The CEC, Governor’s Office, and CAISO presented an update this evening (8/12/2022) on the state of the current electric reliability needs in the face of climate change, supply chain delays, and other factors affecting the online dates of new generation, and energy storage projects, as a means to articulate the role that the Diablo Canyon Power Plant could have in supporting mid-term electric reliability and California’s clean energy transition.
As is well known, the facility is scheduled to cease operations in 2024 (Unit 1) and 2025 (Unit 2). PG&E came to this decision after much debate and consideration of the 2010 OTC regulations and the challenges of maintaining the facility beyond its license expiration, among other things.
The hearing began with Senator John Laird articulating his list of “major” concerns with Diablo continuing operations, namely: safety, who pays to keep the facility open, the sites capacity to store spent fuel beyond 2025 (since there is no viable place to send it), seismology, the OTC regulation, and the scheduled shutdown (if not as scheduled, then when?). Assemblyman Jordan Cunningham and Senator Monique Limon also joined but did not really offer much in the form of meaningful comments.
Senator Laird: “The key reason for this discussion today about the unexpected continuation of Diablo Canyon is inadequate planning. We can’t afford to make this mistake again. And so if we were to continue to operate Diablo Canyon…we must use the time provided by that extension to create a Marshall Plan to move us toward the state’s ambitious goal of zero carbon electricity by 2045.”
CEC Vice Chair, Commissioner Siva Gunda and CAISO EVP and COO Mark Rothleader, repeated what the anticipated potential capacity shortfalls are on the grid for the next few years. Adding that Diablo remaining could help from matters growing worse. Governor Newsom’s office was represented by soon-to-be outgoing Cabinet Secretary, Ana Matosantos.
- The presentations offered by this group provided no new information. Diablo Canyon Power Plant Workshop Presentation
No specific information on the legislative draft language was presented. But we do have some corrections from our last Weekly Report:
The proposed plan is a 10-year extension (not 5-year as we reported last week), with a $1.4 billion loan to PG&E to cover relicensing costs. PG&E will seek Federal money for these costs, if not, the loan is forgivable. The IOUs will purchase the power through the CAISO market. This would extend the operation of Unit 1 and Unit 2 through 2035.
See Newsom’s draft bill language. Matosantos said Diablo Canyon “continues to be an important resource as we transition away from fossil fuel generation to greater amounts of clean energy.” Again, there is no author or bill number as of this time, but we believe it will be a Budget trailer bill that will be used as the vehicle.
Many Challenges Remain
Renewing its license would require state, federal, and local approval and could require expensive inspections and upgrades. But nuclear power is a key part of the Biden Administration’s climate change strategy, and support for relicensing could come from a $6 billion federal program.
In addition to the above, the language says that it extends Diablo’s OTC compliance deadline until 2035 and deems prudent and in the public interest extensions for all other environmental permits.
Potential Problems
- The Loan – Will members of the Legislature really support this? A state-funded forgivable loan to a private company that could otherwise secure funding from private resources? Newsom is asking members who are up for re-election to “trust” the utility and to “trust” him. It might be a lot to ask.
- OTC and the Other Environmental Permits – It is possible that the regulation might have to be reopened in order to offer such a long-term extension. In addition, there is the matter of the other environmental permits – some of which are Federal permits.
- SB 1090 – Friends of the Earth reached an agreement with PG&E to shut down the two reactors at Diablo Canyon and replace them with renewable energy, efficiency, and energy storage.
- NRC – The Nuclear Regulatory Commission must approve the relicensing. It’s no easy task unless the Biden Administration “lends a hand” with the help of the DOE. This also assumes that PG&E is awarded some or all of the $6 billion up for grabs from the DOE funds that have been made available to “distressed” nuclear assets in the US.
The SB 1090 Deal
At the time, the Unions and environmental groups struck an agreement with utility PG&E to support workers and the local community as it planned to decommission its Diablo Canyon nuclear plants. The utility provided funds to the local community to offset lost tax revenue while supporting job retraining and compensation for workers.
Presumably, PG&E would be able to provide jobs by transitioning the plant into a renewables and storage facility.
Note: The state now is looking to create similar programs for the oil sector amid a structural shift taking place…
After the negotiations (2016), Governor Jerry Brown signed an economic assistance bill (SB 1090) for the communities living near Diablo Canyon, ensuring that while its two nuclear reactors moved toward decommissioning, local communities would be acknowledged — and given some financial help as the state makes its final move away from nuclear energy.
The 2016 Joint Proposal was a multi-party agreement that included PG&E, a group of environmental organizations (namely, Friends of the Earth, Natural Resources Defense Council, the Alliance for Nuclear Responsibility), the unions representing the workers at Diablo, and community groups.
So…. If Diablo Canyon’s reactors will not shut down formally in 2024 and 2025… What happens to the deal? Can it be “undone,” given that it constitutes a contractual agreement?
During the hearing, the The yak titʸu titʸu yak tiłhini Northern Chumash tribe (commonly referred to as the “ytt tribe”) is a small, non-federally recognized tribe in San Luis Obispo County spoke during public testimony.
In their statement, they said the negotiated deal was “invalid” as they had not been properly consulted, and now support Diablo’s continued operations.
Interestingly, the Tribe previously wrote to Newsom in January, stating that: “Our members are the documented descendants of the pre-contact villages that existed on lands commonly referred to as Diablo Lands, located north of Avila Beach. These unceded lands were taken from our tribe without consent, agreement or compensation, and should rightfully be returned to us.”
“Now that the future of the DCPP (Diablo Canyon Power Plant) and its surrounding lands is being debated, the state has a unique opportunity to correct a historical wrong that still affects our people today. Whether DCPP continues to operate or is decommissioned — our position regarding the future of the lands will not change.”
Public Testimony
The hearing, which began a little after 4 pm, concluded with just over 2. 5 hours of public testimony. 34 members of the public spoke in support of keeping Diablo open (5 were from out of state) – many of these were academics and a handful of PG&E employees. 56 spoke in favor of closing as had been agreed, most calling it a “broken promise” if it is allowed to operate beyond the negotiated agreement. Notable opposition: V. John White (Executive Director, Center for Energy Efficiency and Renewable Technologies), Nancy Rader (Executive Director, CalWEA) and David Weisman (Legislative Director of the Alliance for Nuclear Responsibility). Not speaking, but also opposing is the Natural Resources Defense Council.
Maintaining Diablo may not be as easy as Newsom wants it to be. He now has a very compressed timeline to get a bill finalized, supported with enough votes, and approved by 2 houses of the Legislature before midnight on August 31.
We anticipate that we will see a vehicle (bill) with more finalized language early this coming week. We will update you as we have more information.