Thank you. Thank you Chair Garcia and members of the committee. My name is Mark Tony. I serve as Executive Director of TURN, The Utility Reform Network. TURN understands that California has an energy reliability crisis. We also understand that California families are facing an energy affordability crisis, which this committee has had a hearing on earlier this year and we appreciate that. TURN is concerned that the governor’s proposal, that the terms of the proposal to extend Diablo Canyon Operation is a terrible deal that is going to enrich PG&E shareholders at the expense of residential, commercial, and industrial rate payers across the state, and will make the affordability crisis even worse by increasing monthly bills.
I don’t need this up right now. Thank you very much. I’ll let you know. So, the first concern is that rate payer bills will skyrocket. So, there is in this deal, a fixed management fee of a hundred million dollars a year starting in 2025. It’s collected by a non-bypassable charge on all customers in California investor owned service territories, PG&E, Edison, San Diego Gas and Electric. It includes all CCAs and all direct access customers, these funds are dedicated to PG&E shareholder profits. Two, there’s a volumetric fee of $20 per megawatt hour for production starting in 2025, estimated at $360 million a year based on historic generation levels. 50% of this volumetric fee is collected by the non-bypassable charge on customers across the state. The funds are dedicated to PG&E shareholder profits. The actual costs of the Diablo Canyon Operations will be billed to customers and exempted from CPUC Reasonableness Reviews, that concerns us.
So, starting in 2025, all Diablo Canyon costs, capital, operations, fuel, insurance, taxes, pension benefits, mitigation fees, fuel storage will be collected from electricity customers all across the state. And there are no mechanisms for constraining costs or limiting the liability of PG&E to recover unlimited spending on Diablo Canyon in electricity rate. I’m going to move to concern about windfall profits for PG&E shareholders. My first concern is that PG&E shareholders would be unreasonably insulated from liability for the first $300 million of cost stemming from outages caused by mismanagement. In 2020 and 2021, Diablo Canyon suffered almost 150 days of outages due to operational problems at unit two, resulting in replacement power costs of $179 million. Under current rate making, PG&E may be responsible for these costs if they’re found to be negligent. But under the governor’s proposal, rate payers would be liable for future outage causes even if the outage is caused by PG&E improvements, mismanagement, or negligence.
Now, I’m going to ask for page three of my presentation to be put up because I’m going to talk about the annual profits that PG&E is. So yes, if you can go to page, okay, here we go. This is it. So, what this shows is that okay from 2017 to 2021, PG&E shareholders collected about $160 million a year. Now it’s slated to go down in ’23 through ’25 to about $140 million a year. But under this new proposal, the governor’s proposal, there would be an additional $204 million on top of that of shareholder profits. And then when you get to 2026 to 2030, that goes up to $468 million a year. We just can’t figure out why PG&E shareholders should be getting so much more per year in profits for extending the plant.
Can you go to the next one, please? Thank you. I appreciate it. So, what this chart does is it shows the cumulative amount that of shareholder profits being collected. Now by 2025, underneath the current PG&E shareholders would collect about $350 million. Okay. And that stays the same for 2030 because the plant would be shut down, there’s no additional collection. But according to the terms of this plan that you see before you, by 2025 that $350 balloons to $962 million. And if you add up all of the profits year after year, by 2030 we’re talking about over $3 billion, that’s real money. Thank you very much. Those are my two slides.
My final point is going to be to share with the committee key principles for extending Diablo Canyon. That is fair to rate payers, fair to taxpayers, and also fair to shareholders without giving them windfall profits. Principle one, treat affordability as equally important as reliability. Two, no windfall profits for PG&E shareholders. Cap future annual shareholder profits from Diablo Canyon at 2023 to ’25 levels, which is no more than $140 million per year. Three, hold PG&E accountable for mismanagement or negligent if the plant goes down. Eliminate shareholder protections for replacement power cost. Four, preserve the integrity of the CPUC Reasonableness Review of all costs for operating the plant and retain exparte rules for transparency. There isn’t the governor’s proposal, a suspension of exparte rules in the first stage of the proceeding, that’s just wrong, we need transparency.
Five, protect rate payers from additional monthly bills due to keeping the Diablo Canyon open. Six, allocate any surplus funds from selling power to offset and reduce rate payer costs in recognition of tens of billions of dollars already invested in Diablo Canyon, do not let PG&E use excess funds as a slush fund to do what they want without CPUC Review, that’s important. Seven, take the time necessary, please as policy makers, to understand the consequences of the governor’s proposal and remedies to ensure the greatest public benefit financially and as a backup resource. And finally, defer action on the big question of who pays and who profits from Diablo Canyon until January to provide the legislature with sufficient time to get independent analysis. Thank you very much.
So the statement that demand is increasing unexpected levels is simply wrong. And I would like to put in the record, the latest key statistics from the Kaiso, which goes back to 2000 and, uh, 10 on what the peak demand has been year by year and what it is in the month, so that you can actually see the actual historical data through 2021. So the administration is not correctly telling you the, uh, facts about where peak demand is. There is. It is I think correct to say that we are now planning for what we’re calling net peak demand, which is the period of time when the sun is setting and we’re, we’re seeing decreased solar, uh, uh, power. And that’s the reason why we need more battery storage. The, the PUC did act twice now in procurement, once in 2019, and once in 2021 and each time, at least in 2019, they were told they needed to do more and they decided not to do more.
