The California Legislature has just taken the first step toward possibly extending the life of the , the state鈥檚 last nuclear facility, past its scheduled closure.
The negotiated by Gov. Gavin Newsom鈥檚 administration and approved by lawmakers late Wednesday allocates a reserve fund of up to $75 million to the state Department of Water Resources to prolong the operation of aging power plants scheduled to close. Diablo Canyon, on the coast near San Luis Obispo, has been preparing to shut down for more than five years.
The funding is part of a that aims to address a couple of Newsom鈥檚 most pressing concerns 鈥� maintaining the reliability of the state鈥檚 increasingly strained power grid, and avoiding the politically damaging prospect of brown-outs or blackouts.
Should the Newsom administration choose to extend the life of the nuclear plant, the funding would allow that 鈥� although the actual cost to keep the 37-year-old facility owned by Pacific Gas and Electric is not known. Newsom鈥檚 office and the Department of Water Resources did not immediately respond to multiple requests for comment. Asked for an estimate, PG&E spokesperson Lynsey Paulo did not provide one.
Even if only a contingency fund, the optics of sending millions of state and federal dollars to the state鈥檚 largest utility 鈥� which has a recent record of responsibility for deadly wildfires and state 鈥渂ailouts鈥� 鈥� are politically problematic.
While the energy bill doesn鈥檛 itself authorize the extension of the plant鈥檚 life, it does provide the money should state leaders decide to do so. Such a move would require 鈥渟ubsequent legislation and review and approval by state, local and federal regulatory entities,鈥� said Lindsay Buckley, a spokesperson for the California Energy Commission.
Overall, the energy trailer bill seeks to address the thorny transition as California tries to move from a reliance on fossil fuels to . The legislation spells out the state鈥檚 concern that, during extreme weather events, renewable energy alone will not be enough to meet the state鈥檚 rising power demand.
The state鈥檚 solution: Keep Diablo Canyon as open as a failsafe, and pay to retrofit several aging fossil fuel facilities and backup power generation.
鈥淭he governor requested this language, not as a decision to move ahead with continuing operation of Diablo Canyon, but to protect the option to do that if a future decision is made,鈥� said state Sen. John Laird, a Democrat from San Luis Obispo.
He also said the public should have a chance to weigh in before a final decision is made on the plant鈥檚 fate.
鈥淭he shuttering of Diablo Canyon has been years in the making, with hundreds of millions of dollars already committed for decommissioning,鈥� Laird said. 鈥淎long with the residents of the Central Coast, I鈥檓 eager to see what the governor and federal officials have in mind.鈥�
Located on the state鈥檚 Central Coast, Diablo Canyon has been supplying power to the state鈥檚 electric grid since 1985. Its 2,240 megawatts of electricity generation is roughly enough to support the needs of .
In 2016, PG&E announced plans to close the nuclear plant, noting that the transition to renewable energy would make continued operations too costly. The California Public Utilities Commission approved the closure in 2018, after the utility reached a settlement agreement with advocacy groups and environmentalists. The facility has two reactors: One reactor is slated to close in 2024, followed by the second in 2025.
Regardless of the future decision about the lifespan of the nuclear plant, nothing can happen without federal and state funding.
The Biden Administration created a $6 billion to rescue financially struggling nuclear power plants, and Newsom has said he would consider applying for federal funding to keep Diablo Canyon open past its scheduled 2025 closure.
But in order to access the federal funding, PG&E is facing a July 5 deadline. The utility on Tuesday asked the federal government to grant it a 75-day extension to apply.
Some federal requirements could prevent Diablo Canyon from qualifying for that federal funding, so last month the Newsom administration to federal Energy Secretary Jennifer Granholm requesting changes to ensure Diablo Canyon鈥檚 eligibility. In response, the Energy Department has proposed : that an applicant not recover 鈥渕ore than 50% of its cost from cost-of-service regulation or regulated contracts.鈥�
PG&E expressed support for the change in its own letter to the Energy Department Tuesday. It also urged the agency to give it an extension, adding that it 鈥渋s needed to provide PG&E the time to collect and analyze the information and prepare an application.鈥�
鈥淭he current energy policy of the state is to decommission the plant when the licenses expire in 2024 and 2025, but considering the recent direction from the state, we鈥檝e requested an extension of the application deadline,鈥� Paulo said. 鈥淭he Department of Energy funding would reduce costs to customers if the state decides it wants to preserve the option to keep the plant open to help with grid reliability.鈥�
鈥淭his is so ill-advised. It鈥檚 a play of desperation.鈥�LINDA SEELEY, SAN LUIS OBISPO MOTHERS FOR PEACE
But changing the federal rules to accommodate PG&E is a bad idea to longtime critics of nuclear power in California. To keep the plant operating, PG&E would have to seismically retrofit the plant and make heavy investments in cooling system and maintenance upgrades 鈥� costs that would outweigh the benefits, the anti-nuclear nonprofit San Luis Obispo Mothers for Peace wrote in a sent to the Energy Department on Monday.
