Dive Brief:

  • California Gov. Gavin Newsom, D, is proposing to keep the two units of the Diablo Canyon nuclear plant online until 2029 and 2030 – as opposed to shuttering the facility entirely by 2025 – while also exploring the option of extending the plant’s life through 2035.
  • Proposed legislative language released Friday includes a $1.4 billion loan from the state’s general fund to Pacific Gas & Electric, the operator of the plant, to cover the cost of relicensing  the 2.2 GW nuclear plant. The legislation also outlines the terms of the loan agreement, including the circumstances under which the utility would repay the loan.
  • PG&E understands that state leaders’ discussions to potentially extend operations at the Diablo Canyon plant are progressing, “and we stand ready to support should there be a change in state policy, to help ensure grid reliability for our customers and all Californians at the lowest possible cost,” utility spokesperson Suzanne Hosn said in an emailed statement.

Dive Insight:

California regulators in 2018 approved a plan to retire Diablo Canyon, the state’s last nuclear plant, by 2024 and 2025. However, stakeholders have more recently been exploring the potential benefits of keeping the plant open beyond that timeframe – last year, researchers at Stanford University and the Massachusetts Institute of Technology published a report concluding that California could reduce power sector emissions by 10% from 2017 levels and save $2.6 billion by keeping the plant online through 2035.

PG&E Corp. CEO Patti Poppe said during the company’s earnings call in late July that the utility was exploring the possibility of keeping the plant operating, but that doing so wouldn’t be easy as it would require legislation and navigating a complicated relicensing process.

The draft legislation released last week outlines a pathway for the plant to receive the state and federal regulatory approvals it will require to stay online. It would direct the California Public Utilities Commission to keep the plant’s two units online through Oct. 31, 2029, and Oct. 31, 2030, respectively. By 2026, regulators would need to decide whether to keep the plant open for even longer, but no later than 2035.

A limited term extension of the Diablo Canyon plant is warranted to ensure reliability as California aims to decarbonize its grid by 2045, the governor’s office said in an overview of the proposal. However, extending the life of the plant would not interfere with the state’s plans to procure additional clean energy resources, it added. Last summer, the CPUC directed power providers to procure 11.5 GW of new, clean electricity resources to help replace the Diablo Canyon plant as well as a suite of natural gas plants set to retire in the coming years.

“In the face of extreme heat, wildfires, and other extreme events that strain our current electrical system, the state is focused on maintaining energy reliability while accelerating efforts to combat climate change,” a spokesperson in the governor’s office said in a statement, adding that, “the Governor supports keeping all options on the table as we build out our plan to ensure reliable energy this summer and beyond.”

However, the proposal drew criticism from some environmental advocates. Legislators should reject the proposal out of hand, Environment California, Friends of the Earth and the Natural Resources Defense Council said in a statement. The groups said the proposal includes sweeping exemptions from environmental regulations and the $1.4 billion loan to PG&E may never be returned to taxpayers.

“With Governor Newsom and the legislature working to appropriate climate budget funds and advance ambitious climate legislation in the waning days of the legislative session, this proposal is a dangerous and costly distraction,” they added.