Feds Grant $1 billion for Diablo Canyon to Remain Open

Written by Neil Farrell

Neil has been a journalist covering the Estero Bay Area for over 27 years. He’s won numerous journalism awards in several different categories over his career.

February 1, 2024

Photo shows Diablo Canyon’s twin containment domes, brown power generation building and the ocean outfall discharging heated cooling water into Diablo Cove.

The effort to keep the Diablo Canyon Nuclear Power Plant operating years into the future got a billion dollar boost from the Biden Administration.

Meanwhile, opponents of the plant argue it’s too expensive to continue to run and the taxpayers are being made to bear the cost burden.

A Billion-plus Awarded

The Energy Department last week announced that it has finalized a $1.1 billion “credit award” to Pacific Gas & Electric out of something called “The Civil Nuclear Credit Program.”

“Funded by President Biden’s ‘Bipartisan Infrastructure Law’” reads the announcement, “and administered by DOE’s Grid Deployment Office, the $6 billion CNC program supports the continued operations of safe and reliable nuclear energy facilities, preserving thousands of good-paying clean energy jobs while avoiding an increase in carbon emissions.”

The claim is that nuclear plants like Diablo Canyon are, “a vital resource for achieving the President’s goal of 100% clean electricity by 2035 and a net-zero emissions economy by 2050.”

Maria Robinson, the director of the Grid Deployment Office, said, “Preserving the nation’s nuclear fleet is critical not only to reaching America’s clean energy goals, but also to ensuring that homes and businesses across the country have reliable energy.”

“Today’s announcement,” she continued, “demonstrates the Administration’s commitment to domestic nuclear energy by preserving existing generation, while we continue to support a stronger nuclear power industry.”

The Energy Department announced in November 2022 that it had conditionally approved the deal and it’s taken this long to finalize the agreement. 

Award Over Four Years

The agreement pays out over four years, from 2023 to 2026; “with the amount of the annual payment to be adjusted based on a number of factors, including actual costs incurred to extend the operation of the Diablo Canyon Power Plant,” the announcement said.

So by that standard, the first installment due PG&E won’t come until 2025 and cover the plant operations from 2023-2024, according to the release.

But just what is the “Civil Nuclear Credit Program?” According to the DOE’s webpage on the program, “owners or operators of commercial U.S. reactors can apply for certification to bid on credits to support their continued operations.

“An application must demonstrate the reactor is projected to close for economic reasons and that closure will lead to a rise in air pollutants.

“Credits will be allocated to selected certified reactors over a four-year period beginning on the date of the selection and credits can be awarded through September 30, 2031, if funds remain available.”

Opponents Cry Foul

While the news might be music to the ears of the plant’s supporters, its detractors are calling it a giveaway for a lost cause.

In a statement released following the Feds’ announcement, Jane Swanson, spokeswoman for the anti-nuclear power group, San Luis Obispo Mothers for Peace, said, “The $1.1 billion federal aid package to support an additional five years of operation of the Diablo Canyon nuclear plant takes advantage of the nation’s taxpayers. Even those not served by PG&E or Diablo Canyon [with few exceptions], will be subsidizing an unprofitable, privately-owned utility that produces the most expensive energy in the State of California.”

She said Diablo Canyon will need a lot more money than this to stay open and there’s a steep price to pay.

“Ratepayers in California,” she said, “who are not customers of PG&E will likewise be exploited. In addition to paying their own utility companies — such as Southern California Edison or San Diego Edison — they will be charged to support the additional [at a minimum] $6 billion required to keep Diablo Canyon running until 2030. This amounts to over $500 for every family of four in the state.”

She added that because PG&E has applied to the Nuclear Regulatory Commission for new operating licenses for both Unit 1 and Unit 2 reactors, this could go one for much longer than five years.

“Since PG&E is applying for a 20-year license renewal from the ever-accommodating Nuclear Regulatory Commission,” Swanson said, “it is entirely possible that this exploitation of taxpayers and rate payers could continue until the year 2045.”

