PG&E Secures Key Lease Extension for Diablo Canyon
California's State Lands Commission has approved a lease extension that Pacific Gas and Electric (PG&E) needed to operate its two Diablo Canyon Power Plant nuclear reactors until 2025.
The three-member commission unanimously approved extending the lease for the power plant's cooling water infrastructure through the end of its current federal licensing period.
Without those extensions, the plant could not operate beyond 2018.
The State Lands Commission has jurisdiction over the plant's once-through cooling system's infrastructure because it is located on the coastline on Avila Beach.
PG&E had asked the commission to combine and approve two leases issued in 1969 and 1970 for Diablo Canyon's cooling water intake structures, breakwaters, and discharge channel. While it recommended approval of the lease, the commission staff also recommended that the lease application does not need an environmental impact study.
PG&E on June 21 announced it would permanently shutter the two-reactor plant on the central California coastline. The company said the move was part of a "joint proposal" with labor and environmental groups that seeks to increase investment in energy efficiency, energy storage, and renewables beyond current state mandates, while also phasing out nuclear power in California by 2025.
But because procurement, construction, and implementation of its planned "greenhouse gas-free portfolio" will "take years," the company said it plans to operate the nuclear plant units until operating licenses granted by the Nuclear Regulatory Commission expire.
Unit 1 will be retired on November 2, 2024, and Unit 2 on August 26, 2025.
The company said the proposal is contingent on a number of regulatory actions, including approval of the lease extension from the State Lands Commission.
The proposal will also need the California Public Utilities Commission's (CPUC's) approval to replace power from the 2.3-GW plant with other zero-carbon resources. "Any resource procurement PG&E makes will be subject to a non-bypassable cost allocation mechanism that ensures all users of PG&E's grid pay a fair share of the costs," the company said.
The CPUC will also need to confirm that PG&E's investment in Diablo Canyon will be recovered by the time the plant closes in 2025, as well as its approval of cost recovery for appropriate employee and community transition benefits.
PG&E said it would file the proposal with the CPUC this July.
-Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)
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