CPUC Approves $722.6 million Rate Hike For 2025 To Keep The Diablo Canyon Nuclear Plant Open

In a 4-1 vote on Thursday, the California Public Utilities Commission approved $722.6 million in additional ratepayer costs to pay for extended operations at both units of the Diablo Canyon Nuclear Power Plant through the end of 2025 – a final part of the needed funding to keep the plant itself open through 2030.

The debate over extending the life of the Diablo Canyon Plant has been ongoing since 2018, when concerns over earthquakes, nuclear waste pollution, and other factors convinced the CPUC to close the plant by 2025. Proponents of the plant moved to try and extend the life of the plant, with concerns over state energy production bringing more support in their favor. Many were attracted to the fact that keeping the plant open for a decade or two more would save the state $21 billion in systems costs, while others, concerned about large gaps in California’s energy production while transitioning into the 100% renewable energy power by 2045 goal, signaled support as a power source to help bridge the gap. The fact that Diablo Canyon provides 9% of California’s total energy production, and is a clean source of energy, has also convinced many people of keeping the plant open.

While several bills in the 2010’s and early 2020’s failed to keep the plant open, one, SB 846, was finally passed by both houses in the state legislature last year. At the same time, Governor Gavin Newsom put out a proposal to keep the plant running for another 5-10 years, outlining how state and federal support would be needed. Despite signing the bill into law, over $1 billion in funding was still needed to make the extension feasible, as well as final approvals from multiple state and federal agencies, such as approval of a new license by the United States Nuclear Regulatory Commission (NRC).

In November of 2022, the Department of Energy awarded $1.1 billion to extend the life of the plant, signaling federal support for the plant for both clean energy and to help avert a power crisis in California in the next decade while green energy production gradually replaces fossil fuel energy. This led to the NRC deciding in March 2023 to keep the plant open while license renewal is being considered. With the clock temporarily suspended, final extensions to at least 2030 now came down to license renewal from both CPUC and the NRC.

Environmental groups continued to challenge the plant and PG&E to close it by 2025. However, despite numerous lawsuits, all of their attempts failed. This included a state court rejecting a lawsuit by an environmental group to close the plant in August of last year and the NRC rejecting a request from several environmental groups to shut down one of the reactors in October 2023. Subsequently, the CPUC voted to keep the plant running through 2030 in November 2023 and the Biden administration finalized the $1.1 billion in January. In total, the cost came out to $8.9 billion to keep the plant open through 2030, but has been offset by not only the federal funding, but by $5 billion in expected revenue and $6 billion in savings for the state for having a reliable energy source. Lawsuits from environmental groups this year failed to block any of the funding.

CPUC approval

However, extended operations were needed in 2025. In total, another $722.6 million would be needed for the plant to get through the year. After months of debate, the CPUC approved the needed funds on Thursday, keeping the plan to keep Diablo Canyon open through 2030 on track.

While the funding was a relief to the state and energy providers because of the needed nuclear power stopgap, other groups condemned the rate hike on Thursday and Friday, pointing out that it was the fifth such hike this year. According to the major power providers in the state, the Diablo Canyon hike only amounts to only about $2 added onto each bill. However, advocates say that all the hikes have added up and that companies like PG&E should pay for them At the CPUC meeting on Thursday, multiple speakers during public comment noted that PG&E posted a $2.2 billion profit last year.

Jessica Tovar, Executive Director of the Local Clean Energy Alliance said during the meeting that “One fifth of Californians are already behind on their bills, totaling over $2.2 Billion in arrearages. The longer CPUC allows Diablo Canyon to stay open, the higher our PG&E bills will cost. California deserves local clean energy and affordability. PG&E is a criminal enterprise and must be held accountable.”

“It’s unprecedented for the state to allow one utility to collect the costs of its generating resources from the customers of all three of the major utilities,” Utility Reform Network lawyer Matthew Freedman added.

In response, PG&E noted that “Every day, Diablo Canyon produces enough safe, reliable, and affordable clean electricity to meet the energy needs of more than three million Californians, all while producing zero greenhouse gas emissions.”

The passage by CPUC now means the Diablo Canyon will continue on through the decade, with energy experts projecting that the state will generate enough extra power by then to allow the shutdown to occur around 2030.

“California doesn’t have many options left when it comes to power,” Sal Braith, a nuclear engineer who has worked at multiple nuclear plants in the U.S., told the Globe Friday. “Oil and gas, you know, any new plant there will raise hell. Plus many are being shut down. Solar and wind and other renewables? Those are on the rise, but energy storage is still a huge issue since those only generate electricity intermittent. Hydro power has environmentalist problems in many areas. Diablo Canyon gives a steady stream of clean energy, but as you’ve seen, it is nuclear and you have all the crazies protesting it being open.

“For California, keeping Diablo Canyon open gives the state time to work on their energy problems and keeps enough power being generated in the state. That’s why they got the extension last year, that’s why we got the rate hike yesterday, and that’s why these environmental groups are never going to win. There’s too much riding here.”