US Dept of Energy Awards PG&E $271 Million for Diablo Canyon Nuclear Plant Ongoing Operations

Pacific Gas and Electric received $271 million from the U.S. Department of Energy to ensure the ongoing operation of Diablo Canyon Power Plant, California’s last operating nuclear plant, with two reactors responsible for producing nearly 10 percent of the state’s total power generation, the DOE announced Friday.

This funding will allow the nuclear power plant to continue to provide secure power to residents, while keeping thousands of high-paying jobs in the region.

This is the first payment under the program. The funds are intended to help cover costs such as reactor component replacements, equipment upgrades, fuel procurement, and other expenses tied to keeping the plant running.

In early August, Gov. Gavin Newsom announced that he would not provide extension beyond 2030 during the remaining months of his term, and said he would leave that decision to the next administration and legislature.

The details:

The U.S. Nuclear Regulatory Commission approved 20-year extensions in April 2026, allowing federal licenses through 2044 (Unit 1) and 2045 (Unit 2). However, California state law (from the 2022 SB 846 extension that Gov. Newsom signed) currently authorizes operations only through late 2029/2030. Further extension past 2030 requires new state legislation.

“Keeping Diablo Canyon online is critical to meeting California’s growing demand for affordable, reliable, and secure electricity,” said Assistant Secretary for Nuclear Energy Ted Garrish. “The Civil Nuclear Credit Program is helping preserve this vital source of baseload power and ensuring that we don’t prematurely take reliable generation off the grid. The Department of Energy is committed to unleashing American nuclear energy and keeping facilities like Diablo Canyon operating safely and reliably for the American people.”

The Diablo Canyon plant was originally set to close around 2024–2025 under a prior agreement but continued under the state-backed extension and federal support. Discussions continue about potential longer-term operation given electricity demand growth, including from data centers and electrification, cost considerations, and reliability needs, though any post-2030 path depends on future state action.

In January 2018 California’s Public Utility Commission voted to shut it down by 2025 Diablo Canyon, the goal of  making California a nuclear free state.

As Ed Ring explained in 2019, it would cost about $18 billion to develop renewable assets using solar and battery technology to replace the overnight EV recharging capacity of Diablo Canyon. If California’s vehicles were electrified, this capacity is sufficient to power 10 percent of California’s automobile mileage. And this is exactly half the story – Diablo Canyon operates 24 hours per day, not just at night to charge EV batteries.

And that is because Diablo Canyon Power Plant provides nearly ten percent of California’s power generation.

The power plant was able to stay open thanks to the Civil Nuclear Credit Program, which was created to provide strategic investments to preserve the nation’s existing nuclear fleet and protect high-paying American jobs.

Under the program, Pacific Gas and Electric is eligible to receive up to $1.1 billion to support activities necessary to keep Diablo Canyon operating. Funds can be used to help cover the cost of reactor component replacements, equipment upgrades, and fuel procurement, or address unforeseen costs associated with extending the plant’s operations and maintaining continued service.