PG&E to close Diablo Canyon

June 21, 2016

Diablo Canyon Nuclear Power PlantBy JOSH FRIEDMAN

Pacific Gas and Electric Co. announced plans to close Diablo Canyon power plant when the licenses to operate its two nuclear reactors expire in 2024 and 2025. The decision is being celebrated by environmental groups as the end of nuclear power in California, while others are concerned about the ensuing financial impact on the Central Coast.

Diablo Canyon has been in operation since 1985. The nuclear plant generates about 9 percent of California’s annual electricity production, according to PG&E.

In 2009, PG&E applied to renew it licenses to operate Diablo Canyon. But in 2011, PG&E paused the license renewal process to evaluate seismic concerns.

Multiple earthquake faults lie within several miles of the nuclear plant. Also in 2011, the Fukushima, Japan nuclear disaster reignited concerns among environmental groups and community members about the safety of Diablo Canyon.

California’s only other nuclear plant, San Onofre, closed permanently in 2013.

On Monday, PG&E reached an agreement with environmental and labor organizations on the closure of Diablo Canyon. The agreement calls for the utility to replace the power generated by nuclear reactors with a portfolio of greenhouse gas-free renewable energy resources.

Parties to the agreement include Friends of the Earth, the Alliance for Nuclear Responsibility, the Coalition of California Utility Employees and the International Brotherhood of Electrical Workers Local 1245.

There are currently about 1,483 Central Coast residents who are employed at Diablo Canyon. Most employees are expected to be offered jobs in the renewable energy industry.

PG&E’s transition away from nuclear energy is due in large part to a California regulation that mandates renewables account for at least 50 percent of the utility’s retail power sales by 2030. Some observers say that regulation, as well as the increasing regulatory scrutiny on nuclear power, removed the financial incentive to maintain operations at Diablo Canyon.

The closure of the nuclear plant will result in an approximately $920 million annual loss to the economies of San Luis Obispo County and northern Santa Barbara County, according to a 2013 study commissioned by PG&E. The Nuclear Energy Institute and Cal Poly’s Orfalea College of Business authored the report.

PG&E’s agreement to close Diablo Canyon states the nuclear plant currently generates about $22 million in local property taxes. That total could decline to zero by 2025, according to the agreement.

PG&E is offering to compensate SLO County an estimated $49.5 million for the loss of tax revenue. The utility expects to recover that amount through nuclear decommission funding.

The San Luis Coastal Unified School District receives more than $10 million, or about 16 percent of its operating budget, from PG&E taxes, according to a recent estimate released by State Sen. Bill Monning (D-Carmel). It is unclear how much money the school district will be able to recoup.

 


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sloweb

Ya gotta love the irony of this announcement coming on the same day that the North County (including Twin Cities Community Hospital) experience power outages.


Gordo

Sam Louis:


Much of the growth in government jobs was funded by revenue from the plant as were many of the programs within the San Luis Coastal school district.


If the plant shuts down in 9 years it will be a problem that local government will have time to plan for, but if it closes next year it will be a catastrophe.


Lost revenue, lost jobs both at the plant and in the service sectors, a decline in middle class property values with families having to leave and sell at bargain prices.


The county has changed, but not as much as we pretend. Wine grapes, college students and a small affluent population of silver hairs will not keep the county, its schools and its infrastructure up to the standard we are used to.


SamLouis

I don’t think SLOC’s schools and infrastructure reflect the huge amount of $$$ that Diablo Canyon has pumped into our local economy. I think when it comes to gov’t entities (including schools), the Diablo largess is reflected largely by unnecessary waste.


It’s time for SLOC entities to tighten their belts — either in the coming 9 years or 20 years. Either way, Diablo Canyon won’t last forever.


As far as property values, I don’t see them declining at all. There are HUGE populations to the north, south and east of SLOC that can’t wait to move here.


TaxMeAgain

This will not end well.


taxpayer

You need look no further than Morro Bay to see what happpens when a small group of people manage to close a well functioning power plant. The town was incorporated because the plant was in existence. Now, Morro Bay is 3 million dollars short of the money they need every fiscal year.