They were, they were advised by Southern California Edison to procure 5,000 megawatts of new capacity and made a decision to procure 3,300. They corrected that in, in June of 2021, when they made the order to procure the 11.5 gigawatts of, of 11.5 gigawatts of new resources. And I think the open question is, are there real delays, supply chain or whatever where they’re calling them? I believe it’s more the interconnection process, but are there real delays that would push those needed projects out beyond the summer summer of 2025? That’s really the key period. We’re gonna retire 3,700 megawatts, very old 1950s vintage fossil fuel plants on the south coast. Those should retire next year. And then we’re going to retire, uh, Diablo canyon. The total is 3,700 fossil, 2,200 of Diablo. So we need to replace 5,900 megawatts. The order is to get 11,500 megawatts. So the order is clearly sufficient.
The, the PUC has recognized it and they’re adding to the reserve margin. Miss ma Santo says, well, the impact is only gonna be just the nuclear plant, the $73 or whatever it is. That’s not actually correct. You need to look at the portfolio effect. What is the combination, the changed portfolio as a result of keeping the Ablo canyon within the mix of resources and adding resources so that your reserve margin, instead of being 15% might end up because you’re double procuring the ALO plus everything else that you need to longer term reduce greenhouse gases may end up with a 25% 30% reserve margin that has a major impact on affordability. If you’re keeping assets, uh, in the rate base or requiring the load serving entities to contract for resource adequacy with these assets, that adds costs to the system. So there are real opportunity costs here that the decision makers, the key decision makers, that the PUC need to balance affordability and reliability need to be carefully balanced. And if we, if we gold plate the system and, and get super high, uh, reserve margins, you’re gonna add costs to everybody. So it, it is a real careful decision that needs to be evaluated in a rigorous way. And frankly, my view is it hasn’t been done so far, uh, here in, in this, uh, in this process.
Yeah, please. I have some other questions too. I think I asked a CCA question. So if a CCAs decides to be, um, no nuclear, will they still have to pay the nuclear fee?
Okay. And then, um, one of the things I think we’ve talked about this before is I’m, I’m very concerned, um, about coastal mitigation. And my read of this is that you are trying to keep all agencies, environmental reviews, but when I read the latest proposal and please correct me if I’m incorrect, is that the coastal commission review goes to the C P C. So can you talk in the proposal currently about what the coastal commission review process will be of for the extension of Diablo canyon?
Happy to the coastal commission, um, will require will, is, will be required to make a consistency determination. This is an element that the nuclear regulatory commission re requires that the coastal commission, uh, do, uh, the coastal agency do as part of the NRC process. So that is the one determination that is required from the coastal commission that they would do under, under the statute. The second element is a potential at this juncture. It is not projected that there is any need to expand the pad where the, where the fuel is stored, but if there was to, um, be a need to expand that, uh, that pad that would require a coastal development permit and that, uh, the legislation makes it really clear that that would be something that would have to go through the coastal commission and would be subject to the regular process. So the, the piece that we know is required is the coastal commission would be required to make the consistency determination. Um, and then depending on what happens, the coastal commission or at at a later point in time could have to consider a cha a coastal development permit, and that would be done on the regular authority.
So, but my understanding and, and perhaps I’m incorrect, but my understanding is, um, the extension of the use itself would trigger coastal mitigation through the coastal
Commission. Um, the extension itself might cons would require a permit from the state water board associated with the operation of the ones through cooling plant. The determination, the, the coastal determination on the coastal role in this process would be specific to the consistency, determination. The coast, the, the ones through cooling plant would be something that would have to be considered by the state water board, not by the coastal commission. Okay. And that would require mitigation.
And I think my colleagues have covered, uh, the, the issue around the calculation of the shareholder profits, um, for PG and E. And I just wanna echo some of those concerns. I’m very concerned that we’re, we’re giving so many free passes to get something, as I think our budget share said that to address this peak demand rather than the base load. And I think that’s our are based demand. And I think that’s a really huge concern for me. Um, and so I just, you know, we don’t have to do this, but I just wanna echo some of those comments cuz I, I share them.
Thank thank you, Mr. Chair. Uh, I wanna start by echoing some of the comments that have previously been made by some of my colleagues, uh, primarily, uh, earlier, uh, assembly member, Marc Sui, who is often conversations related to climate again, another proposal by the administration that was sent to the legislature at a critical time in which we are in final negotiations and any additional conversations related to budget, as well as bills that are moving between both houses. I share that frustration because the legislature in our offices are very limited with time and very limited with staff. My staff here in the capital. I have a staff of four I in the district. I also have a staff of four. We rely on the expertise of consultants and folks in the, in, in the building that have institutional knowledge on some of the issues that are much larger than what we deal with on a day to day.
And I will share that it is incredibly frustrating to receive these last minute, not vetted, not gone through policy committee, not gone through the process of respecting the legislative process in both houses and the assembly and in the Senate to move policy. That is huge. We can’t do this is not how we operate and it is, um, disrespectful through the process. Uh, and it is disrespectful to the offices that we, so then we get this and I’m reading this. Um, we don’t have a lot. And I, and again, I share that because we have what, 24 hours to read, you know, proposals and, and, um, just breakdowns of what it, what this is supposed to be. And here in a hearing, trying to figure it out. And how do we, how are we most, uh, respectful to all of the concerns? So I share that because I’ve heard a couple of things today that just give me pause.
