The below is an editorial response to an August guest commentary in the San Luis Obispo New Times using economic numbers to claim that it would be inordinately expensive to replace Diablo Canyon with solar power.
Mr. Henry’s piece is a classic example of the pro-nuclear industry’s manipulation of the general public. His insinuation that only the wealthy elite can afford solar is the kind of poisonous introduction that tries to make a play on class warfare, as was attempted but failed by the industry in a detestable anti-solar initiative in Florida last November.
He pops a wonderful number crunching scenario that it will cost $55 billion to build enough solar panels to replace Diablo Canyon’s output!
Wow! Maybe Mr. Henry could use a history lesson or two. After nearly $110 million in legal fees (PG&E spent $100 million and the state spent over $7 million) and 4 years of investigation by the California Public Utilities Commission (CPUC) on who should pay for Diablo’s huge cost overruns ($300 million original estimated cost to $5.8 billion and over $7 billion in financing), the CPUC’s estimate for how much the facility would cost ratepayers was a bit over $54 Billion during its 30 year license.
There were two models for estimating the lifetime costs of Diablo. The standard rate making model the CPUC (the $54 billion) used and then what PG&E and the agency agreed to, or a cost plus model. At the time, the U.S. nuclear fleet of reactors was barely averaging 60% capacity factor, so it was thought that if PG&E performed better than around 70% that they would reward them with pure profit on electricity above this. The agreement also refused to pay PG&E $2 billion in initial construction costs out of the $5.8 billion amount, but could be made up if the facility ran better than the rest of the fleet. The CPUC was originally proposing to exclude all but $2.2 billion in construction costs – the amount for construction prior to the 3rd rebuild after the 1981 mirror image discovery. But then there was a change from democratic to republican control which led to a seismic political shift within the CPUC and its original promise to the state’s ratepayers on how much they would be charged for PG&E’s nuclear nightmare.
Besides the above profit incentive, PG&E was also allowed to increase its basic rates for electricity between 1989 from just under 9 cents to 14 cents per kwh by 1993-4, or over a 50% rate increase. Diablo ran at well over the reactor fleet average at nearly 90%, unless you include the 40 day refueling outage every two years. And please remember, the original operating license for the reactors was 30 years, with the company and regulators quietly giving them a ten year extension in the late 90’s that was followed by the $700 million dollar steam generator replacement project that should never had been allowed – as this was a hidden agenda to extend the life of the facility beyond its original 30 year license and expected life that would have meant that Diablo should have closed in 2014-15. Nobody was apparently paying any attention to this back when it happened in the late 90’s.
So all in all, its very likely the $55 billion estimate he claims it will cost for solar to replace Diablo is about what we paid in rates for its first 30 years.
But of course, Mr. Henry apparently wasn’t part of the hearings back in the 1980’s nor did he attend the California State Land Commission’s hearings in June of 2016 when PG&E presented its plan to close Diablo Canyon. Let me know when the CPUC or anyone else releases the full amount of money they’ve been given to the public! Just think, a recent piece pointed out that the average worker at Diablo makes over $150,000 a year. Ask how much a plumber or electrician makes these days elsewhere, or a solar installer whose average annual take home is around $40K. Btw, the solar industry has over 10x more workers in the state than the nuclear industry employs. SLO needs to know that the incredible value that Diablo appears to be for the county is paid for by the rest of PG&E’s 5 million customers. A full accounting of the numbers and impacts to poorer parts of the state should have been done as a consumer service as anyone knows for example that SMUD’s rates are substantially cheaper that PG&E’s and is the reason there is a statewide movement to break away from the private monopoly. There is not a single book in print about the history of the CPUC for a reason. Most people in California don’t have a masters in business accounting to understand just how captured it has long been by very companies it is supposed to oversee.
Here’s the kicker. Mr. Henry apparently didn’t hear that the company was acknowledging publicly that at least half of Diablo Canyon’s power was no longer needed.
And PG&E didn’t mention that federal law requires that the company maintain an equal amount of power as emergency backup due to its immense baseload nightmare that we’ve been ensnared in since its opening. So closing Diablo will allow PG&E to close those old high price backup facilities and deal with the nightmare of its largest source of power being so off the beaten path…
So, Mr. Henry’s estimate is not just off by at least half, but far more if PG&E and the ratepayers don’t have to maintain such a huge backup pool of expensive power.
