Diablo Canyon Power Plant Joint Proposal Reaches Latest State Milestone

April 18, 2017

AVILA BEACH, Calif. — As a joint proposal concerning the future of Pacific Gas and Electric Company's (PG&E) Diablo Canyon Power Plant (DCPP) continues to move through the state's review process, the utility stated that it is looking forward to participating in an upcoming evidentiary hearing that will be conducted by California Public Utilities Commission (CPUC).


At the evidentiary hearing, which will take place April 19-21 and April 24-28, PG&E and other groups participating in the state's review process will have an opportunity to present comments and testimony on the joint proposal. The hearing follows the submission of written testimony and comments by all participating parties.


If approved by the CPUC, the joint proposal would increase investment in energy efficiency and renewables beyond current state mandates, while phasing out PG&E's production of nuclear power in California by 2025. It will also help DCPP employees and the San Luis Obispo County community transition to a future without the plant in operation.


"The Diablo Canyon Power Plant joint proposal represents the most appropriate and responsible path forward for our customers, employees, the local community and the environment. It supports our state's energy vision and ensures an orderly transition from nuclear power to other greenhouse gas-free resources, while supporting our local employees and neighbors. PG&E has welcomed an open and transparent review of the joint proposal, and the evidentiary hearing represents the next step in the CPUC's review process. We look forward to participating in the hearing and continuing to demonstrate the value of this important agreement," said Steve Malnight, PG&E's Senior Vice President of Strategy and Policy.


About the Diablo Canyon Joint Proposal

California's energy landscape is changing dramatically. State policies that focus on renewables and energy efficiency, coupled with projected lower customer electricity demand in the future, will result in a significant reduction in the need for the electricity produced by DCPP past 2025.


Reflecting this change, PG&E partnered with labor and leading environmental organizations on a joint proposal that would increase investment in energy efficiency and renewables while retiring DCPP at the end of its current Nuclear Regulatory Commission (NRC) operating licenses, which expire in 2024 and 2025.


The parties to the joint proposal include PG&E, International Brotherhood of Electrical Workers Local 1245, Coalition of California Utility Employees, Friends of the Earth, Natural Resources Defense Council, California Energy Efficiency Industry Council and Alliance for Nuclear Responsibility.


Recognizing that the procurement, construction and implementation of a GHG-free portfolio of energy efficiency and renewables will take time, the joint parties agreed to support PG&E in obtaining the state approvals needed to operate DCPP to the expiration of its current NRC operating licenses.


This avoided an early shutdown of DCPP and associated negative economic and social impacts, including replacing the plant's output required to meet customer demand with non-GHG-free resources.


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


PG&E does not believe long-term customer rates will increase as a result of the joint proposal.


Commitment to Employees and the Community

The parties to the joint proposal are committed to supporting a successful transition for DCPP employees and the greater San Luis Obispo community.


Accordingly, $85 million has been proposed in support of a community transition plan. PG&E, along with San Luis Obispo County, several local cities and the San Luis Coastal Unified School District, announced details of the revised community impact mitigation program last November.


PG&E's proposed DCPP employee 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 at the end of the plant's license life.


Agreement Contingencies

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

  • Approval by the CPUC of the proposed plan for replacement of DCPP with 2,000 gigawatt-hours of energy efficiency installed by the end of 2024 in the DCPP retirement proceeding.
  • A CPUC directive for replacement of DCPP with GHG-free resources in the CPUC’s Integrated Resource Plan; and that responsibility for and costs of these resources will be addressed as part of that proceeding.
  • 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 retention, retraining, and severance programs.
  • CPUC approval of cost recovery for the community program designed to maintain essential community services until DCPP has reached retirement and to help the local community plan for a future without DCPP.
  • CPUC approval for recovery of costs associated with PG&E's prior relicensing activities.


Additional Information

The joint proposal can be read in its entirety here (PDF, 4.9 MB).


The August 11, 2016, joint proposal application filed at the CPUC can be found here.


Additional information prepared by M.J. Bradley & Associates, a strategic environmental consulting firm, on the joint proposal can be accessed here.


Procedural modifications made to the joint proposal in February 2017 can be found here.


About PG&E

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combined natural gas and electric energy companies in the United States. Based in San Francisco, with more than 20,000 employees, the company delivers some of the nation's cleanest energy to nearly 16 million people in Northern and Central California. For more information, visit pge.com and pge.com/news.