Sell Diablo Canyon to new operator and give $1 billion to fire victims, SLO assemblyman says

Oct. 14--Building on his proposal to declare nuclear power a form of renewable energy in California, a Central Coast legislator wants to also tie Diablo Canyon's future to assistance for wildfire victims and PG&E's ongoing bankruptcy case.

But State Assemblyman Jordan Cunningham's proposed bill to keep Diablo humming is certain to meet major resistance from the utility and state Democrats, as well as a host of environmental and ratepayer advocacy groups.

Cunningham -- a Republican who represents the 35th Assembly District encompassing San Luis Obispo and northern Santa Barbara counties -- announced late last week that he plans to introduce the bill at the beginning of the Legislature's next session in January.

PG&E announced in June 2016 that it was abandoning its efforts to relicense the plant's reactors, due to expire in 2024 and 2025, citing among other factors the state's renewable energy policy.

The bill would codify Cunningham's proposed resolution that would amend the state Constitution to allow Diablo Canyon's production to count toward California's target for renewables, with a goal that someone would acquire the facility through PG&E's bankruptcy proceedings and continue to run it until at least 2045.

The bill goes further than the resolution, creating what Cunningham's office called an "incentive to keep Diablo Canyon nuclear power plant operational and raise funds to pay fire victims," according to a news release.

Specifically, the legislation would prevent the California Public Utilities Commission -- the agency that regulates PG&E and has oversight of the company's bankruptcy proceedings -- from approving a bankruptcy or settlement plan that does not include a plan to continue operation of Diablo Canyon.

Additionally, the law would earmark no less than $1 billion from any sale of the plant to assist victims of state wildfires, and require that another $300 million of that sale "be spent on hardening the electrical grid to prevent catastrophic wildfires," according to the news release.

Cunningham clarified by email Monday that the $300 million would go toward "installing more insulated lines, undergrounding lines, tree trimming, and other best practices to limit catastrophic fire risk."

The two-term assemblyman, who has supported proposed construction of wind energy farms off the Central Coast, says Diablo Canyon's nuclear energy production is part of an "all-of-the-above approach" to waning off reliance on fossil fuels and "fighting climate change."

"Diablo Canyon nuclear power plant, an emission-free source of electricity that supplies the state with 9% of its power, needs to be a part of the answer," Cunningham wrote in the news release.

Cunningham also wrote that PG&E and the bankruptcy court "should be looking at creative ways to raise the type of capital necessary to pay" victims of recent wildfires.

Underlying the utility's bankruptcy are tens of billions of dollars in claims from victims of several Northern California wildfires in 2017 and 2018, including those from the the Camp Fire, which destroyed Paradise, a town of 27,000, and caused 85 deaths.

"There's no reason for a bankrupt utility with billions of dollars in liabilities to shut down a perfectly safe and profitable source of emission-free electricity," Cunningham wrote in the news release.

Asked why it's appropriate to tie wildfire victims assistance with Diablo Canyon, Cunningham noted in an email that PG&E is in bankruptcy because of fire victims, so the sale of any asset while the utility is in bankruptcy should go toward the victims of these wildfires.

"Everyone wins. It doesn't tie the fate of Diablo to the fire victims. The victims are owed money and PG&E already decided to decommission the plant," he wrote. "But now PG&E is insolvent, so its valuable assets like Diablo should be used for the benefit of the public, fire victims, and its creditors."

PG&E still focused on decommissioning

Suzanne Hosn, spokeswoman for PG&E, wrote in an email Monday that while the utility appreciates Cunningham's "strong leadership on helping California meet its clean energy goals," its focus is on operating the plant until the end of its current operating licenses and planning for a successful decommissioning process, which will take several years after the closure.

"The assemblyman's proposal does not change any of PG&E's plans for the plant," Hosn wrote in an email, adding that "there are no plans to sell or close Diablo Canyon early."

"As a state-regulated utility, we remain focused on meeting the energy policies of the state," Hosn wrote. "California has clearly indicated its position on the future of nuclear power in the state through the (California Public Utilities Commission's) approval of the Joint Proposal and the passage of Senate Bill 1090 by the state Legislature."

In August, Cunningham introduced ACA 18, a California constitutional amendment that would include nuclear and large-scale hydro power in the state's Renewable Portfolio Standard.

The reclassification could make the facility an asset worth up to $3.6 billion, according to calculations by Cunningham's office, either for PG&E or outside investors interested in buying it.

"You'd suddenly make it a pretty valuable asset," Cunningham previously said. "There's a lot of money out there to buy assets that have such a high value."

But the bill and its mandates will be a long shot in a Democrat-controlled state Legislature that is more interested in investing in solar, wind, and geothermal energy, not to mention the major hurdles any prospective new owner of the plant will have to navigate to relicense.

An attorney for the ratepayer advocacy group Alliance for Nuclear Responsibility previously likened Cunningham's effort to keep Diablo Canyon open to putting "lipstick on a pig."

Asked about the likelihood of the bill's passage, Cunningham on Monday wrote that "someone needs to be thinking creatively about how we achieve our clean energy mandates, get relief to fire victims, utilize our resources, and protect ratepayers from the conduct of others."

"This bill attempts to offer solutions in a space that is fraught with problems," he wrote.

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