County considers future without Diablo Canyon nuclear plant

Area should diversify economy to deal with possible closure, Supervisor Adam Hill says

ppemberton@thetribunenews.comOctober 16, 2013 

Diablo Canyon nuclear power plant


Without tax revenues from Diablo Canyon nuclear power plant, the San Luis Coastal Unified School District would lose more than 10 percent of its budget, the county would lose millions of dollars that could be used for roads and public safety, and the local economy would lose hundreds of high-paying jobs.

But as Diablo’s long-term future is tied to a license renewal that is currently up in the air, some local officials say the county will be fine in a post-nuclear future — as long as it plans for it.

“If they were to close tomorrow, it would be a devastating loss,” said county Supervisor Adam Hill, whose district includes Diablo Canyon, owned by PG&E. “Once a town has a company like this that has been such a part of it, it’s hard to undo.”

Yet, he added, the county is already planning for a future without the Avila Beach power plant, which began operating in 1985.

“The only way to plan for it is to have an economy that isn’t dependent on one company. We’ve put a lot of money and resources behind economic development,” he said.

Diablo Canyon’s two operating licenses expire in 2024 and 2025. While PG&E has applied to extend each license 20 years, the applications are on hold while PG&E studies a series of earthquake faults around the plant. PG&E officials have said the result of those studies could impact the utility’s decision to further pursue license renewal. PG&E already expects to spend $50 million over the next three years to meet Nuclear Regulatory Commission requirements in the wake of the 2011 Fukushima Daiichi plant disaster in Japan.

Earlier this week, the Board of Supervisors discussed the economic loss the county would incur without Diablo.

According to an economic impact study released by PG&E this summer, the plant is the largest private sector employer in the county with 1,483 employees and a payroll of $202.5 million. Meanwhile, taxes paid by the plant added more than $9 million to the San Luis Coastal Unified School District, accounting for 11.6 percent of its budget, and its $6.8 million paid to the county represents 1.8 percent of the general fund. Beyond that, current employees and retirees pump money into the local economy.

That economic impact, Hill said, has led some to say the county has become too reliant on Diablo Canyon for its financial well-being.

While Hill has applauded PG&E for its efforts in the past, he said the county needs to diversify and plan for a future without the plant — which is guaranteed to happen at some point since nuclear plants typically are designed to last 40 years.

“We need to have more going on,” he said.

Because of the money it gets from PG&E, the San Luis Coastal Unified School District is classified as a “basic aid” district, which means the district does not receive money based on enrollment but, rather, the property tax base. While districts statewide have struggled financially, San Luis Coastal has been better off because of that formula and the money from PG&E, said Ryan Pinkerton, assistant superintendent.    

In 2011, the district’s $80 million budget included more than $9 million from PG&E taxes.

“It would have a huge impact on us if it shut down tomorrow,” Pinkerton said.

While denial of the lease renewals would not cause immediate shutdown, Pinkerton said the district has to be prepared for such an abrupt loss of funding.

“That’s why we’ve kept a high reserve,” he said, adding that the district’s 10 percent reserve would last a year or two if Diablo were to shut down immediately.

The city of San Luis Obispo doesn’t benefit directly from PG&E taxes. But the city is home to many PG&E employees, who buy homes and other goods, Mayor Jan Marx said.

“The economic benefit comes from the head-of-household jobs,” she said, before cautioning that a plant accident could override those benefits. “Were everything to go wrong, there would be a negative impact.”

That’s the argument Mothers for Peace makes whenever PG&E talks about how it supports the community financially.

“PG&E does create a lot of jobs here,” said Jane Swanson, a spokeswoman for the group. “And they’re good jobs. But when you talk about the economic impact, you have to take into account the whole picture.”

While PG&E has touted its safety record, Mothers for Peace is concerned about the seismic faults that surround the plant. 

“Should you have one medium release — one bad day at Diablo Canyon — then all your economic advantages over the decade are going to be wiped out,” Swanson said.

In an opinion piece she wrote for The Tribune in July, Swanson said the economic impact Diablo clearly does create should be offset with the potential damage of a nuclear accident.

“PG&E tax monies that help support schools must be weighed against the health risks to children who live in the shadow of this nuclear plant,” she wrote. “Even under normal operating conditions, nuclear plants emit some radioactive materials.”

Meanwhile, PG&E continues to be a good neighbor, making contributions to local nonprofits and making more of the picturesque land surrounding the plant open to the public.

Still, Hill said, the county shouldn’t rely too much on Diablo.

“We wouldn’t want to put all of our chips in the wine industry either,” he said.

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