Monthly Archives: August 2022

Bruce Severance – Diablo Decommissioning Engagement Panel Member Presentation – 8-24-2022

Bruce Severance speaks at a Diablo Decommissioning Engagement Panel Meeting. Screen grab

A Voice of Reason


Bruce Severence is a member of the Diablo Decommissioning Engagement Panel.

He has recently spoken out in informed critiques of the push to extend the extension of Diablo’s operation in an article and a presentation to his colleagues:


Let’s Be Reasonable about Diablo Canyon and
Research Our Options Before Legislating Disaster


Proposed Nuclear Plant Extension is Unsafe and Far More Costly

and Financially Riskier than Other Grid Stabilization Options.


See also:

Diablo’s long goodbye 

Diablo Decommissioning Engagement Panel Presentation

My name is Bruce Severance. I’m one of the panel members. I want to summarize some of Senator Laird’s comments that were given on the August 12th California Energy Commission and Governor’s Office presentation as a number of the panelists felt that they were extremely relevant and concise. So following that, I’m going to give a few additional comments.

First from Laird’s comments, can we complete the deferred maintenance in time? These are quoted from his excerpts from his script. Bottom line is that we are now faced with a situation where everything that would have been done to renew Diablo Canyon’s operation beyond 2025 during the last six years is now being collapsed into a three-year window.

Item 2, safety requires experienced staff. This issue has been raised by Diablo Canyon Independent Safety Committee and requires full diligence by the state, including support for training and retention so the skilled workforce needed to deliver plant safety can be assured for years to come.

Item 3, who pays? The existing rate system puts major costs on rate payers in a manner that stresses lower and middle-income rate payers and who are already shouldering the cost of the state’s climate efforts. How will we know who pays and how much before we make a commitment to go forward on the extended life of the plant?

Item 4, spent nuclear fuel storage. The existing facility on site at Diablo Canyon where the spent nuclear fuel is stored is large enough to accommodate the waste generated by the plant until 2025. The capacity question must be answered now as there is today no other place that can accept Diablo’s radioactive waste.

Item 5, seismic concerns. Serious questions have been raised in the community about the completeness of existing seismic studies and their possible lack of full review by neutral third parties. We need to explore the state of existing seismic analyses and get answers as to where there may be gaps and whether retrofitting is required to reduce risk if the plant’s life is extended.

Item 6, once-through cooling. Diablo Canyon is permitted to use once-through cooling technology only until 2025. That technology either needs to be replaced or the right to continue using OTC would have to be extended. If an extension is in order, it needs to be done in a manner that adequately mitigates for the significant environmental impact of releasing warm water into the marine environment over an extended time.

Item 7, permitting. There would likely not be sufficient time to complete permitting before the plant life would be extended. Yet, the engagement process that involves stakeholder involvement and agreement on the previous decision to decommission would only happen around possible extension if environmental processes are completed. There’s a fine line between overriding processes and speeding them up.

Item 8, community transition funding. The state legislature passed SB 1090 shortly after the settlement agreement was completed which allowed $85 million for community funding to ease the transition away from Diablo Canyon’s revenue and labor base. Assurances are needed that those funds, much of which have already been spent, will not need to be returned to Sacramento, and further, that additional mitigation will be available in future years when the plant would close.

Item 9, Diablo Canyon lands. The community has fought hard for the conservation of and public access to the Diablo Canyon lands which were expected to be transferred away from PG&E upon Diablo Canyon’s closure in 2025. This process need not be delayed. It is not only good for the community, it implements the governor’s 30×30 Biodiversity Initiative in one of the richest ecological regions in the state.

Item 10, retirement date certainty. The uncertainties regarding Diablo Canyon’s future causes significant anxiety and interferes on many levels with sound planning in San Luis Obispo County. For this reason, I believe there must be a date certain on the final closure date if the life of the plant is to be extended.

Item 12, offshore wind. San Luis Obispo County will be opened to offshore wind development. One of the allures of this location is the existing transmission lines from Diablo Canyon. How do we ensure that an extension of the life of the nuclear power plant does not hinder the ability to onboard and transmit new, renewable power on the grid using local transmission?

That ends our summary of Senator Laird’s comments at the August 12th joint Energy Commission and Governor’s Office presentation. The following are additional concerns not raised by either Laird or the CEC CISO governor’s presentation.

Reactor vessel embrittlement. The reactor vessel of Unit 1 was found to be among the most embrittled in the nation in 2002. Although the NRC has allowed continued operation and waived further testing, embrittlement could inhibit rapid shutdown of the reactor in an emergency and should be evaluated by the Diablo Canyon Independent Safety Committee as well as other independent experts.

