The PG&E filing for Chapter 11 bankruptcy protection raises questions for San Luis Obispo County residents and all Californians because of the schedule closure of the Diablo Canyon nuclear power plant in 2024. In addition, all PG&E customers and ratepayers have an interest in how PG&E restructures and emerges from bankruptcy in the face of its presumed liability for the recent massive wildfire damages in Northern California.
The enactment of Senate Bill 1090, which I jointly authored with Assemblyman Jordan Cunningham, along with the California Public Utilities Commission’s unanimous approval of the measure, means SLO County residents and the broader region should be protected in the funding settlement as it relates to the community impact mitigation settlement of $85 million and employee retention funds. According to the federal Nuclear Regulatory Commission, it considers the decommissioning and spent fuel management funds at Diablo Canyon to be independent trusts that are not within the scope of Chapter 11 restructuring.
What is unknown, however, is a precise measurement of PG&E’s liability from the loss of lives and property in the 2017 and 2018 California wildfires. The utility seeks bankruptcy protection because it is underinsured to pay the projected liabilities, which could be in excess of $30 billion.
The state, the PUC and the ratepayers all are interested in the continued safety and reliability of our electric system; maintenance of infrastructure, including reduction of wildfire hazards; and the integrity of the Diablo Canyon nuclear facility operations until its closure.
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To this end, Gov. Gavin Newsom has established a blue ribbon commission to evaluate PG&E’s wildfire mitigation and safe operations protocols and the state Senate has established a working group that places ratepayer/customer safety as a top priority.
It has been suggested that the state of California should take over operations of PG&E. This is premature and not necessarily in the best interest of ratepayers and taxpayers.
Should the state take over operations of a public utility and assume its current and future debt? If the state were to face an immediate $30 billion liability, it would devastate the general fund and we would not be able to support the services that Californians depend on most: education, healthcare and public safety.
There will be no shortage of recommendations about how PG&E should settle its debts in bankruptcy and reorganization. For the state of California, it is essential that the Legislature and the governor mitigate the consequences of utility instability. This means protecting victims of the fires; protecting the safety/reliability of our electrical system; protecting all ratepayers, especially low income energy customers; and ensuring we can continue to invest in clean energy.
We must also continue to invest resources in fire suppression and emergency response, as well as continue to take proactive, preventive measures, such as dead tree and brush removal, improved emergency warning and early response, and development of fortified energy grid and telecommunications equipment.
As the courts, the PUC, the Legislature and the governor move forward to evaluate and respond to the PG&E bankruptcy filing, the voice of concerned citizens will be crucial to advance the interests of ratepayers and at-risk communities.
The voices of SLO County residents will continue to be among the most important. The risk of a Diablo Canyon accident and its prevention must remain at the top of our list of concerns as California determines how to best respond to the PG&E financial crisis.
State Sen. Bill Monning represents the 17th District, which includes all of San Luis Obispo and Santa Cruz counties and portions of Monterey and Santa Clara counties.