By Wayne Barber
The California Public Utilities Commission (CPUC) on Thursday adopted a cost estimate for decommissioning the Diablo Canyon nuclear power plant that is over $1 billion less than the amount sought by owner Pacific Gas & Electric Co.
In April, state Administrative Law Judge Darcie Houck issued a proposed decision that would reduce PG&E’s $3.8 billion cost estimate by about $1.4 billion, to $2.4 billion. The five-member utilities commission signed off on the projection without comment on Thursday.
The CPUC-approved estimate is directly linked to the ratepayer fees PG&E can charge to pay for decommissioning of Diablo Canyon following its scheduled closure in 2025.
The commission, though, granted PG&E’s uncontested $1.1 billion cost estimate for decommissioning the Humboldt Bay Power Plant, near the city of Eureka, which has been closed since 1976.
PGE spokesman Blair Jones said that the utility was disappointed by the CPUC decision on Diablo Canyon, a two-reactor facility that began operations in 1985.
“The cost forecast we put forward takes into account key environmental and safety requirements, and is well supported by industry benchmarking, best practices and experience,” Jones said by email. “We believe that our forecast is the best estimate of the cost to decommission the facility, and that the CPUC should have approved it in support of the state’s requirements to fully fund decommissioning expenses. We will continue to seek the funding necessary to perform this important project in the next triennial proceeding.”
CPUC assesses investor-owned utilities’ proposed cost needs for decommissioning nuclear power facilities every three years.
The Utility Reform Network (TURN) and other organizations successfully argued before Houck that the cost estimate put forward by the utility owner of the Diablo Canyon was too high.
“This is a great victory for TURN, and for beleaguered consumers,” said TURN Executive Director Mark Toney in a prepared statement. “PG&E is accustomed to using Diablo as its cash cow. With the plant closing, the CPUC’s vote to stop PG&E from milking Diablo for more of customers’ money is long overdue.”
Among other things, TURN had argued that PG&E failed to justify a $344 million increase in expected security costs. The nongovernmental advocacy group also said the utility did not prove the need for $505 million in assumed costs relating to removing the reactor vessel, steam generators, and other large components.
All in all, the decision approved by the CPUC rejects $1.358 billion (or 91%) of the proposed increase and avoids over $100 million in annual rate increases that would have been passed through to customers under PG&E’s cost proposal, TURN said.
Under an agreement worked out among various interest groups, PG&E announced in June 2016 that it would retire both Diablo Canyon nuclear units by the end of 2025. The plant is the last operating nuclear power station in California.
PG&E plans to replace most of the electricity from the two reactor units with renewable power sources, energy storage, and other measures.
The latest PG&E estimate is based on the plant going directly into decommissioning following closure, although the company has not yet determined which option it would pursue, according to Houck’s proposed decision. The Diablo Canyon decommissioning trust fund now holds $2.7 billion.