And that is the conversation around just transition. I’ve been on some of those conversations and it is incredibly difficult. There’s one thing to actually say, just transition. And then the actual implementation of just transition with the state’s goals and of reducing our reliability on fossil fuels and what happens to workers in those, uh, particular industries and how we pivot to more carbon friendly and renewable energy alternatives is easy to talk about a just transition, unless we’re actually doing it. You can’t take a job that pays six figures and think that we’re gonna transition a worker to something that pays 15 to $20 an hour. That’s not a just transition. And then I look at the summary from turn and I’m gonna just echo very quickly and share the annual PG E profits poised to increase by three times, PG E currently earns an average of 150 million a year from Delo canyon under the governor’s proposal.
PG E profits from Delo canyon would rise to 275 million a year starting next year. That’s an 80% increase, 300 million in 2025. That’s a 260% increase. And 460 million started in 2026. That’s a 310% increase. Several of my colleagues have already expressed how concerning that is and how do we go back to our constituents and say that we allowed for this to happen. Um, I share and want to figure out a way in which we increase our reliability on the grid. I think that what we would, what I would have liked to have is more time and to see additional alternatives that are not necessarily, uh, reopening or extending the life of a Diablo canyon, but also creating more opportunities for wind solar, hydrogen and other alternatives. Because I do agree with the administration that we should have a diverse energy portfolio that meets the needs of the current, uh, grid, but extends even further to what we wanna accomplish, which is 100% renewable energy.
And so I find myself, uh, trying to understand why this comes so last minute, um, amid everything else, and also trying to understand how do we get to a compromise in which we put workers in the space. We ensure that we are meeting our climate goals, that we are, uh, use of fossil fuels, that we are actually procuring more clean energy, that we have storage capabilities that we move forward. An agenda for California that is focused on the goals that we have, but it is very difficult to do that when we don’t have the time or we’re not given the opportunity as members of the legislature to actually vet these giant proposals. And so I’d like to know from the administration, just in a very real way, what does it look like to have partnership with the legislature for you? Because it doesn’t look like this to me and our other members of this committee had to step out to go talk and discuss and negotiate a climate package while we are here trying to figure out how do we discuss Diablo canyon, amid everything else. That’s kind of been thrown to the legislature. So I’m interested in partnership. I’m interested in policy discussions and I’m interested in respecting the legislative process. And I currently don’t see that. And I like to figure out why
Thank you for that. Um, we very much appreciate the partnership and respect the partnership. Um, many of the issues we, we, we see in, uh, the, the critical need to take additional actions and to expedite our actions to mitigate climate change. I think, uh, the governor, um, has, uh, has come into support legislation that generally has, um, been part of legislative deliberations, active bills this year legislation that, uh, that was proposed last year that moved out of, uh, out of one house and did not make it across the finish line. The issues that the governor has supported in terms of the five pillars of his climate package that he is supporting, given the need to take urgent action to mitigate climate change are ones that have been under discussion. And he is engaging in that discussion, supporting that legislation and proposing specific amendments in the interest of making sure that those bills that have been considered, um, get, uh, that, that there’s an opportunity to take action with a, a package that coupled with the budget investments that have been, um, before you, since January, um, expanded in may and, uh, that you have, uh, made important improvements through the policy process, um, that, that, that we see that as an opportunity to move forward on ideas that perhaps have not gotten across a finish line that we think now can, uh, that will continue California’s leadership and mitigating climate change in terms of Diablo canyon and the timing of Diablo canyon.
And this extension, we wish we had more time, um, the, uh, examination into where we were, um, and the mid cycle review of our, where we are in relationship to other replacement resources and what our overall needs was was, is one where, you know, it, we have been working with the energy agencies to do, as soon as the air energy agencies identified that they thought we were short. Um, in April, we engage in conversation with you on a real time basis of where we found ourselves. We’re really appreciative of the significant actions and the partnership that we had in, um, in, uh, June that yielded really important actions to put us into a better position moving forward, um, to accelerate projects and to take other elements. Unfortunately, where we are is at this juncture, we are, we are not where we need to be to maintain reliability through this decade, with the, the plan, if the plan retirements continue to move forward.
And the challenge we find ourselves with is that the timing to decide whether or not to keep this option open is now just in light of what is required to move in a different direction than where we’ve been. So the permits, the, the necessary approvals that, and the necessary scrutiny that would be associated with extension requires a change and that change in order to make it possible to extend it is one that is needed. Now the deadline for the federal funding and the opportunity that presented itself as recently as July, um, is one that is available at this juncture. And that was not available in January. So I, I hear you in terms of the timing I hear you in terms of the challenge, wish we were in a different position in terms of not needing to extend this resource and wish we were in a different position and relationship to time, but the, the situation is evolving in a real time basis.
The analysis that led the energy agencies to conclude that we were not where we needed to be, um, is, uh, happened this spring. And we shared it as quickly as possible. The opportunity for federal funding presented itself this summer, and yes, the time is short, but unfortunately we are in a position where we think that what is necessary to continue to taking the actions that we need, uh, to maintain our reliability as we continue to move towards our clean transition and continue to take actions to mitigate climate change is to, uh, to make an extension possible. And that would be something that would need to happen now, given the federal timelines and given the, the permitting timelines that would be required.
