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Judge backs billion-dollar reduction to PG&E's cost estimate for closing Diablo Canyon

Flickr member Tracey Adams

Hearings for Pacific Gas and Electric’s decommissioning plan for the Diablo Canyon Power Plant got underway Wednesday before the California Public Utilities Commission (CPUC). In a parallel case concerning PG&E’s request to raise customer rates to cover its nuclear decommissioning costs, a CPUC administrative law judge issued a proposed decision Thursday to deny PG&E’s multi-billion dollar cost estimate for closing Diablo Canyon, reducing it by $1.4 billion. 

PG&E is asking the CPUC to approve cost estimate figures that translate into over $100 million in annual rate increases to PG&E customers. PG&E’s estimated cost to close the Diablo Canyon Power Plant (DCPP) is the largest ever proposed by a California utility, according to the Utility Reform Network (TURN). The ratepayer advocacy non-profit said PG&E is seeking a 65 percent increase in its cost estimate since 2012 - from $2.3 billion to $3.8 billion.

In the proposed decision, Administrative Law Judge Darcie Houck writes, “it is reasonable to reduce Pacific Gas and Electric Company’s 2015 decommissioning cost estimate for Diablo Canyon Power Plant Units 1 and 2 by a total of $1.358 billion on the grounds the request lacked adequate support to demonstrate the requests were reasonable in nature and amount; the remainder of $2.421 billion is a reasonable cost estimate and should be adopted.”

In a press release, a TURN attorney applauded the preliminary decision.

“PG&E customers really need some good news, and this is it,” Matthew Freedman said. “If this proposal is approved by the full CPUC, it would be the most significant cut in a proposed decommissioning cost increase in California history. It would also put PG&E and other utilities on notice that the costs associated with their nuclear plants will be subject to serious scrutiny with the goal of protecting the interests of customers rather than company shareholders.”

In order to become law, the proposed decision will need to be ratified by a majority of the Public Utilities Commission. The commission’s May 25, 2017 meeting is the soonest it could be calendared.

Friday’s hearing before the full California Public Utilities Commission about specifics of the Diablo Canyon shuttering plan - a separate issue - was canceled due to a widespread PG&E power outage in San Francisco. Hearings on that application will resume Monday.

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