USA – CALIFORNIA Law and Practice Contributed by: Nora Sheriff, Gwenneth O’Hara, Samir Hafez, Antonio Carrejo and Timothy Lee, Buchalter LLP
Other Potential Terms and Conditions The CEC may also impose certain conditions on con- struction and operational approvals. Amendment or Relaxation of a Term or Condition The process for seeking an amendment or relaxation of terms or conditions of approval depends on the approving entity and type of facility. For CEC approvals, the proponent of the amendment must submit a petition for amendment and include the following: • a clear description of the requested change; • specific condition(s) to be modified; • reasons/justifications for the change; • analysis of potential environmental or public impacts; and • supporting studies or documents. The CEC will provide a decision, ranking the amend- ment as significant or insignificant. A significant out- come will require a vote by the full CEC, while an insignificant outcome only requires staff approval of the amendment. Local governments or agencies will have their own processes, but these typically include filing an appli- cation for permit modification that undergoes staff review. 3.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Generation Facilities Under California Public Utilities Code Sections 610– 626, an IOU may condemn any property necessary for construction and maintenance of its plant, system or facilities. Section 625 provides that an IOU may not condemn any property for the purpose of competing with anoth- er entity, unless the CPUC finds that such an action would serve the public interest, pursuant to a petition or complaint filed by the IOU (personal notice of which has been served on the owners of the property to be condemned) and an adjudication hearing (including an opportunity for the public to participate).
If the CPUC finds that the proposed condemnation would serve the public interest, the IOU may then file an eminent domain action in the California Supe- rior Court. If the IOU prevails, the court will generally require the IOU to pay the property owner the fair mar- ket value of the condemned property. 3.5 Decommissioning a Generation Facility There are approximately 25 decommissioned gen- eration facilities in California. These former facilities produced energy using natural gas, biomass, nuclear, solar thermal, coal and diesel fuel. Nuclear Power Plant Decommissioning In general, nuclear facility decommissioning costs are collected through customer rates over the facil- ity’s operating life. Nuclear Regulatory Commission (NRC) regulations require that, once a nuclear power plant ceases oper- ations, it must be decommissioned. Decommissioning removes a facility or site from service and reduces residual radioactivity to safe levels for use. To prepare for decommissioning, all nuclear power plant owners are required to establish a trust that is funded by rates collected for the energy produced over the plant’s operational life. This is intended to ensure that financing is available for eventual decom- missioning. The Diablo Canyon Nuclear Power Plant, a PG&E- owned two-unit 2,240 MW nuclear facility (located in San Luis Obispo, California) is a unique example. It was set to be decommissioned when its NRC licence expired in 2024 for Unit 1 and 2025 for Unit 2. How- ever, pursuant to SB 846 (2022), the Commission invalidated its previous retirement order for Diablo Canyon and conditionally approved extended opera- tions at the plant until 31 October 2029 for Unit 1 and 31 October 2030 for Unit 2. SB 846 orders the CPUC to continue authorising PG&E to recover in rates all of the reasonable costs incurred to prepare for the retirement of these units. On 2 April 2026, the NRC approved PG&E’s 20-year licence renewal application for extension of operations. However, any extension beyond 2030 would require additional legislation from the California legislature.
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