BILL ANALYSIS                                                                                                                                                                                                    Ó






           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                        AB 361|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 


                                   THIRD READING 


          Bill No:  AB 361
          Author:   Achadjian (R), et al.
          Amended:  9/3/15 in Senate
          Vote:     27  - Urgency

           SENATE GOVERNMENTAL ORG. COMMITTEE:  12-0, 6/29/15
           AYES:  Hall, Berryhill, Block, Gaines, Glazer, Hernandez, Hill,  
            Hueso, Lara, McGuire, Runner, Vidak
           NO VOTE RECORDED:  Galgiani

           SENATE ENERGY, U. & C. COMMITTEE:  11-0, 7/7/15
           AYES:  Hueso, Fuller, Cannella, Hertzberg, Hill, Lara, Leyva,  
            McGuire, Morrell, Pavley, Wolk

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 8/27/15
           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           ASSEMBLY FLOOR:  75-0, 6/2/15 - See last page for vote

           SUBJECT:   Nuclear powerplants


          SOURCE:    Alliance for Nuclear Responsibility


          DIGEST:   This bill extends the sunset date for the Nuclear  
          Planning Assessment Special Account (NPASA) from July 1, 2019,  
          to August 26, 2025, to continue funding emergency service  
          programs and planning activities for the Diablo Canyon Power  
          Plant in San Luis Obispo County.  In addition, this bill  
          requires the California Public Utilities Commission (CPUC) to  
          convene, or continue, until August 26, 2025, the independent  
          peer review panel (IPRP) to review Pacific Gas and Electric's  








                                                                     AB 361  
                                                                    Page  2


          (PG&E) seismic studies of PG&E's Diablo Canyon Power Plant, a  
          nuclear facility on the central coast. 

          Senate Floor Amendments of 9/3/15 require the CPUC to convene,  
          or continue, until August 26, 2025, the IPRP to review PG&E's  
          seismic studies of the Diablo Canyon Power Plant.  In addition,  
          the amendments require that the IPRP contract with various state  
          entities to participate on the panel and provide expertise,  
          require the IPRP to review seismic studies and hold public  
          meetings, and require the CPUC to make reports by the IPRP  
          publicly available on the Internet Web site maintained by the  
          CPUC.  Finally, the amendments add Senator Jackson as coauthor  
          and add an urgency clause.  

          The amendments are similar to language from SB 655 (Monning,  
          2015), which passed the Senate Floor on a 38-0 vote but was  
          never heard in the Assembly.

          ANALYSIS: 


          Existing law:


           1) Authorizes, under the California Emergency Services Act  
             (CESA), local government entities to create disaster councils  
             by ordinance and in turn develop disaster plans specific to  
             their jurisdictions.

           2) Requires, under the Radiation Protection Act of 1999 (RPA),  
             local governments to develop and maintain radiological  
             emergency preparedness and response plans to safeguard the  
             public in the emergency planning zone (EPZ) around a nuclear  
             powerplant, and generally makes the Office of Emergency  
             Services (OES) responsible for the coordination and  
             integration of all emergency planning programs and response  
             plans created pursuant to the RPA.

           3) Requires OES to coordinate the activities of all state  
             agencies in preparing and implementing the state nuclear  
             power plant emergency response plan and to perform other  
             related duties.

           4) Prescribes, under CESA, a method for funding state and local  







                                                                     AB 361  
                                                                    Page  3


             costs for carrying out these activities that are not  
             reimbursed by federal funds, with the costs borne by  
             utilities operating nuclear powerplants with a generating  
             capacity of 50 megawatts or more. 

           5) Defines an "electrical corporation" as every corporation or  
             person owning, controlling, operating, or managing any  
             electrical plant for compensation within this state, except  
             where electricity is generated on or distributed by the  
             producer through private property solely for its own use or  
             the use of its tenants and not for sale or transmission to  
             others.

           6) Grants the Public Utilities Commission (PUC) with the  
             regulatory authority over public utilities. 

           7) Requires the development and maintenance of a nuclear  
             powerplant emergency response program by state and local  
             governments based on federal and state criteria.

           8) Requires the California Energy Commission (CEC) to compile  
             and assess scientific studies to determine the potential  
             vulnerability of the state's largest generating plants due to  
             aging or a major seismic event, assess the potential state  
             and local costs associated with accumulating waste at  
             California's nuclear power plants, and adopt the assessment  
             by November 1, 2008.

           9) Requires all charges demanded or received by any public  
             utility for any product or commodity furnished or any service  
             rendered be just and reasonable, and further requires every  
             public utility to furnish and maintain such adequate,  
             efficient, just, and reasonable service, instrumentalities,  
             equipment, and facilities as are necessary to promote the  
             safety, health, comfort, and convenience of its patrons,  
             employees, and the public.

          This bill:

           1) Extends the sunset date for the NPASA from July 1, 2019, to  
             August 26, 2025, to continue funding emergency service  
             programs and planning activities for the Diablo Canyon Power  
             Plant in San Luis Obispo County.








