Bridging to California's energy future

Reflecting California's changing energy landscape, PG&E and labor and leading environmental organizations have announced a joint proposal that would increase investment in energy efficiency, renewables and storage beyond current state mandates while phasing out PG&E's production of nuclear power in California by 2025. The Parties to the joint proposal are PG&E, International Brotherhood of Electrical Workers Local 1245, Coalition of California Utility Employees, Friends of the Earth, Natural Resources Defense Council, Environment California and Alliance for Nuclear Responsibility.


Key elements of the joint proposal

The parties jointly propose that Diablo Canyon Power Plant (DCPP) be replaced with a cost-effective, greenhouse gas free portfolio of energy efficiency, renewables and energy storage. It includes a PG&E commitment to a 55 percent renewable energy target in 2031, an unprecedented voluntary commitment by a major U.S. energy company.


Recognizing that the procurement, construction and implementation of a greenhouse gas free portfolio of energy efficiency, renewables and storage will take years, the parties recognize that PG&E intends to operate Diablo Canyon to the end of its current NRC operating licenses, which expire on November 2, 2024 (Unit 1) and August 26, 2025 (Unit 2).


This eight- to nine-year transition period will provide the time to begin the process to plan and replace Diablo Canyon’s energy with new GHG-free replacement resources.


As part of the joint proposal, PG&E immediately ceased any efforts on its part to renew the Diablo Canyon operating licenses, and asked the NRC to suspend consideration of the pending Diablo Canyon license renewal application. PG&E will withdraw the application upon CPUC approval of the joint proposal.


PG&E does not believe long-term customer rates will increase as a result of the proposal. That is because the company believes it is likely that implementing the proposal will have a lower overall cost than relicensing DCPP and operating it through 2044. Factors affecting this include, in addition to lower demand, declining costs for renewable power and the potential for higher renewable integration costs if DCPP is relicensed.


Commitment to employees and the community

The parties to the agreement are jointly committed to supporting a successful transition for DCPP employees and the community.


PG&E's DCPP Retention Program will provide, among other things, incentives to retain employees during the remaining operating years of the plant, a retraining and development program to facilitate redeployment of a portion of plant personnel to the decommissioning project or other positions within the company, and severance payments upon the completion of employment.


In addition, the joint proposal includes $85 million in support for the San Luis Obispo County community.


Agreement contingencies

The joint proposal is contingent on a number of regulatory actions, including:


  • Approval of a lease extension from the State Lands Commission (SLC) without which the company cannot operate DCPP beyond 2018. The SLC extended the lease on June 28, 2016.
  • Approval by the CPUC of the proposed plan for replacement of Diablo Canyon with greenhouse gas-free resources. Any resource procurement PG&E makes will be subject to a non-bypassable cost allocation mechanism that ensures all users of PG&E’s grid pay a fair share of the costs.
  • CPUC confirmation that PG&E’s investment in DCPP will be recovered by the time the plant closes in 2025.
  • CPUC approval of cost recovery for appropriate employee and community transition benefits.

For further information, please read our news release.

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PG&E External Communications

General information: 805-546-5280
Media requests: 415-973-5930
Email: diablocanyon@pge.com