California regulators to decide fate of state's last nuke plant

Posted January 10, 2018 7:05 p.m. EST

Byline: By David R. Baker

A plan to close California's last atomic power plant, Diablo Canyon, in seven years could win the approval of state regulators Thursday, despite the efforts of pro-nuclear activists to save it.

The California Public Utilities Commission is expected to decide Thursday whether to shut down the plant when its two federal operating licenses expire in 2024 and 2025.

Perched on a seaside bluff near San Luis Obispo, Diablo Canyon has been a source of controversy since long before it opened in 1985. It has also been the state's single largest power plant, generating 9 percent of the state's electricity without producing greenhouse gases.

The plant's owner, Pacific Gas and Electric Co., in 2016 reached an agreement with several labor and environmental groups to close the plant, which the utility forecast would soon become uneconomical to run. The suprise move prompted a campaign to save Diablo Canyon by nuclear power advocates, who argued that closure would hurt California's fight against global warming.

If, however, the commission votes as expected, both sides of the debate could come away disappointed, albeit in very different ways.

The proposed decision would authorize PG&E to shut down the plant. But it would give PG&E less money than the utility wanted -- $222.6 million instead of $363.4 million -- to retain the plant's staff in the years before closure and retrain some of them for the decommissioning process. The commission's staff had initially proposed spending even less, just $171.8 million, but boosted the amount this week.

PG&E and the other parties to the agreement also proposed spending $85 million in the communities surrounding Diablo Canyon to help them prepare for the loss of tax dollars flowing from the plant. The proposed decision argues that only the Legislature -- and not the utilities commission -- can approve such a program.

Finally, PG&E's plans to start lining up replacement resources for the plant's power output would be folded into the utility's regular process for long-term power purchases, under the proposed decision.

PG&E and its allies therefore find themselves in an awkward position.

If a majority of the commission's five voting members approve the proposed decision, Diablo Canyon will close. But PG&E and its negotiating partners will have to come up with a new plan for closing it.

``It's vital that we have an effective employee retention program in place to retain our highly-skilled employees,'' PG&E spokesman Blair Jones said. ``We also think it's critical that we get an early start in replacing the output of (Diablo Canyon) with carbon-free energy resources, and believe that the local community needs economic transition and public services assistance.''

Some of the groups involved said the commission's staff appeared to ignore the hard work necessary to come up with a closure plan that could satisfy not only PG&E but labor unions and environmental groups as well.

``We're pretty dissatisfied, and think this misses a lot of opportunities,'' said Damon Moglen, senior adviser with Friends of the Earth, one of the groups behind the joint proposal. ``We're excited and proud to see they're going to affirm the decision to close Diablo Canyon, but they've missed huge opportunities to ensure that it's replaced with greenhouse gas-free resources, whereas they should be seizing that opportunity.''

Nuclear power advocates, meanwhile, consider the entire move misguided.

Pro-nuclear writer and activist Michael Shellenberger, founder of the Breakthrough Institute think tank, noted that California's greenhouse gas emissions rose after the sudden shut-down of the San Onofre Nuclear Generating Station north of San Diego in 2012.

State and, reportedly, federal investigators later looked into whether the utilities commission and its former president, Michael Peevey, struck an improper backroom deal with San Onofre's owners over the financial details of closing that plant. No charges were filed. Shellenberger on Wednesday sent a letter to the U.S. Attorney's Office for the Northern District of California urging that the investigation continue.

``A reasonable outside observer might look at that and say, 'Hey, we need to resolve the criminal investigation into the closure of one nuclear plant before they close another,' '' Shellenberger said Tuesday in an interview.