SAN FRANCISCO--(BUSINESS WIRE)--
Reflecting California’s changing energy landscape, PG&E today announced
a Joint Proposal 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 overgeneration 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.
He added, “Supporting this is a coalition of labor and environmental
partners with some diverse points of view. We came to this agreement
with some different perspectives—and we continue to have some different
perspectives—but the important thing is that we ultimately got to a
shared point of view about the most appropriate and responsible path
forward with respect to Diablo Canyon and how best to support the
state’s energy vision.”
“We are incredibly proud of the men and women who have made Diablo
Canyon one of the finest nuclear stations in the country and who, in
doing so, have provided our state with GHG-free energy for three
decades. We are committed to supporting our valued employees and the
community and we will advocate on their behalf throughout this process.
We believe the transition period included in this proposal represents a
responsible approach that allows time for the needs of employees and the
community to be properly addressed,” said PG&E President, Electric,
Geisha Williams.
Key Elements of the Joint Proposal
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).
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.
PG&E will immediately cease any efforts on its part to renew the Diablo
Canyon operating licenses and will ask the NRC to suspend consideration
of the pending Diablo Canyon license renewal application pending
withdrawal with prejudice of the NRC application upon California Public
Utilities Commission (CPUC) approval of the Joint Proposal Application.
PG&E does not believe customer rates will increase as a result of the
Joint Proposal because it 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. PG&E has reached agreement on these
benefits with IBEW Local 1245 and will immediately engage in bargaining
with its other labor unions to ensure appropriate benefits for
represented employees.
In addition, the Joint Proposal includes payments by PG&E to San Luis
Obispo County totaling nearly $50 million. The proposed payments are
designed to offset declining property taxes through 2025 in support of a
transition plan for the county.
Agreement Contingencies
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.
Additional Information
The Joint Proposal can be read in its entirety here.
Additional information prepared by M.J. Bradley & Associates, a
strategic environmental consulting firm, can be accessed here.
The joint parties will be issuing additional statements today regarding
their participation in the proposal.
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 utilities 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 www.pge.com/
and www.pge.com/en/about/newsroom/index.page.
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Source: Pacific Gas and Electric Company