The California Public Utilities Commission (CPUC) is scheduled on May 25 to decide whether to approve the latest, disputed cost estimate for decommissioning the Diablo Canyon Power Plant.
Pacific Gas & Electric Co., owner of the two-reactor site in San Luis Obispo County, in 2015 estimated it would cost $3.8 billion to decommission the plant following its planned closure in 2025. That is nearly $1.5 billion above the company’s 2012 projection of $2.3 billion that was approved by the state commission.
In April, state Administrative Law Judge Darcie Houck issued a proposed decision that would reduce PG&E’s cost estimate by about $1.4 billion, to $2.4 billion. She indicated the PG&E projection – prepared by decommissioning services provider TLG Services – does not provide precise data for security, staffing, and other areas to support the estimated cost increase.
The five-person commission must approve the expense projection for it to take legal effect.
PG&E would use the approved amount in setting utility ratepayer fees to fund decommissioning. Managers from the utility met this week with aides to the CPUC members to make the case for their estimate.
PG&E is seeking CPUC approval to collect $117 million in “annual revenue requirements” for the Diablo Canyon decommissioning trust funds. That would be slightly over 0.5 percent extra per month for the average customer, the company says.
“The forecast we put forward takes into account key environmental and safety requirements, and is well supported by industry benchmarking, best practices and experience,” PG&E spokesperson Blair Jones said by email. “The communications we intend to have with commissioner advisors are in full compliance with CPUC rules. We continue to believe that our forecast is the best estimate of the cost to decommission the facility and believe the CPUC should approve it in support of the state’s requirements to fully fund decommissioning expenses.”
The commission is also scheduled on May 25 to grant PG&E’s uncontested $1.1 billion cost estimate for decommissioning the Humboldt Bay Power Plant, near the city of Eureka, which has been closed since 1976.
Any of the commissioners could remove the items from the schedule at next week’s meeting if they feel they need more information, a CPUC spokeswoman said.
Diablo Canyon began operations in 1985. Pacific Gas & Electric announced last year that it would turn off one reactor in 2024 and the other in 2025, as part of a “joint proposal’ with several labor and environmental groups to shift toward renewable forms of energy production.
The latest PG&E estimate is based on the plant going directly into decommissioning following closure, although the company has not yet determined which option it would pursue, according to Houck’s proposed decision. The Diablo Canyon decommissioning trust fund now holds $2.7 billion.
The utility’s cost figure relies on some changes in assumptions from the 2012 forecast, including: an additional four years, to 2028, for the Department of Energy to start meeting its legal mandate to retrieve spent fuel from Diablo Canyon and other U.S. nuclear power plants; a requirement, under an executive order from Gov. Jerry Brown, that all decommissioned material will have to be shipped out of state; staffing and security needs; and inflation and cost escalation over time.
The California Office of Ratepayer Advocates and the nongovernmental organizations The Utility Reform Network (TURN) and Alliance for Nuclear Accountability contested significant parts of PG&E’s proposal, which TURN called the largest such cost increase ever from a California utility and “unsupported by the evidence.”
Houck appears to have been persuaded by the critics in a number of areas. For example, she recommended against the entirety of PG&E’s proposed increase in security costs, from $343 million to $687 million. While the utility said the additional funding is necessary to develop and maintain physical protections to prevent sabotage or theft of special nuclear material, the administrative law judge wrote in the proposed decision that PG&E has not met the burden of proof for the cost spike.
The proposed decision would reduce the cost estimate in four area: $344 million from security costs; $505 million from utility and DOC staffing and large component removal; $312 million from disposal of decommissioned materials; and $197 million via a three-year reduction of the time spent reactor fuel is expected to remain in wet storage.
In its response to the proposed decision, PG&E this month asked that all but the spent fuel storage item be reinstated and that the commission adopt a revised estimate of $3.6 billion. The three remaining projections, it said, “are all supported by ample evidence in the record; further, some of the PD’s conclusions are in conflict with assumptions found to be reasonable in separate decisions for the [San Onofre Nuclear Generating Plant] decommissioning estimate.”
