BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 968| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 968 Author: Monning (D), et al. Amended: 8/17/16 Vote: 27 - Urgency 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 SENATE FLOOR: 36-0, 6/1/16 AYES: Anderson, Bates, Beall, Berryhill, Block, Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pavley, Roth, Stone, Vidak, Wieckowski, Wolk NO VOTE RECORDED: Allen, Liu, Pan, Runner ASSEMBLY FLOOR: 78-0, 8/24/16 - See last page for vote 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. Assembly Amendments require the California Public Utilities SB 968 Page 2 Commission (CPUC) (1) to 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; and (2) to authorize Pacific Gas and Electric (PG&E) to withdraw $400,000 from the nuclear decommissioning trust funds to pay for additional staffing to urgently effectuate the third-party assessment required by this bill. ANALYSIS: Existing law: 1)Authorizes the 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) 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) 4)Requires each electrical corporation owning or operating nuclear facilities to establish an externally managed, segregated fund for expenses associated with decommissioning of nuclear facilities. (Public Utilities Code §8321) This bill: 1)Directs the CPUC to cause an assessment, including potential mitigation actions, to be completed by no later than July 1, 2018, of the adverse and beneficial economic effects, and net economic effects, for the County of San Luis Obispo and the surrounding regions that could occur if Diablo Canyon nuclear SB 968 Page 3 powerplant permanently shut down before the powerplant's current operating licenses from the Nuclear Regulatory Commission expire or when PG&E closes the powerplant upon the expiration of its current licenses. 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 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. 5)Requires the CPUC to approve the withdrawal of $400,000 from the nuclear decommissioning trust funds established by PG&E and to use the moneys for additional staffing to urgently effectuate the third-party assessment required by this bill. 6)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 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. SB 968 Page 4 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. 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: Yes Fiscal SB 968 Page 5 Com.:YesLocal: No According to the Assembly Appropriations Committee: Appropriates $400,000 to the CPUC to fund the assessment and hire limited-term staff to provide oversight (Utilities Reimbursement Fund). 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. SUPPORT: (Verified8/24/16) Alliance for Nuclear Responsibility City of Morro Bay City of San Luis Obispo Economic Vitality Corporation Pacific Gas and Electric Company San Luis Coastal Unified School District San Luis Obispo County Board of Supervisors Santa Barbara County Board of Supervisors OPPOSITION: (Verified8/24/16) 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 SB 968 Page 6 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 People's Democratic Club of Santa Cruz County Physicians for Social Responsibility-Los Angeles Physicians for Social Responsibility-San Francisco 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 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. ASSEMBLY FLOOR: 78-0, 8/24/16 SB 968 Page 7 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Brough, Daly Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107 8/25/16 17:34:52 **** END ****