Second item, incomplete contamination and monitoring records. There was a historical site assessment published by PG&E which cites numerous likely contamination points at the plant that should be routinely checked for radioactive contamination, but PG&E did not make records available to fully complete the report with actual monitoring data. Any further discussion of an operations extension should be predicated upon access to these records and a properly completed historic site assessment. The public deserves to know.

Item 3, rate payer and taxpayer equity. Proposed legislation seeks to offer a $1.4 billion forgivable loan from the state’s general fund to PG&E to fund the cost of license extension and deferred maintenance and continued operations. Costs will also be transferred to community choice aggregators, also known as CCAs, statewide. This will affect both, place a disproportional burden on low-income families as well as undermine the efforts and financial solvency of CCAs that are the primary competition to investor-owned utilities and are run by local government agencies to speed the transition to 100% renewables on the grid. PG&E has suggested that CCAs should pay the additional operating costs through the PCIA. That is a power charge and difference assessment.

20-year license extension. PG&E has suggested, although not confirmed, that they may apply for a 20-year license extension. This is in direct conflict with the governor’s plan to extend the life of the plant for five to 10 years. There’s a very low probability that a five to 10-year life extension would make economic sense given the level of investment needed to operate the plant safely. There doesn’t seem to be a low capitalization alternative to allow continued operation for the few years between 2025 and 2029, during which the projected shortfall on the grid is anticipated. We’re stuck making a 20-year investment to solve a five-year problem.

Item 5, further discussion of the grid shortfall is needed. Senator Laird suggested that there should be further discussion about whether there will, in fact, be a periodic shortfall of power in the 2025 to 2030 time frame and that other options for meeting resource adequacy should be explored. I would suggest reexamination of Loretta Lynch’s study of the August 2020 blackouts which suggests that CISO had the capacity online but was contractually obligated to export it to other states. This would suggest that better modeling and projections and possibly a higher resource adequacy requirement may have solved the problem.

Item 6, peak demand is intermittent. Diablo is a constant source of power. There is an inherent mismatch in the strategy to solve a periodic peak demand problem with large continuous generation. Peak demand is driven by residential HVAC, and exceptional peak demand events are driven by heat waves that occur once in five years. There seems to be an obvious mismatch between the problem and the proposed solution. A further indication that continuation of DCPP operations cannot be more cost effective than other strategies that are suited to address the intermittent problem.

 

Item 7, study is needed. Economics, safety issues, and alternatives should be fully explored before this legislature elects to mandate life-extended operations at the plant. There are better technological solutions to provide grid stability. For example, electric vehicle batteries feeding into the grid during peak demand hours would have prevented the 2020 blackouts. Hydrogen peaker plant turbines with flexible fuel that can run on both natural gas and hydrogen are now commercially available and can facilitate gradual decarbonization of gas peaker plants. This would solve all long-term grid storage problems and harmonize renewables on the grid while avoiding all possible stranded asset scenarios that pose a much larger economic risk with continued Diablo Canyon operations.

Senator Laird calls for a Marshall Plan for California energy, and we feel that further steady is needed before Diablo Canyon extension is approved. If PG&E rushes headlong into applying for license extension, we may face consequences that will not serve a higher public good.

Chuck (11:11):

Thank you, Bruce.

Speaker 3 (11:13):

Chuck, could I just ask for some clarification?

Chuck (11:16):

Yes.

Speaker 3 (11:16):

In reference to these other concerns, just for the House and also for the general public, it would be good to state where these other concerns came from or who they’re actually representing. I know there’s been a lot of discussion.

Bruce Severance (11:32):

I said that they were my additional concerns that were added to Laird’s, but I did work on those in collaboration with some of the other [inaudible 00:11:39].

Speaker 3 (11:39):

And the last statement, as far as “we,” who are “we”?

Bruce Severance (11:45):

That’s a really good point. I meant to take “we” out, and I apologize if I left it in. I did take it out one other place. So I should correct that now for the record and say “I” instead.

Speaker 3 (11:57):

Thank you.

Chuck (12:00):

Thank you very much.


 





Senate Testimony of Kim Delfino on Diablo Extension



Kim Delfino – Defenders of Wildlife in the California Coastal Protection Network

Senate Energy, Utilities and Communications Committee – August 25, 2922

At minute: 00:55:18:28

Re:

SB 846 

Diablo Canyon powerplant: extension of operations



Download PDF

Speaker 1 (06:22):

Network. We have Ms. Delfino here. Welcome. And you’re ready to go.

