Corporate Responsibility and Sustainability Report 2017

Our Approach

We remain strongly committed to the highest levels of safety, performance and security at Diablo Canyon. The Nuclear Regulatory Commission’s (NRC) 2016 assessment places Diablo Canyon among the higher-performing plants in the U.S. nuclear industry. This reflects the hard work and dedication of our employees and our commitment to meeting PG&E’s and the NRC’s high performance standards.

Demonstrating Earthquake, Flooding and Tsunami Safety

Extensive analyses performed at the direction of the NRC continue to show that Diablo Canyon can safely withstand extreme natural events, including potential earthquakes, tsunamis and flooding. The analyses used the latest regulatory guidance, scientific methods and models, site-specific information and independent expertise to re-evaluate the impacts that earthquakes, large waves and flooding could have on the facility. The updated findings represent the culmination of years of study and analysis, and further confirm the safety of the plant’s design.

The updated seismic assessment represents a more extensive evaluation of the seismic hazard than previously performed. Using the NRC’s Senior Seismic Hazard Analysis Committee process, independent seismic experts publicly re-evaluated existing and new seismic information to re-evaluate how earthquakes could potentially impact the facility. The result provides additional confirmation that the plant is seismically safe.

The assessment also informs PG&E’s Long-Term Seismic Program, led by a geosciences team of professionals that partners with independent seismic experts on an ongoing basis to evaluate regional geology and global seismic events to ensure that the facility remains safe.

PG&E’s flooding hazard re-evaluation determined that the plant’s key safety systems and components continue to be safe from tsunamis, including those generated from underwater landslides and earthquakes.

Spent Fuel Storage

At both Diablo Canyon and the former nuclear unit at the Humboldt Bay Power Plant, PG&E safely stores spent fuel in on-site dry cask storage systems approved and licensed by the NRC. Diablo Canyon also safely and securely stores spent fuel in wet storage facilities. These on-site storage systems are used at nuclear power plants around the world.

These two on-site interim storage solutions are federally monitored and follow industry best standards to ensure that they are safe and effective. The ability to store spent fuel safely on-site, however, should not be a long-term alternative to the federal government assuming its responsibility to accept the fuel for permanent storage. To that end, PG&E will continue to advocate that the federal government meet its commitment and take charge of managing the nation’s spent fuel.

Water Management

PG&E actively manages the water used in the electric generation process in accordance with the water discharge limit set by Diablo Canyon’s Clean Water Act permit.

2016 Milestones

In a typical year, at least one of Diablo Canyon’s two reactor units safely undergoes a planned refueling and maintenance outage. Once every five years, both units undergo a planned refueling and maintenance outage, due to their separate operating schedules.

In 2016, Unit 2 at Diablo Canyon underwent a safe and successful refueling and maintenance outage.

PG&E also continued decommissioning the former nuclear unit at the Humboldt Bay Power Plant. PG&E has completed removal of prior operational nuclear systems and equipment, as well as demolition and removal of many structures on-site. Final site restoration and remediation plans have been approved by the NRC, and work continues safely.

Measuring Progress

Diablo Canyon continues demonstrating high operational performance as gauged by its plant capacity factor, a measure of generation reliability. During 2016, Diablo Canyon produced its highest annual generation, resulting in a capacity factor of 96 percent—the highest in 31 years of operation.

Diablo Canyon is a vital local economic engine and brings significant benefits to San Luis Obispo and Northern Santa Barbara counties. Planned refueling outages can bring almost 1,000 temporary workers to the Central Coast, where they spend money on local housing, dining and shopping. In advance of planned outages, PG&E holds jobs fairs at our Energy Education Center in San Luis Obispo to help fill the temporary positions.

Beyond these temporary jobs, PG&E is the largest private employer in the area, with nearly 1,500 workers and operations that contribute more than $900 million to the region through the funds that we directly spend and the subsequent economic activity in the community from those investments. Tax revenues from the plant—the largest property tax payer in San Luis Obispo County—help fund schools, public works projects, public safety, and health and other vital services.

Looking Ahead

California’s energy landscape is changing dramatically. State policies that focus on renewables and energy efficiency, coupled with projected lower customer electricity demand in the future, will result in a significant reduction in the need for the electricity produced by Diablo Canyon past 2025.

Reflecting this change, PG&E entered into a joint proposal with labor and leading environmental organizations to retire Diablo Canyon at the expiration of its current NRC operating licenses in 2024 and 2025 and replace it with a greenhouse gas-free portfolio of energy efficiency, renewables and energy storage.

The parties to the joint proposal include PG&E, the International Brotherhood of Electrical Workers Local 1245, the Coalition of California Utility Employees, Friends of the Earth, the Natural Resources Defense Council, the California Energy Efficiency Industry Council and the Alliance for Nuclear Responsibility.

Recognizing that the procurement, construction and implementation of a greenhouse gas-free portfolio of energy efficiency and renewables will take time, the joint parties agreed to support PG&E in obtaining the state approvals needed to operate Diablo Canyon to the expiration of its current NRC operating licenses.

As part of the joint proposal, PG&E immediately ceased any efforts on its part to renew the Diablo Canyon operating licenses, and asked the NRC to suspend consideration of the pending Diablo Canyon license renewal application. PG&E will withdraw its license renewal application upon CPUC approval of the joint proposal application.

PG&E does not believe that long-term customer rates will increase as a result of the joint proposal. The parties to the joint proposal are committed to supporting a successful transition for Diablo Canyon employees and the greater San Luis Obispo community. Accordingly, $85 million has been proposed in support of a community transition plan. PG&E, along with San Luis Obispo County, several local cities and the San Luis Coastal Unified School District, announced details of the revised community impact mitigation program in November 2016.

The proposed Diablo Canyon employee program will provide, among other items, incentives to retain employees during the remaining operating years of the plant, a retraining and development program to facilitate redeployment of a portion of plant personnel to the decommissioning project or other positions within PG&E, and severance payments upon the completion of employment at the end of the plant’s license life.

During the transition period, we will continue our efforts to ensure the safety of our operations at Diablo Canyon.