HomeMy WebLinkAbout2016-025 PG&E Settlement Agreement
BEFORE THE
PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric
Company for Approval of the Retirement of
Diablo Canyon Power Plant, Implementation of
the Joint Proposal, And Recovery of Associated
Costs Through Proposed Ratemaking
Mechanisms
(U 39 E)
Application 16-08-006
(Filed August 11, 2016)
SETTLEMENT AGREEMENT BETWEEN
PACIFIC GAS AND ELECTRIC COMPANY (U 39 E),
THE COUNTY OF SAN LUIS OBISPO, THE CITY OF ARROYO GRANDE,
THE CITY OF ATASCADERO, THE CITY OF MORRO BAY, THE CITY OF PASO
ROBLES, THE CITY OF PISMO BEACH, THE CITY OF SAN LUIS OBISPO,
THE SAN LUIS COASTAL UNIFIED SCHOOL DISTRICT, FRIENDS OF THE
EARTH, NATURAL RESOURCES DEFENSE COUNCIL, ENVIRONMENT
CALIFORNIA, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS
LOCAL 1245, COALITION OF CALIFORNIA UTILITY EMPLOYEES,
AND ALLIANCE FOR NUCLEAR RESPONSIBILITY
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SETTLEMENT AGREEMENT BETWEEN
PACIFIC GAS AND ELECTRIC COMPANY (U 39 E),
THE COUNTY OF SAN LUIS OBISPO, THE CITY OF ARROYO GRANDE,
THE CITY OF ATASCADERO, THE CITY OF MORRO BAY, THE CITY OF PASO
ROBLES, THE CITY OF PISMO BEACH, THE CITY OF SAN LUIS OBISPO,
THE SAN LUIS COASTAL UNIFIED SCHOOL DISTRICT, FRIENDS OF THE
EARTH, NATURAL RESOURCES DEFENSE COUNCIL, ENVIRONMENT
CALIFORNIA, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS
LOCAL 1245, COALITION OF CALIFORNIA UTILITY EMPLOYEES,
AND ALLIANCE FOR NUCLEAR RESPONSIBILITY
The County of San Luis Obispo (“County”), the Cities of Arroyo Grande, Atascadero,
Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo (collectively, the “Cities”), the San
Luis Coastal Unified School District (“District”), Pacific Gas and Electric Company (“PG&E”),
and Friends of The Earth, Natural Resources Defense Council, Environment California,
International Brotherhood of Electrical Workers Local 1245, Coalition of California Utility
Employees, and Alliance For Nuclear Responsibility (together with PG&E, the “Joint Parties” to
the Joint Proposal filed as Attachment A to the Application in the above-referenced proceeding)
(collectively, the “Parties”), enter into this Settlement Agreement (“Settlement”) as a
compromise of their respective litigation positions to resolve the disputed issues between the
Parties raised in the above-captioned proceeding. This Settlement addresses the Community
Impact Mitigation Program (“CIMP”) proposed by PG&E in this proceeding, including the
ratemaking treatment for the CIMP. The Parties request the California Public Utilities
Commission’s (“Commission”) approve the Settlement as just and reasonable.
BACKGROUND
A. On August 11, 2016, PG&E filed this Application seeking the Commission’s
approval to implement portions of a Joint Proposal for the Retirement of Diablo Canyon Power
Plant (“Joint Proposal”). Concurrent with filing the Application, PG&E also served its Prepared
Testimony and workpapers. On September 15, 2016, the Cities filed a protest and motion for
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party status in this proceeding and the District filed a response to the Application. The County
served its response on September 15, 2016, but a filing error prevented the response from being
docketed. The County filed a motion for leave to late-file a response to the Application on
September 23, 2016; the motion was granted and the County formally filed its response October
6, 2016. On September 26, 2016, PG&E filed a reply to the responses and protests filed by
parties, including those of the Cities, the County, and the District.
B. In its Application, PG&E proposed a $49.5 million fund as part of the CIMP to
provide transitional assistance to the local community in connection with the retirement of
DCPP. PG&E proposed a stream of mitigation payments between 2017 and 2025 as a way to
assist the local community to prepare and plan for the long-term loss of economic stimulus that
DCPP provides. PG&E calculated the size of the community impact mitigation payments based
upon the forecasted reductions in DCPP property tax base over that same period. The rapid loss
of unitary tax funding levels will have significant impacts on the County, the District and 71
other local taxing jurisdictions.