Kim Delfino (06:27):

Thank you. Can you hear me?

Speaker 1 (06:29):

Yes, perfectly

Great. Good afternoon. Chairman and members of the committee. Thank you for the opportunity to speak today. My name as you noted is Kim Delfino and I am here representing Defenders of Wildlife in the California Coastal Protection Network. I’ve been asked to speak on the issues relating to how the governor’s proposal for extending the operation of Diablo canyons, uh, Diablo canyon impacts environmental protections. Uh, let me do a quick summary, uh, before I get into the details of what the environmental and public health concerns are at issue here, as noted by the previous speaker Diabo canyon is an old nuclear power plant currently scheduled to go offline in two years. And therefore it does have a lot of deferred maintenance, uh, a very packed spent fuel pool and in brittle reactor and it exists close to four, uh, earthquake fall lines. In addition, according to the state water board every day, roughly two and a half billion gallons of sea water slosh through Diablo’s enormous intake tubes cooling the hot steam heated by nuclear reactors and the warmed water is then flushed back into the sea creating significant adverse impacts on the ocean resources and animals, including fish, sea lions, turtles, and other creatures, which are killed by the millions.

Make no mistake continuing to operate the Diablo Canyon. Beyond 2025 will have serious impacts on our environment. I wanna walk through how the governor’s proposal overrides existing environmental protections and state agency jurisdictions. One, the governor’s proposal contains multiple CEQA exemptions, including classifying the operations of Diablo canyon as a ministerial exemption and an exemption from seq for all permits leases, licenses, certifications, concurrence plans, decisions for applications to state agencies, and finally an exemption from the loan agreement between DWR and PG E from se a essentially nothing associated with Thete extension of Diablo canyon would be subject to se and its public review and oversight process two. The bill is written. Uh, the language that we’ve seen is written purposefully to limit the scope of public trust agencies, AEs and directs predetermined outcomes for permits and approvals through a combination of specific findings and statutory language that directs agencies to adopt the legislative findings, these legislative findings direct specific outcomes and determinations from agencies, removes agency discretion and override state and federal law.

The findings, when they’re coupled with the statutory directives to use the legislative filing constrains, what the agencies can consider as part of their review, and essentially dictates what should be a final decision. This would impact the state lands commission, the state water board, and the state coastal cons, uh, coastal commission three, the bill overrides the coastal act and the federal coastal zone management act, as well as coastal commission jurisdiction under the federal coastal zone management act, there must be federal consistency, D deter, uh, reviews of federal agency, federally permitted and federally funded activities. The review is then delegated to the coastal commission and the commission standard review is the enforceable policies found within chapter three of the coastal act, the governor’s proposal, amends chapter three of the coastal act and specifically orders the commission to permit the operations of Diablo canyon until January one 30, uh, 2031.

Basically this is a legislative override of the coastal commission’s obligations under the federal coastal zone management act. And if this is enacted a, this kind of UN, uh, override is unprecedented in nature, four, the governor’s proposal overrides and delays compliance with the state water boards once through cooling policy until 2030, and it limits mitigation fees and directly prohibits the state water board from imposing, um, cooling towers as a potential mitigation measure, this kind of prohibition on what the state board can or cannot consider as mitigation is also unprecedented. Finally, the newest version of the governor’s proposal inexplicably puts the California PUC and not the coastal commission in charge of determining what will be the future use of Diablo canyon land after the power plant closes and provides really no guidelines, other than a vague directive that the PC must determine what’s in the best interest of a variety of parties.

This doesn’t make any sense to hand over this kind of decision making of the future of an important part of the coastal Don to an agency that has no natural resource public trust, uh, requirements or responsibilities. Now that I’ve walked through the various exemptions, overrides and efforts to restrict environmental standards. Let me explain why this is unnecessary and should be rejected. First. There is no legitimate reason to prevent any of this relevant state agencies from doing their jobs in carrying out and administering our state and federal environmental laws. There’s no requirement that all state permits and approvals must be secured before an application for relicensing is filed to the nuclear regulatory commission, nor is there a requirement that all permits and approvals must be secured before filing an application with the department of energy for a grant. Instead, all you need is a pathway for permitting, and there is a pathway here.

