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Protests roll in over PG&E's Diablo Canyon nuke replacement plan

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Protests roll in over PG&E's Diablo Canyon nuke replacement plan

California utility regulators the first public participationhearings for Oct. 20 as opponents protested Pacific Gas and Electric Co.'s energy resource procurementplans for replacing its Diablo Canyon nuclear plant.

Numerous parties have filed against PG&E's Aug. 11application forregulatory approval of the plans, including many who questioned whether theutility's proposals for procuring replacement energy resources iscost-effective. The protesters accused the company of proposing to stiflecompetitive procurement in favor of its own self-serving ends.

PG&E on Sept. 26 filed a response to the protests, saying its proposal for threetranches of greenhouse gas-free resources represents only about 25% of the2,240-MW nuclear plant's current energy output. These procurement initiativesare an essential first step in what will require years of replacement efforts,the PG&E Corp.subsidiary said, urging against delay.

Presiding Public Utilities Commission President MichaelPicker and Administrative Law Judge Peter Allen will hear from local residentsas well as intervening parties during the first hearings in San Luis Obispo,Calif. The PUC is promising more hearings will follow.

Community choice aggregators, direct access suppliers andorganizations representing distributed generation suppliers and customer generatorsaccused PG&E of wanting to saddle them with new nonbypassable charges topay for the utility's version of being green. They protested that PG&E isseeking to use rates to recover unprecedented amounts of energy efficiency,storage and renewable resources that would be procured outside of establishedcommission processes and oversight.

However, PG&E responded that the PUC has previouslyordered resource acquisitions to meet specific needs and pointed to subsidiarySouthern California EdisonCo.'s request for proposals for replacement of the San Onofrenuclear generating station as an example. The emergency closing ofthat plant threatened widespread power outages.

Opponents of PG&E's plan contend that the utility isattempting to set the Diablo Canyon replacement plan apart from othercommission proceedings, particularly integrated resource planning, energyefficiency, renewable portfolio standard and resource adequacy proceedings.

The PUC's Office of Ratepayer Advocates, and others say thePUC should make Diablo Canyon replacement decisions through these existingproceedings rather than through an inflexible settlement proposal in whichPG&E, a few environmental groups and a utility workers union have agreed toa take-all package.

"The Commission should view this request for what itreally is — a power grab by PG&E that is meant to counteract the increasingpenetration and success of community choice aggregation in PG&E's serviceterritory," Marin Clean Energy, the first and so far most successful ofsuch agencies, said.

The PUC's Office of Ratepayer Advocates that the needs for DiabloCanyon's replacement should be more appropriately handled through the long-establishedintegrated resource plan process. Many existing generation facilities haveceased operation over the past several years for various reasons, includingphasing out of the once-through cooling plant technology. "The closure ofthese plants did not require special EE [energy efficiency] funding orcompetitive procurement beyond the current commission processes and proceedingsthat have been developed to address such matters," the ratepayer advocatessaid.

PG&E responded that it must start procuring resourcesquickly due to the magnitude of the capacity replacement need, and it cannotact fast enough if it must deal with integrated resource planning. The IRPprocess is complicated by the need to incorporate new state renewable andgreenhouse gas standards, PG&E said.

"While the IRP process is just getting underway, thethree procurement tranches are a reasonable first step to ensuring an orderlyreplacement of Diablo Canyon with GHG-free resources," PG&E said.

Several parties criticized PG&E for proposing to chargedeparting load customers for energy efficiency and other expenses the utilitywould incur long after community choice aggregation and other departing loadcustomers have left PG&E's supply services. PG&E wants to $187 million per yearthrough a new nonbypassable charge for future energy efficiency procurements,according to the California Clean DG Coalition, representing distributedgeneration manufacturers, marketers and their customers.

Shell EnergyNorth America (US) LP, which provides electricity and environmentalproducts to community choice and direct access customers, there is no justification forPG&E to shift costs for 12 years of future energy efficiency and renewableenergy procurement to those who are no longer its customers. Direct accesscustomers are those who buy energy from competitive nonutility suppliers.

PG&E's proposal would erect needless to the future growth ofcommunity choice aggregators, retail competition and consumer choice, theSierra Club said. The environmental organization said the Diablo Canyon settlementadvances energy efficiency and greenhouse gas reductions no further than whatstate law already requires of the utility.