C. PG&E entered into settlement discussions with the Cities, the County, and the
District to address concerns about PG&E’s proposal. The County, District, and PG&E each met
with the the State Board of Equalization (“SBE”) to better understand the unitary tax allocation
methodology and the implications for the local community assuming a 2024 (Unit 1) and 2025
(Unit 2) shutdown of DCPP. As a result of these discussions, the Parties have learned that the
proposed $49.5 million mitigation fund was based on simplified assumptions and understates the
reduction in unitary taxes that is likely to occur over the next 9 years. The County, District,
PG&E, and the remaining Joint Parties have reached a compromise on the appropriate funding
levels for an Essential Services Mitigation Fund, as set forth in this Settlement.
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D. Public Utilities Code Section 712.5 (added by Senate Bill (“SB”) 968 (2016,
Monning)) requires the Commission to cause an assessment of adverse and beneficial economic
impacts for the County and surrounding regions that could occur due to the shutdown of DCPP
(“Monning Report”). The Monning Report will review potential actions for the state and local
jurisdictions to consider in order to mitigate the economic impacts of a shutdown. The Cities
have requested that the Commission review such issues in this proceeding and have expressed
concern that the Monning Report will not be completed in time for consideration in the
proceeding. The County has suggested the Monning Report be considered in a second phase of
this proceeding or a separate proceeding initiated after this proceeding concludes. PG&E has
taken the position that such economic impacts are out of scope in this proceeding given the
separate procedural path specified by the California Legislature for review. On November 18,
2016, the Assigned Commissioner and Administrative Law Judge filed the scoping memo in this
matter, finding community economic impacts to be within the scope of the current proceeding.
Notwithstanding that ruling, the Cities, County, PG&E, and the remaining Joint Parties have
reached a compromise on the procedural path for the future evaluation of economic impacts and
the creation of an Economic Development Fund, as set forth in this Settlement.
E. In the Application, PG&E also proposed to continue support for local emergency
planning and preparedness after the cessation of plant operations in 2025. The County has
requested assurances that PG&E’s commitment to supporting local emergency planning and
preparedness will also continue for the duration of DCPP’s operation through 2025 as well as
after the cessation of plant operations. The County, PG&E, and the other Joint Parties have
reached a compromise that provides these assurances, as set forth in this Settlement.
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SETTLEMENT TERMS AND CONDITIONS
In order to avoid the risks and costs of litigation, the Parties agree to the following terms
and conditions as a complete and final resolution of the CIMP-related issues between the Parties
in this proceeding, subject to reservations of rights set forth herein by the County, the District,
the Cities, and PG&E to address economic impact issues in a future proceeding informed by the
Monning report and other subsequently developed economic impact data. Not all Parties have
agreed to all terms set forth in the Appendices to this Agreement. Each of the Parties has agreed
to support those Appendices described in Sections 1-3, below, in which the specific Party is
named. Each of the Parties agree not to oppose any terms set forth in the Appendices to this
Settlement to which the Party has not specifically agreed.
1. Essential Services Mitigation Fund
1.1. The County, District, PG&E, and the Joint Parties agree to the terms governing an
Essential Services Mitigation Fund, as set forth in Appendix 1 to this Settlement.
2. Evaluation and Mitigation of Regional Economic Impacts
2.1. The Cities, County, PG&E, and the Joint Parties agree to the terms governing the
evaluation and mitigation of regional economic impacts, including the process for further
consideration of the Monning Report and the creation of an Economic Development Fund, as set
set forth in Appendix 2 to this Settlement.
3. Emergency Planning and Preparedness and Future Land Use
3.1. The County, PG&E, and the Joint Parties agree to the terms governing emergency
planning and preparedness and the future use and disposition of DCPP lands, as set forth in
Appendix 3 to this Settlement.
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4. Support for Other Provisions of the DCPP Application
4.1. The Parties agree it is critical to retain the highly-skilled workforce at Diablo
Canyon during the remaining years of operations in order to continue safe and relaible
operations. The Parties support the approval of the Employee Program as described in Chapter 7
of the DCPP Application.
