Central Coast Curious: Will PG&E's bankruptcy affect Diablo Canyon community settlement?
For our latest Central Coast Curious segment, a listener asks what happens to San Luis Obispo County’s compensation for Diablo Canyon’s decommissioning if PG&E goes bankrupt due to its multiple liabilities?
San Luis Obispo County and other local entities are promised $85 million dollars to help mitigate the planned closure of the state’s last nuclear power plant, Diablo Canyon. Now that PG&E has indicated it plans to file for bankruptcy, will that agreement be a casualty?
For the answer, we turned to California Senator Bill Monning, whose district includes San Luis Obispo County and Diablo Canyon.
“I am cautiously optimistic that would be protected through any type of reorganization should P&GE pursue the bankruptcy filing,” Monning told KCBX News.
That's because last year, Monning and Central Coast assemblymember Jordan Cunningham authored a bill—SB 1090—that requires state regulators to approve a “community impact mitigation settlement,” after a California Public Utilities Commission (CPUC) judge ruled the utility couldn’t raise customer rates to pay for it.
“That is state law. It's been passed into law, signed by the governor last year, effective as of January 1, and it's been acted upon and approved by the Public Utilities Commission,” Monning said.
In an emailed statement, PG&E spokesperson Suzanne Hosn underscored that SB 1090 “requires the CPUC to approve and fund the Community Impact Mitigation Program.”
“The CPUC issued a decision in December of 2018 approving the programs and approving funding in rates,” Hosn said. “Since these activities are mandated, CPUC approved and funded, we do not anticipate that the Chapter 11 process will have any impact on the program.”
SB 1090 also called for over $300 million in worker retention funding. Monning said he expects the legislation would protect the dollar amount and agreement through any kind of reorganization of the utility.
“Whatever reorganization happens,” Monning said. “It's going be under the close scrutiny of both the state of California—and for Diablo Canyon—the NRC.”
That’s the Nuclear Regulatory Commission, the federal agency that oversees nuclear power plants across the country.
Under state and federal rules governing nuclear power plants and the decommissioning process, “all nuclear plant owners must maintain trust funds while the plants are in operation to ensure sufficient amounts will be available to decommission their facilities,” according to the California Public Utilities Commission. “Utilities operating nuclear power plants collect monthly fees on customers’ electric bills to fund these trusts, which are further augmented over the life of the plant from returns on investment in fixed income (bonds) and equity (stocks).”
According to figures provided by the CPUC, PG&E has more than enough trust fund balance to cover its decommission costs.
PG&E spokesperson Hosn said as far as the joint proposal goes, a process governed by the CPUC “will ensure we have the proper funding to achieve these important environmental and community goals.”
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