When they unincorporate, they will become part of the County. That will mean that they will have even less money to provide for streets, public safety and the imaginary wastewater treatment plant. All it takes is a few bad apples to spoil the barrel.


mbactivist1

I would like to remind CCN readers of the identity of that alleged “small group of people” who managed to close a “well functioning power plant”. Please check out a May 5, 2010 Wall Street Journal article by Cassandra Sweet


The article says, among other things:


“California regulators adopted new rules Tuesday that will require power plants to reduce their impact on aquatic wildlife at a potential cost of hundreds of millions, or billions of dollars.”


and


“Power-plant owner Dynegy Inc. criticized the draft regulations, saying they’ll force the company to shut down at least two of its plants. Dynegy will likely have to shut its aging South Bay power plant near San Diego by 2013 and its Morro Bay power plant by 2015, when the plants are required to be in compliance with the new rules, a Dynegy representative told the board Tuesday.”


As for the plant being “well functioning”, in a third quarter 2013 earnings report, Dynegy said,


“We believe that the time has come to move beyond this legacy facility and have decided to terminate operations there,”


“Legacy” in this context is, of course, a nice way of saying the facility is outmoded and in need of replacement.


So, the plant was shut down because Dynegy didn’t think it was worth fixing or replacing to comply with the new regulations established by the State.


givemeabreak

Oh BS. The same group of people are still playing tiddly winks trying to figure out where to put their new sewer plant. Wasting millions of taxpayers dollars. This group could care less about the working man and woman. They got theirs.


givemeabreak

taxpayer you are SO RIGHT!


Russ J

Don’t hate the player, hate the game. I know – so cliché. PG&E is just going with the tide – it’s purely business. They don’t have much say in how their future will be and neither do we. Don’t worry Mr. California beach bro; your government is here to save the day. They have an energy plan that will make you wish that you never cracked a drop of petroleum. You see, they know best and by passing legislation and confiscating your paycheck they can produce all the energy you need. Just don’t plan on living here unless you become uber-wealthy or dirt poor (someone has to cook meals and clean for the other class). California is no longer a place for the middle class. More and more it belongs to the politicians, public employees and the wealth creators. Bravo fellow Californians – you get what you vote for!


Gordo

The decommissioning process could take up to 20+ years, Humboldt Bay NPP was shuttered in 1983, however the decommissioning process did not finish until 2013. This means the jobs created by the plant won’t disappear overnight, however, they will decrease in numbers over time and with that we will see the $920M they bring into SLO and SB counties will go away.


If the county doesn’t plan carefully, we will go back to being a broke dick cow county, just like we were before the plant existed.


SamLouis

Things are substantially different in SLOC compared to when Diablo went on-line in 1985. Far, far more self-sustained retirees have moved here and continue to move here. Tourism has grown a great deal. Cal Poly and even “little” Cuesta College have grown significantly.


Lots of growth in gov’t jobs at the federal/state/county and city levels as well. Diablo will definitely be missed (particularly given the way in which money is spent around here by the gov’t), but it won’t have the impact it would have in 1985 had the plant never went on-line.


RealityBytes

Governor Jerry Brown signed legislation in 2011 requiring California’s utilities to obtain 33 percent of their electricity from renewable energy sources by the end of 2020.


Hopefully PGE can meet or exceed that goal by Diablo’s 2025 closure.


Robert1

That huge sucking sound you hear is the tax dollars and salaries leaving SLO County. Look out property owners, the taxers are coming.


hijinks

I guess you assume PG%E will repeal Prop 13?


nunsense

Actually, as I understand it, it wouldn’t have to since it’s not intrinsic to the plant. Only really requires a power source, there in is the rub.


TWEEKSBALMER

Why would you supply water to people who kept fighting you? I’d say go f.. yourself and raise your rates.


justbeware

If Diablo stops producing energy does that mean they will not be able to run the de-sal plant so many are planning on?


indigo1955
TWEEKSBALMER

I hope so.