The Honorable Edmund G. Brown, Jr.
Governor of California
Sacramento, CA 95814
Re: SB 1090 (Monning) – Request to Sign
Dear Governor Brown:
I am personally writing to ask you to sign SB 1090. This bill would direct the CPUC to approve the agreement closing the Diablo Canyon plant in 2025 while retaining employees to ensure safe operation, community transition until then and avoiding a huge increase in greenhouse gas emissions. At the time the agreement was announced, the New York Times editorialized that the proposal’s “commitment and imagination are worth emulating” and that “the agreement could serve as a positive example for other states and nations that may in time need to replace aging nuclear power plants without increasing carbon emissions.” Unfortunately, even though the agreement was widely hailed as a national model, the CPUC did not approve the agreement.
Current Employees are Needed to Safely Operate the Plant Until it is Retired
Diablo Canyon is the single biggest source of GHG-free generation in California. Fully 9% of all California electricity comes from this plant. But when PG&E decided to close Diablo Canyon in 2025, we faced a big problem. The employees working at Diablo Canyon must continue to work there in order for the plant to stay open until 2025. Unfortunately, there is every reason for many of these employees to leave. Many would be eligible to retire, some who would be in their 60s and early 70s before 2025. Many are now in their 30s and 40s and have to find long term work. For the plant to stay open, these people must continue working until the plant is retired. If not, we would have a huge increase in GHG emissions as natural gas generation is ramped up to fill the void.
I negotiated an employee retention program with PG&E that would pay employees for each period of time that they commit to remain working. The employees also must agree to waive their right to transfer to other jobs at PG&E. If they leave prematurely, they have to pay the retention money back. This sort of employee retention program is common. Many times industrial facilities need to keep their workforce employed even when the workforce knows that the plant will close. The employee retention package I negotiated was in the middle of the most relevant national average benchmarking studies. All of this was presented to the Commission by me and by highly qualified expert testimony. The only evidence to the contrary was from 2 witnesses who admitted under oath they had no expertise and performed no analysis. Yet, the Commission eliminated $192 million of the $352 million cost of the employee retention program.
Apparently, the Commission was concerned that some people who received retention payments would be “free riders.” That is, they would have stayed without the payments. Of course, all of us with expertise in this area know that it is impossible to tell in advance which people those would be. Thus, the standard employment practice is to offer the payments to everyone. Anything else would surely pick the wrong people and would create enormous resentment, causing the people you think would stay to be among the first to want to leave.
SB 1090 would restore the employee retention funding I negotiated which was denied by the CPUC.
SB 1090 Provides the Legislative Authority the Commission Found Lacking to Fund Community Impact Mitigation
Part of the agreement to close Diablo Canyon was to provide the local communities with money to prepare for losing their largest taxpayer and employer. If approved, PG&E would fund the Community Impact Mitigation Program. I am sure you will receive many letters explaining the merits of that Program. I would point out that the Commission determined that it did not have the legal authority to approve the payment, but concluded that “[i]f legislation specifically directs this Commission to provide ratepayer funding for the CIMP (or a similar payment to the community), the Commission would do so ….” (Decision 18-01-022, p. 41.) SB 1090 would provide that legislative direction.
SB 1090 Directs the Commission to Avoid a Spike in GHG Emissions
When Diablo Canyon closes, GHG emissions could spike. To avoid this, SB 1090 would direct the Commission to “ensure that integrated resource plans are designed to avoid any increase in emissions of greenhouse gases as a result of the retirement of the Diablo Canyon Units 1 and 2 power plant.” Of course, this is entirely consistent with your policy and the ongoing Commission activity.
If you would like, I am happy to discuss this with you.