Diablo Canyon, the last remaining nuclear power plant in California, gets a lifeline

The California Public Utilities Commission approved a plan Thursday to keep the Diablo Canyon Power Plant near San Luis Obispo open for at least six more years.

The decision “is an important measure towards supporting the reliability of the California electricity grid as we move forward in our energy transition,” said Karen Douglas, the commissioner assigned to the case. “California’s path forward in the energy transition hasn’t always been easy and won’t always be easy.”

Thursday’s 3-0 vote rolls back a 2016 agreement hammered out among Pacific Gas &Electric — the operators of Diablo Canyon — and environmental and labor groups that would have shut down Unit 1 of the plant in 2024 and Unit 2 in 2025.

Instead, the decision calls for keeping Unit 1 open through Oct. 31, 2029, and Unit 2 until Oct. 31, 2030.

It also came at the urging of Gov. Gavin Newsom. While the state’s renewable energy sources and battery storage infrastructure are growing, the Newsom administration insists that for now, keeping the last remaining nuclear power plant in California is needed to ensure electric grid reliability and reduce the risk of power outages.

But during a public comments period that lasted more than 90 minutes at the start of Thursday’s hearing, long-time opponents of nuclear power in general and Diablo Canyon in particular said the plant should be closed as soon as possible.

“No matter what is said today, the results appear preordained,” said one caller from PG&E’s service territory. “Each of you commissioners were appointed by Gov. Newsom.”

There’s also some question about what keeping the plant open will mean for utility customers across the state.

At Newsom’s behest, the Legislature in 2022 passed Senate Bill 846 as an emergency measure to extend operations at Diablo Canyon.

The legislation included a provision allowing PG&E to access a $1.4 billion forgivable loan that would be collected from rates collected by all customers who are served by the utilities commission, known as the CPUC for short.

That would include San Diego Gas &Electric customers, as well as those served by the two community choice energy programs in the area — San Diego Community Power and the Clean Energy Alliance.

The Utilities Reform Network (TURN), a consumer group based in San Francisco, is concerned that last-minute revisions approved by the CPUC on Thursday could leave ratepayers on the hook.

“We’re very disturbed that the proposed decision may allow PG&E to collect a $1.4 billion slush fund from ratepayers that it would use specifically to protect its shareholders from any liability for core performance,” TURN staff attorney Matthew Freedman said.

To help defray the costs of the loan, PG&E applied for funding from the U.S. Department of Energy’s Civil Nuclear Credit Program. In November 2022, PG&E announced it received a conditional award of about $1.1 billion from the Department of Energy to keep Diablo Canyon open.

In an email to the Union-Tribune last month, PG&E spokeswoman Suzanne Hosn said after offsets from federal funding and market revenues are taken into account, “customers could see little-to-no change or even a credit on their bills due to extended operations” at Diablo Canyon.

Questions about the late revisions led one of the CPUC’s five commissioners, Darcie Houck, to abstain from Thursday’s vote. Commission President Alice Reynolds and Commissioner John Reynolds (no relation) joined Douglas in voting yes. Commissioner Genevieve Shiroma was absent.

The public comments session Thursday also included remarks from those who supported keeping the plant open.

“With climate change threatening communities across California through increased wildfires, drought and extreme weather, taking Diablo Canyon offline prematurely poses threats of blackouts and power shortages across the state,” said Madison Schroeder. “Diablo Canyon must be part of California’s clean energy future.”

The two units at the plant provide 2,240 megawatts of electricity to the state’s grid. By itself, Diablo accounted for 8.67 percent of the California’s in-state generation in 2022 and 17 percent of the state’s zero-carbon electricity.

Extending the life of Diablo Canyon marks an about-face for Newsom.

When he was lieutenant governor, Newsom helped shape discussions that led to the 2016 agreement that planned to close the plant in 2024 and 2025.

But in August 2020, California limped through two consecutive days of blackouts, with some parts of the state experiencing outages lasting as long as 2 1/2 hours. The following summer, the California Independent System Operator narrowly avoided a repeat when extremely hot weather blanketed nearly all of the state.

Perhaps thinking of the fate of former Gov. Gray Davis who was recalled from office after a series of rolling blackouts during California’s energy crisis in 2000 and 2001, Newsom said Diablo’s electricity generation remains crucial to keep the lights on.