Possible Economic Impacts and Potential Economic
Opportunities of Decommissioning
The closure of DCPP will impact the local economy. In addition to the loss of jobs and opportunities for jobs in the area, local governments are impacted by the loss of unitary taxes. Currently, DCPP, which employs about 1,500 PG&E workers, is the second largest employer in San Luis Obispo County and provides a large economic base to the area. Unitary tax currently provides funding to 70+ governmental agencies, including the County, Cities and School Districts.
Since PG&E announced the closure, a number of measures have already occurred to soften the economic impact to local government. These include the Joint Proposal, Senate Bill 1090 and Senate Bill 968 as described in this section. These efforts have allowed for local government to ease into the potential impacts.
PG&E partnered with labor and leading environmental organizations in 2016 on the Joint Proposal that would increase investment in energy efficiency and renewables, while retiring DCPP at the end of its current Nuclear Regulatory Commission (NRC) operating licenses, which expire in 2024 and 2025.
The parties to the DCPP Joint Proposal include PG&E, International Brotherhood of Electrical Workers Local 1245, Coalition of California Utility Employees, Friends of the Earth, Natural Resources Defense Council, Environment California, California Energy Efficiency Industry Council and Alliance for Nuclear Responsibility.
The Joint Proposal included an $85 million community impact mitigation program to support the community with its transition and provide funding to support essential public services that the plant and the local community rely upon. It also included a DCPP employee program that would provide incentives to retain employees during the remaining operating years of the plant, and a retraining and development program to facilitate redeployment of a portion of plant personnel to the decommissioning project or other positions within the company.
Senate Bill 1090
In September 2018, Governor Brown signed Senate Bill (SB) 1090 which implemented key objectives of the Diablo Canyon Joint Proposal. SB 1090 included Community Impact Mitigation Funds intended to ease into post-Diablo Canyon economy. The CPUC enacted the rate changes ordered in SB 1090 when it issued D.18-11-024 on December 7, 2018. Collectively, D.18-01-022, SB 1090, and D.1811-024, authorized up to $352.1 million for DCPP employee retention programs, and $85 million for community impact mitigation programs.
The following summarizes the funding approved with this bill:
$10 million – Economic Development Fund
- $3.84 million – County sole use
- $1.7 million – Economic Development
- $1.0 million – Housing revolving funds
- $948,000 – Infrastructure
- $192,000 – City of Grover Beach
- $400,000 – Regional Economic Funds
- $5.76 million – Coalition of Cities (all incorporated cities excluding Grover Beach)
$75 million – Essential Services and Stabilization Fund
- $27.9 million – County total
- $12.1 million – General Fund Mitigation
- $5.4 million – Housing
- $4.5 million – Safety
- $4.1 million – Infrastructure
- $1.9 million – Economic Development
- $47.1 million – 70+ governmental entities including cities and school district
Senate Bill 968
In September 2016, Senate Bill (SB) 968 was signed by Governor Brown. This bill requires and funds the preparation of an assessment of the adverse and beneficial economic impacts, and net economic effects, that could occur, and of potential ways for the state and local jurisdictions to mitigate the adverse economic impact, upon the closure of Diablo Canyon.
In June 2019, an Economic Impact Assessment of the prospective closure of DCPP was released to the public. The report (“Berkeley Report”) was prepared for the CPUC by David Wells Roland-Holst, Drew Behnke, Samuel Evans, Liam Frölund and Annie Yi-Chen from the Department of Agricultural and Resource Economics at University of California – Berkeley.
The following summarizes the conclusions and recommendations of the Berkeley Report:
- Overall economic impact of the closure of DCPP is relatively modest (reduction of $77 million per year for decade – which equates to 0.6% of the regional gross product)
- Some adjustments are needed in the local economy to address the closure
- There is potential to advance a diversified economic growth but only if social barriers and economic segmentation can be overcome
- There is the need for inclusive community dialogue to advance strategic planning
- New businesses that support a highly-skilled workforce should be aggressively welcomed
- Local governments should reconsider high impact fees that deter affordable housing
- Local governments should increase efforts to coordinate across jurisdictions
- The establishment of Public – Private Partnerships should be facilitated
- PG&E should prioritize local contracting during decommissioning
DCPP Job Retention and Retraining
There are approximately 1,300 employees currently employed at DCPP. About 90 percent of these employees are participating in the employee retention program that was put in place in 2016. This assures that well-trained personnel will continue be in place to safely operate the plant until closure.
