PG&E Shareholders – Not Customers – Should Pay For SLO Community Funding, Says State Agency

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Hearings start Wednesday morning in San Francisco for Pacific Gas and Electric’s request to retire the Diablo Canyon nuclear power plant. PG&E representatives will go before the California Public Utilities Commission (PUC) to ask for permission to decommission the plant, as well as approval of a joint agreement PG&E made between San Luis Obispo County and several cities, a school district, labor unions and environmental groups.

At the end of November, PG&E announced the proposed agreement would “provide $85 million in support for the San Luis Obispo County community.” A company statement said the agreement outlines a $75 million fund to be created and distributed to local agencies “whose budgets are impacted by the inevitable decrease in unitary tax funding” from Diablo Canyon.

PG&E said it would create another $10 million economic development fund to offset lost revenue due to the plant’s closure. According to the statement, “PG&E does not believe long term customer rates will increase as a result of the joint proposal.”

The state agency Office of Ratepayer Advocates (ORA) and the Utility Reform Network (TURN) disagree with that position. They say PG&E shareholders should pay the $85 million in community support, not the company’s customers.

According to legal comments filed with the PUC by the Office of Ratepayers Advocates, PG&E has proposed ratepayers fund the community support. Attorneys for the Office of Ratepayer Advocates and the Utility Reform Network wrote that if the PUC approves PG&E’s application, it “would increase total system rates by 1.6 percent in the near term.”

In a Sept. 26, 2016 reply to public comments on the first iteration of the joint proposal, PG&E attorneys wrote, “all electricity consumers should contribute toward assisting the local community to transition to a time without Diablo Canyon in operation. Diablo Canyon has been able to operate so successfully for the past three decades, in part, because of the support of the local community. Electric customers who have enjoyed the benefits of Diablo Canyon’s safe and reliable operation over these last 30 years should contribute to the support of the local community that has made this possible.”

“It is premature for the Commission to consider [the joint settlement agreement],” said ORA attorney Laura Tudisco and TURN attorney Matthew Freedman in their comments. “If the Commission does proceed to consider the provisions in the settlement agreement that would require ratepayer funding, then hearings are warranted. ORA and TURN would not object, however, to the Commission’s approval of the community program if it is funded wholly by shareholders.”

The Public Utilities Commission evidentiary hearings concerning PG&E’s application for approval of the retirement of DCPP, implementation of the joint proposal and “recovery of associated costs through proposed ratemaking mechanisms” begin at 10 a.m. on April 19 at the CPUC’s hearing room at 505 Van Ness Avenue in San Francisco. The hearings are also available via webcast.