                                                                     AB 361  
                                                                    Page  4


           2) Provides that State and local costs to carry out activities  
             pursuant to this bill and the RPA that are not reimbursed by  
             federal funds shall be borne by a utility operating a nuclear  
             powerplant with a generating capacity of 50 megawatts or  
             more.

           3) Requires the PUC to develop and transmit to OES an equitable  
             method of assessing a utility operating a powerplant for its  
             reasonable share of state agency costs.

           4) Specifies that each local government involved shall submit a  
             statement of its costs, as required, to OES.

           5) Specifies that upon notification by OES, from time to time,  
             of the amount of its share of the actual or anticipated state  
             and local agency costs, a utility shall pay this amount to  
             the State Controller for deposit in the NPASA, which is  
             continued in existence, for allocation by the State  
             Controller, upon appropriation by the Legislature, to carry  
             out activities pursuant to this bill and the RPA.

           6) Specifies that the State Controller shall pay from the NPASA  
             the state and local costs relative to carrying out the  
             provisions of this bill and the RPA.

           7) Specifies that upon appropriation by the Legislature, the  
             State Controller may disburse up to 80 percent of a fiscal  
             year allocation from the NPASA, in advance, for anticipated  
             local expenses.  The OES shall review program expenditures  
             related to the balance of the funds in the account and the  
             Controller shall pay the portion, or the entire balance, of  
             the account, based upon those approved expenditures. 

           8) Specifies that the total annual disbursement of state costs  
             from a utility operating a nuclear powerplant within the  
             state for activities pursuant to this bill and RPA, shall not  
             exceed the lesser of the actual costs or the maximum funding  
             levels established under the provisions of this bill.

           9) Specifies that of the annual amount of two million  
             forty-seven thousand dollars ($2,047,000) for the 2009-10  
             fiscal year, the sum of one million ninety-four thousand  
             dollars ($1,094,000) shall be for support of OES for  
             activities pursuant to this bill and the RPA, and the sum of  







                                                                     AB 361  
                                                                    Page  5


             nine hundred fifty-three thousand dollars ($953,000) shall be  
             for support of the California Department of Public Health  
             (CDPH) for activities pursuant to this bill and the RPA. 

           10)Specifies that the total annual disbursement for each fiscal  
             year, commencing July 1, 2009, of local costs from a utility  
             shall not exceed the lesser of the actual costs or the  
             maximum funding levels established in this bill, in support  
             of activities pursuant to this bill and the RPA.  The maximum  
             annual amount available for disbursement for local costs  
             shall, for the fiscal year beginning July 1, 2009, be one  
             million seven hundred thirty-two thousand dollars  
             ($1,732,000) for the Diablo Canyon site.

           11)Specifies that the amounts paid by a utility under this bill  
             shall be allowed for ratemaking purposes by the PUC.

           12)Provides that the amounts available for disbursement for  
             state and local costs shall be adjusted and compounded each  
             fiscal year by the larger of the percentage change in the  
             prevailing wage for San Luis Obispo County employees, not to  
             exceed five percent, or the percentage increase in the  
             California Consumer Price Index from the previous fiscal  
             year.

           13)Specifies that the amounts available for disbursement for  
             state and local costs as specified shall be cumulative  
             biennially.  Any unexpected funds from a year shall be  
             carried over for one year.  The funds carried over from the  
             previous year may be expended when the current year's funding  
             cap is exceeded.

           14)Provides that when this bill becomes inoperative, any  
             amounts remaining in the special account shall be refunded to  
             a utility contributing to it, to be credited to the utility's  
             ratepayers. 

           15)Requires the CPUC to convene, or continue, until August 26,  
             2025, the IPRP to review PG&E's seismic studies of the Diablo  
             Canyon Power Plant, including the surrounding areas of the  
             facility and areas of nuclear waste storage.

           16)Requires the IPRP to contract with the CEC, the California  
             Geological Survey, the Coastal Commission, the Alfred E.  







                                                                     AB 361  
                                                                    Page  6


             Alquist Seismic Safety Commission, the OES, and the County of  
             San Luis Obispo to participate on the panel and provide  
             expertise. 

           17)Requires the IPRP to review the seismic studies and hold  
             public meetings.

           18)Requires the CPUC to make reports by the IPRP publicly  
             available on the Internet Web site maintained by the CPUC.

           19)Includes an urgency clause. 

          Background

          Nuclear Power Plant Regulation.  In 1979, following the accident  
          at Three Mile Island nuclear power plant in Pennsylvania, the  
          California State Legislature mandated that OES, together with  
          the CDPH and affected counties, investigate the consequences of  
          a serious nuclear power plant accident.  Based on site-specific  
          studies in 1980, EPZs around the plant sites were established in  
          detail and integrated plans were developed.  Legislation  
          mandating the Nuclear Power Plant Program has been continuous  
          since 1979, enacted as Government Code and Health and Safety  
          Code sections, called the Radiation Protection Act.

