Utility Judge Proposed Cost Cut for Nuke Closure Could Mean Higher Rates for Customers

A state judge Wednesday recommended that California's largest utility be allowed to increase customer rates by nearly $200 million for costs tied to the planned closing of the state's last operating nuclear plant.

If approved, the plan for the Diablo Canyon nuclear power plant is expected to add a few pennies a month to bills for Pacific Gas & Electric Co. customers.

The proposed decision by California Public Utilities Commission Administrative Law Judge Peter V. Allen trimmed tens of millions of dollars from the request from PG&E.

The utility asked for $360 million for employee retention and training, which the judge cut to about $170 million.

The judge also set aside a plan to use $85 million for assistance for local governments, saying it would require legislative authorization.

"The question before this commission is not whether there will be economic impacts, or even the potential size and scope of those impacts, but rather whether PG&E ratepayers should pay to mitigate these impacts," the judge wrote.

The utility's proposal stems from a 2016 agreement between PG&E and environmental groups to close Diablo Canyon, located midway between Los Angeles and San Francisco, by 2025.

The commission could consider the judge's proposal in December.

PG&E said in a statement it disagreed with the judge's decision to cut the funds.

The utility said the judge's recommendation "differs in regards to certain key areas, including the employee, community and energy replacement programs. PG&E strongly disagrees with these proposed adjustments."

The utility's proposal is separate from the multibillion-dollar plan to decommission Diablo Canyon, under which the site would eventually be dismantled.

The twin-reactor plant has been operating commercially since the mid-1980s, supplying power to about 3 million homes in Northern and Central California.

The judge endorsed the schedule to retire the reactors, Unit 1 in 2024 and Unit 2 in 2025, when their federal Nuclear Regulatory Commission operating licenses expire. He wrote it provides "a reasonable amount of time for the transition process."