Follow up. Thank you for that. I, I really do appreciate you saying that there is value to partnership, but when this dropped, for lack of a better word, when we were talking about what this would look like, and the assembly offering a potential counter-proposal, that had more, more of a diversity of where we want to go. Um, you know, and I wanna share this with you, but where, where is partnership when someone, the, when someone in the administration says that the assembly proposal feels like fantasy and fairy does and reflects a lack of vision and a lack of understanding about the scope of the climate problem
Partnership is in continuing the conversation and looking at the opportunity for what resources can be brought forward to ensure that we are moving forward with all of the above. The focus is on figuring out what can be done, what is possible to get online, all the timing necessary, how do we move as quickly as possible on getting all the clean options online as possible, but make sure that we have the room to be able to have this resource that we believe is necessary to be able to maintain reliability. Um, you know, at this juncture,
As I’ve mentioned? Um, the, so the first piece is the compensation structure provided in this proposal. Um, first is, you know, not allowing any degeneration of profits that would go to shareholders. There is a variable compensation where there, um, is a there, you know, PG and E could get nothing under these management fees. If they don’t perform, they could get, uh, they could get, um, revenue and a management fee paid. If the performance occurs, those dollars, those revenues have to go to funding the work associated with the extension of Diablo canyon or to fund other elements that are critical priorities. And that today are things that are subject to cost recovery from rate payers, including the interconnection, uh, the, the, some of the issues that have been raised around how to make sure that we’re doing more on the interconnection side and speeding that up things to help be able to support our clean transition as well as necessary investments to get to a place of greater safety and reliability, um, transmission, uh, uh, hardening of distribution lines and other components.
So the, the, the, the compensation structure has, uh, you know, is we think fair, um, consistent with what we think is necessary to, um, ensure that there is a real performance incentive in making sure that we deliver and dollars based on the provisions and the statute have to go directly to pay for the cost of operating, or it has to go for other public purposes, um, that we think are important for rate payers and for Californians from a safety standpoint, from a clean transition standpoint, the dollars cannot go for profits that go to shareholders or other like things as some of the, that have been, uh, suggested that are not allowable under the statute.
Thank you very much, Dr. Quick, um, wow. Long day, um, couple things, first of all, most of the questions have been answered. So I’ll just start out with.
“I just don’t see that this plant is going to survive beyond 24, 2025…. And there is a compelling argument as to why it shouldn’t.” – Lt. Gov. Gavin Newsom – 2015
By Mary Beth Brangan & James Heddle – EON
That Was Then. This is now – Newsom has his eye on the presidency and needs nuclear industry support.
Back in December of 2015, the California Land Commission met to decide whether or not to extend PG&E’s 2 leases on the land the plant occupies. One 49-year lease issued in 1969 by the commission was set to expire on Aug. 17, 2018, and another 49-year lease in May 31, 2019.
In his then role as Lt. Gov., Gavin Newsom was a member of the State Lands Commission and he gave a speech, in which he said in part,
“…there’s this lease, which is not insignificant. Turns out perhaps very significant, if it’s not extended 18 and 19. So it gives this body enormous amount of influence, perhaps over the ultimate determination of its fate and future. And as a consequence, it’s a very serious discussion.
“This is the last remaining plant of its type in the state of California. It services an extraordinary need in terms of its a total output. It has a huge economic impact on the region, more broadly, the state, and one could argue the nation. So it’s not an insignificant question that we’re being asked….”
Mr. Newsom went on to opine, “I just don’t see that this plant is going to survive beyond 24, 2025. I don’t see that. Now I absolutely may be wrong, but that’s the punditry. And there is a compelling argument as to why it shouldn’t.”
He accurately observed, “With all of the questions of seismic instability, questions that seem to arise every few years -another fault is discovered, another fault is discovered, another question mark about its safety and its potential capacity to survive an earthquake…. . We’ve discovered quakes with proximity with in some cases less than a thousand feet from critical infrastructure [of] this plant, within certainly a few miles of other discoveries. There’s a huge population density in and around the area, over half a million people in 50 square miles.”
By denying the lease extensions, Newsom pointed out, the body was in a position at that time to shutdown Diablo within months with a single action.
Despite voicing these valid concerns, fast forward to June of 2016: just a week after the Joint Agreement to shutdown Diablo by 2025 had been reached, the California Land Commissioners – including Newsom – voted unanimously to approve two land lease extensions that would allow the Diablo Canyon Power Plant to keep running until 2025 in support of the Agreement.
This is the serial felon corporation that Gov. Newsom wants to award a $1.4 Billion ‘forgivable loan’ for continuing to operate the two aged reactors at Diablo Canyon in an earthquake and tsunami zone for the next 5-20 years.
If the blind-sided California legislators in the Senate and Assembly fall for Newsom’s last-minute gambit on behalf of a moribund international nuclear power industry, PG&E will stand to reap a 310% profit by the third year of the extension.
This is a challenge to California’s proud history of nuclear resistance.
If the ‘Save Diablo’ campaign succeeds in California, the nuclear revivalist cult believes it will be empowered in its nation-wide agenda to subsidize unsafe and uneconomic nuclear utilities across the country and around the world.
The nuclear power and nuclear weapons industries are joined at the hip.
The nuclear bucks must stop here.
