Operating California’s Diablo Canyon nuclear power plant past its 2025 license expiration would cost more than twice what many had anticipated, and significantly more than replacing it with energy efficiency and renewable resources, according to an analysis submitted today to the California Public Utilities Commission (CPUC) by the plant owner. The filing can be found here. NRDC continues to believe that substituting those zero-carbon resources for Diablo Canyon will save electricity users at least $1 billion.

The operating cost estimate (more than 10 cents per kilowatt-hour) is among the important new details that Pacific Gas & Electric Company (PG&E) filed with the CPUC on the widely supported Joint Proposal to retire and replace Diablo Canyon. NRDC helped negotiate and joined that proposal, announced in late June, and while critics claim that polluting natural gas will fill the gap, today’s filing reaffirms that this is incorrect (as has been clearly stated from the start).

The proposal requires the approval of the CPUC, which regulates the state’s private utilities. California’s last operating nuclear plant is located near San Luis Obispo, about 250 miles south of San Francisco, and serves 16 million people in northern and central California.

PG&E today gave the CPUC its exhaustively documented reasons for concluding that its retirement and replacement strategy for Diablo’s two generating units will cost customers less than continuing to operate the plant after its license expires.

Important information in today’s filing

The PG&E analysis concludes with a telling statement : “Finally, as California continues to move closer to a cleaner energy future, a large non-dispatchable unit such as Diablo Canyon no longer ‘fits’ the needed generation profile of the changing energy landscape.”

PG&E reinforces this point with specific references to California’s climate and clean energy leadership, which the utility fully embraces. Important excerpts from the filing include:

“Over the course of the past decade, California has continued to lead in creating a new energy future for the State, a future that is focused on reducing greenhouse gas emissions by providing additional energy supply options . . . Policies to support this vision have accelerated in the past several years, including the passage of Senate Bill (SB) 350, which calls for a doubling of energy efficiency goals and achieving a 50 percent Renewable Portfolio Standard (RPS) by 2030.”

“PG&E has conducted extensive analysis on the cumulative impacts of these policy changes . . . These forecasts show that a substantial portion of [Diablo Canyon’s] energy output is anticipated to not be needed to serve PG&E’s [customers] beyond 2025. In addition, if [Diablo Canyon] were not retired but instead its license renewed, the generation from Diablo Canyon could exacerbate the challenges of integrating increasing amounts of wind and solar into the system . . . PG&E’s analysis projects that it would be more expensive from a consumer perspective to continue to operate Diablo Canyon . . . than to retire Diablo Canyon when the licenses expire in 2024 and 2025 and implement the joint proposal.”

In conclusion: “the most efficient and effective path forward for achieving California’s SB 350 policy goal for deep reductions in GHG (greenhouse gas) emissions would be to retire Diablo Canyon at the expiration of its current operating licenses and replace it with a portfolio of GHG-free resources, as provided in the Joint Proposal.”

These are not quotes from NRDC, remember, although we are in full support: these are the carefully considered findings of one of the nation’s largest natural gas and electric utilities, with more than three decades of experience in nuclear power generation.

Why we support the proposal

Diablo Canyon represents the world’s first nuclear power plant retirement to be conditioned on full replacement with lower cost zero-carbon resources. While nuclear plants are low-carbon facilities, they also are relatively costly, have other environmental impacts, and reduce the flexibility of electricity systems. Running a huge baseload nuclear plant designed to operate around-the-clock becomes a roadblock to replacing polluting power plants with emissions-free renewable energy that ramps up and down. For example, California at times throws away solar energy at midday because it exceeds customers’ electricity needs and storage capacity is insufficient.

The remainder of the PG&E filing addresses other elements of the Joint Proposal , including cost recovery, the initial phases in acquiring the energy efficiency and renewable energy that will be needed to replace Diablo Canyon, and a multi-year transition plan aimed at helping the plant’s community and workers prepare for its retirement.

Comments on the filing are due in 30 days. NRDC will work with other supporters, including PG&E and its workers, to encourage CPUC approval of the Joint Proposal at the earliest possible date.