4.2. The County, Cities, and the District have reviewed all other portions of PG&E’s
Application, testimony, and workpapers and do not oppose or take no position on the relief
requested in PG&E’s Application, as modifed by this Settlement.
5. Modification to the Joint Proposal
5.1. This Settlement results in a modifcation to Section 4 of the Joint Proposal, by and
among PG&E, Friends of The Earth, Natural Resources Defense Council, Environment
California, International Brotherhood of Electrical Workers Local 1245, Coalition of California
Utility Employees, and Alliance For Nuclear Responsibility. The Joint Parties hereby agree
upon and support such modification.
GENERAL PROVISIONS
6. Scope and Approval
6.1. In accordance with Rule 12.5, the Parties intend that Commission adoption of this
Settlement will be binding on the Parties, including their legal successors, assigns, partners,
members, agents, parent or subsidiary companies, affiliates, officers, directors, and/or
employees. Unless the Commission expressly provides otherwise, and except as otherwise
expressly provided herein, such adoption does not constitute approval or precedent for any
principle or issue in this or any future proceeding.
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6.2. The Parties agree that this Settlement is subject to approval by the Commission.
After the Parties have signed this Settlement, the Parties shall jointly file a motion for
Commission approval and adoption of this Settlement, which may be submitted along with
additional partial settlements in this proceeding. The Parties will furnish such additional
information, documents, and/or testimony as the ALJ or the Commission may require in granting
the motion adopting this Settlement.
6.3. The Parties agree to support the terms of this Settlement to which they have
expressly agreed and to use their best efforts to secure Commission approval of those terms in
their entirety without modification.
6.4. The Parties agree to recommend that the Commission approve and adopt this
Settlement in its entirety without change.
6.5. The Parties agree that, if the Commission fails to adopt this Settlement in its
entirety and without modification, the Parties shall convene a settlement conference within
fifteen (15) days thereof to discuss whether they can resolve the issues raised by the
Commission’s actions. If the Parties cannot mutually agree to resolve the issues raised by the
Commission’s actions, the Settlement shall be rescinded and the Parties shall be released from
their obligation to support the Settlement. Thereafter, the Parties may pursue any action they
deem appropropriate, but agree to cooperate in establishing a procedural schedule.
6.6. The Parties agree to actively and mutually defend all terms of this Settlement to
which each Party has agreed if the adoption of those terms is opposed by any other party.
6.7. This Settlement constitutes a full and final settlement of all issues reviewed by the
County, Cities, and District in the above-captioned proceeding. This Settlement constitutes the
Parties’ entire settlement concerning the CIMP, which cannot be amended or modified without
the express written and signed consent of all the Parties hereto.
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7. Miscellaneous Provisions
7.1. The Parties agree that no signatory to the Settlement or any employee thereof
assumes any personal liability as a result of the Settlement.
7.2. If any Party fails to perform its respective obligations under the Settlement, the
other Party may come before the Commission to pursue a remedy including enforcement.
7.3. The provisions of this Settlement are not severable. If the Commission, or any
competent court of jurisdiction, overrules or modifies as legally invalid any material provision of
the Settlement, the Settlement may be considered rescinded as of the date such ruling or
modification becomes final, at the discretion of the Parties.
7.4. The Parties acknowledge and stipulate that they are agreeing to this Settlement
freely, voluntarily, and without any fraud, duress, or undue influence by any other party. Each
party states that it has read and fully understands its rights, privileges, and duties under the
Settlement, including each Party’s right to discuss the Settlement with its legal counsel and has
exercised those rights, privileges, and duties to the extent deemed necessary.
7.5. In executing this Settlement, each Party declares and mutually agrees that the
terms and conditions to which it has expressly agreed are reasonable, consistent with law, and in
the public interest.
7.6. No Party has relied, or presently relies, upon any statement, promise, or
representation by any other Party, whether oral or written, except as specifically set forth in this
Settlement. Each Party expressly assumes the risk of any mistake of law or fact made by such
Party or its authorized representative.
7.7. This Settlement may be executed in separate counterparts by the different Parties
hereto with the same effect as if all Parties had signed one and the same document. All such
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counterparts shall be deemed to be an original and shall together constitute one and the same
Settlement.
