PG&E decision on Diablo relicensing could hinge on seismic retrofit

Pursuit of relicensing will depend on findings of seismic retrofit studies; county supervisors discuss impacts if facility were to close

dsneed@thetribunenews.comOctober 15, 2013 

Diablo Canyon nuclear power plant


Faced with uncertainty over the future of nuclear power in general and the potential cost of seismic retrofitting at Diablo Canyon, county supervisors spent several hours Tuesday grappling with the economic impacts if the plant closed.

Pacific Gas & Electric officials have said the cost of any federally-required seismic retrofitting would be a main factor in their decision whether to reopen its application to renew its license

“After the studies are complete, we’ll study the data and make a decision on license renewal,” spokesman Tom Cuddy said after a San Luis Obispo County Board of Supervisors meeting Tuesday.

Diablo Canyon’s two operating licenses expire in 2024 and 2025. The utility has applied with the Nuclear Regulatory Commission to extend those licenses by 20 years each.

However, those applications are on hold while PG&E studies the network of earthquake faults surrounding the plant. Those studies could be complete by the end of the year and the utility will decide sometime next year whether to pursue relicensing, Cuddy said.

With Diablo Canyon’s longterm presence in the county unclear, supervisors wanted to take a look at the consequences if one of the region’s major economic drivers closed. Everyone who participated in the discussion, even critics of nuclear power, agreed that the plant’s loss would have a profound impact.

The economic study by PG&E and Cal Poly concluded that the plant annually contributes $919.8 million into the economy of the San Luis Obispo County and northern Santa Barbara County, providing high-paying jobs that average $136,561 per year for workers at the plant. Altogether, Diablo Canyon adds 1,543 direct jobs and 3,358 indirect jobs to the local economy and pays $25 million in property taxes.

But Diablo Canyon faces several uncertainties that could affect its decision on whether to seek a license renewal. Chief among them are earthquake retrofitting that could be required by the Nuclear Regulatory Commission in the aftermath of the 2011 Fukushima Daiichi plant disaster in Japan.

PG&E also is doing its own analysis to update its understanding of earthquake fault lines around the plant.

Meanwhile, state water officials are reviewing possible requirements that Diablo Canyon make costly modifications to its cooling water system to reduce the damage it does to the ocean by discharging billions of gallons of heated water a day into the ocean that kills fish and crab larvae.

Tuesday’s board of supervisors’ discussion also was prompted in part by recent announcements that several nuclear power plants would be closing sooner than expected.

The most important was the decision earlier this year to decommission the state’s only other functioning nuclear power plant, San Onofre in Southern California. That plant had been shut down for an extended period due to flaws in its steam generators and will not be restarted.

Other nuclear power plants, including the Vermont Yankee plant, are scheduled for early shutdown due to a variety of economic factors and the need for expensive safety upgrades.

One factor facing nuclear power in general is reduced wholesale prices of electricity caused by cheap natural gas prices.

Supervisors agreed that the best way to cushion the financial impact, if the plant were to close, is to have a vibrant diversified economy. The county works with the Economic Vitality Corporation to promote economic development.

“The only way you can plan for a major loss of jobs is to strengthen your local economy now,” said Supervisor Adam Hill whose district includes Diablo Canyon.

Should the plant close, the county would use a variety of federal funding sources to try to replace the lost jobs, said Emily Jackson with the county administrator’s office. This effort would focus on areas of the county’s economy that have already created significant numbers of jobs including construction, health services, business startups, specialized manufacturing and the county’s tourism industry.

Supervisors also directed staff to look into the possibility of increasing the county’s funding reserves as a way to cushion the effect of the plant’s closure and to research if there is a way to put a price tag on the fact that highly radioactive spent reactor fuel will be stored at Diablo Canyon for the foreseeable future.

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