Pacific Gas and Electric Co.’s announcement yesterday that it would shutter California’s last nuclear plant and replace the power with energy efficiency and renewable energy was the result of a confluence of progressive state policies, CEO Anthony Earley said.
The closure of Diablo Canyon’s two nuclear reactors on California’s central coast in 2024 and 2025 will likely mean the end of nuclear power in the state, due to an existing state moratorium on new plants until the problem of radioactive waste is dealt with permanently.
The agreement came about through negotiations with labor unions and environmental groups, whose leaders said it could serve as a model for other states seeking to shut down nuclear or fossil-fueled plants.
But Earley noted that California’s unique suite of policies formed the basis for the deal.
He cited last year’s passage of S.B. 350, a bill that raised the state’s renewable portfolio standard (RPS) to 50 percent and mandated a doubling of energy efficiency by 2030 as well as continued growth of rooftop solar systems and local governments procuring their own electricity, a practice known as community choice aggregation.
"All of these things have contributed to our conclusion that we can phase out Diablo Canyon," Earley said.
The agreement commits PG&E to using renewables for 55 percent of its total retail sales by 2031.
He said the deal would not have happened if PG&E had gotten its way in negotiations last year to redefine RPS-eligible renewables to include nuclear power.
"We actually do believe that we could have had a lower-cost strategy that way, and we would have been using nuclear," he said. "Given the current state policies, this is the best solution for us."
Renewables target ‘significant’
The agreement still needs approval by the California Public Utilities Commission. The PUC also will also be in charge of approving the procurement of replacement power and approving the use of $400 million in decommissioning funds on retaining and retraining workers at the plant and compensating the county of San Luis Obispo for lost property taxes.
PG&E also needs approval from the State Lands Commission to extend the lease on the state’s coast through 2025; it currently is set to expire in 2018. A hearing Tuesday will determine whether the utility has to perform an environmental impact report on the lease extension.
It was an open question whether PG&E would have gone through with its application to the Nuclear Regulatory Commission to extend the licenses beyond their original 40-year span.
The state’s grid operator, the California Independent System Operator, has been planning for the 2030 renewables targets with the assumption that the plant would close in 2025.
A party to the agreement said the renewables target is new, if not the plan to close Diablo.
"Adopting the 55 percent target, I think, is significant," said John Geesman, an attorney with the Alliance for Nuclear Responsibility.
Other parties include Friends of the Earth, the Natural Resources Defense Council, the International Brotherhood of Electrical Workers and the Coalition of California Utility Employees.
Could it happen elsewhere?
Environmentalists said other states could use the agreement as a template to replace other nuclear and fossil-fueled plants with renewables, especially distributed solar, in order to fight climate change.
They pointed to California’s current drought and record-breaking temperatures in Southern California that are causing blackouts and encouraging wildfires.
"This is what global warming looks like," said Dan Jacobson, legislative director for Environment California. "That’s why it’s so important this deal was put forth."
The nuclear industry pointed out that the plant currently provides a quarter of the state’s greenhouse gas-free electricity and said the agreement does not reflect a national trend.
"This agreement is unique to PG&E and California energy policy," said Nuclear Energy Institute President Marvin Fertel. "In other states, energy companies have extended the operation of 80 reactors as a strategic measure to retain reliable, carbon-free electricity."
Geesman, a former member of the California Energy Commission, disagreed.
"In the same way that so many other California energy policies eventually become templates for much broader application, this one totally fits that description," he said.
"[It’s] the recognition of the economic development potential for renewable energy, and the recognition that when you’re in the energy supply business, it probably makes a hell of a lot of sense to choose the path of least resistance," he added. "Why try to beat your head against a wall trying to produce something that people don’t want? That’s not a successful business formula."
‘Get this right’
Skeptics of the deal argued that Diablo Canyon’s closure could increase the use of natural gas, as happened after the unplanned closure of California’s other nuclear plant, San Onofre Nuclear Generating Station, in 2013.
"[W]hen people understand that the proposal is based on a big lie — that Diablo can be closed without increasing fossil fuel use, methane emissions and carbon emissions — they will reject it, and the leadership of the institutions who negotiated it," the groups Environmental Progress and Mothers for Nuclear said in a statement.
Earley pointed to the ability to renegotiate expiring renewables contracts to allow for the ability to ramp up quickly and curtail production during times of overgeneration. More than 30 percent of the utility’s older contracts are coming up for renewal in the next 10 years, he said.
"The lesson from the failure to prevent GHG emission increases and increased dependence on gas after SONGS [San Onofre] was that we need to plan ahead," said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies.
The group worked on a paper that found Diablo’s power could be replaced by emissions-free substitutes and would not pose a threat to reliability.
"In the case of Diablo, we have time and the opportunity to get this right. And we have a clear commitment from PG&E," White said.
This story also appears in EnergyWire.