The pathway is to let the agencies spend the next two years doing their jobs, which leads me to my second point as to why it’s unnecessary to constrain agency discretion or undermine environmental standards. As I said, the agencies have more than two years before 2025. This has plenty of time for them to do their jobs. For example, the coastal commission has issued dozens of coastal development permits for California’s three coastal nuclear plant plants over the last 40 years without leveraging closure or interrupting power generation. Finally, and I cannot emphasize consuming enough unnecessarily overriding our bedrock environmental laws and the jurisdiction of the coastal commission, state water board, and state lands commission. That’s a terrible precedent. These agencies and laws are in place to ensure that decisions are made to protect people and natural resources. And frankly, I cannot think of a better example of when we need to use these laws than in granting an extension of the operating life of an aging nuclear power plant. Our environmental laws are not a nice to have kind of measure. They are a must have kind of measure. And therefore I would urge that if the legislature chooses to move forward with any kind of legislation pertaining to the canyon, not that I think this is a prudent thing to do that

Speaker 4 (13:26):

We need a broadband fix

Kim Delfino (13:27):

Too. UR discretion.

Speaker 1 (13:29):

You were cut off, you were cut off in your last recommendation. Can you restate it please?

Kim Delfino (13:35):

Okay. So I, was I talking about the nice to have, or the must haveve

Speaker 1 (13:39):

No, after it was your final statement.

Kim Delfino (13:41):

Oh, well I, the punchline, um, I would urge that if you do choose to move forward with legislation that you do so in a way that does not undermine bedrock state and federal environmental laws or override agency jurisdiction or discretion, thank you.

 

Assembly Member Al Muratsuchi – Statement on Diablo Extension



Al Muratsuchi D. Torrance

Assembly Hearing – 8-25-2022

https://www.assembly.ca.gov/media/assembly-utilities-energy-committee-20220826/video

At minute: 02:20:02;03

Re: SB 846 

Diablo Canyon powerplant: extension of operations

 leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB846

Download Muratsucchi PDF

Al Muratsuchi (00:00):

I have to leave for some important climate package related discussions. But I just wanted to to state before I left Mr. Chair, that, that you know, along with Mr, Mr. Wood and, and, and some of my colleagues in the assembly, umwe had an opportunity to visit Fukushima right before the pandemic. And we visited the community surrounding the Daichi nuclear power plant, and it is a wasteland. It communities that once thrived around the, the nuclear power plant were abandoned, you can see the cars and the homes parked were, the weeds are, you know, overtaking the community that was once thriving. And I, you know, I, I, I’m not trying to fear monger here, but I want to make sure that we are as several witnesses here, here today stated to put safety first and foremost, you know, it’s my understanding that there, there have been reviews of what happened in and, and Fukushima.

Al Muratsuchi (01:25):

And there were basically two fundamental problems that happened that led to the Fukushima nuclear disaster. One is that the nuclear plant was allowed to be designed licensed and constructed to only withstand an earthquake and tsunami far smaller than what actually occurred.

And so, you know, I, I know that we’ve heard many assurances today about how the NRC is charged with ensuring the safety and the protection of the local residents of San Luis Obispo county. But again, you know, we can never plan enough for what nature mother nature can unleash.

Second, the Fukushima disaster was in large part caused by the ineffective oversight of, and the cozy too cozy relationship between the nuclear utility and the regulator that allowed what, obviously in hindsight ended up to be inadequate safety requirements.

And so it raises all the more, my deep concern about how we are not only rushing this through, but that we are as PO the, the proposal was calling for a sequel exemption for the bypassing of state agency oversight. It sounds like a recipe for disaster. Thank you very much, Mr. Chairman.

 

Testimony of Ralph Cavanagh – Senate Energy, Utilities and Communications Committee – August 25, 2922



Ralph Cavanaugh – NRDC

Senate Energy, Utilities and Communications Committee – August 25, 2922

At minute: 00:40:16:01

Re: SB 846 

Diablo Canyon powerplant: extension of operations

 leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB846

PDF to download

Speaker 1 (00:00):

And I will, uh, go, we’ll hear from Ralph Kavanaugh, he’s the energy program. Co-director with the natural resources defense council, uh, Mr. Kavanaugh, we see you

Ralph Cavanaugh (00:19):

Chair Hoso senators. I’m Ralph Ralph Cavanaugh representing the natural resources defense council. More than six years ago, I was honored to be among the strikingly diverse group that announced the joint proposal to retire and replace the Ablo canyon. A hunter has just discussed that proposal, national and local environmental groups, representatives of plants’ workers and owner. And we were joined soon after the announcement by the leadership of the plant’s host communities. Now a few critical features of that agreement. First, it was a life extension agreement for Diablo canyon. It extended a critical state permit by seven years. That agreement is the reason why Diablo canyon will be around this summer and next summer and the summer after that, and for unit two, August of 2025, uh, helping to make sure that California has reliable and affordable power, but the joint proposal also rested on an analysis showing that costs for Diablo canyon would rise significantly after 2025.