By making the announcement to not relicense DCPP in 2016, a nine-year time frame was created to design a program to retrain and redeploy the employees currently working at DCPP. Through the approval of the Joint Proposal, $11.3 million in funding will be set aside for the development of retraining and redeployment programs starting in 2021.
DCPP has created the framework for the retraining/redeployment program, which they call the Pathways to Your Futureprogram. The program was named for the five pathways that are included in the program that help employees pick their next employment “path”. The five pathways include: staying on with PG&E, working in decommissioning at DCPP, moving on to another nuclear power plant, finding a job in another industry or retirement.
When the funding is available in 2021, it will be used to support many programs, but the major cost centers will be additional funding for education, apprenticeships and job training programs.
Workshop and Public Meeting on Economic Impacts and Opportunities
On October 17, 2019 and November 13, 2019, the DCDEP held a workshop and public meeting covering the topic of Economic Impacts and Opportunities of the closure of DCPP. Included in the workshop were presentations from the County of San Luis Obispo, the Fort Ord Reuse Authority, and the Hourglass Project.
The workshop held on October 17, 2019 can be found by following this link:
The public meeting held on November 13, 2019 can be found by following this link:
County of San Luis Obispo
The County of San Luis Obispo’s presentation included information about the way in which the funding received from Senate Bill 1090 had been defined for use by the Board of Supervisors.
Fort Ord Reuse Authority
The Fort Ord Reuse Authority was established to provide oversight of Monterey Bay economic recovery from the closure and reuse planning of the former Fort Ord military base. The Army base had been part of the history of Monterey County on the Monterey Peninsula since 1917. Initial efforts to organize governance for reuse faltered. The late Senator Henry Mello sponsored special legislation to establish a local agency charged with the task of planning, financing, and implementing reuse. That agency was entitled the “Fort Ord Reuse Authority”, formed in 1994. The Fort Ord Reuse Authority has a governing body of 13 voting members and 12 non-voting members and is comprised of representatives from cities, the county, special districts, public educational institutions, the military, and state and federal legislators. The Reuse Authority is scheduled to close its doors on June 30, 2020. A transition plan, including a methodology for allocating assets/liabilities; a methodology for infrastructure improvement timing; and the creation of an entity structure to implement obligations and financing options, is currently being developed.
Hourglass Project is a new alliance of business leaders committed to building a resilient, inclusive and prosperous Central Coast economy. The project arose out of concern that Central Coast Region is on a path to economic stagnation. The Hourglass Project focuses on more than San Luis Obispo County, they are seeking a regional approach to drive economic transformation in a three-County area (northern Santa Barbara, San Luis Obispo and southern Monterey). Hourglass has partnered with Deloitte US as a strategic and implementation partner.
Hourglass is collaborating with government entities, private industry, academia and philanthropic organizations. With $300,000 grant from San Luis Obispo County (using Senate Bill 1090 funds), Hourglass was publicly launched in November 2018 and a CEO hired in February 2019.
Hourglass identified regional challenges based on consultations with city managers, regional representatives, a workforce poll and interviews.
Repurposing of the DCPP (Parcel P)
In 2018, the DCDEP held workshops and a public meeting about the potential for repurposing the 700-acre DCPP site (Parcel P) for alternative uses. There were a number of presentations from various individuals and groups about what the site could be used for in the future once it has been decontaminated and decommissioned. In addition, the community weighed in and indicated support for repurposing of the site for other uses.
This Strategic Vision contains visions, goals and recommendations regarding repurposing in Section IV-D. There will need to be ongoing discussions and efforts made regarding the potential reuse of the site (the developed and disturbed areas of Parcel P). This will include ongoing discussions with the County of San Luis Obispo and the work that is underway by the Hourglass Project and any other local and regional economic entity.