7.8. Except as otherwise specifically provided in Appendix 2 specifying time of
payment of the Economic Development Fund within 30 days after Commission’s approval of the
Application, Joint Proposal, and this Settlement, this Settlement shall become effective and
binding on the Parties as of the date it is approved by the Commission in a final and non-
appealable decision.
7.9. This Settlement shall be governed by the laws of the State of California as to all
matters, including but not limited to, matters of validity, construction, effect, performance, and
remedies.
The Parties mutually believe that, based on the terms and conditions stated above, this
Settlement is reasonable in light of the whole record, consistent with the law, and in the public
interest. The Parties’ authorized representatives have duly executed this Settlement on behalf of
the Parties they represent.
PACIFIC GAS AND ELECTRIC
COMPANY
Name:
Title:
Date:
COUNTY OF SAN LUIS OBISPO
Name:
Title:
Date:
9
SAN LUIS COASTAL UNIFIED
SCHOOL DISTRICT
Name:
Title:
Date:
CITY OF ARROYO GRANDE
Name:
Title:
Date:
CITY OF ATASCADERO
Name:
Title:
Date:
CITY OF MORRO BAY
Name:
Title:
Date:
CITY OF PASO ROBLES
Name:
Title:
Date:
CITY OF PISMO BEACH
Name:
Title:
Date:
CITY OF SAN LUIS OBISPO
Name:
Title:
Date:
FRIENDS OF THE EARTH
Name:
Title:
Date:
SAN LUIS COASTAL UNIFIED
SCHOOL DISTRICT
Name:
Title:
Date: -------------------
CITY OF ATASCADERO
Name:
Title:
Date: -------------------
CITY OF PASO ROBLES
Name:
Title:
Date: ------------------
CITY OF SAN LUIS OBISPO
Name:
Title:
Date: -------------------
9
CITY OF ARROYO GRANDE
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CITY OF MORRO BAY
Name:
Title:
Date: __________________ _
CITY OF PISMO BEACH
Name:
Title:
Date: -------------------
FRIENDS OF THE EARTH
Name:
Title:
Date: ------------------
10
NATURAL RESOURCES DEFENSE
COUNCIL
Name:
Title:
Date:
ENVIRONMENT CALIFORNIA
Name:
Title:
Date:
INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS LOCAL 1245
Name:
Title:
Date:
COALITION OF CALIFORNIA
UTILITY EMPLOYEES
Name:
Title:
Date:
ALLIANCE FOR NUCLEAR
RESPONSIBILITY
Name:
Title:
Date:
1
Appendix 1 - Essential Services Mitigation Fund Terms
(District/County/PG&E)
1. The Essential Services Mitigation Fund (“ESMF”) will be increased from $49.5 million to $75
million, of which $10 million will be dedicated to an educational foundation to be designated by
the San Luis Coastal Unified School District (“District”). These funds, including the $10 million
portion to be dedicated to a District educational foundation, will be distributed to San Luis
Obispo County (“County”) in nine equal annual installments through 2025. The funds will be
distributed on September 1st of each year, following a final and non-appealable CPUC decision
approving the settlement and the DCPP Application, as revised. If final and non-appealable
CPUC approval of this settlement is not obtained by September 1, 2017, the first distribution will
occur 30 days after such approval is issued, unless otherwise agreed. The parties will meet and
confer within 30 days of the filing of any application for rehearing or appeal of the CPUC
decision approving this Settlement. The payments will continue as scheduled for the full 9 year
period even in the event one or both DCPP Units closes early. The Parties accept the risk that
DCPP may close before the scheduled dates in 2024 and 2025 and will not request any additional
financial compensation in such an event.
2. The County will redistribute the funds based on a revision of the 2015/2016 unitary factors to the
taxing jurisdictions whose unitary tax funding is negatively impacted by the closure of Diablo
Canyon within two weeks of receiving the PG&E payment and will cause $2 million of the
District’s share of each of the first five installment payments to be deposited into the account of
the District’s designated educational foundation. The recalculation of the unitary tax factors will
exclude local agencies whose funding is not impacted by unitary tax. The allocation that the
County shall use in allocating the ESMF is set forth in Attachment A to this Appendix 1.
