Diablo Canyon / Governor Wins Budget Battle Over $400 Million Loan For Nuclear Power Station ( www.nucnet.org )

Lawmakers in California have approved a $400m (€374m) loan to keep the two-unit Diablo Canyon nuclear power station operating until 2030 after initially expressing concerns over the cost to the taxpayer.

The state’s approved includes the $400m allocation, along with a requirement for the Department of Water Resources to report on how the money will be spent.

There had been criticism and concern surrounding the loan, with some arguing that taxpayers will end up footing the bill for Diablo Canyon operator Pacific Gas & Electric and that the loan will never be paid back to the general fund, putting the burden on taxpayers.

Local press reports said the approval of the loan and the decision to keep the plant open has caused friction between governor Gavin Newsom and lawmakers, with environmental and anti-nuclear advocates warning of a growing price tag to keep the plant open and ongoing legal challenges related to the environmental impacts of extending the plant’s life.

Newsom argued that Diablo Canyon is critical for maintaining grid stability during the state’s transition to clean energy, while legislative leaders questioned the necessity and cost-effectiveness of keeping the facility open.

Diablo Canyon, California’s last commercial nuclear power station, contributes roughly 9% of the state’s energy and was initially set to close in 2025 before Newsom passed a bill to extend its life to 2030.

PG&E, meanwhile, has filed a licence renewal application with the Nuclear Regulatory Commission that could eventually see Diablo Canyon’s operational lifetime extended by up to 20 years to the mid-2040s.

The current operating licences for Units 1 and 2, both Westinghouse pressurised water reactors, were set to expire in 2024 and 2025.

In 2022 the Biden administration finalised up to $1.1bn in credit payments for the continued operation of Diablo Canyon, saying nuclear power is critical in curbing climate change and it wants to keep plants open ahead of the development of next-generation reactors. Biden wants to decarbonise the power grid by 2035.

The credits are to be paid in installments until 2026, with the amount of the annual payment to be adjusted based on factors including actual costs incurred to extend the operation of Diablo Canyon.

PG&E has been quoted in press reports as saying the federal credits will help the company pay back the state loan.