PG&E, SLO agencies challenge CPUC on Diablo Canyon shutdown plan



Last year, PG&E asked the California Public Utilities Commission (CPUC) to approve a $1.76 billion ratepayer-funded decommission of the Diablo Canyon nuclear power plant by 2025.

FINAL ARGUMENTS On Nov. 28, PG&E and SLO County officials asked the California Public Utilities Commission to reconsider a tentative plan to approve only 10 percent of the requested funds to shut down Diablo Canyon nuclear power plant. - PHOTO BY PETER JOHNSON
  • Photo By Peter Johnson
  • FINAL ARGUMENTS On Nov. 28, PG&E and SLO County officials asked the California Public Utilities Commission to reconsider a tentative plan to approve only 10 percent of the requested funds to shut down Diablo Canyon nuclear power plant.

On Nov. 8, to the dismay of PG&E and San Luis Obispo County officials, the CPUC announced plans to approve only $171.8 million for the shutdown—just 10 percent of what was applied for—nixing a $191.6 million proposed Diablo Canyon employee retention program, an $85 million settlement with SLO County agencies to mitigate the local impact of the closure, and $1.3 billion for investing in new energy procurement.

The CPUC's proposed decision sent PG&E, its labor unions, SLO officials, and some environmental groups into a tailspin. It raised alarms about a premature plant shutdown if too many Diablo workers exited before 2025 and increased concerns about the magnitude of the economic hit to local governments and businesses.

Those groups made their concerns loud and clear at the CPUC headquarters in San Francisco on Nov. 28, where four commissioners heard more than three hours of oral arguments from 18 stakeholders involved in the shutdown. A final decision won't be made until Dec. 14 or later.

PG&E counsel William Manheim addressed the commission first and vouched for the CPUC to approve the $352.1 million employee retention program. The program includes three retention periods that would pay Diablo workers 25 percent above their base pay, contingent on their working for the length of the term.

The CPUC tentatively approved only $160.5 million for the program, calling the entirety of the program "costly, inefficient, and not reasonable" for ratepayers.

Manheim disagreed.

"What would happen to the culture of the [CPUC] if everyone in this building was told they would lose their job in eight years, and that only four out of every 10 staffers were important enough to keep here?" Manheim told the commission. "Separating employees into 'have' and 'have not' categories like this would be exceptionally harmful to the performance culture at the plant. It's not worth risking plant safety to save 16 cents per month on the average customer bill."

Officials representing SLO County, local cities, and the San Luis Coastal Unified School District (SLCUSD) also attended the hearing to request that the commission reconsider its proposed rejection of $85 million in community mitigation funds.

The settlement was negotiated between PG&E, SLO officials, and other stakeholders to address the yearly loss of $22 million in taxes, $1 billion in overall annual economic impact, and the ongoing risks of storing spent nuclear fuel in the county. The CPUC argued that ratepayers couldn't legally fund the settlement, calling it, in essence, a substitute for tax revenue.

"It's not simply a substitute [for tax revenue]," said SLO City Attorney Christine Dietrick, who represented the coalition of local cities at the hearing. "We believe [the settlement] is fair and reasonable to all involved, to the communities, to PG&E, to the ratepayers who benefit from the burden that our community bears. ... We're talking about a closure process in which missteps can have catastrophic consequences for our community. It is of utmost importance to us that the joint proposal be approved."

Of the settlement, $10 million would go to SLCUSD to start an educational foundation, and $10 million would be set aside for an economic recovery plan. The remaining $65 million would be distributed to agencies across SLO County impacted by the closure proportional to the amount of tax revenue lost. The settlement would be paid out gradually over the nine-year closure period.

"I ask that you picture the students standing here, because I do," said Kim McGrath, assistant superintendent of educational services for the SLCUSD. "This loss will impact schools, teachers, and staff, effective programs and students, especially our most vulnerable students. Having to implement this type of loss immediately would be devastating."

Not all the stakeholders addressing the commission on Nov. 28 were opposed to the CPUC's tentative ruling. Among the groups in favor of most elements of the decision were Mothers for Peace and the Office of Ratepayer Advocates.

"The proposed decision is accurate," said Mila Buckner, representing the Office of Ratepayer Advocates. "Ratepayers should not be saddled with a $1.3 billion revenue increase."

Other high-profile environmental organizations expressed strong opposition to the direction of the CPUC, especially with regard to its rejection of PG&E's proposal to invest in clean energy procurement to replace Diablo Canyon's production. The CPUC suggested that new energy investments should be part of the "Integrated Resource Plans," a broader effort mandated by Senate Bill 350 to reduce greenhouse gas levels and expand renewable portfolios.

Well-known figures such as Natural Resources Defense Council attorney Ralph Cavanagh and David Freeman of Friends of the Earth spoke at the hearing to ask the commission to reconsider its decision.

"[Diablo Canyon] goes down, and those old gas plants will kick in and they will emit greenhouse gases, and lots of them," Freeman said. "You need to render a decision that reiterates your commitment to addressing climate change." Δ


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