Linda Seeley, a San Luis Obispo resident and longtime member of the group, said extending Diablo Canyon will cause a 鈥渕yriad of problems.鈥�
鈥淭his is so ill-advised. It鈥檚 a play of desperation,鈥� she said. 鈥淚 know we鈥檙e in a very serious climate crisis, but this is not a rational or practical response.鈥�
Supporters insist the funds are necessary to keep the plant open and advance the state鈥檚 goals of getting to a carbon-neutral economy while battling climate change. A coalition of 37 scientists, entrepreneurs and academics on Monday to Energy Secretary Granholm expressing support for the Department of Energy鈥檚 proposal.
鈥淐onsidering our climate crisis, failing to pass this amendment could lead to the plant鈥檚 closure,鈥� the letter said. 鈥淭hat would not only be irresponsible, the consequences could be catastrophic. We are in a rush to decarbonize and hopefully save our planet from the worsening effects of climate change. We categorically believe that shutting down Diablo Canyon in 2025 is at odds with this goal.鈥�
California is facing steep hurdles in addressing its power supply challenges as the climate crisis intensifies and the state transitions to renewable energy. Soaring temperatures and heat waves have been hitting the state in recent years, straining supply and increasing the risk of power outages. A prolonged drought has , while more frequent wildfires also continue to threaten the state鈥檚 electrical infrastructure.
鈥淔ailing to pass this amendment could lead to the plant鈥檚 closure. That would not only be irresponsible, the consequences could be catastrophic.鈥�LETTER SIGNED BY 37 SCIENTISTS, ENTREPRENEURS AND ACADEMICS
The state鈥檚 energy trailer bill, which was negotiated as part of the budget process, would significantly expand the authority of the Energy Commission and Department of Water Resources . The bill would grant the water agency the authority to site, construct and operate power facilities wherever it wants, and does not require the agency to comply with existing state or local laws.
The bill鈥檚 funding could allow PG&E to invest in , a method to safely store spent fuel. The money could also be used for capacity payments 鈥� public dollars that are used to sustain a plant鈥檚 operations 鈥� and to issue flex alerts, when a utility asks its customers to voluntarily reduce their energy consumption and use power during off-peak hours, said Michael Colvin, director of regulatory and legislative affairs at the nonprofit Environmental Defense Fund.
The goal, he said, is to have the cash on hand to sustain operations during high-peak hours and potential power crunches brought on by extreme weather.
鈥淪ome of that money would be to basically keep those types of power plants around and on standby,鈥� he said. 鈥淚 look at this allocation as a contingency fund 鈥� we don鈥檛 necessarily think we鈥檙e going to need this but if we do, we want to have some flexibility available. Setting aside some money to be able to do this now is probably a good use of public funds, given the moment that we鈥檙e in.鈥�
While Diablo Canyon is seen as a climate-friendly alternative to advocates of nuclear power in California, opponents cite safety threats and problems storing radioactive waste. And the prospect of keeping it open involves numerous technical, financial and logistical challenges. PG&E would need to reapply for licensing with the federal Nuclear Regulatory Commission, which issues the licenses to keep the plant operating, and would need to receive state and federal approval to do so. It would also have to address aging infrastructure problems at the site.
The commission issues operating licenses for nuclear power reactors to operate for up to 40 years, and allows renewal for an additional 20 years at a time.
Though it remains unclear how many more years the plant could be extended, Colvin said it鈥檚 unlikely that the state would pursue a lengthy, decades-long extension. He said the plant is more likely to continue operating for another five or so years.
鈥淚 don鈥檛 think we need an asset like Diablo Canyon for that long of a period of time,鈥� he said, 鈥渁nd certainly not at the size and shape of what Diablo Canyon is.鈥�
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