What does PG&E bankruptcy mean for Diablo Canyon shut down agreement?
As reported by the Washington Post, Pacific Gas & Electric has announced it is seeking bankruptcy protection, after global warming-fueled wildfires sparked by its own poorly maintained electric lines killed scores of Californians, and incinerated thousands of homes and businesses.
As reported by the article:
The PG&E bankruptcy promises to be more complex and political than most bankruptcies, pitting fire victims, ratepayers, bankers, insurance companies and renewable-energy providers against one another. Homeowners with property insurance will collect from their insurers, and a person familiar with the bankruptcy planning said that hedge funds are already offering to buy settlement claims from insurance companies.
One casualty of a bankruptcy could be billions of dollars of funding for clean-energy initiatives designed to fight the effects of climate change, Ralph Cavanagh, a California-based energy expert at the Natural Resources Defense Council (NRDC), said in an email. “PG&E is the state’s largest investor in energy efficiency and electric vehicle infrastructure alone, with annual commitments well in excess of $1 billion,” he said. “Other threatened initiatives involve grid upgrades, small-scale ‘distributed’ resources and technology innovation.”
Solar and wind-energy providers are among those who could suffer. In its drive to make the state electricity grid free from carbon dioxide emissions, California has pushed utilities to buy renewable energy. Gabe Grosberg, a utilities analyst at S&P Global, said Monday that “many of the power contracts are above market price” and that a renegotiation of those contracts “is something the bankruptcy judge will take a look at.”
Not directly addressed by the article is the fate of the Diablo Canyon Units 1 & 2 shutdown agreement. PG&E struck a deal with Friends of the Earth, Natural Resources Defense Council, Alliance for Nuclear Responsibility, trade unions working at the reactors, and others, to not seek a 20-year license extension, and instead shutdown the reactors at the end of their 40-year operating licenses in 2024 and 2025. Thus Diablo Canyon would probably be the very first operating nuclear power plant in the U.S. to not seek a 20-year license extension rubber-stamp from the U.S. Nuclear Regulatory Commission.
As the proverb goes, "anything is possible," so technically speaking, the spectrum of what could now happen at Diablo Canyon extends from an even earlier permanent shutdown of the two reactors (as demanded by San Luis Obispo Mothers for Peace), to the specter of Diablo being seen as a potential asset that could boost PG&E's currently dismal financial prospects. For instance, keeping the reactors running past their 40-year license shutdown dates, in order to continue generating revenue, or even Diablo's sale to another nuclear power utility, such as Exelon Nuclear.
The latter scenario (license extension and/or sale) is highly speculative, the former scenario (earlier shutdown) is very hopeful.
But any attempt to extend Diablo Canyon's operating license would be highly risky. In addition to the extraordinary earthquake risks at the site, Diablo Canyon Unit 1 is also one of the most highly embrittled reactor pressure vessels in the country. This names but two risks (pressurized thermal shock rupture of the highly embrittled reactor pressure vessel; earthquakes) at the nuclear power plant, of many.
These paragraphs from the Washington Post article are sobering:
The [PG&E bankrupty] filing comes a day after the company announced the resignation of its chief executive, Geisha Williams. Williams, three other top executives who resigned last week and the company have come under harsh criticism in recent weeks over the utility’s corporate culture. The president of the California Public Utilities Commission had in November widened his investigation of PG&E to include its “safety culture” more generally.
“In our opinion, [PG&E] has significant organizational and leadership problems that have eroded the utility’s trust capital in Sacramento,” the investment advisory firm Height Securities said in a note at the time.
The safety culture investigation comes in light of not only the deadly wildfires of 2017-2018, but also a deadly natural gas explosion in San Bruno, CA in 2010.
An electric utility company with fatal safety culture problems should not be operating atomic reactors, plain and simple. Likewise, it should not be allowed to sell Diablo Canyon nuclear power plant to another company, such as Exelon -- nor should it be allowed itself to run the reactors into the ground -- as desperate money-making ploys, amidst its bankruptcy crisis. The two reactors at Diablo Canyon should be permanently shut down, ASAP.
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