Looking for help in a post-Diablo Canyon economy

Love it or hate it, the Diablo Canyon Nuclear Power Plant has been a financial boon for San Luis Obispo County, fueling the local economy by $1 billion a year in payroll and purchases, spin-off employment, property taxes, charitable donations and other perks.

That comes to an end in 2025, if Pacific Gas & Electric Co.’s proposal to close the plant moves forward as planned.

Other communities already have gone through the process and survived, as will we.

It won’t be easy. As The Tribune’s recent series of articles pointed out, when nuclear power plants close, small businesses often suffer, homes sit on the market and unemployment rises. In some cases, government services are reduced and homeowners see their property taxes soar (not an option in California, on account of Proposition 13).

Compared with smaller, more rural communities where plants have shut down, San Luis Obispo County is better prepared to absorb the financial hit. Our population is bigger, our economy more diverse and we have other large institutions—Cal Poly, Cuesta College, the California Men’s Colony, Atascadero State Hospital—that are here to stay. We also have nine years to plan for the shutdown; that’s far more notice than most communities have gotten.

Still, the loss of revenue from Diablo Canyon will be felt. San Luis Coastal Unified School District already anticipates closing schools and reducing staff, and leaders in business, retail and real estate are bracing for slowdowns in their sectors.

Based on our research of what worked—and didn’t work—in other communities, here are our recommendations as we move forward:

▪ Don’t get hung up conducting surveys, running focus groups and preparing elaborate economic development plans full of boilerplate suggestions. Organizations like the Chamber of Commerce and Economic Vitality Corp. already have good ideas. Don’t waste time or money on fancy reports that will sit on the shelf.

▪ Do lobby for economic development funds that can be used to offer incentives—such as help with infrastructure— and low-interest loans to help businesses grow (more on this later).

▪ Continue exploring the possibility of using Diablo Canyon’s desalination plant to supply water to South County. This was presented as a viable plan before PG&E announced the plant’s closure, but the idea was quickly dismissed once the decision was made. Frankly, we never got a good explanation as to why.

▪ Network with other “nuclear communities” that have lost power plants, especially on legislation that could be mutually beneficial. For example, a federal bill has been introduced that would compensate regions that continue to store spent nuclear fuel after a plant has closed. As currently written, San Luis Obispo County would not benefit, but it’s still worth supporting the bill as it could establish a precedent for providing aid to communities that serve as de-facto long-term nuclear storage sites.

PG&E, to its credit, has taken steps to help smooth the transition to a post-Diablo economy.

It has offered $49.5 million to local government agencies to make up for tax revenue losses that will occur as the plant is depreciated. It’s allocated $350 million to employee retention, retraining and severance. It’s also made a verbal commitment to continue its current level of contributions to nonprofits, through 2025.

What’s missing, though, is a commitment to financial recovery and development. PG&E’s packed is generous, but there will still be a $1 billion hole in the economy when Diablo shuts down.

Unfortunately, the federal government has no assistance program for communities that lose a nuclear power plant. The Nuclear Regulatory Commission oversees the dismantling of nuclear plants and the storage of the spent radioactive fuel that’s left behind, but it does not get involved in economic recovery efforts.

That’s wrong.

Assistance is available to coal communities, for example. Isn’t it only fair that similar opportunities be open to communities left economically devastated by the closure of a nuclear power plant?

San Luis Obispo County may not require that level of help, but smaller communities that relied even more heavily on nuclear power revenue should not be left to die a slow economic death.

We strongly urge legislators with nuclear plants in their districts – are you listening, Justin Fareed and Salud Carbajal? – to unite behind comprehensive legislation that recognizes the challenges communities face when nuclear plants shut down and allocates resources to their recovery.

That, however, will take time. Meanwhile, communities like San Luis Obispo are left to their own devices. While there may be other sources of economic aid – a few communities have secured state and federal grants, for example – power plant owners are the most likely source of post-closure assistance.

As reported in The Tribune, Entergy Corp. allocated $10 million to the state of Vermont to be spent on economic development projects in Windham County, where the shuttered Vermont Yankee plant is closed.

The fund has provided incentives and loans to businesses looking to expand or to settle in Windham County, plus grants to nonprofits for job training and marketing assistance for small businesses. The program hasn’t been without flaws; there were complaints, for example, that too much money went to grants and not enough into revolving loans.

We believe, though, that the idea is sound. If properly designed and managed, it could help San Luis Obispo County compete in the fierce race for the types of companies that generate high-paying jobs, particularly in the high-tech sector.

Here’s our pitch: We ask PG&E, which has already agreed to continue its charitable giving through 2025, to also support economic development efforts. San Luis Obispo County should pitch in as well; in fact, how about dedicating your portion of the $49.5 million to economic development?

We aren’t going to pull a dollar amount out of the air. We call on the business community—which has not been as proactive as the county or the school district in plotting its post-Diablo future—to develop a program and come up with a price tag.

One caveat: We have plenty of entry-level jobs in retail and service industries. We urge following Vermont’s lead by specifying that economic development funds can only be used to develop high-paying positions. (Again, we call on the business community to set the parameters.)

PG&E has no legal obligation to bail us out. Yet as a company that will continue to do business on the Central Coast for many years to come, it’s in PG&E’s best interests to see the local economy thrive after Diablo Canyon shuts its doors.

This is one of those times when a small investment could pay huge dividends down the road. We respectfully ask PG&E to consider a major financial commitment to help ensure our community’s long-term economic health.

This story was originally published September 2, 2016 at 5:59 PM with the headline "Looking for help in a post-Diablo Canyon economy."