3. The parties agree that the compromise they have reached is a settlement and is not intended to be
a substitute or in-lieu tax payment. Estimating potential tax revenue declines is simply one of
many factors the parties considered in developing an appropriate and reasonable ESMF.
4. The ESMF will be included as part of the overall Community Impact Mitigation Program and
collected in rates through the nuclear decommissioning charge over the remaining life of the
plant, as described in Chapter 10 of the DCPP Application.
5. The County and District agree to support the Employee Program set forth in the Application and
to not oppose the remaining provisions of the Application, as may be modified through
settlements with other parties.
6. This term sheet is subject to (i) final approval by all parties; (ii) negotiation and execution of a
final settlement agreement; (iii) agreement by the Joint Parties to the PG&E Joint Proposal for
Diablo Canyon (to the extent the terms and conditions result in modifications to the Joint
Proposal) and (iv) approval by the CPUC.
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Attachment A to Appendix 1:
Distribution of the Essential Services Mitigation Fund
The Essential Services Mitigation Fund (ESMF) of $75,000,000 is created to assist local
jurisdictions whose annual budgets will be impacted by the decline in unitary tax over
the next nine years. Local jurisdictions (71) currently receiving unitary tax include the
County of San Luis Obispo, Incorporated Cities, Special Districts and Basic-Aid School
Districts. The San Luis Obispo County Auditor-Controller-Treasurer-Tax Collector has
developed Schedule 1 by starting with 2015/2016 unitary factors and redistributing the
percentages allocated to agencies whose budgets are not impacted by the decline in
unitary tax. Those agencies’ (non-basic aid schools and redevelopment agencies)
percentages were redistributed based on the actual 2015/2016 unitary factors so that
the allocations of the ESMF include only those agencies whose annual budgets are
adversely impacted by the closure of DCPP. The County Auditor-Controller-Treasurer-
Tax Collector will distribute the amounts identified in Schedule 1 to the 71 agencies
within two weeks of receiving the annual payment by PG&E. The ESMF is not Unitary
Tax and will not change any prescribed Unitary Tax distributions.
The ESMF will be distributed annually in 9 equal and consecutive payments of
$8,333,333.33 from PG&E to the County of San Luis Obispo on the 1st of September
beginning in 2017. If final and non-appealable CPUC approval of this settlement is not
obtained by September 1, 2017, the first distribution will occur 30 days after such
approval, unless otherwise agreed. The payments will continue as scheduled for the full
9-year period even in the event one or both DCPP Units closes early.
The total distribution to San Luis Coastal Unified School District includes $10 million that
will be dedicated to an educational foundation to be designated by the District. The
County will cause $2 million of the District’s share from each of the first 5 installment
payments to be deposited to the account of the District’s Educational Foundation. The
other receiving agencies will not be impacted by this distribution.
Schedule 1
Agency
Essential Services
Mitigation Fund of 75 Million
9 Annual Payments of
$8,333,333.33
County of San Luis Obispo – General Fund $3,106,644.19
Roads $130,559.76
Air Pollution Control District $13,202.49
San Luis Obispo County Library $223,570.15
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Schedule 1 – continued
Agency
Essential Services
Mitigation Fund of 75 Million
9 Annual Payments of
$8,333,333.33
Garden Farms Water $273.50
Santa Maria Valley Water Conservation District $356.23
Cambria Community Hospital $2,823.44
Cayucos Sanitary District $4,030.04
City of Arroyo Grande $30,202.90
City of Atascadero (including sanitation) $40,440.60
City of Grover Beach $12,615.28
City of Morro Bay $104,716.70
City of Paso Robles $40,387.74
City of Pismo Beach $20,581.13
City of San Luis Obispo $76,962.63
Cachuma Resource Conservation District $210.29
Post San Luis Harbor District $170,300.53
California Valley Community Services District $1,330.71
Nipomo Community Services District $3,608.31
Cambria Community Services District $13,658.70
San Simeon Acres Community Services District $667.65
Templeton Community Services District $5,235.49
Nipomo Sewer Maintenance $103.42
Nipomo Drain Maintenance $103.42
Linne Community Services District $119.51
Grover City Street Light District #1 $2,962.49
San Luis Obispo County Flood Control District $32,067.95
Nacimiento Water Services District $39,975.20
Flood Control Zone 1 $998.60
