BILL ANALYSIS Ó SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS Senator Ben Hueso, Chair 2015 - 2016 Regular Bill No: SB 657 Hearing Date: 6/16/2015 ----------------------------------------------------------------- |Author: |Monning | |-----------+-----------------------------------------------------| |Version: |4/21/2015 As Amended | ----------------------------------------------------------------- ------------------------------------------------------------------ |Urgency: |Yes |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Jay Dickenson | | | | ----------------------------------------------------------------- SUBJECT: Diablo Canyon Units 1 and 2: enhanced seismic studies and review: independent peer review panel DIGEST: This bill requires the California Public Utilities Commission (CPUC) to convene, or continue, until January 1, 2025, the independent peer review panel (IPRP) to review Pacific Gas and Electric's (PG&E) seismic studies of PG&E's Diablo Canyon Power Plant, a nuclear facility on the Central Coast. ANALYSIS: Existing law: 1)Requires the California Energy Commission (CEC) to compile and assess scientific studies to determine the potential vulnerability of the state's largest generating plants due to aging or a major seismic event, assess the potential state and local costs associated with accumulating waste at California's nuclear power plants, and adopt the assessment by November 1, 2008. (Public Resources Code §25303) 2)Requires all charges demanded or received by any public utility for any product or commodity furnished or any service rendered be just and reasonable, and further requires every public utility to furnish and maintain such adequate, efficient, just, and reasonable service, instrumentalities, equipment, and facilities as are necessary to promote the safety, health, comfort, and convenience of its patrons, employees, and the public. (Public Utilities Code §451) This bill: SB 657 (Monning) PageB of? 1)Requires the CPUC to convene, or continue, until January 1, 2025, the IPRP to conduct an independent review of PG&E's Diablo Canyon Units 1 and 2 powerplant, including the surrounding areas of the facility and areas of nuclear waste storage. 2)Requires the IPRP to contract with CEC, the California Geological Survey, the Coastal Commission, the Alfred E. Alquist Seismic Safety Commission, the Office of Emergency Services, and the County of San Luis Obispo to participate on the panel. Background Diablo Canyon - nuclear power on the seismically active Central Coast. Diablo Canyon Power Plant is a two-unit nuclear powerplant located in San Luis Obispo County. The power production facility and support operations sit on approximately 900 acres adjacent to the Pacific Ocean between Avila Beach and Montano del Oro State Park. According to PG&E, the plant produces approximately 10 percent of California's energy load and about 20 percent of PG&E's overall electricity production. The powerplant is licensed by the federal Nuclear Regulatory Commission (NRC) to operate until 2024 and 2025, respectively, for units 1 and 2. Since the initial siting of Diablo Canyon, PG&E and the state have been aware that the plant lies within a seismically active zone. Recently, seismologists have become aware of the possibility of an earthquake directly beneath the powerplant. In 2008, in response to statutory direction, the CEC released its assessment of the potential vulnerability of Diablo Canyon to a major disruption due to a seismic event.<1> As part of that assessment, the CEC recommended that PG&E use three-dimensional geophysical seismic reflection mapping and other advanced techniques to supplement ongoing seismic research programs; and that CEC and other appropriate state agencies evaluate whether these studies should be required as part of the Diablo Canyon license renewal feasibility studies for the CPUC. Soon after, the CPUC directed PG&E to incorporate the --------------------------- <1> http://www.energy.ca.gov/2008publications/CEC-100-2008-008/CEC-10 0-2008-008-CMF.PDF SB 657 (Monning) PageC of? recommendations from the CEC report into its feasibility study to extend the operating licenses of Diablo Canyon. In 2009, PG&E filed an application with NRC to extend Diablo Canyon's operation by 20 years. The licensing decision rests wholly with the NRC. However, the CPUC will decide the reasonableness of PG&E's request to recover the costs for continued operation of the powerplant. In 2010, the CPUC formally decided to convene, via contract, its IPRP, composed of itself, the CEC, the California Geological Survey, the California Coastal Commission, and the California Seismic Safety Commission. The IPRP would conduct an independent review of PG&E's seismic studies to enhance CPUC's ability to assess the reasonableness of Diablo Canyon's proposed license renewal. The IPRP has conducted several reports assessing PG&E's seismic studies of Diablo Canyon. Following the 2011 earthquake in Japan that severely damaged the Fukushima Daiichi nuclear power plant, NRC required PG&E to conduct additional, advanced seismic studies of the area around and underneath Diablo Canyon. PG&E requested that NRC delay its decision on PG&E's relicensing request so that PG&E could conduct the seismic studies. The NRC agreed. The contract for the IPRP expires on November 30, 2015. PG&E's advanced seismic studies are ongoing. They will likely continue past 2015. Forced dating. The author and supporters contend the IPRP needs to exist beyond 2015 so that it may continue to provide an independent, impartial review of PG&E's seismic studies. The IPRP exists, however, not because of statutory requirement. Rather, its existence is the result of a CPUC decision. Presumably, the CPUC, which supports this bill, could act, on its own, to extend or renew the contract of the IPRP. In any case, the author contends statute is needed to ensure the work of the IPRP continues through the end of Diablo Canyon's current operating license. For that reason, the author seeks to mandate the existence of the IPRP till January 1, 2025. Diablo Canyon unit 2, however, is licensed to operate till August 26, 2025. The author and committee may wish to amend the bill to require the existence of the IPRP till August 26, 2025, to coincide with the expiration of unit 2's license. SB 657 (Monning) PageD of? Prior/Related Legislation AB 361 (Achadjian, 2015) extends, until July 1, 2024, the method for funding state and local costs for emergency service activities associated with a nuclear powerplant, with respect to a utility operating a nuclear powerplant with a generating capacity of 50 megawatts or more, thereby extending an amount, as specified, available for disbursement for local costs for the Diablo Canyon site. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No SUPPORT: Alliance for Nuclear Responsibility California Coastal Commission California Public Utilities Commission County of San Luis Obispo Pacific Gas and Electric Company, if amended Physicians for Responsibility-Los Angeles Physicians for Social Responsibility-San Francisco Area Chapter Sierra Club California Sierra Club-Santa Lucia Chapter Several Individuals OPPOSITION: None received ARGUMENTS IN SUPPORT: The author contends the Legislature needs to act to ensure the IPRP exists throughout Diablo Canyon's licensure so that it may continue its independent, impartial, expert review of PG&E's seismic studies. -- END --