And that the plant would be an increasingly poor fit with a rapidly evolving California electricity grid. So we provided, as hunter said, for replacement of the plant with a portfolio of zero carbon resources, which would reduce cost and improve reliability. And we provided for and recommended compensation for the workers to retain them on the job for the communities to help them with the transition. And as I think my friend hunter stern will acknowledge all of those promises have been kept in part because you senators ratified that agreement almost unanimously in Senate bill 10 90, authored by then majority we or bill Monning and Republican assemblyman Jordan Cunningham. So the question for us today is what has changed that matters that would cause you to repudiate an agreement you ratified almost unanimously four years ago, and what is missing from the very thorough background report that was submitted in advance of this hearing and from commissioner, Douglas’s very thorough and admirable remarks.

And I venerate her and this is not, there’s no attack on her, but something was missing from all of that. Wasn’t missing because of their, it was their fault. It was missing because it doesn’t exist. And what doesn’t exist is a published report by any of the state’s energy regulatory agencies recommending a Diablo canyon life extension, or comparing it with the cost and availability of alternatives. What is missing is any assessment by Diablo Canyon’s owner, whom you’ve just heard from, or any other California utility or community choice aggregator, providing a rationale for life extension, what commissioner Douglas showed you is a need for. And what hunter testified to is a need to acquire additional resources during some hours of the day in September of 2025 and afterward. And the obvious question is, well, what are our alternatives and what are our best choices? And normally in California, we answer that question by conducting a comp a competitive test, we go out for proposals.

We can look for resources all over a gigantic Western grid. That’s seven times the size of Texas that extends well beyond San Louis Obispo, a marvelous place, but we’re not doing any of that. Instead you are being asked in the final days of this session to declare a very expensive winner in a competition that your electricity regulators haven’t organized, or even analyzed, you don’t know how much this will cost or who will pay. Although mark, Tony will have plenty to say about both in a moment, and you have been told there may be federal subsidies, giant federal subsidies. But what wasn’t mentioned was a submission to the us department of energy by NRDC and numerous other parties, including friends of the earth, showing that Diablo canyon doesn’t qualify for those federal subsidies, which are only available. The nuclear plants exposed to competitive markets who are, who can document op operating losses and DBU canyon is neither.

You have been given no remotely adequate reason here in the final days of this session to repudiate a retirement and replacement agreement that you ratified almost unanimously four years ago, you have been shown graphs indicating that we may need 1800 megawatts during certain hours in 2025, where might you get 1800 megawatts? Well, in 2000 and 2001, when we had a statewide electricity crisis, that many of you remember, well, the governor’s office organized energy efficiency and demand response campaigns that cut our electricity use during peak hours by 4,800 megawatts, more than double the capacity of at DLO canyon in a matter of months. And we are looking out today at three years. And if I were asked for the perfect person to lead a similar campaign, uh, for governor Newsome, I’d pick Karen Douglas senators. One last thing I want you to know that not many people know about the joint proposal or retire and replaced the ALO canyon, the instigator, the man who started the effort and was critical to its success was a longtime skeptic and adversary of PG and E by the name of S David Freeman.

And many of you knew him, the negotiations, which he catalyzed began on his 90th birthday and PG and E basically graciously gave him a birthday cake. And I know what Dave Freeman would have to say about this proposal to effectively repudiate his extraordinary achievement, which he shared with many others, not any of it would be remotely printable. So I’m not going to try to voice him. I’m simply going to close by asking you to honor his legacy and the magnificent precedent that he inspired in that joint proposal with the workers, with the communities with so many who have worked so long on the ALO canyon. And I’m asking you to decline the invitations to repudiate that legacy, that precedent. Thank you.

 

Testimony of Ed Smeloff, Clean Power Campaign on Diablo Extension



Ed Smelloff – Clean Power Campaign

Assembly Hearing – 8-25-2022

https://www.assembly.ca.gov/media/assembly-utilities-energy-committee-20220826/video

At minute: 01:53:01;23

Re: SB 846 

Diablo Canyon powerplant: extension of operations

 leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB846

Download Smelloff PDF

Ed Smelloff (00:03):

Good morning, Chairman Garcia and members of the committee. Thank you for the opportunity to address you this morning. I’m Ed Smelloff. I’m representing the Clean Power Campaign, which is a coalition of environmental organizations and clean energy technology providers. So I want to make three points today. The first is related to reliability. The second, greenhouse gas emission reductions. And the third are some short-term suggestions on what can be done to improve reliability and reduce greenhouse gas reductions.

