BILL ANALYSIS Ó SB 968 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 968 (Monning) - As Amended August 1, 2016 ----------------------------------------------------------------- |Policy |Utilities and Commerce |Vote:|15 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill requires the California Public Utilities Commission (PUC) to contract with an independent third party to perform an economic assessment on the regional impacts that could occur if the Diablo Canyon Units 1 and 2 nuclear powerplant were to temporarily shut down prior to the expiration of its license or when PGE closes the power plant. Additionally, this bill appropriates $400,000 from the PUC Utilities Reimbursement Account to the PUC to fund additional staffing and the third party assessment. SB 968 Page 2 FISCAL EFFECT: Appropriates $400,000 to the PUC to fund the assessment and hire limited-term staff to provide oversight (Utilities Reimbursement Fund). The PUC estimates it will require $250,000 to contract with an independent third party to perform the assessment and an additional $170,000 to provide oversight. COMMENTS: 1)Background. PG&E's Diablo Canyon is the only operating nuclear powerplant in California. According to PG&E, the plant produces approximately 10% of California's energy load and about 20% 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 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 (SLC). These leases will expire in 2018 and 2019, respectively for units 1 and 2. The SLC has not indicated whether it will renew the leases. The PUC must also approve ratepayer funding to pay for Diablo Canyon's operations. SB 968 Page 3 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 of dollars in property tax revenue, which mainly benefits local schools. A June 2013 Economic Impact Study, funded by PG&E, concluded that the local economic impact of Diablo Canyon is substantial, with the total 2011 estimated economic impact to be approximately $920 million. The powerpant has approximately 1,483 employees and it is estimated that this year the San Luis Coastal Unified School District will receive more than $10 million (12% of its operating revenue) from taxes paid by PG&E. 2)Purpose. On June 21, 2016, PG&E announced it will not renew its license for the two nuclear units at Diablo Canyon but it will continue paying property taxes through 2025, as well as enact workforce retention and retraining programs. According to the author, because Diablo Canyon will not operate past its current license, this bill is needed due to the region's economic reliance on the powerplant. The author further contends, that it is critical for state regulators and the public to be informed about potential economic impacts when the plant is no longer in operation and how to best mitigate negative impacts before the closure. Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081 SB 968 Page 4