Has the state done a detailed study of how much it cost to transmit so much power to the larger urban areas in the state where its needed? The U.S. average loss of power from transmission 6%. How much you wanna bet that the amount lost via transmission for Diablo is more. Unless that power is being sold to SoCal to cover the huge amount of power it takes to pump N. Cal’s water over the Tehachipi’s.
But wait. there are more missing numbers Mr. Henry doesn’t want you to look at. And very big ones! The state of California ordered all Once Through Cooling power generators along the state closed by 2010 due to the severe impacts of pelagic life along coastal California. PG&E got a waiver until the end of its ten year license extension as it was predicting that cooling towers would cost them between $1.5 – $11 billion to install (Bechtel’s estimate started at over $6 billion). If anything SLO residents may remember about Diablo’s history is how its original estimates tended to go up rather than down for any construction costs.
So, lest summarize a bit here. Nearly half of Diablo’s power won’t be needed according to PG&E, so right off the bat, his estimate is twice as high as it should be. But then, we also get to save billions of dollars in rates it costs annually to maintain expensive backup power. And then when Diablo closes, we can retire the backup power, but also not have to pay billions more to protect the state’s aquatic life and Abalone that used to live at Diablo Cove – with the collapse of the fishing and Abalone populations there from immense thermal and chemical pollution that is released in the 2 billion gallon a day operation.
So you do the math. Solar panels are estimated to last at least 40 years, or about the same life Diablo will have achieved – without the need for spent fuel storage (10,000 years) or $4 billion to decommission – or melting down after a major quake. A few minor financial issues…
But wait again as there’s more financial costs we’ve had to bare that Mr. Henry conveniently forgets to mention that are now impacting largest nuclear states back east – in Ohio, Illinois and New York, where massive taxpayer bailouts have been announced to keep older reactors from closing, all of the new deals costing billions of dollars. In simple terms, nuclear power is no longer able to compete with much cheaper natural gas prices.
California was the first state to realize that market competition wouldn’t work for nuclear energy.
Former governor Pete Wilson came up with an innovative counter strategy to deal with California’s electric price spike (large electric users were threatening to leave the state by 1995) caused primarily by the rate increases in the early 1990’s by Diablo and San Onofre’s entry into the rate base. Mr. Wilson came up with the plan to deregulate the state’s electric industry that included a one time $28 billion handout to the utilities of taxpayer money to pay for the companies’ stranded costs at Diablo and San Onofre so they could compete in his deregulated electric market plan. Does the 2001 energy crisis ring a bell here? Yes, folks Diablo and San Onofre were the indirect cause of the state’s electric market collapse in 2001, leading up to PG&E losing all of the billions it received, having invested it in out of state power facilities, not to mention going bankrupt.
If, the industry actually cared about climate issues rather than just using it as an excuse nationwide to push its failed nuclear agenda as it has done for decades, it would have been pushing for far more subsidies on solar but sadly, the state’s primary solar subsidy ran out in 2014 that helped launch the industry here. Us poor folks and renters never got a chance as most of the takers were republicans or big companies who saw the financial benefits of that initial state funding. Its publicly known that the electric industry held private meetings back in 2012 to kill solar rooftop expansion by attacking net metering laws as well as pushing to counter rooftop electricity with large scale centralized solar funded by Florida’s nuclear corporate holding company Next Era. The study done by the National Renewable Energy Labs that 74% of California’s electric needs could be met alone by solar rooftop power has been downplayed on purpose because if carried out would be the demise of the state’s privately owned electric monopolies.
Just as most people would prefer to own their own home, why wouldn’t they also prefer to own their own electricity with very short returns on their investment, compared to nuclear investment cycles that take 30 years to pay off.
I could go on about the recent collapse of Westinghouse and new reactor designs, or mention the 1985 Forbes magazine report calling the nuclear industry the largest managerial disaster in U.S. history, but what good would it do? Most people in this country have become so illiterate about how they are being manipulated by the energy industry that they wouldn’t even know that homes in other parts of the world were once passively cooled and heated using no electricity. Let me know when somebody mentions the global inequities caused by energy use like the fact that 1.3 billion Africans use less electricity than Americans use just for air conditioning. Or what that means in terms of climate impacts! Americans just love to work ever harder to pay for things they really should never have needed to pay for in the first place!