Loss of $85 million in Diablo deal would be ‘painful’ for SLO County, officials say

Many officials said they were disappointed Wednesday by news that San Luis Obispo County cities and government agencies might not receive $85 million in economic support once Diablo Canyon closes.

Here are some of the reactions to California Public Utilities Commission administrative judge Peter Allen’s recommendation that the commission not approve the settlement portion of PG&E’s closure application, saying ratepayers should not be expected to foot the bill.

▪  Third District county Supervisor Adam Hill said the Board of Supervisors will likely begin discussing its options next week, noting the possibility of approaching the Legislature for the money.

“It’s very disappointing, but I don’t think we are out of possibilities here,” he said. “I think we still have some very important arguments to make.”

If that is unsuccessful, Hill said he didn’t think the loss of the mitigation money would devastate the community, “but it is going to be painful.”

▪  Eric Prater, superintendent of the San Luis Coastal Unified School District — which was expected to be the most impacted by the loss of property taxes from Diablo’s closure — wrote in a blog post Wednesday that the district would “explore all potential legal and political options at our disposal.”

“Regardless of how this ultimately plays out with the CPUC, I am confident we will survive this ordeal by working together,” he wrote. “We will continue to make the best decisions for our district and the students we serve.”

When reached for comment, Prater said he organized a special committee last year to examine the district’s options if the district could not find an alternate source of money to replace Diablo Canyon’s property tax revenue. That committee is expected to release the results of its study Dec. 12.

Though he is not aware of the final results of the report, Prater said he expected it would include suggestions for how to cut costs or increase revenue such as increasing class sizes, eliminating programs or even closing schools.

Prater said though it is a difficult situation, the district will continue to work to provide an exceptional education to its students.

“Even though it looks like we are not getting the money, we certainly have reserves, and this is an opportunity to roll up our sleeves and dig in,” he said. “We have a really great district, and our students are doing exceptional things. The unfortunate thing is this is one of those things public schools have to endure, when funding dries up. We just have to come together and rally.”

▪  Democratic Rep. Salud Carbajal, who represents the 24th Congressional District including San Luis Obispo County, called the recommendation “disheartening.”

“However, I expect the commission to fully weigh how their forthcoming decision will impact the Central Coast, as well as consider how our community has provided a steady, reliable source of energy in the state of California for decades,” he said in a statement. “I will continue to partner with the community in order achieve the goals of the joint agreement and to keep our local economy thriving as the Diablo Canyon decommissioning moves forward.”

▪  State Assemblyman Jordan Cunningham said he was concerned about the loss of $85 million in community impact funds, as well as the reduction in funds for employee retention and retraining.

“I’m going to be proposing some remedy or maybe a number of remedies,” Cunningham said.

If it turns out that passing those costs on to ratepayers is not authorized by law — which is what the administrative law judge concluded — Cunningham said he’d be willing to take that up in the Legislature.

“If that’s the case and that’s something that could be authorized with specific legislation, we could pursue that,” he said.

▪  State Sen. Bill Monning said he would “work with all stakeholders to assess the implications of the proposed decision.”

“It is troubling to learn that Judge Allen’s ruling does not recommend $85 million be allocated to the Community Impacts Mitigation Program,” he said. “The economy of the greater San Luis Obispo region will be dramatically impacted by the decommissioning of the Diablo Canyon Power Plant, and I will continue to review the decision and the impacts associated with it, understanding that the full California Public Utilities Commission will hear this issue.”

▪  Rochelle Becker of the Alliance for Nuclear Responsibility said she is pleased with one aspect of the decision: The judge recommended reducing the amount ratepayers will have to pay for PG&E’s relicensing efforts.

The utility had requested reimbursement of $53 million for relicensing efforts completed before it decided to shutter the plant. The judge recommended reducing that amount to $18 million.

“We feel very good about prevailing on license renewal,” Becker said.

▪  San Luis Obispo Mothers for Peace spokeswoman Jane Swanson applauded the decision to restrict the settlement agreement.

“This proposed decision has merit in that it places limits on the ability of PG&E to use ratepayer money to bail out the corporation for expenses that the share-holders should be responsible for,” she said. “But it is disappointing because it fails to implement important measures to protect the environment.”

▪  Assistant County Administrative Officer Guy Savage said the county was working with its community partners to address the loss.

“This is disappointing, in part because our community overwhelmingly supported this effort to safeguard local public health, safety and economic stability,” Savage said. “As we have said before, our community will suffer if we do nothing to ease the impacts of the plant’s closure. However, we are not giving up and are working with our community partners to develop the best path forward.”

▪  San Luis Obispo City Manager Derek Johnson said: “We are stunned and disappointed by CPUC staff’s recommendation to deny our PG&E/Diablo Canyon Power Plant closure settlement agreement. Instead of supporting the proposed $85 million to help our communities manage the grave economic impacts of plant closure, the CPUC is rejecting the agreement in its entirety. Coalition members will continue to work together to evaluate our options before the scheduled Nov. 28 CPUC hearing.”

▪  Pismo Beach City Manager Jim Lewis said he was frustrated with the judge’s decision.

“Why should the costs be expected to be born just by the community, which already bore the risks of having the plant for years, and not by the ones who benefited from the energy for years?” Lewis said.

Lewis also noted that the judge’s assertion that ratepayers should not pay for government services was beside the fact, saying the money for both the settlement and the employee program would go to helping people, not bureaucracy.

“This is an issue of the continued safety of the plant and its safe shutdown,” he said, “not government services. It’s also about people and their jobs and the economic sustainability of this area.”

This story was originally published November 8, 2017 at 2:22 PM with the headline "Loss of $85 million in Diablo deal would be ‘painful’ for SLO County, officials say."