Back-and-Forth

The issue has been hit back-and-forth like a game of pickle ball. PG&E for many years sought a license renewal for the two reactors, which were scheduled to cease operations in 2024 and 2025. 

But a deal was made with environmental groups and government regulators to abandon the re-licensing process and shut it down permanently at the end of the licenses. 

But subsequent hot summers and energy shortages including so-called rolling brown outs, has led to a sea change in thinking in both Sacramento and Washington D.C. 

Since that announced closure, the State Legislature has called for PG&E to keep it open longer to strengthen reliability of the energy grid while more wind and solar generating plants, and storage facilities including battery plants, can be built.

Diablo Canyon’s 2,200 megawatts of emissions-free energy, accounting for about 9% of the total generating capacity in California, was deemed too important to close the plant down right now.

The State has already awarded a $1 billion forgivable loan to PG&E, and now the Federal Government has added another billion.

More Good News for Diablo

And in other Diablo Canyon news, in December, the Nuclear Regulatory Commission (NRC) decided that PG&E’s new license application for the two reactor units was “sufficient for its review.”

That simply means the NRC has what it needs to judge whether Diablo’s licensing applications to extend operations can move forward. 

Meanwhile, the decision also allows the plant to continue to generate electricity past 2024 and 2025, while NRC processes the applications for new 20-year licenses.

According to the NRC, it was the State that directed PG&E to apply for the new licenses, after the NRC refused to allow the company to pick up where it left off with its former licensing applications, which were halted in mid-review when PG&E agreed to shut down the plant.

The NRC announcement came a week after the California Public Utilities Commission approved “the ratemaking design and new retirement dates for Diablo Canyon’s Units 1 and 2, now 2029 and 2030 respectively.”

The renewed push for nuclear power as an option to combat climate change, seems to contradict the old argument against nukes — that they are too dangerous in general, and with nearby earthquake faults, Diablo Canyon in particular. 

Water Use Ignored

Keeping the plant open will also require an abandonment of the State’s push to end so-called “once through cooling,” which in Diablo Canyon’s case, uses billions of gallons of seawater to cool steam. 

That ruling by the State Water Resources Control Board was a major factor in Duke Energy’s abandonment of a project to replace the Morro Bay Power Plant, as well. 

Diablo Canyon was facing the same ruling and has already missed the 2020 deadline to stop once through cooling at nuclear plants, but any enforcement action that might have been imposed for missing the deadline has apparently also been suspended. Keeping the plant open another 20 years, if a new license is granted, would require that ruling to continue to be ignored.

Power Not Needed

The Mothers for Peace and other opponents have argued that the power isn’t even needed and hinders progress towards more emissions-free, cleaner, renewable sources.

“Keeping Diablo Canyon online beyond its current licenses that expire in 2024 and 2025,” reads the Mothers’ statement, “will crowd out and slow the development of alternatives [wind, solar, energy storage and demand response]. It will depress the State’s growing renewables market, thus causing collateral economic effects and undermining the State’s goal of converting to an entirely renewable and zero carbon electric energy grid by 2045.”

Swanson concluded, “Diablo Canyon is too expensive to keep running. It is dangerous, being surrounded by major, active earthquake faults. It is not needed because of new, renewable energy sources and much added energy storage capacity. It is blocking the addition of even more renewables by hogging access to the grid. Shut Diablo down at the end of current licenses — November of 2024 and August of 2025 for the two units.”

Lawsuit Filed

The next word on this could play out in a courtroom. SLO Mothers for Peace “is pursuing legal actions in both Federal and State agencies to stop continued operations of the Diablo Canyon plant.”

Other groups, including some who signed the original closure agreement, are also seeking to sue over the about-face.

If readers want to learn more about the position of Mothers for Peace, see:  mothersforpeace.org/blog for more information.

 

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