By Robert Mullin

Pacific Gas and Electric said Tuesday it will shut down California’s last nuclear power plant in 2025 under an agreement reached with a coalition of environmental, labor and anti-nuclear groups.

The utility said it will develop a portfolio of renewable resources, energy efficiency and energy storage to replace output from its 2,240-MW Diablo Canyon facility, located on the state’s central coast near Avila Beach.

That condition was a victory for environmental groups that had opposed the plant on safety grounds but wanted to avoid an outcome in which gas-fired generation would replace the plant’s greenhouse gas-free output.

“It will be the first nuclear power plant retirement to be conditioned on full replacement with lower-cost, zero-carbon resources,” said the Natural Resources Defense Council, one of the parties that negotiated the agreement.

Other parties included Friends of the Earth, Environment California, International Brotherhood of Electrical Workers Local 1245, the Coalition of California Utility Employees and the Alliance for Nuclear Responsibility.

Under the proposal, the company would also commit to serving 55% of its customer load with renewables by 2031.

The state’s revised renewable portfolio standard, enacted last year, calls for 50% renewables by 2030. PG&E cited the RPS, the recent doubling of state energy efficiency goals, growth of distributed energy resources and the potential loss of retail customers to alternative suppliers known as community choice aggregators as key factors in the decision to retire the facility.

Quake Risk

Environmentalists have long been concerned with the plant’s location near several earthquake fault lines, including one 3 miles from the plant that was discovered three years after construction began in 1968. Calls for its closure were renewed after the 2011 quake and tsunami that led to a meltdown at the Fukushima Daiichi nuclear plant in Japan.

Another major consideration: the inability of a baseload plant like Diablo Canyon — which cannot be quickly cycled up and down — to respond to the “overgeneration and intermittency conditions” stemming from increased penetration of solar and wind resources.

In response to the 50% RPS, CAISO will put a premium on the capability to respond to renewables’ variability. The ISO is currently developing a “flexible ramping” product to encourage the development of resources to fulfill that need.

Diablo Canyon accounts for about 20% of annual electricity production in PG&E’s service territory and 9% of production in the state. While the utility points out the plant is currently needed to help maintain system reliability, it said that its absence will reduce the need for solar curtailments during peak solar production and improve the integration of RPS resources.

“California’s energy landscape is changing dramatically with energy efficiency, renewables and storage being central to the state’s energy policy,” PG&E CEO Tony Earley said. “As we make this transition, Diablo Canyon’s full output will no longer be required.”

2025 Retirement Assumed

The California Public Utilities Commission has not yet asked CAISO to perform any special studies related to the retirement, ISO spokesman Steven Greenlee told RTO Insider.

CAISO’s 2016-17 transmission planning process — which looks 10 years into the future — already assumes Diablo Canyon will be retired by 2025 because of state restrictions on “once-through cooling,” the process of drawing coastal or river water to cool turbines. That water is then expelled back into the environment at higher temperatures, affecting marine life. State regulators required the plant to end the practice by 2024.

Any reliability issues stemming from retirement will be identified in the current transmission planning analysis, according to the ISO.

“We will not present a recommendation [on retirement], but PG&E’s decision allows the ISO to begin planning for a grid without Diablo Canyon and a grid that better integrates renewable resources in support of the state’s goals,” Greenlee said.       In 2009, PG&E filed with the Nuclear Regulatory Commission to extend the licenses for Diablo Canyon’s two reactors for an additional 20 years. This week’s proposal stipulates that the company will ask to suspend that proceeding. In return, the other parties to the agreement promised not to seek the facility’s closure before the last license expires in August 2025.

They also agreed not to oppose PG&E’s efforts to fully recover costs for the shutdown from California ratepayers. That stipulation requires the parties “to not oppose amortization and cost recovery of Diablo Canyon’s costs in PG&E’s 2017 general rate case” submitted to the PUC.

The agreement is subject to approval by the PUC. PG&E has asked regulators to render a decision by Dec. 31, 2017.