A billion-dollar bailout proposed by the governor of California could help give the state’s last operating nuclear power plant a new lease on life, according to a draft bill published late last week.
If draft legislation supported by Gov. Gavin Newsom’s (D) becomes law, Sacramento could authorize the California Department of Water Resources “to make a loan or loans” totaling $1.4 billion to Diablo Canyon Power Plant operator Pacific Gas & Electric (PG&E). Media including the San Luis Obispo Tribune reported that the draft bill was part of a climate proposal Newsom sent to the legislature last week.
Diablo Canyon, located along the coast near San Luis Obispo, Calif., is currently slated to close this decade. PG&E has said that it would take the plant’s two reactors offline in 2024 and 2025, respectively.
According to Newsom’s proposal, the state bailout would come with a couple of conditions. Among those, PG&E must “take all steps necessary” to secure an extension of Diablo Canyon’s operating license with the Nuclear Regulatory Commission. The utility applied with NRC in 2009 for such a license extension, but withdrew in 2018 after it decided to shutter the plant.
An NRC review of a new extension application might last beyond Diablo Canyon’s scheduled 2025 shutdown date.
Another condition of the proposed bailout: PG&E must agree “to secure a grant or other funds available for the operation of a nuclear power plant from the United States Department of Energy, as well as any other potentially available federal funds.”
The White House’s Inflation Reduction Act, which passed both houses of Congress last week, includes a provision aimed at subsidizing nuclear power. DOE is also currently accepting applications for the first round of its civil nuclear credits program, for which Congress approved roughly $6 billion over five years. PG&E has said it will pursue those funds.
A spokesperson for PG&E did not return a request for comment by deadline Tuesday for Weapons Complex Morning Briefing.
Utility CEO Patti Poppe said during an earnings call in July that keeping Diablo Canyon online was not “an easy option.” Doing so “will require much coordination between the state, multiple regulatory bodies and PG&E as well as many others impacted by the outcome of this decision,” Poppe said.
Meanwhile, the California state legislature, which according to reports received Newsom’s bill late Thursday, would need to move quickly to pass the proposed bailout. The Golden State’s legislative session ends Aug. 31, and lawmakers won’t convene again in Sacramento until January.