          Local governments are also required to develop and maintain  
          radiological emergency preparedness and response plans to  
          safeguard the public in the EPZ around a nuclear power plant and  
          to take specified actions within that zone.  Utilities also have  
          a role to play, including developing and maintaining  
          radiological emergency preparedness and response plans in  
          coordination with state and local governments and to coordinate  
          with state and local governments in maintaining nuclear power  
          plant education information.

          Diablo Canyon - nuclear power on the seismically active Central  
          Coast.  Diablo Canyon Power Plant is a two-unit nuclear  
          powerplant located in San Luis Obispo County.  The power  
          production facility and support operations sit on approximately  
          900 acres adjacent to the Pacific Ocean between Avila Beach and  
          Montano del Oro State Park.  According to PG&E, the plant  
          produces approximately 10 percent of California's energy load  
          and about 20 percent of PG&E's overall electricity production.   
          The powerplant is licensed by the federal Nuclear Regulatory  







                                                                     AB 361  
                                                                    Page  7


          Commission (NRC) to operate until 2024 and 2025, respectively,  
          for units 1 and 2.  
           
          Since the initial siting of Diablo Canyon, PG&E and the state  
          have been aware that the plant lies within a seismically active  
          zone.  Recently, seismologists have become aware of the  
          possibility of an earthquake directly beneath the powerplant.  

          In 2008, in response to statutory direction, the CEC released  
          its assessment of the potential vulnerability of Diablo Canyon  
          to a major disruption due to a seismic event.  As part of that  
          assessment, the CEC recommended that PG&E use three-dimensional  
          geophysical seismic reflection mapping and other advanced  
          techniques to supplement ongoing seismic research programs; and  
          that CEC and other appropriate state agencies evaluate whether  
          these studies should be required as part of the Diablo Canyon  
          license renewal feasibility studies for the CPUC.  Soon after,  
          the CPUC directed PG&E to incorporate the recommendations from  
          the CEC report into its feasibility study to extend the  
          operating licenses of Diablo Canyon.

          In 2009, PG&E filed an application with NRC to extend Diablo  
          Canyon's operation by 20 years.  The licensing decision rests  
          wholly with the NRC.  However, the CPUC will decide the  
          reasonableness of PG&E's request to recover the costs for  
          continued operation of the powerplant.  

          In 2010, the CPUC formally decided to convene, via contract, its  
          IPRP, composed of itself, the CEC, the California Geological  
          Survey, the California Coastal Commission, and the California  
          Seismic Safety Commission.  The IPRP would conduct an  
          independent review of PG&E's seismic studies to enhance CPUC's  
          ability to assess the reasonableness of Diablo Canyon's proposed  
          license renewal. 

          The IPRP has conducted several reports assessing PG&E's seismic  
          studies of Diablo Canyon.  Following the 2011 earthquake in  
          Japan that severely damaged the Fukushima Daiichi nuclear power  
          plant, NRC required PG&E to conduct additional, advanced seismic  
          studies of the area around and underneath Diablo Canyon. PG&E  
          requested that NRC delay its decision on PG&E's relicensing  
          request so that PG&E could conduct the seismic studies. The NRC  
          agreed. The contract for the IPRP expires on November 30, 2015.   
          PG&E's advanced seismic studies are ongoing.  They will likely  







                                                                     AB 361  
                                                                    Page  8


          continue past 2015.  

          Related Legislation
          
          SB 657 (Monning 2015) requires the CPUC to convene, or continue,  
          until August 26, 2025, the IPRP to review PG&E's seismic studies  
          of the Diablo Canyon Power Plant, including the surrounding  
          areas of the facility and areas of nuclear waste storage. (Held  
          in Assembly Rules Committee)

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee, the provisions  
          dealing with extending the sunset date for the NPASA would  
          result in total revenues of $8.5 million to the NPASA (special)  
          to cover OES's costs between 2019 and 2024.  In addition, a  
          passthrough of $13.3 million to the NPASA (special) that is  
          collected and distributed by OES on behalf of local agencies for  
          their costs between 2019 and 2024.


          The provisions dealing with the requirement that the CPUC  
          convene the IPRP would result in approximate annual costs of  
          $200,000 until fiscal year 2025-26 to the Public Utilities  
          Reimbursement Account (special) for IPRP contract costs.  All  
          costs are anticipated to be reimbursed by PG&E.


          SUPPORT:   (Verified9/4/15)




          Alliance for Nuclear Responsibility 




          OPPOSITION:   (Verified9/4/15)


          None received







                                                                     AB 361  
                                                                    Page  9



          ASSEMBLY FLOOR:  75-0, 6/2/15
          AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau,  
            Chiu, Chu, Cooley, Dababneh, Dahle, Daly, Dodd, Eggman,  
            Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo  
            Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley,  
            Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,  
            Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,  
            Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark  
            Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,  
            Wood, Atkins
          NO VOTE RECORDED:  Brough, Chávez, Cooper, Grove, Harper

          Prepared by:Felipe Lopez / G.O. / (916) 651-1530
          9/4/15 18:25:56


                                   ****  END  ****