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Cities, School and County Reach Diablo Deal

By Camas Frank

A tentative agreement announced on Nov. 28 may ease the tension over the planned closure of the Diablo Canyon Power Plant in 2025.

Six San Luis Obispo–area cities including the City of SLO, along with the County itself, and San Luis Coastal Unified School District (SLCUSD) have reached an agreement with PG&E for a significant increase over the $49.5 million originally proposed to defray the economic impacts of the plant closure.

According to the County, which served as lead agency in negotiations, “under the first part of the agreement between PG&E, the County and SLCUSD, a $75 million Essential Services Mitigation Fund will be created to offset the potential negative impacts to essential services provided to the community by the SLCUSD and the County.”

SLCUSD stood to lose $8 million in annual revenue as the tax funding from the power plant drops off, a subject of several informational public meeting conducted by Superintendent Eric Prater. In their own announcement Prater was quoted as saying, “By establishing certainty about what the School District will receive over the next nine years, the agreement gives us needed breathing room for making what will still be a very difficult transition…with this baseline of certainty, San Luis Coastal can develop a thoughtful, long-term transition plan.”

The $75 million for the Essential Services Mitigation Fund is planned to be distributed to the County in nine equal annual installments through 2025 and the County will redistribute the funds to local agencies.

The mayors of the six Coalition cities which came together in an atypical show of local unity following PG&E’s original proposal to the California Public Utilities Commission offered this joint statement: “In reaching this agreement, PG&E has recognized the need to help our region navigate an uncertain economic future. We are pleased with this phase of the process. The transition to a post-Diablo era will be challenging, but the Economic Development Fund will help facilitate the planning and action required to support the future economic vitality of our communities.”

Jan Marx of San Luis Obispo; Shelly Higginbotham of Pismo Beach; Steven W. Martin of Paso Robles; Tom O’Malley of Atascadero; Jamie Irons of Morro Bay; and Mayor Pro Tem Barbara Harmon of Arroyo Grande “signed” the statement.

The cities will share slices of a much smaller pie than the Essential Services Mitigation Fund, having tentatively agreed to share a $10 million Economic Development Fund in addition to the original $49.5 million that PG&E proposed in June as a Community Impact Mitigation Fund. Shared proportionally to their tax revenue from Diablo, the City of SLO will get $1.82 million.

Speaking on behalf of the staff for the Coalition Cities, Katie Lichtig, San Luis Obispo City Manager, said in part, “In order for our communities to thrive after Diablo, it is vital that the Cities and the County – together with our residents, the broader business community and other key institutions – collaborate closely for years to come.”San Luis Coastal stood to lose $8 million in annual revenue as the tax funding from the power plant drops with decommissioning of the plant, a subject of several recent public meetings conducted by Superintendent Eric Prater.

“By establishing certainty about what the School District will receive over the next nine years,” Prater said in a news announcement, “the agreement gives us needed breathing room for making what will still be a very difficult transition… with this baseline of certainty, San Luis Coastal can develop a thoughtful, long-term transition plan.”

The $75 million for the Essential Services Mitigation Fund is planned to be paid to the County in nine, equal installments annually through 2025, and the County will redistribute the funds to local agencies.

The mayors of the six coalition cities, which came together in an unusual show of local unity following PG&E’s original proposal to the California Public Utilities Commission, released a joint statement: “In reaching this agreement, PG&E has recognized the need to help our region navigate an uncertain economic future. We are pleased with this phase of the process. The transition to a post-Diablo era will be challenging, but the Economic Development Fund will help facilitate the planning and action required to support the future economic vitality of our communities.”

The statement was signed by Mayors Jan Marx of San Luis Obispo, Shelly Higginbotham of Pismo Beach, Steve Martin of Paso Robles, Tom O’Malley of Atascadero, Jamie Irons of Morro Bay, and Mayor Pro Tem Barbara Harmon of Arroyo Grande.

The cities will share slices of a much smaller pie than the Essential Services Mitigation Fund, having tentatively agreed to share a $10 million Economic Development Fund in addition to the original $49.5 million that PG&E proposed in June as a so-called, “Community Impact Mitigation Fund.”

Shared proportionally to their tax revenues from Diablo Canyon, the City of SLO will get $1.82 million.

Speaking on behalf of the staff for the Coalition Cities, SLO City Manager, Katie Lichtig, said, “In order for our communities to thrive after Diablo, it is vital that the Cities and the County — together with our residents, the broader business community and other key institutions — collaborate closely for years to come.”

PG&E is also slated to pay from $37.5 million to $62.5 million for emergency planning efforts over the next 15-25 years, according to a news report in The Tribune.

So including that amount, the total so far that PG&E has agreed to pay is from $122.5 million to $147.5 million. As to how the company would pay all this, “PG&E does not believe long-term customer rates will increase as a result of the joint proposal,” PG&E said in its news release.

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