BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 968 (Monning) - Diablo Canyon Units 1 and 2 powerplant ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: March 31, 2016 |Policy Vote: E., U., & C. 9 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 2, 2016 |Consultant: Narisha Bonakdar | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 968 requires the Pacific Gas and Electric Company (PG&E) to submit to the California Public Utilities Commission (CPUC) an assessment of the adverse and beneficial impacts that would result from closure of the Diablo Canyon Power Plant (Diablo Canyon). Fiscal Impact: One-time cost of $659,000 (Public Utilities Commission Utilities Reimbursement Account) for the CPUC to oversee the economic impact assessment process and conduct a new proceeding. Unknown, but likely significant costs, for the completion of the assessment required by the bill (reimbursed through ratepayer funds). SB 968 (Monning) Page 1 of ? Background: PG&E's Diablo Canyon is the only operating nuclear powerplant in California. 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. Diablo Canyon is licensed by the federal Nuclear Regulatory Commission (NRC) to operate until 2024 and 2025, respectively, for units 1 and 2. In 2009, PG&E filed an application with NRC to extend Diablo Canyon's operations by 20 years. The outcome of the application is uncertain. In addition to the application with NRC, Diablo Canyon's continued operation is subject to state permitting and regulation. Diablo Canyon sits on state tidelands and operates pursuant to leases issued by the State Lands Commission. These leases will expire in 2018 and 2019 respectively, for units 1 and 2. The State Lands Commission has not indicated whether it will renew the leases. The CPUC must also approve ratepayer funding to pay for Diablo Canyon's operations. These permitting uncertainties, along with the sudden and seemingly unexpected closure of the San Onofre Nuclear Generating Station in 2013, led many in the region to contemplate a future without the nuclear powerplant. Whatever the other effects, the closure of Diablo Canyon would remove a major contributor to the economies of San Luis Obispo County and northern Santa Barbara County. According to San Luis Obispo County, PG&E is both the largest taxpayer and largest private employer in the county; Diablo Canyon itself generates millions in property tax revenue, which mainly benefits local schools. A recent study, commissioned by PG&E, concluded that, in 2011, Diablo Canyon contributed, directly and indirectly, more than $900 million to the local economy, including many of the regions high-paying, year-round jobs. SB 968 (Monning) Page 2 of ? Proposed Law: This bill: 1)Directs the CPUC to require PG&E to submit an assessment, by July 1, 2018, of the economic harm, benefits, and potential mitigating actions, for the surrounding region if Diablo Canyon were to temporarily or permanently shut down. 2)Requires the assessment to be conducted by an independent third party, selected by the CPUC from among qualified entities who respond to the RFP issued by PG&E. 3)Requires the independent third party to consult with governmental entities in San Luis Obispo County. 4)Requires the CPUC to make the assessment publicly available on its website and to place it as an agenda item on the first CPUC meeting following publication of the assessment. 5)Declares the need for a special law: Diablo Canyon is the only nuclear powerplant operating in California. Related Legislation: AB 361 (Achadjian, Chapter 399, Statutes of 2015) extended the sunset date for the Nuclear Planning Assessment Special Account from July 1, 2019, to August 26, 2025, to continue funding emergency service programs and planning activities for Diablo Canyon. The bill passed each house of the Legislature with zero "no" votes. SB 657 (Monning, 2015) would have required the CPUC to convene, or continue, until August 25, 2025, the independent peer review panel to review PG&E's seismic studies of Diablo Canyon. The bill passed the Senate on a vote of 38-0, but was held at the Assembly Desk. SB 968 (Monning) Page 3 of ? Staff Comments: This bill directs the CPUC to require PG&E to issue an RFP for the independent third party to conduct the economic assessment. According the CPUC, in practice, the CPUC must issue the RFP, and be reimbursed for expenses by PG&E. -- END --