California Governor Has Plan to Keep Diablo Canyon Nuclear Plant Open

California Gov. Gavin Newsom has proposed a plan that would keep the Diablo Canyon nuclear power plant open into 2035, a decade beyond the facility’s current closure date.

The proposal, which in part includes giving plant owner Pacific Gas & Electric (PG&E) a forgivable $1.4-billion loan, was included in a draft legislative package sent to state lawmakers late on Aug. 11. The bill has not yet been introduced in the state legislature. The current legislative session ends Aug. 31, though Newsom could call for a special session beyond that date to consider the plan.

The proposal was confirmed by Newsom spokesman Anthony York, according to Associated Press. The news service reported the bill “says impacts of climate change are occurring sooner than anticipated and are simultaneously driving up electrical demand while reducing power supplies.”

“The governor has been clear for months about the potential need to extend the life of Diablo Canyon,” York said. The spokesman said the governor has stressed the importance of all energy options to maintain a reliable power supply, and “this proposal reflects the continued need to keep that flexibility.”

Patti Poppe, PG&E’s CEO, in a July conference call with investors said legislation to keep the plant open would need to be in place by September in order for the utility to change its plan to close the nuclear plant. Diablo Canyon’s operating license from the U.S. Nuclear Regulatory Commission expires in August 2025.

‘Ensure Energy System Reliability’

Language in the bill says the continued operation of Diablo Canyon beyond 2025 is “critical to ensure statewide energy system reliability.” The draft bill also says the plant would be exempt from the California Environmental Quality Act (CEQA), along with other environmental rules that could otherwise be used to challenge keeping the plant in operation past 2025.

The 2,250-MW nuclear plant is California’s largest electricity production facility. The plan to close Diablo Canyon has been widely debated, with some saying the plant should remain open due to concerns about a power shortage in California. Opponents of nuclear power argue the plant will not be needed as more renewable and cleaner energy options come online.

Diablo Canyon generated about 6% of California’s electricity last year. The plant is located on the state’s Central Coast south of Morro Bay. PG&E in 2019 struck a deal to close the plant by 2025, at the end of its current operating license, in large part due to a continued public outcry about the plant’s location in an area near several seismic fault lines, and fears radiation could be spread should there be an earthquake.

Concerns about the state’s power supply, though, have brought calls to keep the plant open. Nuclear power is seen by many as a zero-emission power source that is needed to combat climate change, something of major concern in California due to drought—which has lessened hydropower output—and wildfires. Extreme heat and an insufficient supply of power led to rolling blackouts in the state in August 2020.

Federal Funding

Newsom earlier this year, after the Biden administration said the federal government would make $6 billion available to keep nuclear power plants open, said California would be “remiss not to put that on the table as an option.” It’s not clear whether PG&E would be eligible for any of that money, which likely led to Newsom’s proposal for the state to take its own action regarding Diablo Canyon.

The state’s Dept. of Water Resources would be authorized to lend PG&E $1.4 billion if lawmakers support Newsom’s plan, money that could be used to help pay for the federal operating license renewal process, and also for reactor maintenance. PG&E would have to repay any unused portion of the loan.

PG&E officials have said they are not inclined to continue operating the nuclear plant. However, the utility—which came out of bankruptcy two years ago—would likely follow state lawmakers’ direction on Diablo Canyon, according to energy and economic analysts.

Reports on Friday said the governor’s office also could consider a five-year operating extension for the plant through 2030, and then look at another five-year extension if needed. Officials from the governor’s office were expected to provide more insight into their plans in a meeting with the California Energy Commission on Friday.

Environmental Oversight

The draft bill sent to the Legislature late Thursday also said any state action needed to keep Diablo open would be exempt from the CEQA rules, meaning agencies reviewing a license extension would not need to undertake an extensive environmental review.

PG&E had planned to shut Diablo Canyon no later than 2025 in order to comply with a state law that orders power plants along the California coast to stop using large amounts of ocean water to cool their generators. That process has been cited for killing fish and other marine life. PG&E decided to close the nuclear plant instead of spending billions of dollars for equipment upgrades.

Newsom’s plan would move the compliance deadline for that law to Oct. 31, 2035, though it also would require PG&E to pay an environmental “mitigation fee” of $10 for each million gallons of ocean water used, starting in 2024. Analysts said that payment would be about $8 million annually, with a 3% increase to the usage fee each year. Analysts said that payment would be far more than the utility pays for its water use today.

—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).