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
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|Version: March 31, 2016 |Policy Vote: E., U., & C. 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 2, 2016 |Consultant: Narisha Bonakdar |
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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
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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
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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
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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.
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