San Francisco: Reflecting California’s changing energy landscape, PG&E announced a Joint Proposal June 21 with labor and leading environmental organizations 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.
Underpinning the agreement is the recognition that California’s new energy policies will significantly reduce the need for Diablo Canyon’s electricity output. There are several contributing factors, including the increase of the Renewable Portfolio Standard to 50 percent by 2030, doubling of energy efficiency goals under SB 350, the challenge of managing over-generation and intermittency conditions under a resource portfolio increasingly influenced by solar and wind production, the growth rate of distributed energy resources, and the potential increases in the departure of PG&E’s retail load customers to Community Choice Aggregation.
The Joint Proposal would replace power produced by two nuclear reactors at the Diablo Canyon Power Plant (DCPP) 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.
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.
“California’s energy landscape is changing dramatically with energy efficiency, renewables and storage being central to the state’s energy policy. As we make this transition, Diablo Canyon’s full output will no longer be required. As a result, we will not seek to relicense the facility beyond 2025 pending approval of the joint energy proposal. Importantly, this proposal recognizes the value of GHG-free nuclear power as an important bridge strategy to help ensure that power remains affordable and reliable and that we do not increase the use of fossil fuels while supporting California’s vision for the future,” said PG&E Corporation Chairman, CEO and President Tony Earley.
Under the terms of this Joint Proposal, PG&E will retire Diablo Canyon at the expiration of its current Nuclear Regulatory Commission (NRC) operating licenses. The parties will jointly propose and support the orderly replacement of Diablo Canyon with GHG-free resources.
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).
The Joint Proposal is contingent on a number of important regulatory actions, including:
• Approval of a lease extension from the State Lands Commission without which the company cannot operate DCPP beyond 2018.
• 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.