Posted on January 27, 2017

Diablo Canyon Joint Proposal Reaches Next Milestone in State’s Review Process

AVILA BEACH – As a joint proposal concerning the future of PG&E’s Diablo Canyon Power Plant (DCPP) continues to move through the state’s review process, the energy company stated that it is looking forward to carefully reviewing and replying to written responses on the agreement that various groups submitted today to the California Public Utilities Commission (CPUC) for consideration.

Under the established review schedule for the joint proposal, groups participating in the state’s review process had until Jan. 27, 2017, to submit their responses to the CPUC. PG&E and the joint proposal parties will reply by March 17, 2017.

If approved by the CPUC, the joint proposal would increase investment in energy efficiency and renewables beyond current state mandates, while phasing out PG&E’s production of nuclear power in California by 2025.

“The parties behind the joint proposal, including PG&E, labor and some of the nation’s leading environmental groups, believe it represents the most appropriate and responsible path forward. It supports the state’s energy vision and ensures an orderly transition from nuclear power to other GHG-free resources, while supporting our local employees and community. We look forward to reviewing and replying to the responses submitted today, and will continue our dialogue with stakeholders as the joint proposal continues to move through the CPUC review process,” said PG&E’s Geisha Williams, who currently serves as President, Electric, and will assume a new role as CEO and President of PG&E Corporation on March 1.

In line with PG&E’s commitment to ensuring an open and transparent review process, last year PG&E hosted a workshop for groups who formally engage in the CPUC intervenor process, as well as four information meetings in which PG&E provided an opportunity for the public to ask questions and to comment on the joint proposal. This feedback was included with the filing of the proposal in Aug. 2016.

About the Diablo Canyon Joint Proposal

California’s energy landscape is changing dramatically. State policies that focus on renewables and energy efficiency, coupled with projected lower customer electricity demand in the future, will result in a significant reduction in the need for the electricity produced by DCPP past 2025.

Reflecting this change, PG&E partnered with labor and leading environmental organizations on a joint proposal that would increase investment in energy efficiency and renewables while retiring DCPP at the end of its current Nuclear Regulatory Commission (NRC) operating licenses, which expire in 2024 and 2025.

The parties to the joint proposal are PG&E, International Brotherhood of Electrical Workers Local 1245, Coalition of California Utility Employees, Friends of the Earth, Natural Resources Defense Council, Environment California and Alliance for Nuclear Responsibility.

The proposal includes a PG&E commitment to a 55 percent renewable energy target in 2031, an unprecedented voluntary commitment by a major U.S. energy company.

Recognizing that the procurement, construction and implementation of a GHG-free portfolio of energy efficiency and renewables will take years, the joint parties agreed to support PG&E in obtaining the state approvals needed to operate DCPP to the expiration of its current NRC operating licenses.

This avoided an early shutdown of DCPP and associated negative economic and social impacts, including replacing the plant’s output required to meet customer demand with non-GHG-free resources.

As part of the joint proposal, PG&E immediately ceased any efforts on its part to renew the DCPP operating licenses, and asked the NRC to suspend consideration of the pending DCPP license renewal application. PG&E will withdraw its license renewal application upon CPUC approval of the joint proposal application.

PG&E does not believe long-term customer rates will increase as a result of the joint proposal.

Commitment to Employees and the Community

The parties to the joint proposal are committed to supporting a successful transition for DCPP employees and the greater San Luis Obispo community.

Accordingly, $85 million has been proposed in support of a community transition plan. PG&E, along with San Luis Obispo County, several local cities and the San Luis Coastal Unified School District announced details of the revised community impact mitigation program last November.

PG&E’s proposed DCPP employee program will provide, among other things, incentives to retain employees during the remaining operating years of the plant, a retraining and development program to facilitate redeployment of a portion of plant personnel to the decommissioning project or other positions within the company, and severance payments upon the completion of employment.

Agreement Contingencies

The joint proposal is contingent on a number of regulatory actions, including:

  • Approval by the CPUC of the proposed plan for replacement of Diablo Canyon with greenhouse gas-free resources. Any resource procurement PG&E makes will be subject to a non-bypassable cost allocation mechanism that ensures all users of PG&E’s grid pay a fair share of the costs.
  • CPUC confirmation that PG&E’s investment in DCPP will be recovered by the time the plant closes in 2025.
  • CPUC approval of cost recovery for appropriate employee and community transition benefits.

Additional Information

The joint proposal can be read in its entirety here.

The Aug. 11, 2016, joint proposal application filed at the CPUC can be found here.

PG&E’s Sept. 26, 2016, response to public comments on the joint proposal can be read here.

Additional information prepared by M.J. Bradley & Associates, a strategic environmental consulting firm, on the joint proposal can be accessed here.

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