James Heddle – EON
Here’s a list of some of the known PG&E actions, adapted, with additions, from a timeline put together by Energy-Net.org
* PG&E’s creation was the brain child of Southern Pacific’s William Crocker as a way to outmaneuver the city of San Francisco’s 1898 Charter that called for the public takeover of private water, transit, phone and electric companies.
* The company known as Pacific Gas and Electric was incorporated on October 10, 1905, as a consolidation of more than two dozen power and water concerns around the state. PG&E went on to consolidate power in northern California and by 1952 represented 520 merged companies;
* San Francisco supervisor’s testified that they had been given major bribes by PG&E during the 1906-9 San Francisco Graft Trials that indicted Southern Pacific’s (the Octopus) control over the state and city politics;
* SF labor leader Tom Mooney fingered by PG&E Pinkerton agents;
* In 1922, PG&E spent $220,000 of the $500,000 raised by the state’s private electric companies (that used vicious red baiting tactics) to defeat the California Initiative that would have created a statewide publicly owned water and power system that FDR eventually created – The Central Valley Project. (The initiative also lost in 1924 and 1926).
* As Part of a national compromised between public and private power interests, the 1920 Federal Power Act allowed PG&E and other companies to use eminent domain to take state and private land to build over 400 dams as long as they agreed to let these dam licenses to return to public authority every 50 years. – Latest cycle of licenses starts in 2022!
* PG&E took part in the national campaign in the 1920’s, led by the National Electric Light Association, that took over the country’s book companies and produced propaganda about the benefits of private ownership vs. publicly owned electricity.
* in 1925, PG&E convinced San Francisco’s Board of Supervisors to give it control of the city’s publicly financed Hetch Hetchy electrical system [see: http://www.clovisnews.com/trails/hetch_hetchy_power.html ] that it has made millions of dollars on.
* In 1945, PG&E outdid its own Hetch Hetchy scandal, when republicans cut all funding for the Central Valley Project’s grid, resulting in the collapse of public electric coops statewide just as PG&E was building its own power lines up to all the system’s major dams from Shasta to Friant.
* Being the nation’s largest utility in the 1950’s PG&E was a one electric industry’s leaders (along with GE & Westhinghouse) in promoting the development of nuclear power generation.
* Holds the distinction of being the focus of the first anti-nuclear movement in history, starting in 1958 when they tried to construct a nuclear reactor at Bodega Bay, a thousand feet from the epicenter of the 1906 earthquake where ground shifts up 30 feet took place.
* As a result of fears around the 1975 Proposition 15 that would have stopped nuclear power development, the state of California passed legislation that banned further construction of more nuclear facilities until a permanent home for spent nuclear fuel was ready. PG&E took the legislation all the way to the U.S. Supreme Court and lost.
* Bribed the Sierra club into allowing the siting of Diablo Canyon at the 2nd to last coastal wilderness in California. The scandal led to David Brower leaving the Sierra Club and forming Friends of the Earth.
* The first time the reactors were turned on, 14,000 Abalone in Diablo Bay were killed. The cove was also home to a sacred Chumash burial area and was the home of the worlds largest oak trees. It was given the name Diablo after Catholic Priests felt their first earthquake in the 1700’s.
* Pushed to build over 60 nuclear reactors in its service area. But ended up taking on over 20 years of opposition to its push to build reactors all over the state.
* Opposed lifeline electric rates for poor Californians, but failed.
* PG&E failed to even acknowledge the existence of the Hosgri Fault when first proposing Diablo Canyon Construction Nor did it ever mention that:
* The Hosgri fault likely caused Millions in damages to Santa Barbara (14 deaths) including the destruction of a 400 foot dam after 1925 quake.
* Forced to rebuild the Diablo Canyon reactors 2 times, running the cost up from $300 million to $5.8 billion as a result of:
* A newly hired engineer, in 1981, discovers that PG&E had built the seismic supports for the reactors backwards, just after the Abalone Alliance had completed the largest civil disobedience action in U.S. history.
* PG&E is a major financial supporter of the Pacific Legal Foundation that filed a 1981 SLAPP suit against the Abalone Alliance in an attempt to get it to pay for the costs of its Diablo Canyon blockade. The suit went all the way to the U.S. Supreme court before being withdrawn in 1986.
* PG&E is the proud recipient of the only company to ever have an operating license (Diablo Canyon) pulled by the Nuclear Regulatory Commission.
* Ronald Reagan secretly ordered the EPA to give the financial strapped utility $2.7 billion to help PG&E finish Diablo Canyon.
* The Diablo Canyon operation was allowed to go ahead by Judge Robert Bork. He was famous for being the Nixon’s saturday night massacre lawyer that fired the Watergate prosecutor.
* The company spent $110 million in legal fees to win the Diablo Canyon rate case. The state, which had promised that it would force the utility to eat at least $2 billion of the construction costs settled a deal that allowed PG&E to set up a $54 billion 30 year contract.
* The 1989 rate settlement led to the steepest rate increases in the country, driving electric costs from 8 cents a kwh to over 14 cents by 1994.
* This huge increase led to the revolt of big electric users, that in turn caused the disastrous Wilson deregulation plan.
*When the the California Public Utilities Commission allowed TURN to put rebuttals into PG&E’s electric bill, the company took the decision to the U.S. Supreme court and won, resulting in the collapse of Ralph Nader’s nationwide Citizen Utility Board (CUB) Campaign.
