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HomeMy WebLinkAbout03-15-2016 Item 14, BeckerMAR 15 2016 From: Rochelle Becker - -- Sent: Tuesday, March 15, 2016 10:03 AM To: E -mail Council Website Subject: SB 968 Attachments: 128 16 Diablo econ impacts - Leg Counsel.PDF; 2 2016 SB 968 - Diablo Canyon fact sheet.pdf, 022316 A4NR support SB968 -1.pdf Dear Mayor Marx and Council: I would like to take the opportunity to inform you, in advance, that I will be attending the public comment segment of the council meeting on March 15th at which time I will ask the council to consider offering formal support for SB 968, legislation now proposed by our district senator, William Monning and co- authored by Assemblyman Achadjian. I am attaching the bill language and the fact sheet provided by Mr. Monning's staff. In short, this bill will call on PG &E to perform (under the aegis of the CPUC) an economic analysis of SLO's financial future in the aftermath of the closing of Diablo Canyon, and to identify "mitigating strategies" that will help to ameliorate the anticipated losses. Therefore, on behalf of the Alliance, I will be formally asking the City to endorse this legislation. Kindly feel free to contact me at any time if you have questions or need additional information. Yours truly, Rochelle Rochelle Becker, Executive Director Alliance for Nuclear Responsibility PO 1328 San Luis Obispo, CA 93406 www.a4nr.org COUNCIL MEETING: - IS -1 co ITEM NO.:- I - -- 84044 01/28/16 06:37 PM RN 16 02721 PAGE 1 An act to add Section 712.5 to the Public Utilities Code, relating to electricity. r N N N r N � O b ally 84044 01/28/16 06:37 PM RN 16 02721 PAGE 2 THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 712.5 is added to the Public Utilities Code, to read: 712.5. (a) The commission shall require the Pacific Gas and Electric Company to submit an assessment of the adverse economic impact for the region surrounding the County of San Luis Obispo that could occur if the Diablo Canyon Units 1 and 2 powerplant were to temporarily or permanently shut down before the powerplant's current operating licenses from the Nuclear Regulatory Commission expire. The assessment shall be conducted by an independent third party whose independence and qualifications can reasonably be verified by the commission. (b) The assessment shall consist of, but not be limited to, all of the following: (1) Estimates of any decreases in local tax revenues, decreases in workforce populations, losses in indirect or induced economies, and potential impacts to ratepayers from an early shutdown. (2) A review of the economic impacts that affected the region surrounding the San Onofre Nuclear Generating Station after it was decommissioned by the Southern California Edison Company and of the relevant decommissioning plans of the San Onofre Nuclear Generating Station. (3) Identification of any contingency plans that could mitigate the adverse economic impact of an early shutdown to state and local jurisdictions, the local workforce, and entities receiving enhanced tax revenue. (c) The independent third party shall consult with the board of supervisors of the County of San Luis Obispo, the governing board of the San Luis Coastal Unified a g �a N h N b 84044 01/28/16 06:37 PM RN 16 02721 PAGE 3 School District, and other relevant governmental entities to assist in an accurate assessment of decreases in local tax revenues. (d) The commission shall make the assessment publicly available on its Internet Web site and place it as an item on the agenda at the next commission meeting after EEO the assessment is made publicly available for purposes of collecting and recording wy� H public comment, and hold any subsequent public meetings as necessary. (e) The commission shall consider any further assessments or reviews needed e that could assist local efforts in the region surrounding the County of San Luis Obispo to prepare for a sudden closure of the Diablo Canyon Units 1 and 2 powerplant and make those considerations and findings publicly available. SEC. 2. The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because, currently, the Diablo Canyon Units 1 and 2 powerplant, owned and operated by the Pacific Gas and Electric Company, is the last operating nuclear powerplant in California and its continued operation is uncertain as Diablo Canyon Units 1 and 2 are only authorized to operate until 2024 and 2025, respectively. Local communities were ill- prepared and given no notice after the sudden closure of the San Onofre Nuclear Generating Station was announced on June 7, 2013, and the state is still responding, at significant cost, to the sudden, permanent, and unexpected loss of baseline electricity. Therefore, an assessment is needed from the Pacific Gas and Electric Company on the adverse economic impact specific to an early shut down of the Diablo Canyon Units 1 and 2 powerplant to provide 84044 01/28/16 06:37 PM RN 16 02721 PAGE 4 the state, and local communities, with valuable and necessary information to plan and prepare for that circumstance, if needed. p h ry �q .rte 84044 01/28/16 06:37 PM RN 16 02721 PAGE 1 NoM n �i LEGISLATIVE COUNSEL'S DIGEST ry ., Bill No. as introduced, General Subject: Diablo Canyon Units 1 and 2 powerplant. Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. The Diablo Canyon nuclear powerplant, composed of reactor Units 1 and 2, is operated by the Pacific Gas and Electric Company in the County of San Luis Obispo. Existing law requires the commission to convene, or continue, until August 26, 2025, an independent peer review panel to conduct an independent review of enhanced seismic studies and surveys of the Diablo Canyon Units l and 2 powerplant, including the surrounding areas of the facility and areas of nuclear waste storage. This bill would direct the commission to require the Pacific Gas and Electric Company to submit an assessment, conducted by an independent third party, of the adverse economic impact that could occur if the Diablo Canyon Units 1 and 2 powerplant were to temporarily or permanently shut down before the powerplant's 84044 01/28 /16 06:37 PM RN 16 02721 PAGE 2 current operating licenses expire. The bill would require the commission to consider any further assessments or reviews needed that could assist local efforts to prepare for a sudden closure of the Diablo Canyon Units 1 and 2 powerplant. This bill would make legislative findings and declarations as to the necessity of ----gym a special statute for the Pacific Gas and Electric Company. F Vote: majority. Appropriation: no. Fiscal committee: yes. State - mandated local program: no. r N M SB 968 FACT SHEET SENATOR BILL MONNING DIABLO CANYON: ADVERSE ECONOMIC IMPACT ASSESSMENT PROPOSED BILL Senate Bill (SB) 968 requires the Pacific Gas and Electric Company (PG &E) to submit to the California Public Utilities Commission an assessment of the adverse economic impacts that could occur in the San Luis Obispo County region if the Diablo Canyon Nuclear Power Plant were to temporarily or permanently shut down. The assessment would be conducted by an independent third party and made publically available. BACKGROUND The Diablo Canyon Power Plant (Plant) is owned and operated by PG &E and located on the California coast in San Luis Obispo County. The Plant is the only nuclear power plant operating in the state and is licensed by the Nuclear Regulatory Commission (NRC). Unit 1 is licensed to operate until November 2, 2024, and Unit 2 is licensed to operate until August 26, 2025. On November 24, 2009, PG &E filed a 20 year license renewal with the NRC but after the accident at the Fukushima Daiichi nuclear power plant in Japan in 2011, active efforts to extend the license have stalled. As a result, seismic studies and reviews are ongoing and will need to be completed prior to NRC's decision to extend Diablo Canyon's license. Additionally, if PG& E continues to move forward with the Plant's license extension, use of the Once - Through Cooling system and future environmental mitigation will need to be reviewed by the State Water Resources Control Board. Senator Monning A June 2013 Economic Impact Study funded by PG &E concluded that the local economic impact of Diablo Canyon is substantial, with the total 2011 estimated economic impact to be $919.8 million. The Plant has approximately 1,483 employees and it is estimated that this year the San Luis Coastal Unified School District will receive more than $10 million, 16 percent of its operating revenue, from taxes paid by PG &E. According to San Luis Obispo County records, PG &E is the largest property taxpayer in the County, paying over $25 million in 2014, much of that attributable to its operations at Diablo Canyon. NEED FOR LEGISLATION While the 2013 Economic Impact Study highlighted the economic benefits of Diablo Canyon, the study failed to detail the adverse economic impacts that could occur if the Plant were to shut down. No one can say for certain whether the Diablo Canyon Nuclear Power Plant will continue to operate in the near -term or long -term. Given this uncertainty and the region's economic reliance on the Plant, it is critical that state regulators and the public be informed about the potential adverse economic impacts should the plant not be in operation and how to best mitigate these impacts In 2013, local communities were ill prepared for the sudden closure of the San Onofre Nuclear Generating Station (SONGS) in San Diego. Contact: Ryan Guillen at (916) 651 -4017 SB 968 Fact Sheet Unlike the region impacted by the SONGS closure, the San Luis Obispo region relies more hcavily on the cconomic bcncfits provided by Diablo Canyon and needs' economic impact information in order to assess how the region can absorb adverse economic impacts should the Plant be closed. SOLUTION SB 968 calls for a comprehensive economic assessment of the region that would be impacted if the Diablo Canyon Nuclear Power Plant temporarily or permanently closes. The assessment would determine if there would be