PG&E Proposes 8-Year Rate Increase To Cover Diablo Canyon Closure

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SAN FRANCISCO >> PG&E customers will see an increase in their electricity bills if state regulators approve rate increases linked to the proposed closure of the Diablo Canyon nuclear power plant.

The average bill for a typical residential customer using 500 kilowatt-hours of electricity a month would rise 1.6 percent, according to PG&E spokesman Blair Jones. That means the average electricity bill would increase from $96.94 to $98.48 — a monthly jump of $1.54.

When PG&E announced in June its plans to shutter the aging nuclear power station, the utility said customers wouldn’t see an increase in monthly bills over the “long term.” But a billing insert sent to customers revealed a planned “near term” increase, running from 2018 through 2025. The proposal was confirmed by company officials Wednesday.

“If the proposal is approved, the costs would be $1.77 billion and would be collected over an eight-year time period,” PG&E stated in the billing insert.

The announcement drew fire from watchdog groups.

“It’s outrageous and it is totally deceptive what PG&E said before compared with what is actually going to happen,” said Michael Shellenberger, president of the Berkeley-based advocacy group Environmental Progress.

San Francisco-based PG&E plans to shut the Diablo Canyon plant by 2025, a move that would also close out California’s era of nuclear power, which began in 1957.

The utility estimated the costs of closing the plant, whose iconic domes are perched on a scenic stretch of coastline in San Luis Obispo County, will include:

• $350 million for retention and other efforts to keep a skilled workforce on hand while the plant winds down.

• $50 million to cover property tax revenue that will evaporate from San Luis Obispo County. The payments will be made over the next nine years.

• Undetermined expenses to replace the lost power generation.

PG&E says the costs for ratepayers to relicense and continue operating the plant through 2044 would exceed the expenses of closing the plant’s Unit 1 reactor in 2024 and the Unit 2 reactor in 2025.

“State policies that focus on renewables and energy efficiency, coupled with projected lower customer electricity demand in the future, will result in a significant reduction in the need for the electricity produced by Diablo Canyon past 2025,” Jones said.

The proposed rate increase would require at least one round of approvals by the state Public Utilities Commission, which has been accused of lazy oversight of PG&E. Federal investigators believe the PUC’s lax regulation was a contributing factor in the San Bruno pipeline explosion, in which eight people died. PG&E was convicted in August on criminal charges linked to the blast.

The utility only told “half the story” during its June announcement, said Liza Tucker, an official with advocacy group Consumer Watchdog.

“This all has to be watched very carefully,” Tucker said. “That nuclear waste has to be disposed of. And that will be expensive.”

Shellenberger also warned that Diablo Canyon’s nuclear energy might not actually be replaced with green energy.

“The concern is Diablo Canyon will overwhelmingly be replaced by natural gas plants,” Shellenberger said.

The revenue from the rate hike would be used for energy-efficiency projects to reduce electricity demand by 2,000 gigawatt-hours by 2024, and the expenses related to the Diablo Canyon closure, PG&E said.

Over time, Diablo Canyon and the nuclear power it produces will become less necessary amid greater use of green energy, the utility said.

“California’s energy landscape is evolving dramatically,” Jones said.

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