I completely agree with what Dr. Quirk said earlier this morning, we are seeing more severe, more frequent impacts of climate change. That is patently obvious. No one can deny that. However, I do want to make a point that if you look over the past 15 years at peak demand in California, it’s actually decreased. The peak demand for the Kaiser system occurred in 2006, it’s gone down by 12 and a half percent for the peak in 2021.

And it has not exceeded that yet in 2022. And I think we know the reason why that happened. It’s the extraordinary policies of California to invest in energy efficiency, load management, and behind the meter solar generation and battery generation. We’ve been able to manage the load in cooperation with the citizens of this state so that we haven’t increased demand on the peak, actually has a name it’s called the Rosenfeld Effect named after Art Rosenfeld, the illustrious scientist and former commissioner at the California Energy Commission has been promoted.

Karen Douglas has been a major champion of this and is deserves a lot of credit for putting this in place over the last decade and a half. It’s bipartisan. It’s been supported by Republican administrations and Democratic administrations. Governor Schwarzenegger had a key role in this when he initiated the California Solar Initiative. And so we know we have the tools to manage peak load it’s in our DNA.

We need to double down on this and I’ll have a few suggestions at the end of my presentation. Secondly, I completely agree that electric system reliability is a public good. It is a shared responsibility of all load serving entities across the state. Now, the framework for reliability in California is called Resource Adequacy, and it’s a delegated framework to specific load serving entities.

They are responsible for maintaining sufficient capacity to meet the loads within their jurisdictions. So for instance, where I live up in Trinidad, California, it’s the Redwood Coast Energy Authority where I used to work in San Francisco. It’s San Francisco Clean Energy, where I worked for developing solar power plants in Richmond. It was Marin Clean Energy. Each of these many entities, and there’s about 40 have the responsibility for Resource Adequacy. It all has to add up so that we have an adequate amount of excess reserves to keep the lights on in almost all occasions.

Now, reliability is a trade off against affordability. You just can’t have an infinite amount of resources and assure that the lights will never go off. We typically have developed a standard, and Karen Douglas mentioned this it’s called loss of load expectation. And the standard is once in 10 years, and that’s pretty much across the United States. So there’s a little bit of misinformation here that standard is no longer appropriate.

And perhaps we should revisit. Maybe it should be one in 20 years, but the kind of ad hoc approach that the administration is used in showing you that we’re at greater risk, really doesn’t undergo the kind of rigor that a probabilistic analysis done by the Public Utilities Commission would do. So, yes, it is important to understand what are the inputs and assumptions that go into these kinds of studies and they are changing because of climate change.

We are seeing more intense heat waves. We are seeing the impact of reliability on thermal power plants because of the lack of water for cooling them. So this does have an impact we can put together all of the assumptions that go into that, but the argument that we are in a severe reliability crisis, I don’t think really bear scrutiny. Last year, the Public Utilities Commission adopted the midterm reliability order.

And they ordered that the state, all of the load serving entities in proportion that their responsibilities procure 11.5 gigawatts of net qualifying capacity. And that is enough to more than replace the ones through cooling plants, the thermal plants on the South Coast, as well as Diablo Canyon. And in fact, the Public Utilities Commission said, “We’re going to move what’s called the Planning Reserve Margin,” which is the excess capacity that you need to have to assure reliability from 15% to 20.7%.

So they recognize that we are seeing more uncertainty in weather and other issues. So we need to have a higher reliability standard. So it is appropriate that we procure this 11.5 gigawatts of new resources to keep the lights on. And it will do that. It’s actually meeting a higher standard, but I do want to mention, and I think there’s something that the administration did get right in their presentation is that, if we retire Diablo Canyon at this time, we will see an increase in greenhouse gas emissions over a certain period of time after that.

In order to prevent that from happening, the 11.5 gigawatts is not going to be sufficient. We have to order additional. We have to have a procurement order to get additional clean energy resources in place, including clean firm energy, geothermal energy, which is, as we think about this, we do need clean firm energy, but a 40-year-old power plant has a lot of potential problems.

And a lot of unknown unknowns there. When we’re building a new set of geothermal power plants and other clean firm energy, this is going to be the future. It’s going to be what we can rely on for the next 20, 30 years in place, but in order to do that, and this is a really significant point I want to make. And it’s where we’ve dropped the ball in California.

