On the final day of the legislative session, Governor Gavin Newsom scored major victories on some of his “5 point climate plan,” including the “lithium valley,” and Diablo.  As for what kind of “horse trading” or favors were afforded for the votes – those will eventually be revealed. 

Final Outcomes

• Codifying the state’s goal to be carbon neutral by 2045 into law. AB 1395 — FAILED
• Ramp up the 2030 greenhouse gas emissions reduction target from 40 percent to 55 percent below the 1990 level. AB 2133 — FAILED
• Establish setbacks of 3,200 feet between new oil wells and schools, homes and parks. SB 1137 — APPROVED
• Set clean electricity targets of 90 percent by 2035 and 95 percent by 2040 to keep the state on track to the previously established goal of total clean electricity retail sales by 2045. SB 1020 — APPROVED
• Establishing a regulatory framework for carbon removal and capture, utilization and sequestration. SB 905 and AB 1279 — APPROVED
• Diablo Canyon re-licensing. SB 846 — APPROVED
• Budget trailer bill, which has millions for climate change, including funding for storage and the Lithium Valley. SB 126 — APPROVED

While Newsom will have until the end of September to act, all the approved bills will be signed.

California Independent System Operator Control Room

The California Independent System Operator (CAISO) has issued two separate power deficiency warnings. The CAISO is asking for the conservation of power usage between 4pm and 9pm.

• CAISO has called a state-wide Flex Alert from 4 pm to 9 pm today due to extreme heat across the State.

• CAISO has also called an Energy Emergency Alert for hours 18 to 20 – CAISO is forecasting energy deficiency and may not be able to support exports bid into the HASP Market.

For more information: http://www.caiso.com/Documents/california-iso-issues-flex-alert-for-today-aug-31.pdf

With three days to go in the session, Governor Gavin Newsom’s “5 point climate plan,” Diablo Canyon’s re-licensing, and the “lithium valley,” now have bill numbers.  Will they all be approved?  What kind of “horse trading” is happening behind the scenes to have at least some of these or all of these survive? 

Newsom’s climate Pillars + Diablo (Bills and Links):

• Codifying the state’s goal to be carbon neutral by 2045 into law. AB 1395
• Ramp up the 2030 greenhouse gas emissions reduction target from 40 percent to 55 percent below the 1990 level. AB 2133
• Establish setbacks of 3,200 feet between new oil wells and schools, homes and parks. SB 1137
• Set clean electricity targets of 90 percent by 2035 and 95 percent by 2040 to keep the state on track to the previously-established goal of total clean electricity retail sales by 2045. SB 1020
• Establishing a regulatory framework for carbon removal and capture, utilization, and sequestration. SB 905 and AB 1279
• Diablo Canyon re-licensing. SB 846
• Budget trailer bill, which has millions for climate change, including funding for storage and the Lithium Valley. SB 126

All of these must be approved by both houses of the Legislature by midnight on 8/31.  Those measures that are approved will be sent to Newsom for action.  Newsom will have until the end of September to act.

As we have previously reported, Governor Gavin Newsom called on the Legislature to help keep the PG&E-owned Diablo Canyon nuclear power facility online for 10 more years.  With a few hours to go until the deadline on Sunday, SB 846 finally materialized.  But can he get the votes needed to pass both houses of the Legislature?

The Case for Diablo

A day after the idea was presented to the Senate, it was the Assembly’s turn to hear the reasons why Diablo Canyon needs to stay on another 10 years.

On Thursday and Friday, the Energy committees in the Senate and Assembly met to hear about Diablo Canyon.

While there was no actual legislation at the time, in a rare move, the Governor’s Office sent outgoing Cabinet Secretary Ana Matosantos to testify in both committees.

Matosantos said, “In order to be able to maintain reliability and to do in the most cost-effective way for California ratepayers and taxpayers, we need a bit more time with these resources.”  She then proceeded to discuss the importance of the Diabo Canyon extension.

While other individuals testified for and against a Diablo Canyon extension, the legislators really matter at this late date. In the Senate hearing, the proposal was lukewarm at best.

Senator Laird asked several pointed questions, including why now; will we have an adequate workforce since several employees retired recently; seismic safety; enough room for additionally spent fuel rods; extension of once-through-cooling at Diablo Canyon; and commitments to kick start renewables.

Senator Becker asked about renewables, potential delays near offshore wind near Diablo Canyon, and seismic safety concerns.

Senator Min focused on more renewable investments and Diablo Canyon’s ability to qualify for federal funds.

Senator Dahle asked whether all state ratepayers will cover the costs and why the state is in such a rush to move a problem that should have been seen.

Senator Hueso asked why ex parte rules were suspended on Diablo Canyon, waiving of some of PG&E’s liability and PG&E’s profits.

Senator Stern focused on renewables and CEQA review.

In the Assembly, the proposal was met by a more friendly audience.

Assemblyman Wood asked about the renewable market delays and whether any state agency is coordinating new renewables.

Assemblyman Mathis stated his support and asked if Diablo is cost worthy of an extension; shouldn’t the state look at expansion?

Assemblyman Muratsuchi asked why the Diablo proposal was coming at the last second, is the legislation necessary, and grid reliability.

Assemblywoman Calderon asked about the profits PG&E will make on this deal and the costs being spread amongst most Californians.

Assemblyman Quirk asked friendly questions about PG&E’s rate of return, impact on utility bills, and grid reliability, and Governor Newsom initially called for the closing of Diablo Canyon.

Assemblyman Ting asked about seismic safety if the state can rely on Diablo Canyon when the plant shut down for 150 days, why the rate of return is so high, reliability issues and is the future problem a peak or baseload issue. 

Assemblywoman Boerner-Horvath asked what the plan for reliability was when Diablo was first discussed about closing and the coastal commission’s involvement in the review of Diablo Canyon.

Assemblywoman Carrillo focused on why this proposal is so late and PG&E’s profits.

A Vehicle for Diablo

After the hearings ended, Capitol insiders waited and waited for bill language.  At 7:56 PM on Sunday, Senate Bill 846 was amended to address Diablo Canyon. This bill will give PG&E $1.4 billion for Diablo Canyon to potentially keep running for at least five more years, with a possible 5 more years after.

The language calls for the Department of Water Resources to issue up to a $1.4 billion loan to PG&E for the extension.  The bill also asks the California Energy Commission to present a cost comparison and operations assessment of the Diablo Canyon powerplant by late 2023.  It also establishes a three-member Independent Safety Committee for Diablo Canyon

Senate Bill 846 only extends the plant until 2030 since the once-through cooling extension for the plant expires on October 31, 2030.

The Hurdles for Passage 

The bill has several hurdles to be passed.  First, the legislature must move at lightning speed.  California has a 72-hour in-print rule for all bills, meaning the bill cannot be heard until Wednesday, August 31 at 7:56 PM.  The bill must also clear both houses before midnight since that is when this two-year legislative session ends.

Aside from having only four hours to pass the bill, the legislation also includes an urgency clause that requires two-thirds approval.  This means 27 aye votes in the Senate and 54 aye votes in the Assembly.

Note: PG&E has until September 6 to request federal funds appropriated to assist nuclear power plants.  PG&E’s CEO previously stated that the Legislature and Newsom would need legislation to assist with the efforts to seek a relicensing for the facility.  DOE will not inform recipients of the $6 billion fund for nuclear projects until January 2023.