Energy Challenges to Continue Despite Gov. Newsom Signing Diablo Canyon Extension Bill

Following Gavin Newsom’s signing of a bill this weekend to allow Diablo Canyon Nuclear Power Plant to operate for another 5 years, many are scrambling to seek final approvals for not only final hurdles to keep the plant open, but to get enough power plants up and running within that time to replace the power gap that would occur.

Senate Bill 846, authored by Senator Bill Dodd (D-Napa), invalidates the 2018 California Public Utilities Commission ruling that would have Diablo Canyon shut down between 2024 and 2025.  New dates, if approved of by the U.S. Nuclear Regulatory Agency, will be added in instead. Up to $1.4 billion would then be allocated to the Diablo Canyon Extension Fund to keep the plant running, with the overall goal of helping California reach the 2045 goal of having 100% green and carbon-free energy in the state.

Ever since Pacific Gas and Electric announced in 2016 that it would close Diablo Canyon in 2025 – to be replaced by newer zero carbon resources and reduced traditional electricity energy usage – many have called for an extension of the plants life due to the critical energy role it plays in California.

In addition to being clean energy, Diablo Canyon currently powers 9% of the state, amounts to about 15% of all clean energy produced in the state, and would be a huge loss as California slowly transitions to being 100% renewable energy powered by 2045. While prior bills have failed in the past to extend the life of the plant, including AB 2898 in 2020, many state and federal officials have been pulling for California to keep the plant going. A November 2021 Stanford/MIT study that found that keeping the plant open until 2035 would save billions and keep California on track to meet its emissions goals had the rare unifying effect in California of bringing many Democrats and Republicans together to keep the plant open. This has included California Republican leaders, notable Democrats such as Senator Dianne Feinstein, and Biden cabinet officials such as Energy Secretary Jennifer Granholm. Blackout and brownout worries due to the energy transition have also won many lawmakers over as well.

The push also affected Governor Newsom, who in April began seriously considering keeping the plant open for another 5-10 years. With energy and environmental concerns still at the forefront, and the state not wanting to leave a major gap in energy production open while the state strives to meet clean energy goals, Newsom backed the framework of SB 846. Specifically, Newsom proposed last month that PG&E would receive a $1.4 billion from the state to cover operations and relicensing costs, as well as possible U.S. Department of Energy grants, with the California Public Utilities Commission setting a new closure date of October 31, 2029 for one unit, and a date between October 31, 2030 and October 31, 2035 for the other. This led to the Governor signing SB 846 into law during the weekend.

Newsom signs SB 846, final agency approvals still needed

“The purpose of this letter is to express my intent in signing Senate Bill 846, which supports the option to extend the Diablo Canyon Power Plant (DCPP) by five years to meet the State’s energy reliability needs,” said Newsom in his approval letter.

“Climate change is causing unprecedented stress on California’s energy system and I appreciate the Legislature’s action to maintain energy reliability as the State accelerates the transition to clean energy. Senate Bill 846 facilitates the actions necessary to keep the option of the DCPP as a statewide reliability asset beyond the current 2024-2025 retirement dates of the plant’s two units.

“The bill includes a rate component specific to the DCPP that does not apply outside of the extended operation of the DCPP. The legislation provides that the rate component established in the bill is applied based on a customer’s gross consumption of electricity.”

However, the signing of SB 846 still leaves much to do. Multiple state agencies, as well as the U.S. Nuclear Regulatory Committee, still need to give the OK to keep the plant going for another 5+ years. In addition, the state needs more solar, wind, hydro, and other non-carbon plants to help fill the huge gap to be filled by the eventual closing of Diablo Canyon, as well as future technology such as energy storage batteries and other things to help strengthen California’s energy resources.

“Diablo Canyon staying open is a band-aid,” LA-based energy expert Adam Klein told the Globe on Tuesday. “An expensive one and a needed one, but it only keeps California in an energy holding pattern until the end of the decade. The state has some big goals, but residents also, you know, need electricity. Beyond focusing on putting all the pieces in place for Diablo Canyon, which again, isn’t a sure thing yet, the state needs to approve more plants and look for anything to help inch up to meeting the demand. This includes giving tax breaks for home solar and even wind plants, replacing energy inefficient machinery and appliances, and utilizing new energy alternatives as they are created.

“The state should also hold off on ending the sale of gas powered cars and should only do so once electrical issues are solved. The more electric cars on the road, the more the grid will strain, especially during heat waves. I mean, gas powered cars can be fueled at any time. In an energy event, you can’t. We literally have seen California not allow electric cars to charge at peak energy times.”

“The thing is, California is trying to do everything at once to reach all of these climate goals. While noble, they are also stretching themselves thin. Diablo Canyon helps, but the bigger problem still leaves a deep shadow.”

Newsom has until the end of September to either sign or veto legislation.