An administrative law judge for the California Public Utilities Commission (CPUC) on Wednesday recommended approval of Pacific Gas & Electric’s application to close the Diablo Canyon nuclear power plant by 2025.
The utility last year announced a joint proposal reached with labor and environmental organizations to shut down Diablo Canyon reactor Unit 1 in 2024 and Unit 2 in 2025 as their Nuclear Regulatory Commission licenses expire. It would replace the San Luis Obispo County facility, the last operating nuclear power plant in California, with other forms of greenhouse gas-free energy.
The utility says the power plant will not be needed in future years due to greater energy efficiency and other advances, and independent stakeholders concurred. In a 53-page proposed decision, CPUC Administrative Law Judge Peter Allen said the PG&E plan “is reasonable, and should be approved.” The full five-person commission would rule on the recommendation, no earlier than its Dec. 14 business meeting.
Allen, though, recommended against approval of much of PG&E’s request for recovery from ratepayers of more than $1.76 billion in closure costs, including $1.3 billion for energy efficient acquisitions to replace Diablo Canyon’s power output, $363.4 million for worker retention and retraining, and $85 million for a community impacts mitigation program.
PG&E had proposed three “tranches” of replacement energy production, but withdrew two in February during the review process in the face of opposition from parties ranging from Shell to the Sierra Club. That left Tranche 1: 2,000 gross gigawatt hours of energy efficiency.
The California Office of Ratepayer Advocates and other parties remained critical of Tranche 1, questioning its cost effectiveness and whether it is even necessary to replace Diablo Canyon’s power output. Recommendations from the parties ranged from a partial power replacement procurement to no procurement during the current proceeding.
“[It] is not clear that PG&E could actually procure over 50% more energy efficiency than a goal that is already supposed to include all cost-effective energy efficiency (unless PG&E procures energy efficiency that is not cost effective),” Allen wrote. “There is no reason to approve a $1.3 billion rate increase for a proposal that will most likely either fail to achieve its goal or will achieve a goal not worth reaching. Accordingly, PG&E’s Tranche 1 proposal is not adopted.”
The administrative law judge also rejected the $85 million for community impacts mitigation to offset the loss by 2025 of $22 million in annual property taxes paid to the county, school district, and area cities. CPUC “is reluctant to require ratepayers to pay for the cost of local government services that are typically paid for by taxpayers, no matter how beneficial those services may be,” according to Allen. “Absent legislative authorization, utility rates should be used to provide utility services, not government services.”
Allen also recommended cutting the amount for worker retention and retraining from $363.4 million to $171.8 million. He supported $18.6 million in ratepayer funding for license renewal operations.
“While the proposed decision preserves several elements of the joint proposal, it differs in regards to certain key areas, including the employee, community and energy replacement programs,” PG&E said in a prepared statement. “PG&E strongly disagrees with these proposed adjustments. All of these programs support the key focus of the joint proposal, which is having DCPP serve as a reliable and affordable clean energy bridge to 2025 while other greenhouse gas-free replacement resources are developed to replace the output we need to meet customer demand.”
The proposed decision is now undergoing a 25-day comment period, after which it will be sent to the commission for a ruling, PG&E said. The utility indicated it would submit comments and then participate in final oral arguments on the proposal on Nov. 28. It is asking for a final decision before the end of 2017.
