California Passes Bill Requiring Diablo Canyon Plant to Be Replaced With Carbon-Free Resources

 Last summer, state regulators approved a plan to close Diablo Canyon, California’s last nuclear reactor. That plan also slashed hundreds of millions of dollars for worker retraining and community support — and failed to require that Pacific Gas & Electric seek out carbon-free resources to replace the facility.  

A bill now headed to Gov. Jerry Brown’s desk would restore that funding and ensure that the plant’s 2.2 gigawatts of always-on, carbon-neutral electricity will come from a portfolio of greenhouse-gas-free resources.  

These are the terms of SB 1090, which passed the state Senate in May and this week was approved by the State Assembly on a 67-to-1 vote. Gov. Brown has until Sept. 30 to sign the bill.

SB 1090 would restore about $85 million in community support funding, along with about $89 million in funding for worker retraining and retention that was stripped from the plan by a California Public Utilities Commission decision in January. The CPUC was responding to objections from groups concerned about the rise in PG&E rates that would result from the plan.

 But the decision also drew condemnation from the same coalition of environmental, community and labor groups that reached the 2016 settlement agreement with PG&E, which set the original terms for helping the San Luis Obispo region recover from the loss of jobs and tax revenue to come when the plant closes by 2025.  

The new legislation also restores a key piece of the 2016 settlement agreement that was left out of the CPUC’s decision in January — a requirement that Diablo Canyon’s energy and capacity must be replaced with a portfolio of greenhouse-gas-free resources.

That was a critical goal for the Natural Resources Defense Council, one of the primary parties in the 2016 settlement. Deploying clean energy resources should more than cover the worker retraining and community support costs that SB 1090 would restore, according to the environmental group.

Replacing "Diablo Canyon with zero-carbon energy efficiency and renewable energy will save PG&E customers at least $1 billion,” Peter Miller, NRDC’s western energy project director, wrote in a Wednesday blog post. The community and worker funding restored by SB 1090 amount to “a small fraction of net savings” from this resource mix, adding at most 18 cents per month to customers' bills spread from now until 2025, and “will cease after the plant’s 2025 closure, while the net savings to customers will continue to grow,” according to NRDC’s analysis.

The greenhouse-gas-free requirement is also a sharp departure from how state regulators and utilities managed the closure of the San Onofre nuclear power plant. Southern California Edison was forced to close the power plant in 2013, and the CPUC instructed the utility and San Diego Gas & Electric to seek out a large portion of the resources needed to replace it from zero-carbon resources, including hundreds of megawatts of distributed energy.

But it also allowed both utilities to add hundreds more megawatts of natural-gas-fired power plants, angering clean energy advocates who had pushed for more zero-carbon alternatives.