1 Sep, 2022

In sweeping reversal, Calif. lawmakers authorize PG&E nuclear plant extension

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Operation of PG&E's Diablo Canyon nuclear plant could be extended for five years after state lawmakers sent a major bill to Gov. Gavin Newsom.
Source: Roger Ressmeyer/Corbis/VCG via Getty Images

In a sweeping reversal of California energy policy, state lawmakers early Sept. 1 overwhelmingly approved last-minute legislation proposed by Gov. Gavin Newsom authorizing Pacific Gas and Electric Co. to seek an extension of operations at its Diablo Canyon nuclear plant for up to five years.

The amended Senate Bill 846 effectively halts the decommissioning process set in motion by the California Public Utilities Commission's 2018 approval of a 2016 multi-stakeholder settlement to shutter the state's largest power plant, contingent upon the U.S. Nuclear Regulatory Commission's extension of the facility's operating license.

The bill authorizes a $1.4 billion state loan to the PG&E Corp. subsidiary toward extension efforts, which the governor's office expects could be fully offset by federal funds through a $6 billion U.S. Energy Department nuclear energy credit program. It also expedites permitting to accelerate relicensing and authorizes collection of ratepayer funds to pay for the ongoing costs of operating the 2,240-MW plant.

"I'm not a proponent of the Diablo Canyon power plant, but I am a proponent of keeping the lights on," Assemblymember Chris Holden said in a sprawling final set of debates that began at midnight, capturing the sentiment of many Democrats.

"It will help ... to bridge our gap, the gap between 2025, when it's slated to close now, and the future when we have enough renewable energy and enough storage capacity to fully power our grid," said Jorden Cunningham, a Republican whose Central Coast district includes the plant.

After the governor signs the bill, the PUC would be required to authorize PG&E to "take all necessary actions" to extend Diablo Canyon's unit 1 operating license through October 2029 and unit 2 through October 2030, according to a Sept. 1 legislative analysis of the bill.

"Following state direction and pending the governor's signature, we plan to submit an application seeking DOE funding to help lower costs for customers," a spokesperson for PG&E said in an email.

PG&E faces a Sept. 6 deadline to apply.

Clean energy investment

Pending appropriation by the Legislature, the measure also creates a $1 billion Clean Energy Reliability Investment Plan, to be developed by the California Energy Commission, and requires regulators to adopt a goal to shift demand for electricity from the late afternoon and early evening period when grid reliability is most at risk.

Among the bill's provisions are also what lawmakers dubbed "offramps" to protect ratepayers and pursue alternative pathways to proceed without extending Diablo Canyon. It requires the California Energy Commission to analyze the costs of extending Diablo Canyon versus other options and to present a comparison by Sept. 30, 2023.

"We need to have the option available to keep the lights on and keep making progress towards net-zero carbon emissions," said state Sen. Bill Dodd, a Napa County Democrat who authored the bill. "The risks to Californians are too great."

Opponents of the bill said the proposal came with its own risks.

"Make no mistake, California ratepayers are going to pay, and you're going to bail them out," said Republican state Sen. Brian Dahle, who is seeking to unseat Newsom as governor in November.

The Utility Reform Network, a ratepayer advocacy group, estimated roughly $1.35 billion in ratepayer impacts.

The PUC's Public Advocates Office supported the measure.

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