BILL ANALYSIS                                                                                                                                                                                                    Ó




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                                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  








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          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  








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            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.  









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          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  








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          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








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          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








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           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


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