BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 657 (Monning) - Diablo Canyon Units 1 and 2: enhanced seismic
studies and review: independent peer review panel.
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|Version: June 23, 2015 |Policy Vote: E., U., & C. 10 - |
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|Urgency: Yes |Mandate: No |
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|Hearing Date: July 6, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 657 would require the California Public Utilities
Commission (CPUC) to continue to convene an independent peer
review panel (IPRP) to review enhanced seismic studies and
surveys of the Diablo Canyon Units 1 and 2 powerplant until
August 26, 2025.
Fiscal
Impact: Approximate annual costs of $200,000 until FY 2025-26
to the Public Utilities Reimbursement Account (special) for IPRP
contract costs. All costs are anticipated to be reimbursed by
PG&E.
Background: Diablo Canyon Power Plant is a two-unit nuclear powerplant
located in San Luis Obispo County. According to PG&E, the plant
produces approximately 10 percent of California's energy load
SB 657 (Monning) Page 1 of
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and about 20 percent of PG&E's overall electricity production.
The powerplant is licensed by the federal Nuclear Regulatory
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 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 was charged with conducting
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 current contract for the IPRP expires on November 30, 2015.
PG&E's advanced seismic studies are ongoing and will likely
continue past 2015. However, the existing IPRP contract only
convenes the body until 2015.
Proposed Law: This bill would require that the CPUC continue
to convene the IPRP until at least August 26, 2015, which is the
SB 657 (Monning) Page 2 of
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date which the license for Diablo Canyon unit 2 expires.
The IPRP would be required to contract with the California
Energy Commission, the California Geological Survey of the
Department of Conservation, the California Coastal Commission,
the Seismic Safety Commission, the Office of Emergency Services,
and the county of San Luis Obispo to participate with the IPRP.
This bill is an urgency measure.
Staff
Comments: The contract required by this bill will necessitate
an extension of the existing IPRP contract. Assuming that the
extended contract costs will be similar to the current contract,
this bill would require the CPUC to incur $200,000 of costs
annually for a total of $1.9 million through 2025.
Under the current contract, state agencies submit invoices to
the CPUC for their participation in IPRP activities. The CPUC
pays for approved costs from the Public Utilities Reimbursement
Account and seeks reimbursement from PG&E, who then recovers the
costs from its ratepayers.
Because the CPUC is the signatory to the IPRP contract with the
other state agencies, it is the party contractually responsible
for the other agencies' costs, not PG&E. Therefore this bill
technically has state costs. That said, staff anticipates that
all state costs will be reimbursed by PG&E.
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