BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 968


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          SENATE THIRD READING


          SB  
          968 (Monning)


          As Amended  August 17, 2016


          2/3 vote.  Urgency


          SENATE VOTE:  36-0


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Utilities &     |15-0 |Gatto, Patterson,     |                    |
          |Commerce        |     |Burke, Chávez, Dahle, |                    |
          |                |     |Eggman, Cristina      |                    |
          |                |     |Garcia,               |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |Hadley,               |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Roger Hernández,      |                    |
          |                |     |Obernolte, Quirk,     |                    |
          |                |     |Santiago, Ting,       |                    |
          |                |     |Williams              |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |15-0 |Gonzalez, Bigelow,    |                    |








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          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Chang, Eggman, |                    |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Weber, Wood, McCarty  |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
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          SUMMARY:  Requires the California Public Utilities Commission  
          (CPUC) to cause an assessment of the economic impacts, for the  
          County of San Luis Obispo and the surrounding regions that could  
          occur if or when the Diablo Canyon Nuclear Powerplant  
          temporarily or permanently shuts down.  Specifically, this bill:  
           


          1)Requires the CPUC to cause an assessment to be completed by  
            July 1, 2018, of the adverse and beneficial economic impacts,  
            and the net economic effects, for the County of San Luis  
            Obispo and the surrounding regions, that could occur if the  
            Diablo Canyon Units 1 and 2 powerplant were to temporarily or  
            permanently shut down before the power plant's current  
            operating licenses or when it closes upon the expiration of  
            its current licenses.


          2)Requires the assessment to include a specified review of  
            potential actions for the state and local jurisdictions to  
            consider in order to mitigate the adverse economic impact of a  
            shutdown.


          3)Requires the assessment to be conducted by an independent  
            third party, as specified.










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          4)Requires the assessment to consist of, but not be limited to,  
            all of the following:


             a)   Estimate of any changes in local tax revenues, changes  
               in workforce populations, changes in indirect or induced  
               economies, and potential impacts to ratepayers from a  
               shutdown;


             b)   A review of the economic impacts that affected the  
               region surrounding the San Onofre Nuclear Generating  
               Station (SONGS) after it was decommissioned by the Southern  
               California Edison Company and of the relevant  
               decommissioning plans of SONGS;


             c)   A review of the regions in the United States similar to  
               the region surrounding the County of San Luis Obispo that  
               have experienced the decommissioning of a nuclear  
               powerplant and of the resulting economic impacts of the  
               decommissioning on those regions; and


             d)   Identification of any contingency plans that could  
               mitigate the adverse economic impact of a shutdown to state  
               and local jurisdictions, the local workforce, and entities  
               receiving enhanced tax revenue.


          5)Requires the independent third party to consult with the Board  
            of Supervisors of the County of San Luis Obispo, the governing  
            board of the San Luis Coastal Unified School District, the  
            Center for Labor Research and Education at the University of  
            California, Berkeley, the regional economic development group  
            of the County of San Luis Obispo, and other relevant  
            governmental entities or community-based organizations to  
            assist in an accurate assessment of the economic and workforce  
            impacts of a shutdown.








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          6)Requires the CPUC to make the assessment publically available  
            on its Internet Web site, distribute copies to relevant state  
            and local jurisdictions, and convene a public forum in the  
            County of San Luis Obispo on the findings and recommendations  
            of the assessment.


          7)Appropriates $400,000 from the nuclear decommissioning trust  
            funds to be used for additional staffing to urgently  
            effectuate the specified third-party assessment.


          8)Includes an urgency clause allowing the provisions of this  
            bill to take effect immediately upon enactment.


          FISCAL EFFECT:  According to the Assembly Appropriation  
          Committee, this bill appropriates $400,000 to the CPUC to fund  
          the assessment and hire limited-term staff to provide oversight.  
           In addition, the CPUC 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:  The Diablo Canyon Powerplant is a two-unit  
            nuclear powerplant operated by the Pacific Gas and Electric  
            Company (PG&E), and is the only remaining operating nuclear  
            powerplant in California.  According to PG&E, the powerplant  
            produces approximately 20% of PG&E's overall electricity  
            production and 10% of California's energy load.  The  
            powerplant is licensed by the federal Nuclear Regulatory  
            Commission (NRC) to operate until 2024 and 2025, for units 1  
            and 2.  In June 2016, PG&E announced that it would not renew  
            its license for the Diablo Canyon Powerplant.  








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          2)Diablo's Economic Impacts on the Region: According to the  
            author, having unbiased and accurate economic data for local  
            planning and discussion is valuable because the region  
            surrounding the Diablo Canyon Powerplant is heavily reliant on  
            the plant.  Arguably, shuttering of Diablo Canyon would have a  
            major impact on the economies of San Luis Obispo and its  
            surrounding regions.  The loss of jobs resulting from the  
            closure of Diablo Canyon potentially would have a ripple  
            effect on the business and economic health of the region. 


            This bill requires the CPUC to cause an assessment to be  
            completed by July 1, 2018, of the adverse and beneficial  
            economic impacts, and the net economic effects, for the County  
            of San Luis Obispo and the surrounding regions, that could  
            occur if or when the Diablo Canyon Units 1 and 2 powerplant  
            temporarily or permanently shuts down.  In addition, this bill  
            requires the assessment to be conducted by an independent  
            third party, and requires the independent third party to  
            consult with specified entities. Furthermore, this bill also  
            requires the assessment to include a review of potential  
            actions for the state and local jurisdiction to consider in  
            order to mitigate the adverse economic impact of a shut down.   
            This bill appropriates $400,000 from the nuclear  
            decommissioning trust funds to be used for additional staffing  
            to urgently effectuate the specified third-party assessment. 




          Analysis Prepared by:                                             
                          Edmond Cheung / U. & C. / (916) 319-2083  FN:  
          0004383












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