decreases in local tax revenues, decreases in the local workforce, and if there would be indirect economic losses. Additionally, the assessment would include a review of the economic impacts of the closure of the San Onofre Nuclear Generating Station and how the community is handling decommissioning. Assessing and planning for any adverse economic impacts should the Diablo Canyon Power Plant shut down is prudent and will not take away from the existing public safety assessments related to the Plant. SB 968 will allow local communities and the state with the information they need to develop potential contingency plans should Diablo Canyon temporarily or permanently shut down. SUPPORT None at this time OPPOSITION None at this time Senator Monning FOR MORE INFORMATION Contact: Ryan Guillen Phone: (916) 651 -4017 Email: ryan.g)td11e (g)sen.ca.gov Contact: Ryan Guillen at (916) 651 -4017 SB 968 Fact Sheet ALLIANCE FOR NUCLEAR RESPONSIBILITY February 23, 2016 Senator Bill Morning State Capitol, Room 313 Sacramento, CA 95814 RE: SB 968— SUPPORT Dear Senator Monning: PO Box 1328 San Luis Obispo, CA 93406 (858) 337 -2703 (805) 704 -1810 www.a4nr.org On behalf of the Alliance for Nuclear Responsibility (A4NR), we wish to thank you for your leadership in authoring this bill. As our district's senator, you are keenly aware of San Luis Obispo's historical dependence on revenue —both taxed and indirect —from PG &E's Diablo Canyon Nuclear Power Plant. While this community has for years borne the risks from hosting this facility, it has nonetheless received the economic benefits. However, the latest reports from the Energy Commission and CAISO indicate that changing and newly emerging energy paradigms are creating a situation in which the energy from Diablo Canyon will continue to diminish in importance to California's overall goals. At the same time, PG &E's bid to relicense the facility faces increasing obstacles, not the least of which are complex permitting requirements from the State Lands Commission, State Water Resources Control Board and the Coastal Commission. Even the early relicensing exuberance of PG &E's executive leadership has waned to a "non- committal" stance at best. It should be remembered that three of four commercial reactors in California closed well in advance of their license expiration, and that Southern California Edison shuttered San Onofre only weeks after their own management testified to the CPUC that they fully expected one unit to restart that summer. The decision to close Diablo Canyon will be made at 77 Beale Street, and as the lesson from San Onofre illustrates, may be made suddenly and on the basis of cutting corporate losses. Thus, SB 968, with its goal of evaluating San Luis Obispo's post- Diablo economic future, comes at the right time. While the County government has discussed the need to plan for a post - Diablo future, this bill opens the door for dialog between our local community and Sacramento. Of all the elements in the bill, we find this section to have the most importance to the future of San Luis Obispo: (3) Identification of any contingency plans that could mitigate the adverse economic impact of an early shutdown to state and local jurisdictions, the local workforce, and entities receiving enhanced tax revenue. [emphasis added] "Running the numbers" regarding economic losses is perhaps the cursory part of the legislation. The development of mitigation strategies to offset the losses that would _come with the closin of of plant is key to insuring that this bill achieves its desired impact. True diligence and a broad, macro -view of our region's development outlook are needed for the mitigation challenge. While the bill asks for a look at the aftermath of the closing of SONGS, there are recent lessons to be learned from other former reactor communities — including Crystal River, Florida and Kewaunee, Wisconsin —that have similar populations to San Luis Obispo as well as the ancillary drivers of tourism and agriculture. Those communities are scrambling to make up the losses and cobble together redevelopment plans. Among the lessons: Local planners should have evaluated land use, zoning, infrastructure, tax and housing policies in advance of closure in order to become a competitive location for the economic drivers they now seek. Any study evolving from SB 968 should involve regional planning and economic development consultants, including overtures to the federal government with regard to redevelopment funds as if this were a military base closure. In closing, we thank you for taking the important steps needed to make sure that San Luis Obispo remains "whole" as a community in the aftermath of Diablo Canyon's closing. While that decision will be PG &E's, the ability to remain pro- active remains with us. Yours truly, /s/ Rochelle Becker, Executive Director cc: Assemblyman Mike Gatto, Chair, Assembly Utilities and Commerce Committee Senator Ben Hueso, Chair, Senate Energy, Utilities and Communications Committee