California regulators vote unanimously to close state's last nuclear plant

Byline: By David R. Baker

California's last nuclear power plant -- Diablo Canyon, whose contentious birth helped shape the modern environmental movement -- will close in 2025, state utility regulators decided Thursday.

The unanimous vote by the California Public Utilities Commission will likely bring an end to nuclear energy's long history in the state. State law forbids building more nuclear plants in California until the federal government creates a long-term solution for dealing with their waste, a goal that remains elusive despite decades of effort.

The decision comes even as California ramps up its fight against global warming. Owned by Pacific Gas and Electric Co., Diablo Canyon is the state's largest power plant, supplying 9 percent of California's electricity while producing no greenhouse gases.

``With this decision, we chart a new energy future by phasing out nuclear power here in California,'' said commission President Michael Picker. ``We've looked hard at all the arguments, and we agree the time has come.''

Diablo Canyon's planned shut-down is the latest blow to America's nuclear power industry, beset by plant closures and the cancellation of proposed reactors.

It will also hit San Luis Obispo County hard.

With 1,500 employees, many of them highly skilled, Diablo Canyon is the county's fourth-largest employer, pumping an estimated $1 billion per year into the local economy. PG&E had proposed spending $85 million in the surrounding communities over the next seven years to help wean them off the loss of tax revenue. But the commission rejected that idea, saying it would require action by the state Legislature.

``These are great jobs,'' said Wade Horton, the county's chief administrative officer. ``We're very concerned.''

PG&E will, however, be able to shift onto its customers $241.2 million in costs related to shutting down the plant, including retaining its staff. That equals roughly $45 per PG&E customer, but many factors could affect whether some or all of that amount appears on bills. The company, based in San Francisco, did not have an estimate Thursday for the potential impact on ratepayers.

PG&E opened Diablo Canyon in 1985 on a coastal bluff near San Luis Obispo despite fierce opposition from environmentalists convinced that the plant's proximity to fault lines-- one of them just 650 yards away -- posed a lethal risk. Waves of demonstrations, including one addressed by a young Gov. Jerry Brown, failed to block the plant.

Three decades later, radical changes in California's electricity market, including the rapid rise of renewable power, threaten to make the plant uneconomical to run. PG&E in 2016 reached an agreement with environmental groups and labor unions to retire Diablo Canyon when its two federal operating licenses expire in 2024 and 2025 and replace its output with renewable power and energy efficiency measures.

While the utilities commission agreed with the larger goal of closing the plant, it jettisoned much of the agreement hammered out among PG&E and its negotiating partners.

The commission's decision gave PG&E less money -- $222.6 million instead of $363.4 million -- to retain Diablo Canyon's employees and retrain some of them for the decommissioning process. It provided no firm requirement that the plant's output be replaced with carbon-free resources.

``The decision undermines what should have been an inspiring model for the rest of the country and the world on best practices for planning for the closure of giant, expensive, and inflexible nuclear plants,'' said Ralph Cavanagh, co-director of the energy program at the Natural Resources Defense Council, one of the groups that negotiated the closure agreement with PG&E.

The commission, he said, did not seem to appreciate the amount of thought the negotiating partners, some of which had a long history of fighting PG&E, put into the details of their agreement.

``It was a joint proposal by numerous parties that have never agreed on anything,'' Cavanagh said.

Several commissioners said Thursday that while they wanted Diablo's output replaced with carbon-free energy sources, those purchases should be handled in a separate proceeding already created for long-term power purchases. They also sympathized with the potential economic impact on surrounding communities. But Picker said the kind of community spending program that PG&E had proposed would need approval from the legislature rather than the commission, which governs utility rates.

``Utility rates should be used to provide utility services and not government services, no matter how beneficial those services might be,'' he said.

Horton said the county would consider pursuing legislation to approve the program, or one like it.

PG&E, meanwhile, said it would meet with its partners to decide how to proceed.

``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,'' PG&E spokesman Blair Jones said.

The commission gave PG&E $18.6 million to cover expenses the utility incurred while exploring the possibility of renewing Diablo Canyon's federal operating licenses.

While anti-nuclear demonstrators mobilized against Diablo Canyon's construction and commissioning, pro-nuclear advocates in recent years organized to keep it open.

They saw the plant as essential to California's effort to combat climate change. California's greenhouse gas emissions, which have fallen almost every year since peaking in 2004, rose in 2012 following the abrupt closure of the San Onofre Nuclear Generating Station north of San Diego. (That year's drought, which cut the output of hydroelectric dams, also helped push up emissions.)

But proponents of nuclear power were unable to convince state legislators to get involved, said Michael Shellenberger, a pro-nuclear writer and activist in Berkeley.

``It's a brick wall,'' said Shellenberger, president of the Environmental Progress non-profit group, whose experience trying to save Diablo inspired him to run for governor. ``I tried to meet with everyone I could, Democrats and Republicans, and it was useless. There was no interest.''