February 27, 2017
SAN FRANCISCO, Calif. — Reflecting feedback from parties participating in the California Public Utilities Commission's (CPUC) review of the Diablo Canyon Power Plant (DCPP) joint proposal, PG&E announced today several modifications focused on utilizing the most appropriate regulatory proceeding to consider the replacement of DCPP's energy output.
As part of the updated proposal, PG&E maintains its previous commitment to replace DCPP's energy output with greenhouse gas (GHG)-free resources and its intention to provide customers with electricity that is 55 percent renewable by 2031. In addition, the proposal to retire DCPP, and the employee and community transition portions of PG&E's proposal, remain unchanged.
In its August 2016 application filed with the CPUC, PG&E proposed replacing the energy output needed to meet customer demand with energy efficiency savings and other GHG-free energy resources through three successive steps, or tranches. PG&E is revising the proposed energy replacement tranches as follows:
- Maintain the previously proposed Tranche 1 that focuses on obtaining 2,000 gigawatt-hours of energy efficiency savings to be implemented over the 2018-2024 time period.
- Withdraw Tranche 2 and in its place use a CPUC energy planning proceeding known as the Integrated Resource Plan (IRP) as the process to consider the replacement of DCPP with other clean energy resources.
- Withdraw Tranche 3 and meet the previously announced voluntary commitment of 55 percent renewables by 2031 through the IRP process.
- Request that the CPUC adopt a policy directive that DCPP should be replaced with GHG-free resources in the IRP, and that responsibility for and costs of these resources will be addressed as part of that proceeding.
The joint parties, including labor and leading environmental groups who have been involved in the procurement proceeding, are fully supportive of the modifications.
"We are gratified by the strong consensus we have seen throughout the review process to replace DCPP with GHG-free resources. This is an important commitment in support of the state's ambitious goals to reduce GHG emissions, as reaffirmed with the enactment of Senate Bill 32. While the updated proposal offers a new energy replacement procedural track, it maintains our strong clean energy commitments, and support for the local community and employees," said Steve Malnight, PG&E's Senior Vice President of Regulatory Affairs.
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 IRP, 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 and community transition benefits as well as recovery of costs associated with PG&E's relicensing activities.
Additional Information
The joint proposal can be read in its entirety here.
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.
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.
