A legal dispute has emerged over whether the California Public Utilities Commission (CPUC) can refuse to evaluate prudency and cost-effectiveness for spending tied to the Diablo Canyon nuclear plant under California Senate Bill 846.
In court filings, the CPUC implied that California Senate Bill 846 prevents the agency from considering whether continued spending on Diablo Canyon is prudent or cost-effective—an interpretation Mothers for Peace asserts could allow billions of dollars in ratepayer-backed spending to proceed without evaluating the evidence.
Legal experts say the CPUC’s position is unusual because administrative agencies are generally required to evaluate evidence presented in proceedings and explain the reasoning behind their decisions. Courts have long held that regulators must provide a rational explanation when they reject or disregard evidence in the record. The Commission’s claim that SB 846 prevents it from considering prudency or cost-effectiveness at Diablo Canyon appears to conflict with these basic principles of regulatory decision-making.
Expert testimony and analysis were submitted to the Commission by several public-interest organizations, including San Luis Obispo Mothers for Peace (SLOMFP), Alliance for Nuclear Responsibility and The Utility Reform Network. The filings raised concerns about the prudency and cost-effectiveness of continued investment in the aging nuclear facility and the potential financial exposure for California electricity customers.
The CPUC ignored this evidence without explanation. After the Commission issued its initial ruling, Mothers for Peace filed an application for rehearing requesting that the CPUC analyze and make the required finding on the prudence and cost-effectiveness of operating Diablo Canyon, but the Commission again denied the request without providing a substantive explanation.
Mothers for Peace subsequently filed a Petition for Writ of Review with the California Court of Appeals, Sixth Appellate District challenging the Commission’s refusal to make the required findings. The Court of Appeal issued a one sentence order denying the Petition for Writ of Review. Mothers for Peace now intends a further appeal to the Supreme Court of California.
“The progression of rulings by the CPUC are illegal in that the agency does not give any explanations for its denials, are self-contradictory and ignore the provisions of SB 846. We can’t let the CPUC get away with it but must build the record to show the unreasonableness of its actions,” said Jane Swanson, President of Mothers for Peace.
This dispute raises broader concerns about regulatory transparency and accountability when large utility expenditures are involved. State legislation authorized up to $1.4 billion in loans to support the Diablo Canyon extension, and additional operational and upgrade costs could increase the financial exposure for California ratepayers over the life of the extension.
The dispute could draw legislative scrutiny because it raises questions about whether the CPUC is complying with oversight requirements in California Senate Bill 846 and whether lawmakers may need to clarify the statute.
This case is about more than one power plant. It’s about whether regulators must follow the law, consider evidence, and explain their decisions when billions of dollars in ratepayer funds are at stake.