Diablo Canyon Cost Recovery Denied

PG&E Can’t Charge Ratepayers $80 Million it Will Spend to Extend Life of Power Plant

PG&E was denied permission to charge ratepayers $80 million for costs the utility giant estimates it will incur applying for permission to extend the life of the Diablo Canyon nuclear power plant in Avila Beach another 20 years. Instead, an administrative judge with the California Public Utilities Commission (CPUC) put PG&E on notice that it first must complete high-energy, three-dimensional offshore studies to determine the exact force and velocity of the new fault line discovered three years ago just a few hundred yards off the coast from the nuclear power plant.

The judge’s action came at the instigation of Alliance for Nuclear Responsibility, an anti-nuclear watchdog group headquartered in San Luis Obispo. PG&E officials minimized the ruling, describing it as a ministerial action and pointing out that they had already agreed to a suspended approval, meaning that the new seismic studies needed to be completed before the relicensing application could be approved. David Weisman with the alliance insisted there was a significant difference between a suspension and a denial. With a suspended application, Weisman said, PG&E would have been allowed to use all the data it’s already collected as part of its relicensing application. But because the judge denied the application, he said, PG&E would have to use data collected only after the new seismic studies have been completed. In the intervening three to five years, Weisman said, the market forces that might impact the cost-benefit analysis required for the relicensing requirement could change dramatically. Solar and wind, he said, might be significantly cheaper in three years. Likewise, new requirements that PG&E take steps to better cool the water offloaded into the ocean by the reactors might make Diablo Canyon significantly more expensive. In the meantime, Weisman also confirmed that the alliance is also opposing PG&E’s effort to recover the costs associated with the three-dimensional seismic studies. PG&E, Weisman said, initially estimated the cost of such studies would be $18 million. Subsequently, he said, those costs have skyrocketed to $64 million. Until PG&E justifies that, Weisman said, the alliance would oppose the utility’s cost recovery application with the CPUC.

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