* Designed and built the Helms Stored River project, that went nearly ten times over original budget and killed a handful of workers.
* Caught in PCB transformer scandals that contaminated a major San Francisco high rise and its own workers statewide.
* PG&E was a coalition partner in destroying the grassroots based alternative energy movement in the state that was culminated in their FERC appeal that killed PURPA contracts in the state in 1994.
* The San Diego team of Steve Peace and Governor Wilson led the team plan to give the state’s utilities the disastrous deregulation mess. It included a $28 billion bonus to cover all the construction costs of Diablo Canyon and SoCal Eds’ SONGS reactors.
* PG&E is a member of the Palo Alto based Electric Power Research Institute’s disastrous national electric industry deregulation agenda that cost $17 billion to state electric customers in 2001 that led to Enron’s bankruptcy.
* In the late 1990’s it was disclosed that PG&E had covered up the extent of damages to the coast and Abalone, and was given a $14 million fine. The fine was later reversed.
* Check out the Julia Roberts movie about how PG&E contaminated hundreds of families in Hinkley California with Chromium.
* Between 2000 and 2010 PG&E spent $112 Million lobbying politicians.
* in 2010, the year of San Bruno gas pipeline explosion, PG&E increased its lobbying by 600% or a record breaking $44 million.
* Since the 2008 downturn, PG&E has been one of a handful of major U.S. Corporations that have not had to pay taxes yet still making sizable profits.
*PG&E accepts its criminal guilt over the 2010 San Bruno gas explosion, agreeing to a fine of $6 million vs the called for $562 million demanded.
* In 2010 PG&E puts a bill on the statewide ballot and spends $46 million in an attempt to kill the statewide Community Choice Movement but fails.
* Governor Newsom selected PG&E’s favorite law-firm (O’Melveny & Myers) that spent $100 million in legal fees during the 1985-89 CPUC Diablo Rate Case, to write up PG&E’s 2nd bankruptcy settlement plan over its role in wildfire damages.
* City’s across Northern California have been calling for the takeover of PG&E for years but to no avail.
It would be nice to run down the historic numbers of how much money PG&E has spent lobbying over the years, not to mention how much money they have made from their takeover of Hetch Hetchy and the Central Valley Project power grabs.
Nuclear Revivalism as a Religious Cult of ‘True Believers’
‘Meltdown at Diablo’ – ArtOfMark Bryan-com
“The failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster on a monumental scale … only the blind, or the biased, can now think that the money has been well spent. It is a defeat for the U.S. consumer and for the competitiveness of U.S. industry, for the utilities that undertook the program and for the private enterprise system that made it possible.” – Forbes Magazine- 1985
“Regardless of one’s views of the social values of nuclear power … as a business proposition nuclear stinks. The business case for existing nukes in the U.S. is also ominous… This comes on top of multiple closings of U.S. nukes unable to compete in competitive markets in recent years, state subsidies in Illinois and New York to keep uneconomic plants open, and threats of even more shutdowns… If it weren’t for actions by state governments in Illinois and New York, the picture would look worse.“ – Power Engineering Magazine – 2017
You have to understand, the nuclear industry and the people that run it have a religious belief in nuclear power. So facts don’t interfere. You know, religion is belief. They believein nuclear power.” – S. David Freeman – 2012
By Mary Beth Brangan and James Heddle – EON
‘Save Diablo’s’ Delusional Dimensions
This series is based on our research for participation in a recent Zoom workshop on the current push by nuclear proponents to extend the operation of PG&E’s two Diablo Canyon nuclear reactors beyond their scheduled respective shutdown dates in 2024 and 2025 – – an agreement approved by the California Public Utilities Commission, large majorities in both Houses of the California Legislature, and which Newsom himself had boasted about helping to broker when he was lieutenant governor. It was affirmed by Senate Bill 1090 signed by then-Governor Jerry Brown in 2018.
The full title of the 2016 agreement is “Joint Proposal of Pacific Gas and Electric Company, Friends of the Earth, Natural Resources Defense Council, environment California, International Brotherhood of Electrical Workers Local 1245, Coalition of California Utility Employees and Alliance for Nuclear Responsibility to Retire Diablo Canyon Nuclear Power Plant at Expiration of the Current Operating Licenses and Replace it with a Portfolio of GHG Free Resources.”
The ‘Save Diablo’ campaign not only violates the existing agreement between the utility and citizen organizations, but also requires major exemptions from and revisions in both state and federal laws.
If you can’t or won’t comply with the law, just attempt to change it.
Devilish Details
Ana Matosantos, Cabinet Secretary at the California Governor’s office apparently crafted the legal language of the required exemptions and revisions necessary to extend the plant’s functioning for an indefinite period. In a Joint Agency Remote Access Workshop held on August 12, 2022, she presented what appeared to be an unscripted articulation of the proposal, demonstrating her familiarity with the issues involved.
The eleventh hour plan, launched in the final weeks of California’s 2022 legislative session ending August 31st, calls for the U.S. Department of Energy to extend an offer for part of a $1.6 million pot of money for operating subsidies for economically distressed nuclear plants to Diablo Canyon under the Civil Nuclear Credit Program. Diablo does not meet the criteria for ‘financially distressed’ under this program.
