In a victory for ratepayers, the Alliance for Nuclear Responsibility (A4NR) has scored a Proposed Decision from the CPUC that will return $43.2 million from PG&E back into customer’s pockets.
Contrary to A4NR’s initial opposition, the CPUC in 2019 gave PG&E $130 million to replace the troubled main generator stator in Unit 2 at Diablo Canyon Nuclear Power Plant. During 2020-2021 the replacement unit failed to perform as expected, leading to 149 days of unplanned outages and requiring PG&E to purchase $178 million in replacement power for which they were going to charge ratepayers.
A4NR made extensive discovery requests in that CPUC proceeding, gaining access to PG&E’s internal Root Cause Evaluation reports after signing an NDA. Intensively scrutinizing the trove of confidential documents, the Alliance team pieced together a string of failed oversight and supervisorial mishaps on the part of PG&E’s management team. Although the CPUC judge found that PG&E acted appropriately for five of the six outages,
“The Commission concurs with A4NR that PG&E failed to recognize that the design verification testing did not integrate the performance of stator end winding and parallel ring vibration resonance into the design change proposed by Siemens, which was a factor in forced outage four…Accordingly, we disallow $43,208,116 for the replacement power costs associated with forced outage four.”
Also troubling is the fact that the Diablo Canyon Independent Safety Committee (DCISC)—a CPUC chartered ombudsman—gushed effusively over the “excellence” of the entire generator rebuild from start to finish without critical review. SB 846—legislation enabling the extended operation of Diablo Canyon until 2030—makes the DCISC the sole arbiters of technical review for the plant. What does this portend, as many more pieces of complex equipment are being rebuilt or installed for the extended operations? SB 846 acknowledges “the greater risk of outages in an older plant that the operator could be held liable for” and makes ratepayers liable for up to $300 million per year in replacement power costs for Diablo Canyon outages during the extended period even when PG&E fails to meet the reasonable manager standard.
“With this Proposed Decision the CPUC found PG&E failed to meet that standard, and without A4NR’s intervention, PG&E would have plucked $43.2 million from the pockets of already struggling ratepayers,” notes A4NR Executive Director David Weisman.
“Indemnified now from having to meet that standard, giving PG&E a $300 million annual buffer against its own mistakes will inevitably encourage sloppier operating practices going forward at Diablo Canyon.”
These costs will be charged to all CPUC-jurisdictional customers outside PG&E’s service territory such as Southern California Edison and San Diego Gas & Electric. Weisman concludes, “Is this how the legislature truly intended to bring affordability to California utility customers? Perhaps it’s time to stop PG&E’s looting, and for Sacramento to seriously consider the many off-ramps in SB846.”
The Proposed Decision can be downloaded at:
