Modern economies cannot function without electricity, and production of electric power affects citizens in many ways, including climate change. Production of electricity requires investments that easily reach billions of dollars, and streams of investment capital must be perpetual to procure fuel, build and maintain plants, and transmit electricity to customers. This case study addresses whether a California decision relevant to investments about generating electricity adequately considered competing concerns. In 2009, Pacific Gas and Electric (PG&E, a private, investor-owned utility) applied to renew the operating licenses of its two nuclear reactors at the Diablo Canyon Nuclear Power Plant (the “plant”). By 2016, PG&E had decided not to seek license renewal and asked the California Public Utilities Commission (CPUC) to approve a price increase for its electricity to pay for specified expenses in closing the plant, which generated 24% of PG&E’s electricity. Four environmental groups and two labor organizations supported PG&E, and CPUC approved most elements of PG&E’s plan in 2018. PG&E’s application generated considerable debate during the CPUC process, and multiple organizations argued that PG&E’s plan was flawed. Two of the protests were from environmental groups favoring nuclear power as mitigation for climate change. Nuclear reactors generate electricity with uranium and have low emissions of carbon dioxide, the key source of climate change. This case study summarizes the competing arguments relevant to energy investments and climate change. Was the decision to close the plant in the best interest of the PG&E customers and the residents and taxpayers of California?

KEY MESSAGE

  1. Recognize the key role of investment decisions in energy.

  2. Recognize that decisions on investments in energy affect climate change.

  3. Recognize competition among primary energy sources for generating electricity.

  4. Recognize that institutional and regulatory structures affect competition among alternative primary energy sources.

INTRODUCTION

In August 2016, Pacific Gas and Electric (PG&E) asked the California Public Utilities Commission (CPUC) to permit several actions. The requests most relevant to this case study were (a) to approve a schedule for closing the Diablo Canyon Nuclear Power Plant (“the plant”) and (b) permission to allow higher prices for electricity to pay for expenses associated with closing the plant.

The proposal was from PG&E, but the utility had, 1 month earlier, signed a “Joint Proposal” with four environmental groups—each of which opposed the use of uranium (nuclear power) to generate electricity—and two labor organizations—both of which represented PG&E employees. The plant had two nuclear reactors, unit 1 licensed to operate until 2024 and unit 2 until 2025.

The Joint Proposal was not filed as a legal document with CPUC, but it was included as an appendix to PG&E’s formal filing. PG&E had sought the six collaborators1 to show broad support for PG&E’s requests [1].

CPUC granted some of PG&E’s requests in 2018, and at one level it was a routine exercise of CPUC’s regulatory powers over private utility companies and not necessarily of high interest in the environmental arena. Multiple contextual factors, however, made the exercise of distinct environmental importance.

Most important were the connections to climate change. Scientists broadly agree that carbon dioxide (CO2) is the most important greenhouse gas introduced into the atmosphere by humans [2], and this gas is responsible for most of the temperature increases observed over the past century [3]. Climate change, in other words, has been triggered primarily by human additions of CO2 to the atmosphere, and most of the CO2 comes from burning fossil fuels (coal, oil, and gas). Electricity production is a major use of fossil fuels, but nuclear power plants using uranium emit much less CO2. As this case study will show, some environmental groups (other than the collaborators) argued against PG&E and closing the plant, because of its capacity to produce electricity with low CO2 emissions.

Mitigation of climate change requires investments to enable electricity production without fossil fuels. Should some of the investments enable continued uses of uranium or not? This is a major question facing policy makers seeking mitigation of climate change, and no scientific or political consensus exists on the best answer.

PG&E in collaboration with its environmental allies claimed it could use renewable energy and energy efficiency to replace the electricity lost from closing the plant [4], a position consistent with extensive studies showing the enormous energy supplies potentially available from renewable sources (wind, solar, hydropower, biomass, and geothermal heat) [5]. As the case will show, however, other environmental critics [Environmental Progress and Californians for Green Nuclear Power (CGNP)] feared that the utility would instead use natural gas, a fossil fuel, and disrupt California’s efforts to curtail CO2 emissions [6]. In the 1960s, environmental critics of the plant had objected to industrial development of pristine coastline and to pollution risks of using uranium [7]. In contrast, Environmental Progress and CGNP in this case refocused criticism to climate change and argued to continue operating the plant. Arguments among environmental groups and how they change are important, but they are not the focus of this case study. Instead, this case delves into CPUC’s effects on investment decisions underlying all supplies of energy.

Major investments undergird all energy projects, and CPUC’s authority indirectly affected a perennial question for PG&E: “What investments will the utility make to generate electricity?” If not uranium, then what energy source would PG&E use? CPUC does not directly control investments by regulated utility companies, but its regulations and decisions profoundly affect utility decision-making:

  • regulating electricity prices informs utilities of the likelihood of profiting from investments,

  • mandating adequate generation capacity to meet the demands of customers forces utilities to prepare for their customers’ needs, and

  • regulating compliance with California’s minimum requirements for renewable energy, with low emissions of CO2, forces utilities to select their energy sources accordingly.

Despite its profound indirect affects, CPUC does not dictate investment decisions to PG&E. PG&E determines how it will invest its funds, and its decisions stem from the need to recoup its investment expenditures by selling electricity at prices regulated by CPUC. PG&E must also consider its mandate to comply with other CPUC requirements: to have enough power to serve its customers and to comply with California laws on amounts of electricity sales from renewable energy sources. PG&E’s application already included plans for its legal obligations. In addition, the utility had undoubtedly considered the costs of NOT closing the plant, but these details are not visible to the public.

For its part, CPUC is bound by strict rules. It must make its decisions based solely on evidence presented in the hearings and legal briefs surrounding the requested rate increase [8]. Other parties may have had strong opinions that affected PG&E, but if that information did not enter the record, it could not be considered.

Consider a few of the other events or actions that may have shaped PG&E’s decision-making or the opinions of the public, but which never entered the record and thus were not eligible for consideration.

  • Natural gas in the USA has become relatively less expensive since 2009 due to the enhanced technology of hydraulic fracturing (“fracking”) that releases natural gas from previously inaccessible shale formations [9]. Many nuclear power plants are old and in need of relicensing and extensive upgrades, making them uneconomic to continue operating compared to gas and, increasingly, to renewable energy [10].

  • Federal subsidies for construction of new nuclear power plants, authorized in 2005, combined with utilities charging electric consumers for construction in progress have failed to ignite a “nuclear renaissance” building many new reactors. Three projects underway in 2016 demonstrated that nuclear power plant construction had never solved the economic problems leading to cessation of new construction in the late 1970s [11]. One of the projects, V. C. Summer in South Carolina, collapsed in bankruptcy in August 2017, with a loss of US$9 billion [12]. The second, Alvin W. Vogtle in Georgia, is still proceeding (2018), despite large cost overruns, delays, and projections of uneconomic performance when completed. Continuation required further financial contributions from customers, approved by state regulators [13]. The third, Watts Bar in Tennessee, began operating commercially in October 2016. It is the only one, so far, of the three new projects to reach completion, but critics have pointed to its antiquated design, no longer considered safe, and to its cost overruns [14].

  • On 11 March 2011, an earthquake and tsunami badly damaged Japan’s Fukushima-Daiichi nuclear power plant and led to catastrophic explosions in three of the plant’s six reactors [15]. This catastrophe led the U.S. Nuclear Regulatory Commission (NRC) to ask all nuclear power plants in the United States about the abilities of their respective plants to withstand earthquakes [16]. PG&E completed most of the required examination by 2015, but the issue of seismic safety of the Diablo Canyon plant had been contested since the 1980s and remained so in 2015 [17].

  • The new presidential administration elected in 2016 came in explicitly disavowing concern about CO2 and climate change and enthusiastically seeking to revive the fortunes of coal power plants. The administration has also strongly downplayed concerns with pollution, and they added promotion of nuclear power plants to efforts with coal plants. This administration has consistently sought ways to subsidize the uses of both coal and uranium in plants that are nearing retirement and no longer viable economically [18].

This study focuses on the CPUC processes because they were one of the few instances allowing public participation in legal procedures that affected decision-making on investments by a private utility, especially as those decisions affect climate change.

The study asks readers to sort through competing arguments—entered into the record—about primary energy sources to decide, “For the purposes of lowering risks from climate change, was the decision to close the plant—and stop using uranium to make electricity—in the best interests of PG&E customers and the residents and tax-payers of California?” This case allows a unique glimpse of diverse opinions about decision-making involving investments, energy, and climate change.

The issues involved are complicated, and this study can only summarize them. Readers may want to consult outside materials to better understand the areas of contention. Suggestions for further reading are at the end.

CASE EXAMINATION

PG&E is a private, investor-owned utility that generates, transmits, and distributes electricity to about 16 million California citizens scattered over 70,000 square miles [19]. PG&E manufactures some of the electric power from its own generators, and the plant (Figure 1) produced 24% of PG&E’s electricity in 2016 [20]. The plant produced 7% of the total electricity retail sales in California in that year [21], and it was the last nuclear power plant operating in California. California also receives nuclear electric power from the Palo Verde nuclear power plant in Arizona. For example, the Los Angeles Department of Water and Power, a publicly owned utility, owns 5.7% of the Arizona plant and is entitled to draw as much as 9.7% of its output [22].

FIGURE 1.

The Diablo Canyon Nuclear Power Plant located in California on the Pacific coast (Courtesy of John Lindsey, PG&E).

FIGURE 1.

The Diablo Canyon Nuclear Power Plant located in California on the Pacific coast (Courtesy of John Lindsey, PG&E).

PG&E operates the plant under regulations of the U.S. NRC, which in the 1980s had issued two licenses, each for 40 years. License expiration was based on estimated lifetimes of the two nuclear reactors: 2024 (unit 1) and 2025 (unit 2). To continue operations after those dates, PG&E had to renew the two licenses, and in 2009, PG&E began the applications. This decision indicated that—in 2009—PG&E had decided to invest enough funds to meet NRC requirements. In 2005, a study on needed refurbishment or replacement of steam generators suggested that these costs could reach US$1 billion per reactor [23] or US$2 billion for both reactors at Diablo Canyon. Other costs could increase this total. As late as 25 February 2015, PG&E was still moving ahead with license renewal [24], but by 21 June 2016, PG&E had changed its mind [25]. Separately from the CPUC process, PG&E noted that as more renewable energy enters the transmission system between now and the plant’s retirement, the utility will lower the power output of the plant by about 50%. This will approximately double the cost of producing the plant’s electricity and diminish any competitive advantage it might have [26].

PG&E’s actions, both in 2009 and 2016, were major decisions about future investments: which fuels should the utility use to make electricity? Investment decisions are, in almost all cases, irrevocable choices of the fuel to be used. For example, a plant to use natural gas cannot use uranium, and a nuclear reactor using uranium cannot use coal. Similarly, a plant using solar radiation cannot use natural gas, coal, uranium, or wind.

Moreover, investments in energy must be perpetual, year after year, first to build the needed technology and then procure fuels. As equipment wears out, it requires further investments to maintain production. At the end of a machine’s lifetime, the company must invest to refurbish old or build new equipment, which means, “Same again or something different?” Failure to invest steadily ultimately ends electricity production.

Nuclear power plants use uranium as the primary energy source (fuel), and uranium is one of nine primary energy sources for making electricity. The other eight are coal, oil, gas, hydropower, solar radiation, wind, biomass, and geothermal heat. Energy efficiency can reduce the need for primary energy sources, but generating electric power means choosing among these nine fuels [27]. Currently, no other options exist.

A complicating factor in PG&E’s decision arose because of its location in San Luis Obispo County. The local economy had benefited economically for years from the plant. Dollars flowed into the county due to sales of electricity in other locations, and the wages of PG&E employees living in the area flowed in turn to local enterprises serving them. In addition, tax revenues from the employees and PG&E supported local governments and schools. Closure of the plant would disrupt the economic fortunes of thousands of employees, local businesses, and local governments [28].

PG&E is a highly regulated public utility, obliged to provide adequate, safe, and affordable electric power to its customers. In return for a quasi-monopoly status, PG&E may—with the approval of CPUC—charge rates to recoup and profit from its investments, including paying for the depreciation of the plant over time. CPUC approved parts of PG&E’s proposed plan on 11 January 2018 [29].

CPUC, a state agency with Commissioners appointed by the Governor, regulates companies providing electricity, natural gas (California’s major fuel for generating electricity and for other uses, Figure 2 [30]), telecommunications, passenger transportation, and water and sewer services. It also regulates the compliance of utility companies with California’s major laws to mitigate climate change by reducing emissions of greenhouse gases, such as CO2.

FIGURE 2.

Primary energy sources used to generate electricity within California, 2001–2017. Graph shows (a) natural gas as the major fuel for California’s electricity, and (b) decline of nuclear power and rise of solar and wind power. Solar power exceeded in-state nuclear power for the first time in 2016. Solar power exceeded wind for the first time in 2015. (Courtesy of Michael Nyberg, California Energy Commission.)

FIGURE 2.

Primary energy sources used to generate electricity within California, 2001–2017. Graph shows (a) natural gas as the major fuel for California’s electricity, and (b) decline of nuclear power and rise of solar and wind power. Solar power exceeded in-state nuclear power for the first time in 2016. Solar power exceeded wind for the first time in 2015. (Courtesy of Michael Nyberg, California Energy Commission.)

CPUC decisions have powerful effects on investment decisions. Environmental Progress and CGNP argued against PG&E’s proposal, because these groups argued it was necessary to continue using uranium to generate power due to low emissions of CO2; these protesters feared that electricity generated with natural gas would replace the plant’s electricity. Others, however, argued that moving away from uranium to some other primary energy sources was imperative, good, or at least acceptable.

CPUC’s process involves, sequentially:

  • the proposal from PG&E;

  • protests, responses, and motions to the proposal from other interested parties;

  • a reply to protests and responses from PG&E;

  • a prehearing conference and public participation hearings;

  • CPUC’s ruling on the scope of decisions to be made;

  • interested parties file briefs about the proposal based on scoping decisions;

  • CPUC issues proposed decision;

  • opportunity for written comments and final oral arguments about the proposed decision;

  • issuance of final decision; and

  • an opportunity to request a rehearing.

We turn first to PG&E’s proposal, then to arguments against the proposal based on preferences to relicense the plant, and finally the CPUC’s decisions on scoping and on its final decision.

PG&E’s and Its Environmental Collaborators’ Proposal

PG&E summarized four reasons for the reversal of its 2009 decision to relicense the plant, all based on uncertainty about the future [31]. Different people interpret uncertainty in different ways, and PG&E’s conclusions about the future may differ from others.

Uncertainty about the future amounts of electricity PG&E had to generate.

By law, PG&E had to maintain reliable sources of generation sufficient to serve its customers. Refurbishing the plant to pass NRC requirements for a renewed license—necessary to continue using uranium—might be expensive, as much as US$1 billion per reactor and perhaps more.

PG&E claimed its estimates of future demand for its electricity were uncertain because of new technology, such as LED light bulbs, enabled lower purchases of power. Also, its customers were installing solar panels and generating their own electricity.

Most importantly, changes in federal and California laws had enlarged the potential for competition in electrical markets. Starting in 2002, California allowed formation of Community Choice Aggregators (CCAs) that could purchase electricity from any generator and sell it over the transmission and distribution wires of PG&E. CCAs were public agencies operated as non-profit brokers of electricity. PG&E knew that many of its customers were likely to join a CCA [32] yielding a loss of sales and revenue, perhaps by half by 2025–2030 [33].

Mandated changes in California’s electric grid.

In 2002, California mandated electric generators to use renewable energy sources to generate 20% of their electric power, and this required-percent renewable increases to 50% by 2030. These regulations aimed to reduce emissions of CO2 to mitigate climate change. PG&E had reached 33% renewables by 2016, over the target mandated for 2020 [34]. Uranium emits low levels of CO2 but does not count toward the mandate [35].

PG&E claimed this evolution necessitated more flexible sources of generation, not met by nuclear power plants, which are used almost entirely for generating “baseload power,” i.e., the minimum amount of power used 24 hours a day. PG&E wanted generation technology capable of rapid increases or decreases of power during the day to meet “peak demand.”

A nuclear power plant might increase the cost of integrating renewable energy into the daily cycle of power demand.

California has excellent resources of solar radiation and wind, but these sources are (a) intermittent and (b) fluctuate up and down during each day. Solar radiation, for example, generates its maximum amount of electricity at mid-day, and grid managers are learning to accommodate solar fluctuations. PG&E claimed that the cost of integrating renewable energy into the power mix on the grid might be lower without the plant.

The plant faced uncertainty in regulation which could significantly increase operating costs.

PG&E claimed two specific examples of these potential uncertainties but did not provide details for the CPUC record. One, PG&E feared that the NRC might impose new safety requirements to obtain new licenses. PG&E had good reason, for example, to fear high expenses for seismic retrofits to renew the plant’s licenses. In 2013, Friends of the Earth (FOE), later one of PG&E’s collaborating environmental partners in 2016, had filed a lawsuit against the NRC for improperly handling PG&E’s existing licenses about the seismic safety of the plant [36]. In 2014, FOE had released a highly critical report of the plant’s seismic safety [37].

PG&E Responses and CPUC’s Scope of Issues Deemed Relevant

Two, the California State Water Resources Control Board had originally approved the plant’s operation with “once-through cooling” systems, i.e., water was pumped into the plant from the ocean, cooled the reactors, and discharged back into the ocean at a higher temperature. In 2010, however, the Board developed a new policy calling for “closed-cycle, evaporative cooling” or a reduction in damage to marine life due to cooling water intake. By 2016, when PG&E and its collaborators filed their proposal to CPUC, the utility still did not know the outcome of the Board’s decision. The Board was working collaboratively with other state agencies to manage both water quality and electric reliability and did not reach a final decision until 2018 [38]. Thus in 2016, PG&E had reason to fear high expenses to change the plant’s cooling systems to continue operating.

Responses of Opponents Relevant to Use of Uranium

Many parties responded to different issues in PG&E’s proposal, and two environmental groups—not part of the Joint Proposal—called for PG&E to continue using uranium indefinitely: Environmental Progress and CGNP. Both argued that nuclear power plants with low CO2 emissions were essential to mitigate the risks of climate change. As with PG&E’s proposal, different people may reach different conclusions based on differences in weighing evidence and uncertainty about the future.

CGNP participated throughout the entire proceedings, was disappointed in CPUC’s approval of PG&E’s plan, and petitioned the Commission to rehear the case. The organization’s mission statement emphasizes the promotion of nuclear power as a source of carbon-free electricity [39].

Environmental Progress participated in the proceedings only at the beginning before dropping out. This organization, however, has a broader environmental mission: to lift all people out of poverty and to save the natural environment. Its president, Michael Shellenberger, has written widely on a variety of environmental issues and appeared in various public presentations, both in person and in film or TV. Shellenberger has become one of a handful of environmentalists advocating a comprehensive program for nuclear power and claimed credit for actions to keep other nuclear plants open in other states [40]. In 2018, Shellenberger ran unsuccessfully in the Democratic primary as a candidate for governor in California. The claims of Environmental Progress in this case rested on 10 points [41]:

  1. California needed to increase the rate of its reduction of CO2 by seven times, compared with the reduction rates of 2000–2014.

  2. Despite the need to increase rates of reduction, emissions had been rising since 2011.

  3. California’s population will rise between now and 2030, thus increasing emissions of CO2 significantly.

  4. If energy efficiency increases, electricity rates will increase, but overall electricity demand will still not fall.

  5. To achieve California’s climate goals requires significant electrification of transport, and electric cars will consume additional amounts of electricity.

  6. Closing Diablo Canyon will not allow use of a significant amount of solar “overgeneration” currently unused.

  7. The plant’s low-carbon electricity will be replaced largely by fossil fuels, with additional emissions of CO2.

  8. More use of natural gas in California to generate electricity will likely increase deaths from pollution and pipeline explosions. (A PG&E gas pipeline exploded in 2010, with 10 deaths and 38 homes destroyed in San Bruno, CA; faulty PG&E procedures were the cause.)

  9. PG&E falsely claimed that very expensive reworking of the plants cooling systems will be required by California regulators.

  10. Even with overestimated future costs, the plant will still produce cheaper electricity than other low-carbon sources.

PG&E Responses to Protests and CPUC’s Scope of Issues Declared Relevant

PG&E denied Environmental Progress’ claim that PG&E had “‘falsely’ stated” the costs that might be associated with revamping the plant’s cooling system. PG&E maintained that it was correct to worry about this issue, because the state agency responsible had not yet acted [42]. (Debate had surrounded the costs associated with a new cooling system [43], and a recent assessment by the California Energy Commission described the agreement PG&E was negotiating with the Water Board to pay mitigation costs for its cooling system until the plant closes [44].)

The Commission included two of Environmental Progress’ protests within the scope. First, the dates PG&E had proposed for closing the plant could be challenged [45]. Some parties argued for earlier closure, but Environmental Progress and CGNP argued for indefinite delay in closure, an argument to keep using uranium as an energy source.

Second, the scoping decision allowed challenges about the proposed replacement of power lost by closure [46]. PG&E had argued that it would use renewable energy and energy efficiency, claims that Environmental Progress found incredible. Environmental Progress, however, dropped its participation in CPUC’s process before its conclusion, and the organization has not published an explanation for its departure.

CPUC’s Decision

The CPUC’s final decision stated (a) PG&E could close the plant in 2024 and 2025, and (b) PG&E could increase prices of electricity to recover US$222.6 million to retain and retrain employees for closing activities and US$18.6 million for costs the utility had incurred for its initial activities to renew the plant’s licenses. Replacement of power lost was routed into the normal process of Integrated Resource Planning, an established process already in existence [47]. This planning framework covered all electricity procurement policies governed by CPUC, especially those related to meeting California’s goals for reducing emissions of CO2. It involved looking ahead 10 years, ensuring that local needs were met, and remaining flexible about the resources needed [48].

The Commission ruled against Environmental Progress’ recommendations to continue using uranium. By its actions, therefore, CPUC showed no evidence that it thought PG&E’s investment plans threatened the ability of the utility to continue providing power to its customers and to continue meeting its mandates for using renewable energy. In other words, CPUC saw no reason to recommend a change in PG&E’s decision-making on investments in energy or program to comply with California’s efforts to mitigate climate change.

CONCLUSION

Nuclear power and climate change have occupied a prominent place in public debates about environmental and economic policies for many decades. A strong regulatory framework created by comprehensive laws surrounds nuclear power and the use of uranium as an energy source, and the federal government dominates through the actions of the NRC. Without an NRC license, no one can build or operate a nuclear power plant. NRC, however, has no mandate to consider climate change. States and local governments have limited authority over nuclear power, confined largely to governing sites for plants and protection of other resources, such as water.

Climate change, in contrast, does not have a strong regulatory framework. The Obama Administration used the Clean Air Act and international agreements to move the United States toward concerted actions on climate change, but the Trump Administration has worked to reverse all these steps. No comprehensive law governing climate change permits robust actions by the federal government. State and local governments’ actions to protect air from polluting CO2 are governed largely by federal laws that do not specifically target CO2 and other greenhouse gases to protect the climate.

The question of nuclear power as a mitigating technology for climate change, therefore, falls between the cracks of federal laws, and state and local governments have a limited ability to deal with this issue. CPUC’s wrestling with the closure of Diablo Canyon made the gap between nuclear power and mitigation of climate change glaringly obvious. Neither PG&E nor CPUC had a mandate to consider climate change, other than CPUC’s mandate to enforce requirements for renewable energy. PG&E’s environmental partners had a clear interest in climate change, as did Environmental Progress and CGNP. The latter two groups, however, opposed closing the plant. Accordingly, the stage set by the CPUC process served as a poor arena for a fully rational discussion of nuclear power and climate change.

Flawed as the CPUC process may have been, very few alternatives, legal arenas exist for debates about nuclear power and climate change. This case study summarizes the major points made in the legal record—the only evidence that counted in CPUC’s process—and approved closure of the plant plus allowed PG&E to recover some costs associated with closure. If rule of law is to operate on climate change, however, legal stages are essential. Readers of this case should now consider and debate the issues illuminated and decide for themselves about the merits of CPUC’s decisions.

CASE STUDY QUESTIONS

  1. Did the issues PG&E provided for closing Diablo Canyon Nuclear Power Plant overlap with the issues raised by Environmental Progress? Explain any differences you see.

  2. Explain in your own words how this case illustrates competition among fuels for making electricity. What role does CPUC play in these processes?

  3. Do you think Environmental Progress gave careful attention to issues of costs to continue using Diablo Canyon Nuclear Power Plant?

  4. Opponents of nuclear power have focused on issues, such as (a) political stalemate on proposals to dispose of nuclear wastes, (b) low-level radiation emitted normally by nuclear power, and (c) the potential for catastrophic accidents releasing large amounts of radiation. PG&E, Environmental Progress, and CGNP did not mention these other issues. CPUC did not have jurisdiction to consider them, because they are controlled by NRC. Should rate-setting by CPUC include them? Do these issues affect how you understand the relationship between nuclear power and climate change?

  5. Explain in your own words how investment decisions affect the ways in which society generates electricity.

  6. Many commentators have recently discussed the growing inequality of income and wealth in the United States, and government policies can substantially reduce these inequities. Concerns about environmental justice also point to the need for equity in bearing costs and risks. The Commission allowed PG&E to increase rates to recover US$18.6 million that the utility spent when it had intended to renew the licenses for the plant, and these costs will be paid by PG&E customers. Who should pay this cost: current customers, taxpayers, or utility stockholders? Justify your answer.

  7. Similar to question 6, the Commission allowed PG&E to increase rates to recover US$222.6 million for retraining and retaining of employees of the plant, to be paid by PG&E customers. Who should pay these costs? Current customers? Stockholders of the utility? Let employees take care of their own futures, without financial assistance? Justify your answer.

  8. Does this case study help you decide what you think about using uranium to generate electricity? Why or why not? Consider costs, equity, climate change, and the risks of pollution from different energy sources.

  9. Did the CPUC reach a decision in the best interests of residents, rate-payers, and taxpayers of California? Why or why not?

  10. What additional information do you want to answer any of these questions? Where might you find this needed information?

AUTHOR CONTRIBUTIONS

JP designed and wrote this case study.

Ralph Murphy and Tom Womeldorff provided excellent advice on a draft of this case study, and Dr. Murphy tested a draft in class. I am grateful to the students working with Dr. Murphy for their useful assessments of the case study, which led to further revisions. John Lindsey of PG&E provided the image of the plant (Figure 1). Michael Nyberg of the California Energy Commission provided Figure 2. Three reviewers of the manuscript offered valuable critiques and suggestions, for which I am grateful. I, however, remain responsible for any errors or muddled explanations.

FUNDING

No external funds were received to prepare this case study.

COMPETING INTERESTS

The author has no competing or conflicting interests of a financial nature. He was a customer of PG&E, but he recently elected to switch to Marin Clean Energy, a CCA. He also elected to pay slightly higher costs to have 100% of his home’s electricity supplied by renewable energy sources.

SUPPLEMENTARY MATERIALS

Supporting and additional information. Docx.

Data accessibility statement

Primary data used in this case study can be retrieved from the websites of CPUC, other agencies, and NGOs.

1.

The proposal was joined with four environmental groups opposed to continued operations of the plant (Natural Resources Defense Council, Friends of the Earth, Environment California, and the Alliance for Nuclear Responsibility) and two labor groups (International Brotherhood of Electrical Workers Local 1245 and the California Coalition of Utility Employees), both of which represented PG&E employees.

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Supplementary data