In addition, another major feature of the Governor’s Proposal is to offer a “forgivable loan” from the state’s General Fund to PG&E – essentially a grant – of up to $1.4 billion to cover the costs “associated with the relicensing” of Diablo Canyon. Although the Governor’s Proposal referred to a “limited term extension,” the fine print calls for the Public Utilities Commission to consider an extension for as long as ten years, until October 31, 2035.
Now that extension has reportedly been extended to 20 years – in order to justify the extremely high expenses involved in reversing the shutdown process at this late date.
Gov. Newsom’s Cabinet Secretary, Ana Matosantos – Workshop screen capture
The clearly brilliant Ms. Matosantos has reportedly been the brain behind California governors from Arnold Schwarzenegger , Jerry Brown, and most recently as Gavin Newsom’s Cabinet Secretary.
If her alleged multi-pronged law-changing strategy succeeds, she will have left quite a legacy.
Zoom Marathon
In the Zoom call – that went on for 5-and-a-half hours, and was reportedly attended by more than 600 participants – several officials made presentations on the issues.
In case you missed it, the recording of the full event is available with an audio transcript here.
California Senator John Laird thoughtfully laid the background history and the twelve issues that, in his mind, will need to be thoroughly addressed. Senator Laird represents the 17th State Senate District, including all of Santa Cruz and San Luis Obispo counties, the majority of Monterey County, and parts of Santa Clara County. A transcript of his full statement is here.
His list of gnarly issues included:
Safety
Who pays?
Spent Nuclear Storage
Seismic Studies
Once Through Cooling Violations
Permitting Requirement
Community Transition Funding
Diablo Canyon Lands Returned to Community Use
Chumash Heritage National Marine Sanctuary
Date Certain Uncertainties
Offshore Wind Development Plans
Marshall Plan for Renewables Development
Senator Laird concluded, “I don’t see a pathway to Diablo’s Canyon continued operation unless each of these elements is addressed. No proposal can be complete without that….” That suggests that, as Grandma used to say, “Many a slip between cup and lip.” There’s a boulder-strewn thicket of red tape impediments to get through to keep Diablo making more deadly nuclear waste radioactive virtually forever.
Succeeding speakers from the California Energy Commission and the California Independent Systems Operator (CAISO) presented what seemed to many viewers to be a cheery, if subtle, sales pitch for extension, laced with repeated protestations that ‘assured safety’ is their overriding priority.
It is worth noting here that CAISO is not, as its name implies, a government agency. According to Dun & Bradstreet, it is a corporation and is part of “the Management, Scientific, and Technical Consulting Services Industry.” It is a business with contractual obligations to export electricity to other states. That’s why it is said to be mainly responsible for the August 2020 blackouts. It had reportedly miscalculated its demand projections and, although it had the capacity to meet California’s sudden in-state demand, it had instead sent the power out of state in order to fulfill its existing business contracts. This could happen again, with or without Diablo in operation.
What we see as a charm offensive was supported by glossy graphics based on hypothetical modeling purporting to show that, without Diablo’s output, California’s energy supply may well be doomed very soon.
Workshop screen capture purporting to show looming energy shortfall without Diablo.
This is a myth that will not die.
Graphic credit: Women’s Energy Matters based on government data.
As far back as 2013, the late Barbara George, Founder/Director of Womens Energy Matters, described in our video California’s Unnecessary Nukesher discoveries as a professional intervenor on behalf of the public interest at the California Public Utilities Commission (CPUC), showing private utilities’ resistance to energy efficiency, conservation and clean energy technologies in a state that already had an excess of power – without nuclear reactors.
Diablo is No Protection Against Blackouts
That was then, and this is now. Figures have changed.
Proponents of extending Diablo Canyon’s operation for up to 20 more years argue that the plant’s two aging and embrittled reactors, located over 13 intersecting earthquake faults in a tsunami zone, operated by serial felon Pacific Gas & Election (PG&E) are necessary backups to prevent power outages in the state.
But the following chart, created by Donna Gilmore of SanOnofreSafety.org based on official government data, conclusively demonstrates that relying on Diablo as a buffer against blackouts is a foolish course.
Diablo is not a dependable power source.
It averages one or both reactors being shutdown 40% of every year.
‘Saving Diablo’ Means Gambling with California’s Economy and Safety.
Graphic: Donna Gilmore – SanOnofreSafety.org
Public Comments
In the recent Diablo Zoom workshop, following the official statements, the duration of the marathon meeting was filled with 2-minute public comments from remote attendees.
According to viewer and testifier Jan Boudart of Illinois’ Nuclear Energy Information Service (NEIS.org), her tabulation showed that, “About 95 made comments: 48 were in favor of keeping it open, 51.6%; 42 were in favor of closing it, 44.1%; 4, I couldn’t tell their opinion, 4.3%.” This would show the effectiveness of the ‘Save Diablo’ campaign’s year long, well-funded psyop propaganda begun in 2016 by recent unsuccessful candidate for governor, Michael Shellenberger. Other viewers observed that many of those who spoke in favor of the proposal could be seen to have personal vested interests in nuclear energy.
National Implications
The fact that so many participants Zoomed in from around the country suggests that citizens as well as corporate strategists see famously anti-nuclear California as the identified bellwether state with a target on its back. The motto, “As goes California, so goes the country” takes on ominous implications.
As the nationwide push to bailout nuclear utilities and put aging reactors on life support goes forward, cracking California is seen by revivalists as a keystone in their agenda.
