By Robert Mullin
Pacific Gas and Electric filed with California regulators last week to shut down the state’s last remaining nuclear power plant by the end of 2025.
The application also asks the state Public Utilities Commission to approve a joint proposal that the utility forged with environmental, labor and anti-nuclear groups to replace output from the 2,240-MW Diablo Canyon facility with a portfolio of renewable resources, energy efficiency measures and energy storage.
PG&E announced the closure in late June, saying the plant’s full output would no longer be needed in light of dramatic changes in California’s energy market, which increasingly is putting a premium on flexible resources over inflexible baseload generation. (See: PG&E to Shut Down Diablo Canyon, California’s Last Nuclear Plant).
In its filing, the utility also pointed out the uncertainty of its future supply needs, with customer demand being undercut by improvements in building efficiency, increased adoption of rooftop solar and the growth of alternative energy suppliers such as community choice aggregators (CCA).
“As a result of the rapidly changing California energy landscape, Diablo Canyon will not be needed at the end of the license period,” the utility wrote.
The joint proposal accompanying the filing includes three tranches to procure energy efficiency and greenhouse gas-free resources between 2018 and 2045.
The first tranche is intended to reduce load before Diablo Canyon retires through a competitive solicitation to add 2,000 GWh worth of energy efficiency to PG&E’s service territory by 2024. The company is seeking PUC authorization to recover $1.3 billion to administer the program over seven years through a “public purpose program” rate component.
Included in the second tranche is a solicitation for 2,000 GWh of carbon-free energy to be delivered between 2025 and 2030, with renewable resources, energy efficiency and other technologies eligible to bid. PG&E is seeking to recover part of the costs associated with this tranche from a “clean energy charge” allocated to the utility’s bundled electric and direct access customers as well as to CCA customers. Renewable procurement costs would also be recovered from an additional fee assessed on customers who depart from PG&E.
The third tranche includes PG&E’s voluntary commitment to increase its renewable portfolio standard to 55% over the 2031-2045 period — five percentage points above the current 2030 mandate.
The joint proposal also includes provisions for PG&E to recover costs related to winding down Diablo Canyon’s operations.
PG&E is asking the PUC to approve a two-way balancing account to implement yearly rate adjustments to recover the costs and allow the plant’s book value to be depreciated to zero by the time it closes. The utility is also seeking have ratepayers cover $53 million in costs previously incurred in efforts to renew the plant’s operating license beyond 2025.
PG&E has requested a decision by the CPUC by June 2017.