Flood Control Zone 1A $104.57
Flood Control Zone 3 $1,807.60
Flood Control Zone 9 $3,776.08
County Waterworks No. 8 $344.74
Nipomo Lighting District $241.32
San Miguel Community Services District - Lighting $613.64
County Service Area # 23(former Santa Margarita Lighting) $227.53
County Service Area #1 $65.50
County Service Area #1 Zone A $280.39
County Service Area #1 Zone B $143.64
County Service Area #1 Zone C $52.86
County Service Area #1 Zone D $212.59
County Service Area #7 $288.43
County Service Area #7 Zone A $1,184.77
County Service Area #7 Zone B $265.45
Los Osos Community Services District Zone A $2,022.49
Los Osos Community Services District Zone B $11,629.32
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Schedule 1 – continued
Agency
Essential Services
Mitigation Fund of 75 Million
9 Annual Payments of
$8,333,333.33
Los Osos Community Services District Zone C $116.06
Los Osos Community Services District Zone F $66.65
County Service Area #10 $998.60
County Service Area #12 $3,524.42
County Service Area #16 $217.19
Heritage Community Services District $1,740.95
San Miguel Sanitary District $429.78
Oceano Community Services District $5,668.72
Cayucos Fire District $1,290.49
San Miguel Community Services District - Fire $2,090.29
Santa Margarita Fire District $887.14
Arroyo Grande Cemetery District $897.48
Atascadero Cemetery District $2,489.04
Cambria Cemetery District $640.07
Cayucos-Morro Bay Cemetery District $10,058.44
Paso Robles Cemetery District $2,978.58
San Miguel Cemetery District $611.34
Santa Margarita Cemetery District $707.87
Shandon Cemetery District $480.34
Templeton Cemetery District $674.55
Avila Beach County Water District $31,330.20
Avila County Water Improvement District #1 $1,341.05
Coast Unified School District (Cayucos Elem) $16,515.47
Coast Unified School District $54,799.13
San Luis Coastal Unified School District – Note: For the first
5 distributions $2,000,000 will be deposited in the District’s
Educational Foundation
$4,090,809.51
Annual Total $8,333,333.33
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Appendix 2 - Economic Development Fund Terms
(Coalition Cities/County/PG&E)
1. The Parties agree that the economic impacts of DCPP closure should be considered as a part of a
separate CPUC proceeding following issuance of the economic analysis specified in California
Public Utilities Code Section 712.5 (“Monning Report”). The Parties support Commission
approval of this settlement and proceeding with consideration of the remaining scope of the
DCPP Application immediately, without delay for consideration of the economic impacts of
DCPP closure.
2. The Parties agree that the DCPP Application should be revised to include a $10 million payment
by PG&E to the County and to the Cities of Arroyo Grande, Atascadero, Morro Bay, Paso
Robles, Pismo Beach and San Luis Obispo (collectively, the “Coalition of Cities”) to establish a
fund for implementation of regional economic development and job creation programs
(collectively, the “Economic Development Fund”). The County and the Coalition of Cities agree
to further distribute those payments pursuant to the allocation methodology set forth in
Attachment A. The purpose of the Economic Development Fund is to provide immediate funding
for actions to create new economic development opportunities and mitigate impacts associated
with the pending closure of DCPP.
3. Within 18 months of the payment by PG&E of the Economic Development Fund, the County and
each of the Coalition of Cities will prepare a report that (i) enumerates and describes the
expenditures from the Economic Development Fund and (ii) assesses the results and effectiveness
of the economic development measures or programs resulting from such expenditures (the “Initial
Report”). The County and each of the Coalition of Cities will prepare subsequent annual updates
to the Initial Report until all Economic Development Fund revenues have been expended, at
which time the reporting may cease. The Initial Reports and any subsequent updates will be
provided to PG&E, and PG&E will submit the reports to the CPUC and make them available to
the public. Reports shall report on expenditures on a fiscal year basis. In the event payment of the
Economic Development Fund is delayed by any rehearing application or appeal of the CPUC’s
decision approving the DCPP Application, the County and each of the Coalition Cities shall be
entitled for purposes of the specified reporting to credit against the Economic Development Fund
amounts expended by the Cities for purposes of economic development and impact mitigation
between the date the CPUC first issues its decision and the date of payment of the Economic
Development Fund pursuant to this agreement.
