to say that adding more energy efficiency over seven years before Diablo Canyon closes is “a proposal that will most likely either fail to achieve its goal or will achieve a goal not worth reaching.” Does the commission really want to say that energy efficiency savings totaling only one-ninth of the annual output of Diablo Canyon represent a goal that is either unachievable or not worth reaching, and then refuse even to authorize an effort that PG&E itself has volunteered to make?

NRDC also strongly supports the labor and community provisions of the Joint Proposal, which would lose more than 60 percent of their recommended funding under the proposed decision. Retaining a skilled, cohesive workforce in a remote area for seven years is no small matter. The Proposed Decision would put the commission in the position of experimenting irresponsibly with whether Diablo Canyon can keep its workers and operate safely when more than half the funding for a retention program is summarily disallowed, and the small communities in which those workers live are faced with tens of millions of dollars in cuts to essential services due to reduced revenues over the years immediately ahead.

California deserves better, and the proposed decision is the recommendation of a single administrative law judge, who serves on the commission's staff. The CPUC commissioners have the final say, and there is still time for them to unite in support of the Joint Proposal. We hope they will.

About the Authors

Ralph Cavanagh

Energy Co-Director, Climate & Clean Energy Program

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