Incentives even included a last-minute offer from Gov. Gavin Newsom to give Pacific Gas & Electric Co. a $1.4-billion ‘forgivable loan.’ Desperate nuclear recidivism in action.
The attempt to extend Diablo Canyon’s operation in defiance of citizen opposition, public safety and common sense demonstrates two things:
Nuclear energy is a quintessentially totalitarian and anti-democratic technology
Nuclear Revivalism is a religious cult
The late S. David Freeman – who executed more nuclear plant shutdowns in his career than any other nuclear administrator – put it this way:
“You have to understand, the nuclear industry and the people that run it – and I say this advisedly – they have a religious belief in nuclear power.
“So facts don’t interfere. You know, religion is belief.
“They believein nuclear power, and I’ll tell you how it came about.
“It started off as a guilt trip.
“We got the bomb in World War 2, and President Truman said – right after he found out about it, he said – ‘We’ve got to make something good out of this evil.’
“And so the whole nation started off with civilian nuclear power plants as a gigantic guilt trip.
“And so we overlooked the dangers inherent in it, and we thought we were doing something good.
Freeman knew whereof he spoke from a lifetime of experience.
Freeman was involved in the negotiations that led to the Diablo shutdown agreement – approved by California Public Utilities Commission (CPUC), the California Legislature and supported by then Lt. Gov. Newsom – which, Newsom and the nuclear revivalist cultists are now attempting to violate.
Freeman would no doubt strongly advise against it.
We were privileged to shoot video interviews with him in his various roles twice in the course of our documentary productions. In his last interview with us he warned, “We need to phase out and shut down the 104 reactors in America. I will put it very bluntly. We need to kill them before they kill us.” [Emphasis Added]
Freeman was not the only one to identify the cultish aspects of pro-nuclearism.
The subtitle reads: “A new history reveals that federal regulators consistently assured Americans that the risks of a massive accident were “vanishingly small”—even when they knew they had insufficient evidence to prove it.”
New Yorker staff writer Ford is no stranger to nuclear chicanery, having served as executive director of the Union of Concerned Scientists from 1972 to 1979.
He has also published a number of papers, articles and books on the topic, including his 1992 book The Cult of the Atom: The Secret Papers of the Atomic Energy Commission, based on government documents obtained in an intensive FOIA investigation. The AEC was the discredited precursor agency to the current Nuclear Regulatory Commission (NRC).
So, Mr. Ford is eminently qualified to review in his timely New Yorker article the 2021 US Government publication by Prof. Thomas Wellock, the official historian of the U.S. Nuclear Regulatory Commission (N.R.C.). entitled “Safe Enough? A History of Nuclear Power and Accident Risk.”
Ford notes, “During my on-the-record interview with Wellock, a Nuclear Regulatory Commission public-relations officer sat in, and said that Wellock could answer questions about historical matters but not current agency policy.”
Nevertheless, Ford finds Wellock’s book, “a refreshingly candid account of how the government, from the nineteen-forties onward, [ which] approached the bottom-line question posed in the book’s title.”
Says Ford:
Wellock’s book proffers no evidence that anyone inside the A.E.C. was involved in a criminal conspiracy to hide the risks posed by nuclear plants; he is the agency historian, after all, and not a prosecutor. Instead, there seemed to be an abundance of hubris and cult-like true-believing in the idea of a nuclear future in which the risk of a catastrophic accident was accepted, as a matter of doctrine, to be very low.
Ford also interviewed a former agency staffer named Thomas Murley, who went on to become a director of nuclear reactor regulation at the N.R.C.. Murley told Ford, “We all believed our own bullshit back then.”
What about now? Has anything changed? The current delusional Diablo extension discussions would suggest it has not.
Ford notes:
In the early seventies, the A.E.C. predicted that there would be a thousand nuclear reactors operating in the country by 2000—an estimate that would turn out to be off by a thousand percent, give or take.
In our minds, this is a tribute to the effectiveness of informed public pushback, just like what’s happening now in relation to Diablo.
Perhaps the most telling story in Ford’s article comes from his own experience.
In the seventies, an executive with the utility company Florida Power & Light told me that his company had adopted nuclear power so that its leaders wouldn’t be embarrassed on the golf course by other C.E.O.s who had done so.
This suggests that groupthink, social peer pressures, political expediency and going-along-to-get-along are the main determinants of nuclear policy – not rigorous scientific, engineering and ethical principals.
According to Ford:
Wellock’s book notes that some analysts have put forward rough statistics based on the history of the worldwide nuclear industry: the world’s reactors have now been in operation for more than fourteen thousand “reactor-years,” and to date there have been “five core-damage accidents”—Three Mile Island, Chernobyl, and the three reactors at Fukushima. These numbers, in a back-of-the-envelope sense, suggest that the world should expect one full or partial meltdown every six to seven years. If that estimate is plausible—Wellock presents no challenge to it—then the worldwide nuclear program is slightly overdue for its next big surprise.
On this basis, Ford suggests, “The next meltdown, arithmetically speaking, is just around the corner; the only issue I cannot resolve is where it will occur.”
His top candidates? One of the French nuclear reactors massively afflicted with stress-corrosion cracking, or our country’s most embrittled reactor at Diablo Canyon in Californi
In our next and final installment of this series, The Case Against Extension, we look at why he’s right to point at Diablo. Please stay tuned….