4. The County and Coalition of Cities commit to spending the Economic Development Fund solely
for the purposes of economic development and impact mitigation purposes.
5. PG&E shall pay $400,000 of the total Economic Development Fund to the County within 30 days
of issuance of a decision by the CPUC approving the DCPP Application and thereafter shall not
request any reimbursement of payment from the County or the Coalition of Cities. PG&E shall
pay the remaining balance of the Economic Development Fund within 30 days of the final and
non-appealable approval of the DCPP Application, as revised consistent with this Settlement,
unless otherwise agreed. The parties will meet and confer within 30 days of the filing of any
application for rehearing or appeal of the CPUC decision approving this Settlement.
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6. Following issuance of the Monning Report (per SB 968), the Commission will institute a new
proceeding to evaluate the results of the Monning Report, take comment, and consider further
action. The Parties reserve all rights in such proceeding to advocate for or to oppose further
funding of economic impact mitigation by PG&E and/or its customers. PG&E specifically
reserves the right to assert that no additional funding, beyond the mitigation payments provided
by the DCPP Application, as modified by this settlement, is required, and the County and the
Coalition of Cities or any of the cities specifically reserve the right to seek additional funding
beyond the Economic Development Fund. In no event shall the Coalition of Cities or the County
be required to refund any amount paid under this Settlement.
7. PG&E, the County, and the Coalition of Cities agree to work together to advocate jointly for
additional funding or other assistance from the State of California and Federal government
agencies, and their respective legislative bodies, to support the economic transition of the local
community to an era without DCPP in operation. This provision is not intended to bind any Party
to any financial commitment or specific position with respect to such advocacy.
8. The Economic Development Fund will be included as part of the overall Community Impact
Mitigation Program, as described in Chapter 10 of the DCPP Application.
9. The County and the Coalition of Cities agree to support the Employee Program set forth in the
Application and to not oppose the remaining provisions of the Application, as may be modified
through settlements with other parties.
10. This term sheet is subject to (i) final approval by all parties; (ii) negotiation and execution of a
final settlement agreement; (iii) agreement by the Joint Parties to the PG&E Joint Proposal for
Diablo Canyon (to the extent the terms and conditions result in modifications to the Joint
Proposal); and (iv) approval by the CPUC.
Attachment A to Appendix 2
Distribution of Economic Development Fund County of San Luis Obispo/Coalition of Cities
Total Amount
County (40%)
Coalition Share
(60%)
Regional
Economic
Development
Arroyo Grande
Atascadero
Morro Bay
Paso Robles
Pismo Beach
San Luis Obispo
$10,000,000 $3,840,000* $5,760,000 $400,000** $747,422 $783,106 $497,472 $1,145,631 $767,028 $1,819,341
*The County will allocate $192,000 of this amount to the City of Grover Beach.
** To be distributed to the County for Regional Economic Development.
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Appendix 3 – Emergency Planning and Future Land Use Terms
(County/PG&E)
Emergency Planning and Preparedness
1. The specific costs and detailed plans for emergency planning and preparedness (emergency
management) through the decommissioning period will be definitively proposed in the site-
specific decommissioning estimate to be submitted to the CPUC as specified in Chapter 8 of
PG&E's prepared testimony supporting Application 16-08-006. The purpose of this agreement is
to outline the intent of what will be submitted as part of the site-specific decommissioning
estimate and is subject to CPUC approval and funding in nuclear decommissioning rates.
2. The parties recognize that PG&E will continue to fund, at current funding levels, the maintenance
of all emergency response-related equipment, including the public warning sirens, as well as the
approximately $4 million in funding for offsite state and local emergency planning functions, as
required to be adjusted pursuant to state law, through cessation of plant operations in 2025.
Infrastructure that is directly maintained by PG&E as of June 21, 2016, will continue to be fully
maintained by PG&E.
3. In addition to continued funding per current state law, beyond the expiration of said law, the
general intent is that the maintenance of the public warning sirens and funding for offsite
community and local emergency planning functions (approximately $2 million forecast in 2017)
will continue until all spent fuel is in dry cask storage and the two nuclear reactors are fully
decommissioned (following the surrender of the Part 50 licenses). Using the formula established
in Section 8610.5 of the California Emergency Services Act, funding for offsite community and
local emergency planning functions will be paid directly to the County of San Luis Obispo.
