State regulators gave final approval Thursday to a plan to shutter the Diablo Canyon nuclear power plant, a decision that also clears the way for higher monthly power bills for PG&E customers.
The state Public Utilities Commission’s decision to close Diablo Canyon would mark the end of more than a half-century of nuclear power generation in the state and could serve as a blueprint for closing other U.S. nuclear facilities.
“The plant is no longer economic, and the owner, PG&E, has asked to close it down,” PUC President Michael Picker said Thursday.
The two 1,100-megawatt reactors at Diablo Canyon, which began operation in 1973, produce nearly 9 percent of California’s electricity and provide enough power for 3 million people a year.
San Francisco-based PG&E intends to phase out the Diablo Canyon reactors when their operating licenses with the U.S. Nuclear Regulatory Commission expire. The license for Unit 1 expires in November 2024, and the license for Unit 2 expires in August 2025.
However, it appears PG&E customers will have to help bankroll the retirement of the two reactors at the plant.
PG&E spokesperson Blair Jones said Thursday, “We will need to review this to determine the new rate impact, but it will be significantly less than the original request.”
The PUC decision authorized PG&E to recover in customer monthly rates $241.2 million in costs associated with retiring the plant, which is perched on a scenic stretch of the central California coast near Avila Beach, and not far from seismic zones, including the San Andreas Fault.
These recovery costs to be recouped from ratepayers include: $211.3 million to retain PG&E employees until the power plant is scheduled to close; $11.3 million to retrain workers; and $18.6 million for Diablo Canyon license renewal expenses incurred by PG&E.
“We have laid out a fair and reasonable pathway to clean power replacement, as well as a program for retaining skilled workers over the course of the next seven years,” Commissioner Picker said.
PG&E has said it believes the “long-term” impacts of the plant’s shutdown wouldn’t cause customer bills to increase, an assertion it repeated on Thursday.
But in October 2016, PG&E sketched out plans for short-term increases in monthly bills.
To replace the lost nuclear power, PG&E plans to expand energy efficiency, its use of renewable energy, and energy storage that would exceed current state mandates. California’s landmark 2015 energy law requires that power companies procure 50 percent of their electricity from renewable sources, such as solar or wind, by 2030.
“We looked hard at all the arguments, and the commission agrees that the time has come” for Diablo Canyon to be retired, Picker said.
PG&E said it would meet with labor, community and environmental allies about the decision and what might be the next steps. The utility said it was disappointed that the PUC did not approve PG&E’s original plans for full employee retention.
“The Diablo Canyon Power Plant joint proposal represented a significant milestone in the planning to meet California’s ambitious clean energy vision,” PG&E said. “We appreciate the CPUC’s thoughtful consideration of this complex issue and its approval of certain elements.”
