If Diablo Canyon deal approved, utility would be 55% renewable in 2031

Pacific Gas and Electric (PG&E) (NYSE:PCG) intends to be 55% powered by renewables by 2031, which would voluntarily exceed the state’s 2030 target of 50%, if the California Public Utilities Commission (CPUC) approves a retirement plan for the Diablo Canyon nuclear plant.

PG&E is also seeking more than a billion dollars in rate recovery for extensive energy efficiency efforts. The utility is also hoping for a final CPUC decision in June 2017. That’s according to an 80-page filing that the parties made with CPUC on Aug. 11.

PG&E proposes a procedural schedule that would call for responsive testimony to be served in the fall, hearings in December, briefs in January, and a proposed decision by May 2017. A final CPUC decision in June 2017 would enable PG&E to proceed with the procurement of GHG-free resources in order to achieve Joint Proposal milestones for the orderly replacement of Diablo Canyon’s energy.

The company, along with environmental and labor groups, announced a proposed sunset of Diablo Canyon on June 21. Under the “Joint Proposal,” the two reactors at the Diablo Canyon nuclear plant, which together generate more than 2,200 MW, will retire by 2025.

PG&E, Friends of the Earth (FOE), Natural Resources Defense Council (NRDC), Environment California, International Brotherhood of Electrical Workers Local 1245 (IBEW Local 1245), Coalition of California Utility Employees (“CUE”) and Alliance for Nuclear Responsibility (A4NR) have entered into the Joint Proposal governing the closure of Diablo Canyon.

If the deal is approved, PG&E will drop its previous pursuit of 20-year license extensions for the units before the Nuclear Regulatory Commission (NRC). PG&E filed a license renewal application with the NRC in November 2009.

Diablo Canyon Units 1 and 2 began commercial operation in May 1985 and March 1986, respectively. The two pressurized water reactors (PWRs) are located in Avila Beach, California. Diablo Canyon is one of the largest employers and taxpayers in the San Luis Obispo County area. It has roughly 1,500 employees.

The nuclear plant produces more than 18,000 gigawatt-hours (GWh) of energy each year, providing approximately 6% of the energy generated in California annually. Over its 30-year lifetime, Diablo Canyon has been in operation more than 80% of the time, compared with the national average of 70% for other nuclear facilities, according to PG&E.

Here are a few other highlights from the filing:

  • On July 12, 2016, PG&E and the Joint Parties held a public workshop at PG&E’s office in San Francisco to give interested parties an opportunity to review, ask questions, and potentially join in the Joint Proposal. A report was prepared by M.J. Bradley summarizing the issues raised at this and similar sessions.
  • PG&E should be authorized to recover in rates the approximately $53m reasonably incurred in the federal and state license renewal process.
  • The Joint Proposal includes three tranches of energy efficiency and GHG-free energy resource procurement that will occur between 2018 and 2045, and addresses how the costs associated with this procurement will be allocated.
  • Tranche #1: This tranche includes one or more competitive solicitations and potentially new utility programs to add 2,000 gross GWh of energy efficiency to be installed by the end of 2024. This tranche is intended to reduce load with a GHG-free resource before Diablo Canyon retires. PG&E seeks authority to recover $1bn in connection with the energy efficiency plan.
  • 2. Tranche #2: This tranche includes a competitive solicitation for 2,000 GWh of GHG-free energy for delivery in 2025-2030. Energy efficiency and RPS energy resources, as well as other GHG-free energy resources, will compete to fill this opportunity.
  • 3. Tranche #3: This tranche includes a voluntary 55% RPS commitment, which is 5% above the 2030 RPS mandate in Senate Bill 350. The commitment would start in 2031 and terminate the earlier of 2045 or when superseded by law or a CPUC decision.
About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.