- The decommissioning and decontamination process should begin immediately upon shutdown thus avoiding SAFSTOR in order to limit economic impacts and provide economic opportunities
- The activities associated with decommissioning should promote a successful and sustainable economy while reflecting a future that embraces our community values and builds upon existing economic drivers, including agriculture, education, technology and tourism
- The County of San Luis Obispo and San Luis Obispo Council of Governments should play a leadership role in supporting and promoting economic development
- The policies of local government should support and promote the retention of existing local businesses and workforce during and beyond the closure of DCPP
- The funds provided to local governmental entities for economic development through Senate Bill 1090 should be used to promote and support local economic activities
- The conservation of, and sustainable access to, the 12,000-acre Diablo Canyon Lands should be embraced and promoted as a vital part of local economic health
- The safest possible storage of highly radioactive spent nuclear fuel should be undertaken to protect economic stability
- The permitting for decommissioning should be completed efficiently, while allowing for substantial public input, in order to not create delays in the decontamination process
- The 12,000-acre Diablo Canyon Lands surrounding the plant should be conserved and made available for public use as soon as possible, to promote regional tourism and the economic vitality of neighboring communities
- The evaluation of existing reuse and redevelopment projects in California should be used to ascertain successes and drawbacks of repurposing and its impact on local economic development
- The potential reuse and repurposing of the already disturbed and developed areas of Parcel P should be supported by PG&E throughout the decommissioning process
- The storage of spent nuclear fuel on site should be accomplished in the safest manner possible to allow for repurposing and reuse of existing infrastructure, as well as the development of new uses on the already disturbed areas of Parcel P
- The retention and promotion of existing businesses, as well as the establishment of new businesses and industries that offer diverse living wage/head of household jobs that have growth potential and are clean and green, should be supported by local governments
- The use of local labor and local businesses should be used during decommissioning to reduce impacts due to the loss of local jobs and job opportunities
- Recommend that PG&E and the County ensure an efficient and collaborative permitting process that includes comprehensive public involvement, in order to prevent any delays to the start of decommissioning and decontamination immediately upon shutdown and precluding SAFSTOR which could have potentially severe local economic impacts
- Recommend that local governmental entities and PG&E review and consider other repurposing programs (including the Fort Ord Reuse Authority and the Concord Reuse Project) for guidance on successful economic development measures and pitfalls to be avoided
- Recommend that PG&E and the County actively engage with decision makers at the UC, CSU, and Community College systems, to promote the potential repurposing of facilities to advance the educational mission of those entities and provide local economic enhancement
- Recommend that any regional entity, such as the Hourglass Project, Economic Vitality Corporation or similar organization, collaborate with the DCDEP in the development of repurposing strategies and ideas that are supported by the local community
- Recommend that PG&E undertake a detailed and thorough analysis of the existing facilities on Parcel P and their potential for repurposing given site constraints and the potential conflicts created by management of spent nuclear fuel and other demolition waste and activities
- Recommend that PG&E undertake an analysis of the potential for construction of new facilities on already disturbed areas of Parcel P to support repurposing of existing on-site facilities
- Recommend that PG&E, the County or a regional entity consider having a design competition to crowdsource creative repurposing ideas to improve awareness of the opportunity for reuse of the DCPP site and stimulate out of the box thinking and ideas
- Recommend that PG&E consider the repurposing of the facilities on Parcel P, the conservation and public access of the Diablo Canyon Lands and the recommendations relative to dry cask systems in this Strategic Vision when choosing a new spent nuclear fuel storage management system
- Recommend that PG&E consider making facilities available outside of the DCPP property (ex: Energy Education Center, Kendall Road) for repurposing early in the decommissioning process
- Recommend that PG&E, the County, and the local land conservancy engage with State Parks and other potential management entities as soon as possible to create, and begin implementing, a conservation and public access plan for the Diablo Canyon Lands to stimulate economic growth in the tourism sector
- Recommend that the County of San Luis Obispo evaluate whether the hiring of a skilled economic specialist position (with a focus on the development of new, and retention of existing, businesses in the region) would lead to definite and measurable positive economic results
- Recommend that local governments perform an analysis of existing policies and fees to determine whether any changes should be made to encourage business to relocate to this area and ensure retention of existing businesses
- Recommend that local governments, PG&E and other local economic or governmental entities support and promote any recommendations from a regional entity that create a diversified local economy and are viable, sustainable, embrace community values, build upon existing economic drivers, including tourism, agriculture, education, and technology, and offset potential economic impacts of closure and where feasible, offer incentives to bring these recommendations to fruition
- Recommend that PG&E ensure that local labor and local businesses are used to the greatest extent possible to ease the impacts of the loss of local jobs due to the closure of DCPP and that any formal mechanism, such as a non-discriminatory Project Labor Agreement or other agreement, be fair and equitable
- Recommend that PG&E, in recognition of the substantial economic opportunities that will be created through decommissioning, demonstrate its continued commitment to the local workforce through a formal partnership with the local building and construction trades council and that such partnership include recognition of the importance of, and incorporate outreach to, local businesses and local workers
- Recommend that PG&E give full consideration to an array of community benefits in any negotiated agreement, such as but not limited to: employment of local workers, career pathway apprenticeship training , encouragement of small and local businesses, outreach to veterans, programs promoting the employment of women and minorities, programs for disadvantaged youth and any other programs targeting underserved portions of the community