BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 968|
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THIRD READING
Bill No: SB 968
Author: Monning (D), et al.
Amended: 5/31/16
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 9-0, 3/29/16
AYES: Hueso, Morrell, Cannella, Gaines, Hill, Lara, Leyva,
McGuire, Wolk
NO VOTE RECORDED: Hertzberg, Pavley
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
SUBJECT: Diablo Canyon Units 1 and 2 powerplant
SOURCE: Author
DIGEST: This bill requires an assessment of the regional
economic effect that would result from closure of the Diablo
Canyon Power Plant.
ANALYSIS:
Existing law:
1)Authorizes the California Public Utilities Commission (CPUC)
to fix rates, establish rules, examine records, issue
subpoenas, administer oaths, take testimony, punish for
contempt, and prescribe a uniform system of accounts for all
public utilities, including electrical and gas corporations,
subject to its jurisdiction. (Article 12 of the California
Constitution)
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2)Requires that all charges demanded or received by any public
utility for any product, commodity or service be just and
reasonable, and that every unjust or unreasonable charge is
unlawful. (Public Utilities Code §451)
3)Authorizes the collection of funds, on a nonbypassable basis,
required for site restoration when an electrical corporation's
nuclear powerplant is removed from service. (Public Utilities
Code §379)
This bill:
1)Directs the CPUC to cause an assessment to be completed, by
July 1, 2018, of the economic effects, and potential
mitigating actions, for the region surrounding the County of
San Luis Obispo that could occur if Diablo Canyon Power Plant
were to temporarily or permanently shut down before the
powerplants current operating licenses expire or if PG&E were
to decide not to pursue licensing renewal.
2)Requires the assessment to be conducted by an independent
third party, selected by the CPUC from among qualified
entities who respond to a request for proposal by the CPUC.
3)Requires the independent third party to consult with
governmental and community-based entities in San Luis Obispo
County, as well as the Center for Labor Research and Education
at University of California Berkeley.
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.
Background
Diablo Canyon's uncertain future. There remains one operating
nuclear powerplant in California - PG&E's Diablo Canyon Power
Plant in San Luis Obispo County. According to PG&E, the plant
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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 operation by 20 years. The outcome of
the application is uncertain.
In addition to the application with NRC, continued operation of
Diablo Canyon is subject to state permitting and regulation.
Diablo Canyon sits on state tideland. It operates pursuant to
leases, issued by the State Lands Commission, that expire in
2018 and 2019, for units 1 and 2, respectively. It is unknown
whether the State Lands Commission will renew the leases. And,
of course, the CPUC must approve ratepayer funding to pay for
operation of Diablo Canyon.
These permitting uncertainties, along with the sudden and
seemingly unexpected closure of the San Onofre Nuclear
Generating Station (SONGS) in 2013, lead many in the region
around Diablo Canyon to contemplate a future without the nuclear
powerplant. Whatever its other effects, shuttering of Diablo
Canyon would remove a major contributor to the economy of San
Luis Obispo County and northern Santa Barbara County.
Bill proponents call for a study by an independent, third party
that would, at a minimum, consider decreases in local tax
revenues, decreases in local workforce, and indirect economic
losses. Proponents conclude that such a study, informed by the
experiences of SONGS and similar facilities that have shut down
elsewhere, would better prepare the communities that would be
most affected by closure of Diablo, thereby enabling mitigation
of the worst economic effects.
Who will pay? This bill directs the CPUC to issue a request for
proposal for an independent third party, to be selected from
bidding parties by the CPUC, to conduct the economic assessment
of Diablo Canyon's closure. Presumably, the CPUC will require
PG&E to recover the cost of the statutorily required assessment
from its ratepayers.
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Related/Prior Legislation
AB 361 (Achadjian, Chapter 399, Statutes of 2015) extended 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. 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 PG&E's Diablo Canyon
Power Plant. The bill passed the Senate on a vote of 38-0. The
bill was held at the Assembly Desk.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
One-time cost of approximately $250,000 (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).
SUPPORT: (Verified5/27/16)
Alliance for Nuclear Responsibility
City of Morro Bay
City of San Luis Obispo
County of San Luis Obispo Board of Supervisors
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Economic Vitality Corporation
Pacific Gas and Electric Company
San Luis Coastal Unified School District
Santa Barbara County Board of Supervisors
OPPOSITION: (Verified5/27/16)
Azul
CodePink Women for Peace, Golden Gate Chapter
Committee to Bridge the Gap
Desert Protection Society
Ecological Options Network
Food and Water Watch
Green Action for Health and Environmental Justice
Green Party of San Luis Obispo
Greenpeace
No Nukes Action Team
Northern Chumash Tribal Council
Nuclear Energy Information Services
Nuclear Hotseat
Nuclear Information and Resource Service
Nuclear Watch South
People of Faith for Justice
Physicians for Social Responsibility-Los Angeles
Public Citizen
Residents Organized for Safe Energy
Rocketdyne Cleanup Coalition
San Francisco Occupy Forum Environmental Working Group
San Luis Obispo Mothers for Peace
San Onofre Safety
Southern California Federation of Scientists
Sunflower Alliance
Teens Against Toxins
Tri-Valley CAREs
West Berkeley Alliance for Clean Energy and Safe Jobs
Women For: Orange County
Women's International League for Peace and Freedom, Santa Cruz
ARGUMENTS IN SUPPORT: According to the author, no one can say
for certain whether the Diablo Canyon Nuclear Power Plant will
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continue to operate in the near-term or long-term. Given this
uncertainty and the region's economic reliance on the plant, it
is critical that state regulators and the public be informed
about the potential adverse economic impacts should the plant
not be in operation and how to best mitigate these impacts.
ARGUMENTS IN OPPOSITION: Opponents make numerous arguments
against the bill, including that the assessment is unneeded
because PG&E already commissioned a benefits assessment, and
that the CPUC cannot be trusted to act independently of PG&E in
selecting a third party to conduct the assessment.
Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
5/31/16 22:13:33
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