Dear Governor Schwarzenegger,

Until you approve the 2005 IEPR allowing the California Energy Commission to move forward with its recommended analysis of the costs/benefits and risks of the state’s reliance on aging nuclear plants, California will be at the mercy of nuclear industry lobbyists and self-serving utilities. Your commitment to leading our state towards an independent and renewable energy future has been an example to other states to search for self-reliant generation. However, both Democratic candidates have made bold statements supporting our state law to ban nuclear new nuclear plants, yet the public has yet to hear your opinion on this important issue.

The prospect of 20 more years of high-level radioactive waste that will be stored on our fragile coast for generation upon generation is being discussed this month before the California Public Utilities Commission. Though the licenses for Diablo Canyon’s operation do not expire until the mid 2020’s, PG&E has asked for $19 million from its ratepayers – that’s us - to do an in house feasibility study of license renewal.

PG&E’s and the nuclear industries track record for predicting what could go wrong at each reactor is abysmal and cannot be relied upon for future energy forecasts. For example, the $500 million estimate for construction morphed into a final $5.7 billion price tag between application and final license to operate. The licensing process took at least a decade longer than anticipated.

The CPUC staff recognized that it would not be either reasonable or prudent to pass the full costs onto PG&E ratepayers. The staff recommended that $4.4 billion not be allowed to be passed on in rates, as it was PG&E’s inability to find an offshore earthquake fault and to design the reactors to correct blueprints that caused this multi-fold increase.

After closed door settlement meetings, PG&E agreed to be paid only for power produced at a very healthy cost per kilowatt rather than risk a review of the reasonableness of construction costs. A very generous per kilowatt price was allotted and PG&E shareholders were to be held financially responsible for costs of all refueling outages, any new NRC regulations, downtime and the costs of any replacements.

The state’s now infamous deregulation legislation did much more than place California in economic uncertainty. AB 1890, PG&E’s bankruptcy and the CPUC bailout reversed the 1989 Commission decision. Without any review of previous cost overruns, the CPUC placed the Diablo Canyon Nuclear Plant in traditional cost-of-service ratemaking. Ratepayers would have been livid-if they had known.

In 2002, the CPUC decided that PG&E ratepayers would now be responsible for all costs at Diablo Canyon. The timing of the decision is certainly questionable when seen in light of: new NRC security requirements extended refueling outages as plants age and components must be more closely monitored, construction of onsite high-level radioactive waste storage facility(s) and large component replacements (steam generators, turbine rotors, reactor vessel heads, all being charged to ratepayers. Faulty large components failed half-way through the operating life of Diablo Canyon and conveniently when shareholders were not longer financially responsible. It seems an unlikely coincidence that all major costs of continuing to operate and secure the Diablo Canyon Nuclear Plant were not deemed necessary until shareholders liability was removed.

Now PG&E wants ratepayers to fork over $19 million to determine if a nuclear plant designed in the 1960’s, constructed in the 1970’s and undergoing well over a billion dollars in component replacements eighteen years before the current license expires is in PG&E’s best interest.

Why is PG&E pushing for this study so far in advance? There are several reasons. First, under the current administration license renewals are being granted at record speed (less than 2 years for most approvals). Second, PG&E’s old reactors will have shiny new parts in the next couple of years and even though many more components will likely fail (or fail again); the old plant will look pretty good after the current replacements. Third, the CPUC has given the utility virtually everything it has asked for since placing its nuclear plant in rates, but someday it might become more than a lapdog agency. Finally, the California Energy Commission has recommended an independent analysis of all costs/benefits/and risks of that state’s continued reliance on aging nuclear plants and PG&E would likely undermine this analysis by doing its own extremely costly study. The CPUC should not allow this self-serving end run around a responsible sister agency.

We ask that our Governor, who came to power from energy mismanagement, carefully consider the industry’s inability to predict nuclear costs in the past and not allow this crystal ball forecast to determine cost-effective, safe, and reliable energy needs in the future. We ask our governor to approve the CEC recommended analysis in the 2005 IEPR and help determine which energy sources will be in the best interest of California ratepayers in the future.

Your Address Sat, 19 Jul 2008 Your Comment Your Name