As blackouts loom, PG&E changes tune about shutting California’s last nuclear plant

PG&E Corp. has been planning for years to shut down California’s last nuclear plant, at Diablo Canyon, saying the aging facility no longer made economic sense in an energy climate increasingly dominated by solar and other renewable sources.

Now the utility appears ready to try to prolong Diablo Canyon’s life beyond its planned 2025 closure date.

A spokeswoman for PG&E said Wednesday the utility probably will apply for a share of a $6 billion federal program designed to keep nuclear power plants from shutting down. The Civil Nuclear Credit Program was created as part of the infrastructure bill signed by President Joe Biden.

“We expect to apply,” said PG&E spokeswoman Suzanne Hosn.

The decision comes as Gov. Gavin Newsom’s administration struggles to increase electricity supplies and prevent a repeat of the two nights of rolling blackouts that hit hundreds of thousands of Californians during an August 2020 heatwave. Diablo Canyon generates about 9% of the state’s power.

Newsom’s cabinet secretary, Ana Matosantos, asked U.S. Energy Secretary Jennifer Granholm in May to loosen the guidelines for the $6 billion fund to make Diablo Canyon’s continued operation more feasible. Matosantos said PG&E would need help with “significant transition costs” it would incur to keep the plant going, including upgrades and permitting. The Department of Energy agreed to revise the rules last week.

Also last week, the Legislature passed a law that would allow the state itself to purchase electricity from Diablo Canyon to avoid blackouts. Environmentalists complained bitterly that, by promoting the legislation, Newsom was backing away from his commitment to green energy and fighting climate change. State law says the grid must be all-renewable by 2045.

Hosn said Newsom’s encouragement has altered PG&E’s thinking about the future of Diablo Canyon, which sits near Avila Beach west of San Luis Obispo.

“The governor has asked us to explore the steps ... toward keeping Diablo Canyon open,” she said.

Diablo Canyon remains controversial in some circles. In 2013 an inspector from the Nuclear Regulatory Commission raised questions about earthquake faults near the plant.

The anti-nuclear group San Luis Obispo Mothers for Peace recently urged the Biden administration not to revise the rules governing the $6 billion fund. Postponing the shutdown would impede the “transition to a low carbon electric sector based on other more efficient technologies,” the group said.

The plant opened in the 1980s, and PG&E told state regulators in 2016 that it was time to prepare for its shutdown. With the boom in solar power, “there is less room on the electrical system for energy from inflexible and large baseload resources such as Diablo Canyon,” the utility said in a 2016 report to the Public Utilities Commission. “As a result of the rapidly changing California energy landscape, Diablo Canyon will not be needed at the end of the license period (in 2025).”

In December, after Granholm suggested that the Biden administration would like to see the plant stay open, PG&E Chief Executive Patti Poppe said the utility wasn’t changing its mind.

“We are on a path that was set some time ago to retire Diablo Canyon. And that path has not changed,” she said in an interview with The Sacramento Bee.

Energy shortages have become a major issue in recent years, as California reduces its dependence on traditional power sources and leans more heavily on solar, wind and other renewables. The state’s grid is particularly vulnerable in the early-evening hours during major heatwaves — when solar fades but it’s still too hot to click off air conditioners.

Portions of the state endured two consecutive nights of rolling blackouts in August 2020 and narrowly avoided a repeat during a heatwave last July. Grid officials say that, despite improvements, the state’s power supplies remain fragile this summer and in years to come. The drought, for one thing, is expected to rob the grid of hundreds of megawatts of power generated at California’s hydro plants.

This story was originally published July 6, 2022 at 2:32 PM.