PG&E responds to public comments on Diablo Canyon joint proposal

Source: PG&E

PG&E filed with the CPUC its response to public comments on a joint proposal to increase investment in energy efficiency, renewables and storage beyond current state mandates while phasing out PG&E's production of nuclear power in California by 2025.

Pacific Gas and Electric Company (PG&E) filed with the California Public Utilities Commission (CPUC) its response to public comments on a joint proposal to increase investment in energy efficiency, renewables and storage beyond current state mandates while phasing out PG&E's production of nuclear power in California by 2025.

The parties to the joint proposal are PG&E, International Brotherhood of Electrical Workers Local 1245, Coalition of California Utility Employees, Friends of the Earth, Natural Resources Defense Council, Environment California and the Alliance for Nuclear Responsibility.

"The diverse parties behind the joint proposal, including labor and leading environmental groups, believe it represents the most appropriate and responsible path forward for supporting the state's energy vision. Most importantly, it reflects our strong commitment to supporting local employees as well as the community in transitioning to a future without Diablo Canyon Power Plant in operation," said Geisha Williams, president, PG&E Electric.

"We fully understand that elements of the joint proposal reflect important issues for the state and PG&E’s customers. The near decade-long period ahead of us provides the time to plan and replace Diablo Canyon's energy with new GHG-free replacement resources. PG&E welcomes feedback on the agreement, the opportunity to respond, and the opportunity to continue our dialogue with stakeholders as it moves through the CPUC review process," added Williams.

PG&E and the other parties announced the joint proposal on June 21, 2016. In line with the company's commitment to ensuring an open and transparent process, over the summer PG&E hosted a workshop for groups who formally engage in the CPUC intervenor process, as well as four information meetings in which PG&E provided an opportunity for the public to ask questions and to comment on the joint proposal. This feedback was represented along with the filing of the joint proposal at the CPUC on August 11.

Parties interested in formally participating in the state's review process of the joint proposal had the opportunity to file comments with the CPUC on September 15. PG&E's filing today serves as a response to these comments.

Key Elements of the Joint Proposal

Under the terms of the joint proposal, PG&E will retire Diablo Canyon at the expiration of its current Nuclear Regulatory Commission (NRC) operating licenses. The parties jointly propose and support the orderly replacement of Diablo Canyon with greenhouse gas (GHG)-free resources.

Recognizing that the procurement, construction and implementation of a GHG-free portfolio of energy efficiency, renewables and storage will take years, the parties recognize that PG&E intends to operate Diablo Canyon to the end of its current NRC operating licenses, which expire on November 2, 2024 (Unit 1), and August 26, 2025 (Unit 2).

As part of the joint proposal, PG&E immediately ceased any efforts on its part to renew the Diablo Canyon operating licenses, and asked the NRC to suspend consideration of the pending Diablo Canyon license renewal application. PG&E will withdraw the application upon CPUC approval of the joint proposal.

PG&E does not believe long-term customer rates will increase as a result of the proposal. That is because the company believes it is likely that implementing the proposal will have a lower overall cost than relicensing Diablo Canyon and operating it through 2044. Factors affecting this include, in addition to lower demand, declining costs for renewable power and the potential for higher renewable integration costs if Diablo Canyon is relicensed.

Commitment to Employees and the Community

The parties to the agreement are jointly committed to supporting a successful transition for Diablo Canyon employees and the community.

PG&E's Diablo Canyon Retention Program will provide, among other things, incentives to retain employees during the remaining operating years of the plant, a retraining and development program to facilitate redeployment of a portion of plant personnel to the decommissioning project or other positions within the company, and severance payments upon the completion of employment. PG&E has reached agreement on these benefits with its labor unions, including International Brotherhood of Electrical Workers Local 1245, Engineers and Scientists of California Local 20, and Service Employees' International Union United Service Workers West.

In addition, the joint proposal includes proposed payments by PG&E to San Luis Obispo County totaling nearly $50 million. The payments are designed to offset declining property taxes through 2025 in support of a transition plan for the county.

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