We need to build new transmission so that we can bring that power from the North Coast, from the offshore resources off Humboldt County, from Imperial County, from the desert in Riverside, in San Bernardino counties into the load centers. It’s going to require a significant amount of investment in new transmission. We need to get started now.

I am concerned that this focus on the Abo Canyon and its extension is crowding out the necessary policy decisions that we need to make, to assure that long term, we’re going to be reducing greenhouse gases. And we can do this with union labor building these transmission lines and new projects. I will and my friend just wanted to address some directly on that.

So I wanted to the assembly has put together a package. I don’t know all of the details in your package for addressing climate issues, but I’ve read the bullet points. And I think there’s some very important initiatives that you’ve put together. And the reason I say this is because I do want to mention one thing, and it is an important point. There is going to be a shift in cost from the Northern California load-serving entities to the Southern California load-serving entities.

Rates are going to go up for residents of Southern California and San Diego. They may go down a little bit because of the way that this agreement has been structured, but it is not, there are going to be differentiated impacts. It’s not going to do anything specifically to address the equity issues in California, the climate equity issues. And regardless of what happens on Diablo, I think this needs to be a priority that needs to be done immediately as we’re addressing the reliability.

And I think there’s some very attractive features of what you’ve put together in the assembly plan. And I’ll just support, the one is an equitable community-based solar and storage. Solar and storage can be built very quickly. I’ve done that when I worked for SunPower Corporation, we can get these projects built, particularly the ones on the local grid on the distribution system. We can get them built in less than a year.

This is going to be a new strong resource. I do want to correct one minor mistake that Ms. Douglas made earlier on the Inflation Reduction Act. Now, provides a production tax incentive and investment tax incentive for standalone storage. So we can add storage to existing solar projects. They can be charged both by the solar project and by the grid, and capture the federal tax benefits.

So we’ve really incentivized the storage being built across the state. Obviously, investors throughout the world are seeing what happened with the Inflation Reduction Act. And there’s a lot of money pouring into technologies to be able to address climate change. But let me get back to the equity issues. So you have this community-based solar and storage, $240 million. You have what I think-

Speaker 1 (10:44):

Sure.

Ed Smelloff (10:45):

… also there’s a proposal to have grants for an Equitable Building Decarbonization program that would install efficient appliances, lighting, insulation, and other infrastructure directed to low income customers in California. These are things that need to be funded, which I think, you could make a strong case that these are better uses of the $1.4 billion than a five-year extension of Diablo Canyon.

And there is a need to put this money to benefit the people who have not benefited as much from the Rosenfeld Effect. We need to make sure that this is equitable, that there’s opportunity for low income families to have solar in their communities, on their households to invest in the energy efficiency and load management technologies that are available. So I think there is a better way, and I really thank you for the opportunity to address the committee today. And I would welcome any questions later.

Thank you. And I know that our colleagues here on the [inaudible 00:11:55] are eager to ask questions and we will get there very shortly. Mark Toney is a next presenter.

 

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Q&A

At minute: 02:41:24;06

 

Ed Smeloff (00:00):

The CAISO reports that between November of 2020 and April of 2022, which is the period of the pandemic, a total of 2,360 megawatts of new grid-connected storage projects have been added and are operational on the grid. So we now have a total as of August 1st of 3,344 megawatts of storage available. In the interconnection queue, there’s an order of magnitude greater than that, particularly in the most recent interconnection so there is no shortage of opportunities to get there. All of the load-serving entities are currently they’ve put out to bid procurements, competitive solicitations, many are in active negotiations.

What is not really transparent at this time, and I’m hoping that the administration has that, is the milestones on each of the many projects, because a lot of this decision hinges on whether or not by the summer of 2025, the 11.5 gigawatts, perhaps is a little less than that because it may take longer for the geothermal and long duration storage can come online and be available when Diablo is not available in 2025.

Well, [inaudible 00:01:21] you bringing that up because Mr. Singh brought it up also this issue around interconnection. My understanding is there’s 40,000 to 60,000 megawatts waiting this second to be interconnected. What’s stopping that [inaudible 00:01:35]?