4. The funding for other emergency preparedness equipment, training, emergency planning
functions, and PG&E’s emergency response personnel will be informed by the reduced risks that
remain and will be more definitively proposed in the site-specific decommissioning estimate.
5. The process for development of the site-specific decommissioning estimate will include
formation of a decommissioning advisory panel, which will include representation from the
County of San Luis Obispo, industry experts, state and local government representatives, and
affected stakeholders.
6. Parties reserve their ability to make arguments in future decommissioning proceedings regarding
necessary and appropriate emergency response and preparedness actions and costs associated
with DCPP following the surrender of the Part 50 licenses.
Future Land Use
1. Issues surrounding the disposition of lands related to DCPP, including future land uses, will be
addressed in the DCPP site-specific decommissioning plan to be submitted in PG&E’s next
Triennial Nuclear Decommissioning Proceeding, and the Parties agree they are not within scope
of this proceeding.
2. As stated in the October 4, 2016, letter that PG&E sent to the County, which is Attachment A to
this Appendix 3, PG&E agrees to complete a site-specific decommissioning plan for the facility
2
before making any decisions on the disposition of the DCPP lands. As part of this process,
PG&E will convene a community advisory group that will give stakeholders an opportunity to
help shape the future use of PG&E’s land plans prior to finalizing the site-specific plan. In the
meantime, PG&E and its affiliate companies that hold a property interest in the DCPP lands will
not make any commitments on land disposition or post-retirement land use, including the Wild
Cherry Canyon parcels, until the stakeholder process is completed and PG&E’s recommendations
have been considered by the Commission as part of the DCPP site-specific decommissioning
plan.
Thomas Patrick Jones
Director, Strategic Initiatives
735 Tank Farm Road
Suite 200
San Luis Obispo, CA 93401
805-595-6340
TPJ2@pge.com
October 4, 2016
Dan Buckshi
County Administrator Officer
County of San Luis Obispo
1055 Monterey Street
San Luis Obispo, CA 93408
Dear Mr. Buckshi:
Pacific Gas and Electric Company (PG&E) has carefully reviewed the County of San Luis Obispo’s (County)
September 15 response to PG&E’s Diablo Canyon Power Plant (DCPP) Application 16-08-006. One of the
concerns raised by the County (and other locally-based parties) pertains to the future use of the 12,000 acres of
lands surrounding DCPP after the facility is retired. In our September 26 reply to protests and responses, PG&E
clarified that we do not yet have a plan for the future use of DCPP lands, that we will commence a public
stakeholder process as we evaluate the options, and that we will submit a land use plan to the California Public
Utilities Commission (CPUC) in the site-specific decommissioning plan for the facility, which PG&E will file as
part of its next Nuclear Decommissioning Triennial Proceeding application in 2019.
I am writing to assure you that PG&E intends to complete the site-specific decommissioning plan for the facility
over the coming years with community input before making any decisions on the disposition of the DCPP lands.
As part of this process, PG&E will convene a community advisory group that will give stakeholders an
opportunity to help shape the future use of PG&E’s land plans prior to finalizing the site-specific plan. In the
meantime, PG&E will not make any commitments on land disposition or post-retirement land use, including the
Wild Cherry Canyon parcels, until the stakeholder process is completed and PG&E’s recommendations have been
considered by the CPUC as part of the DCPP site-specific decommissioning plan.
PG&E values and appreciates the active partnership of the County and other local stakeholders, and we look
forward to continuing to work with you and the rest of the community in both the pending CPUC proceeding and
the important decommissioning work to follow. Please feel free to contact me if I can provide any further
assurance regarding these land disposition issues.
Sincerely,
Thomas P. Jones
cc: City of Arroyo Grande
City of Atascadero
City Grover Beach
City of Morro Bay
City of El Paso de Robles
City of Pismo Beach
City of San Luis Obispo
Friends of Wild Cherry Canyon
Service List for CPUC Docket No. A.16-08-006 (via email only)
Attachment A to Appendix 3
PG&E October 4, 2016 Letter to the County