PG&E is now offering $85 million to help the local economy recover from the loss of the Diablo Canyon nuclear power plant — a more palatable and realistic settlement proposal than the $49.5 million originally on the table.
Will the settlement please everyone? Of course not. There are many in the community who remain convinced that PG&E is making a huge mistake in closing Diablo Canyon.
Nonetheless, the company has made its decision, and under the circumstances, it’s incumbent on local leaders in business, government and nonprofit realms to protect community interests as much as possible so that we can avoid the severe economic hardships that other regions experienced when they lost nuclear power plants.
Both PG&E and the local government agencies that challenged the original offer deserve credit for reaching what appears to be a fair compromise that puts nearly $35 million more on the table — not counting the $32.5 million to $62.5 million for emergency efforts over the next 15 to 25 years.
It’s significant, too, that the settlement amount could be adjusted upward later, if a state-mandated economic impact report finds that financial losses will be even greater than anticipated.
Still, let’s not kid ourselves. Even with the additional dollars, the local economy will struggle to replace the high-paying jobs and tax revenue that will be lost when California’s last remaining nuclear power plant shuts down in 2025.
The settlement will, however, buy us time to adjust to the new reality and to step up efforts to strengthen and diversify the economy now.
Under the revised proposal, PG&E is allocating $75 million to offset property tax declines that will occur as the plant depreciates over the next nine years. That’s especially good news for the San Luis Coastal Unified School District, which is most heavily dependent on Diablo Canyon tax dollars.
The settlement package — which will be funded by ratepayers and, as such, must be approved by the state Public Utilities Commission — also includes $10 million in economic development aid that will be distributed to the county and the individual cities. While $10 million is a relatively small amount compared to the total package, this is a significant win for the community, as there were no economic development dollars included in the original offer.
PG&E was wise to change its mind. We’ve reported what’s happened in other small and mid-size communities that lost nuclear plants. Property values fell, businesses closed, buildings sat empty, populations declined and government services were cut drastically.
San Luis Obispo County is fortunate to have a diverse economy that should better withstand the loss of its nuclear power plant, but there will still be a gaping hole in the economy when Diablo Canyon’s high-paying jobs disappear.
The PG&E economic development funds will help; the revenue could potentially be used for revolving loans for businesses that want to expand or open; for necessary infrastructure improvements needed to attract investors; for job retention for employers considering relocating out of the area; and for grants for workforce development and training.
Again, it’s no panacea — tough times are ahead.
But what’s on the table now is a step in the right direction and for that, we commend PG&E and we congratulate local government agencies and elected officials for their vigilance.
By pushing back, they’re not only benefiting San Luis Obispo County, they’re also serving as an example for communities around the nation that are faced with similar circumstances.