BILL ANALYSIS                                                                                                                                                                                                    

                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 361 (Achadjian) - California Emergency Services Act: nuclear  
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          |Version: May 28, 2015           |Policy Vote: G.O. 12 - 0, E.,   |
          |                                |          U., & C. 11 - 0       |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 17, 2015   |Consultant: Marie Liu           |
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          This bill meets the criteria for referral to the Suspense File. 

          Summary:  AB 361 would extend the sunset date on the requirement  
          that state and local costs associated with preparing for and  
          responding to accidents at nuclear powerplants be borne by  
          utilities operating those powerplants. 

           Total revenues of $8.5 million to the Nuclear Planning  
            Assessment Special Account (special) to cover OES's costs  
            between 2019 and 2024.
           Passthrough of $13.3 million to the Nuclear Planning  
            Assessment Special Account (special) that is collected and  
            distributed by OES on behalf of local agencies for their costs  
            between 2019 and 2024.


          AB 361 (Achadjian)                                     Page 1 of  
          Background:  The Radiation Protection Act (HSC 114650) establishes the  
          responsibilities of OES, the Department of Health Services, and  
          local governments in preparing and responding to accidents at  
          nuclear powerplants. Section 8610.5 of the Government Code  
          requires utilities operating a nuclear powerplant with a  
          generating capacity of 50 megawatts or more to cover state and  
          local costs from preparing and responding to accidents at the  
          powerplant that are not reimbursed by federal funds. In order to  
          collect these costs, the California Public Utilities Commission  
          (CPUC) is to develop an equitable method of assessing the  
          utilities their reasonable pro rata share of state agency costs  
          and providing this method to OES. Local agencies are also  
          responsible for reporting their costs to OES. Then OES will  
          periodically collect payments from the utilities for their share  
          of the local and state costs. Payments are deposited into the  
          Nuclear Planning Assessment Special Account (account). Section  
          8610.5 specifies that OES is to receive up to $1,094,000 for the  
          support of its duties in the 2009-10 fiscal year and the  
          Department of Public Health is to receive up to $953,000 for its  
          duties. Additionally, local governments can receive up to  
          $1,732,000 for the Diablo Canyon nuclear powerplant and up to  
          $1,600,000 for the San Onofre site. These amounts are to be  
          adjusted for subsequent years according to the Consumer Price  
          Index or the percentage change in the prevailing wage for San  
          Luis Obispo County employees in the case of the Diablo Canyon.
          Payments to the local governments are made out of the account by  
          the Controller. Up to 80% of the fund can be disbursed in  
          advance for anticipated costs while the balance is paid out for  
          OES approved expenditures.

          These provisions for the recovery of state and local costs  
          become inoperative on July 1, 2019. Any remaining funds in the  
          account at that time shall be credited to the utility's  

          There remains only one operating nuclear powerplant in  
          California - Pacific Gas and Electric's (PG&E) Diablo Canyon  
          Powerplant. The powerplant is licensed by the federal Nuclear  
          Regulatory Commission (NRC) to operate until 2024 and 2024 for  
          units 1 and 2, respectively. In 2009, PG&E filed an application  
          with NRC to expend Diablo Canyon's operation by 20 years.


          AB 361 (Achadjian)                                     Page 2 of  

          Proposed Law:  
            This bill would extend the sunset date of the cost recovery  
          provisions until August 26, 2025 and would make technical  
          amendments to reflect that the state now only has one operating  
          nuclear powerplant.

          Comments:  This bill would align the statutory requirements for  
          state and local cost recovery with the existing operating  
          license for PG&E's nuclear facility, which expires in 2024 and  
          2025 for units 1 and 2, respectively. By extending the sunset  
          date on the cost recovery provisions, the state will be ensured  
          a mechanism to recover its costs associated with the Radiation  
          Protection Act from PG&E. Between 2019 and 2024, OES anticipates  
          a total of $8.5 million in cost recovery. 
          As this bill would also extend the ability for OES to collect  
          payments on behalf local governments and then disburse those  
          funds as reimbursements, this bill will also technically extend  
          costs to the Nuclear Planning Assessment Special Account.  
          However, staff notes that there should ultimately be no net  
          costs to the state for these provisions. 

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