Diablo Canyon will close in 2025 — without SLO County’s $85 million settlement

In a landmark decision, the California Public Utilities Commission has decided PG&E can close Diablo Canyon nuclear power plant in 2025 — and San Luis Obispo County still won’t get its much-desired $85 million mitigation settlement to support the community through the shutdown.

PG&E will get more than expected for its employee retention and retraining program, however.

The commission unanimously voted to approve the application Thursday, saying the utility company presented a reasonable pathway toward a more energy-efficient future.

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“With this timing in mind, and this decision today, we chart a new energy future,” Commissioner Michael Picker said. “We agree the time has come.”

PG&E announced in June 2016 that it planned to close the state’s only remaining nuclear power plant by 2025 as part of a joint agreement with labor and environmental organizations.

The company agreed to increase investment in energy efficiency, renewable power and electricity storage to offset the power that will no longer be produced by the nuclear plant.

Commissioner Liane M. Randolph applauded the decision, saying it was a step forward for the state.

“It moves California away from the era of nuclear power and toward the era of zero-carbon renewable energy,” she said. “I will be voting in favor.”

PG&E spokesman Blair Jones said the decision “represented a significant milestone in the planning to meet California’s ambitious clean-energy vision.”

“We appreciate the CPUC’s thoughtful consideration of this complex issue and its approval of certain elements,” he said. “While we are disappointed that they did not approve the full employee retention program, as well as the community impact mitigation and energy efficiency programs, we are appreciative that the CPUC took the positive step to increase the amount of funding for employee retention beyond their original proposed decision.”

Jones added that the company will be meeting with labor, community and environmental groups in the coming days to discuss “next steps and the path forward.”

San Luis Obispo Mothers for Peace applauded the decision Thursday, noting that the commission also left room in its decision for the plant to close sooner than 2025 should “facts change in a manner that indicates Diablo Canyon should be retired earlier.”

“The commission made a well-reasoned and fair decision in this case,” Mothers for Peace attorney Sabrina Venskus said. “We are pleased that the commission acknowledged that earlier closure of Diablo may be warranted, and has built into its final decision the possibility of challenging the continued operation of Diablo well before the anticipated 2024/2025 shutdown.”

Settlement package

Despite some protest from local groups and agencies, the commission decided to uphold the recommendation of administrative Judge Peter Allen in November to not approve the settlement portion of PG&E’s application.

The commissioners all expressed sympathy for the local agencies who petitioned for a community impact program, but stressed that they felt the money for the program would be better sought through state legislation, and not from ratepayers.

“In the absence of legislation authorization, the community impact program is not approved,” Picker said.

In 2016, PG&E agreed to pay local cities, San Luis Coastal Unified School District and San Luis Obispo County an $85 million settlement package to support those agencies after the plant’s closure.

Of that, $75 million was expected to go to offset property tax losses by the school district, county and 69 other special districts, and $10 million would go for economic development efforts in the county and cities. The company also agreed to pay between $37.5 million and $62.5 million toward local emergency planning efforts until all spent fuel is in dry cask storage and the two nuclear reactors are fully decommissioned.

Allen, who over the past year heard testimony and received public comment on the proposal, said ratepayers should not be expected to foot the bill.

Allen said the commission would approve ratepayer funding for the community mitigation program if legislation required it to do so; PG&E could also choose to use shareholder funds to pay for the program.

SLO County disappointed

In general, San Luis Obispo County representatives and government officials expressed disappointment at the loss of the settlement Thursday.

“The county worked with a broad community and business coalition to develop a program that would help us protect local public health, safety and economic stability,” County Administrative Officer Wade Horton said. “This continues to be our top priority. We will continue collaborating with our partners to determine the best path forward.”

According to a release, the county and its partners now have two options, given the commission’s decision: They include working with the state of California to create legislation that specifically directs the commission to approve ratepayer funding for the mitigation program or hoping PG&E will pledge shareholder funds to support it.

Both Sen. Bill Monning, D-Carmel, and Assemblyman Jordan Cunningham, R-San Luis Obispo, said Thursday they were disappointed by the commission’s decision to not approved the settlement, and promised to pursue legislation that would help assist the community.

San Luis Obispo City Manager Derek Johnson, speaking on behalf of the coalition of cities that originally bargained for the settlement, said they will continue to search for a way to ease the transition into a post-Diablo economy.

“Despite the commission’s decision, members of the coalition of cities are determined to find a successful path forward,” he said. “On our own initiative, we will explore other options for mitigation — including working with PG&E — the legislature can take.”

The Economic Vitality Corp. said Thursday that the EVC will lead a collaboration to secure funding for an economic analysis and planning project that would help inform regional economic strategy and mitigate the impacts of the closure.

“Notwithstanding the missed monetary support from the joint proposal, and eventual loss of Diablo Canyon power plant and the economic benefits that come with it, the EVC and its Board of Directors are excited at the great potential that this situation brings to diversify our local economy,” EVC President and CEO Michael Manchak said.

Employee retention and retraining

In his proposed decision, Allen recommended chopping funding for PG&E’s proposed employee retention and retraining program almost in half, from $350 million to about $160 million.

The commission on Thursday approved a modified plan that would give the company $222 million, more than Allen’s recommendation: $211.3 million for employee retention and about $11 million for retraining of employees.

“Given the long transition time we have here ... (and) the severance package and increased amount allocated toward worker retention, I believe it is a reasonable and prudent package we are approving,” Commissioner Clifford Rechtschaffen said.

Kaytlyn Leslie: 805-781-7928, @kaytyleslie

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