So not all of it will be connected. That is vastly in… So what’s stopping that is the studies that need to be done on deliverability network upgrades. So when you apply for an interconnection, the CAISO and the participating transmission owner does detailed studies, power flow studies on the impacts of that. That’s taken longer than should be. It could be corrected by simply more staffing.:

Then there is a need, in some cases, to actually do upgrades to the transmission system, perhaps reconductoring maybe an additional transformer. Different pieces of equipment need to be installed. That’s where we’re seeing delays in the process that aren’t sufficient to get these resources, so real-

Mr. Tang (02:22):

So I guess what do we need to do to speed that up? Because obviously that, to me, seems like low-hanging fruit where we could just be… I mean…

Ed Smeloff (02:29):

Well, I think one thing would be to, and so this is sort of the intangible about this decision is there’s so much of energy in the C-suite of an organization and what are they going to focus on doing and where are they going to get the additional staffing? So it really is in PG&E’s executive’s Southern California Edison, San Diego Gas and Electric, and the CAISO to really staff up adequately and to go through this process.

There’s also, this is sort of a little bit of a different issue, we kind of double permitting on upgrades to transmission, once at the CAISO, where they make a determination of need through their transmission planning process and a second time at the California PUC through its CPCN process, its certificate of need and convenience. So we need to streamline that. I think we need to find that these projects are needed only once and then move them through the permitting process more quickly.

Mr. Tang (03:33):

I think Mr. Stern wanted to answer that question, too.

Mr. Stern (03:36):

Well, thank you. Thank you, Mr. Tang.

Mr. Stern (03:39):

So I just wanted to add, I think Mr. Smeloff actually identified some of the problems, but I want to make it clear this is our work. We’re as frustrated as anybody about the lack of this pace in which interconnection is made.

Mr. Stern (03:54):

At the same time, I think the real problem is the way we see it and what I mean we, I mean porphyry 5NQ is that we’ve already missed the boat. There isn’t a way to accelerate this in a meaningful way to build these projects. Because once the decision is made to either build new transmission resources or reconductor expand capacity on existing, it’s still years away and then you do run into materials and equipment. Because that’s also part of the opportunity here is to implement the new technology that’s coming online so that when we do increase capacity and when we do make these decisions, we can expand the transmission system to accept much, much more renewables and clean energy in the future.

Mr. Tang (04:46):

Thanks. I wanted to ask Mr. Smeloff and then go back to administration with the same question.

Mr. Tang (04:51):

With the charts the administration, I think, provided, you’re looking at five to six days or seven days in September that are going to be major issues. Is this really a base load issue? Or this is just a peak, a peak load issue, meaning obviously if it’s a base load issue, that’s why you would need something like a Diablo. But if it’s a peak load issue, could we use something that’s more flexible that you can ramp up, ramp down for those particular days?

Ed Smeloff (05:24):

Well, reliability is always a peak issue and it has some varying components to it, both capacity and energy for charging the batteries. This will be more of an issue in the future.

But typically we are most concerned about the months of August and September and we’re concerned about the hours now as the sun is setting that we have sufficient capacity, particularly storage capacity that can ramp fast, that can modulate very quickly to address the needs because we have to balance the system second by second. Nuclear plant doesn’t do that. Other resources do and batteries do that very, very well because they can quickly adjust to what the load requirements are.

Mr. Tang (06:10):

Thank you. I don’t know if the administration wanted to-

Speaker 4 (06:16):

[inaudible 00:06:16] thing, sorry-

Mr. Tang (06:16):

Please.

Speaker 4 (06:16):

Because the hybrid format [inaudible 00:06:17] awkward if I could just add in on the interconnection question that you asked previously.

Speaker 4 (06:22):

I think Ed actually touched on some specifics that are causing delays, but I will say from the generator side of things, we have been experiencing persistent interconnection delays from transmission operators and not having the transparency as to why and when things are going to come online.

Speaker 4 (06:39):

One good advancement that occurred amongst the agencies and with the task force that the governor’s office mentioned today and with the leadership of people like CPUC president Reynolds is, frankly, a measure-and-manage approach of tell us what’s going on with every interconnection, tell us where you’re at consistently. That is a step in the right direction. That hadn’t been happening kind of self-regulatory, shall I say, by the transmission operators before, but things are not quite transparent as to why the delays are happening. We get COVID and supply chain hand waving, but that’s obviously not enough.

Speaker 4 (07:13):

What this does it holds back solar storage resources that could provide essential reliability functions. It holds back gigawatts scale-wise of those resources that could be online today or tomorrow that are just way behind because of that interconnection problem. So I do really want to spotlight that issue and it cannot be an issue of it’s the way it is. It’s tough to solve. That’s not sufficient and we’re squandering resources and procurements that are in place that can come online and provide the ROA we all need.

Mr. Tang (07:49):

Now…