Saving California's last nuclear power plant could save ratepayers money, industry says

California lawmakers sent a proposal to Gov. Gavin Newsom that could extend the life of the state’s last nuclear plant through 2030, a measure energy providers estimate could result in some savings for ratepayers.

The vote, which came after midnight Thursday morning, gives lawmakers the option to make a $1.4 billion loan available to extend the life of the Diablo Canyon Power Plant.

The plant – initially set to shut down in 2025 – produces nearly 10% of California’s energy portfolio, according to Pacific Gas & Electric. Newsom proposed extending the facility’s lifespan in the final weeks of the legislature, stressing the need to utilize the power plant to ensure California’s energy reliability while more renewable sources become available.

“I am not a proponent of the Diablo Canyon power plant; I am a proponent of keeping the lights on,” Assemblymember Chris Holden said, adding that the plant is a temporary “stopgap” measure to give the state time to develop and deploy clean energy sources.

PG&E, which operates the Diablo Canyon Power Plant, estimates the total impact of keeping the plant operation for ratepayers will be minimal but could result in some customer savings.

“Diablo Canyon provides energy both day and night, and will cost far less than comparable baseline resources like geothermal and biomass,” PG&E Spokesperson Suzanne Hosn told The Center Square in an email. “We estimate the cost to our customers from continuing to operate the plant will range from a charge of less than $1 a month to a bill credit of more than $5 per month, depending on market prices.”

Lawmakers emphasized Thursday that the bill includes two important protections for ratepayers if the plant remains up and running – it prevents PG&E from realizing windfall profits and requires PG&E to refund ratepayers when Diablo Canyon is profitable. Republican lawmakers in the Senate were skeptical that PG&E investors would see no benefit from extending the life of the plant.

The vote on the bill comes days before the Sept. 6 deadline for PG&E to apply for a share of $6 billion in federal funds made available by the Biden administration to save nuclear plants at risk of closing. Without the federal funds, lawmakers said an extension of the plant’s operating life would not be possible without a subsidy from the state’s General Fund or ratepayers.

Several lawmakers on both sides of the political arena spoke in support of the measure Thursday, stressing the importance of maintaining energy reliability and availability for California residents.

“When given the choice between keeping this plant online and blackouts, the choice is pretty straightforward,” Assemblymember Eduardo Garcia said.

The Diablo Canyon extension was one of several climate measures Newsom presented to the legislature in the final weeks of the session. In the waning days, the governor proposed a five-pronged climate plan to lawmakers, which included proposals to set ambitious targets for carbon neutrality.

Most proposals made it out of the legislature and onto the governor’s desk. One proposal that made it out would prohibit new oil and gas drilling within 3,200 feet of homes, schools and parks.

One proposal, however, failed to pass in a last-minute vote in the Assembly. Assembly Bill 2133 would have adopted a more aggressive greenhouse gas emissions reduction target for 2030 - stretching the target from 40% to 55% below 1990 levels.