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$85 million Diablo Canyon settlement is dead — what does SLO County do now?

Now that the expected $85 million settlement for community impact mitigation is dead, SLO County agencies have to figure out how they will survive through the impending closure of Diablo Canyon nuclear power plant.

Top of the list for where they could find help? State legislation or PG&E shareholders.

“We’re trying to keep our heads up here,” San Luis Coastal Unified School District Superintendent Eric Prater said. “The remarks by the commission left room for some options we can pursue. We’re hoping members of the state Assembly could come together to pick the ball up now.”

Since November 2016, local groups — including the school district, a coalition of local cities and the county — have been touting the settlement with PG&E that would help support the region through what promises to be a massive economic shift.

Diablo Canyon, after all, has an estimated $1 billion impact on the local economy, and is the county’s largest private industry employer with nearly 1,500 workers.

PG&E, which operates the plant, is also the largest taxpayer in the county, representing about 5.88 percent of the county’s total budget, according to documents filed with the California Public Utilities Commission. (For comparison, the next largest taxpayer accounts for 0.3 percent of the budget.)

To help mitigate the huge impact the closure will have, PG&E promised $75 million to offset property tax losses by the school district, county and 69 other special districts and $10 million for economic development efforts in the county and cities.

The California Public Utilities Commission rejected that agreement on Thursday, saying ratepayers should not foot the bill for what is essentially a tax replacement plan.

So that begs the question: “What now?”

According to the county, there are two options: Work with the state of California to create legislation that specifically directs the commission to approve ratepayer funding for the mitigation program, or hope PG&E can pledge shareholder funds to support it.

“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 Thursday. “This continues to be our top priority. We will continue collaborating with our partners to determine the best path forward.”

Soon after the decision, Sen. Bill Monning and Assemblyman Jordan Cunningham promised to pursue legislation that would help assist the community.

“San Luis Obispo County agreed to house the Diablo Canyon nuclear power plant, which provides power to more than 3 million people and benefits Californians despite the negative repercussions,” Monning said. “The county and its residents deserve to be compensated for the impacts they will incur when the plant shuts down.”

“I’ll be working with Sen. Monning and community leaders to find ways to mitigate the impact of the PUC’s unfortunate decision today,” Cunningham said.

State legislation to allow PG&E to collect the money from ratepayers for a Diablo Canyon settlement wouldn’t be without precedent.

In 1997, San Luis Obispo County and the San Luis Coastal Unified School District sought protections against the possibility that Diablo Canyon-related property taxes could decrease because of electric restructuring and changes in rates, and asked for the two agencies to be made whole if property taxes dropped.

In that case, the California Public Utilities Commission also denied the proposal to have ratepayers pay what amounted to a settlement, but were later directed by state legislature to allow PG&E to collect up to $10 million from ratepayers to pay for a potential settlement.

As to the second option — having shareholders, and not ratepayers, foot the bill for a settlement — the process and precedence is less clear.

County CAO Horton said to his knowledge, a decision to have shareholders fund a community impact program would be entirely up to PG&E.

“Is there a way to compel them? To my understanding, no,” he said.

When asked if the company would support legislative efforts to support a local impact mitigation program, or if the company would consider having shareholders pay the sum, PG&E spokesman Blair Jones said only that the company will be meeting with labor, community and environmental groups in the coming days to discuss “next steps and the path forward.”

Kaytlyn Leslie: 805-781-7928, @kaytyleslie

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