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
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          |Author:    |Monning                                              |
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          |Version:   |4/21/2015    As Amended                              |
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          |Urgency:   |Yes                    |Fiscal:      |Yes             |
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          |Consultant:|Jay Dickenson                                        |
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          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.
          

          

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