Dive Brief:
- Pacific Gas & Electric and a range of parties in the San Luis Obispo County community have reached a settlement calling for the utility to provide $85 million to bolster tax coffers after it shuts down the Diablo Canyon nuclear facility, the Associated Press reports.
- Under the largest portion of the agreement, PG&E will contribute $75 million into an Essential Services Mitigation Fund that will be distributed to the county in nine equal annual installments through 2025, according to the utility's statement.
- Under a second part of the agreement, PG&E would create a $10 million Economic Development Fund to ease the local economic impacts of the plant's closure. A third part of the agreement addresses the continuation of funding for offsite community and local emergency preparedness and planning efforts until all spent fuel is in dry cask storage and the two nuclear reactors are fully decommissioned.
Dive Insight:
When PG&E shutters the Diablo Canyon plant in a decade, there will possibly be negative impacts to local services as the tax base provided by the plant will dry up.
To address this, and gain support for its closure plan, PG&E this week announced a deal with labor and environmental groups, the County of San Luis Obispo, and the San Luis Coastal Unified School District (SLCUSD), calling for it to make $85 million in contributions across nine years.
The utility will have to work hard to garner support for its plan. While PG&E had said there would be no long-term costs to customers associated with the closure, a bill insert sent to customers last month shows increased rates for eight years. Average customers could see rates rise about 1.6% from 2018 to 2025, with PG&E collecting $1.77 billion in revenue over the 8-year span.
PG&E has indicated it wants to use a cocktail of energy efficiency measures, renewable energy and energy storage to replace the lost generation. While that plan will cost ratepayers now, the utility estimates it will be less overall than if the plant remained open past 2025.
"Relicensing and operating Diablo Canyon through 2044 would likely have had a higher overall cost for our customers than replacing it with a mix of renewables and energy efficiency," a spokesman said last month.
