Amid Grid and Climate Challenges, Newsom Moves to Keep Diablo Canyon Nuclear Plant Open

Updated 2:05 p.m. Friday

California Gov. Gavin Newsom on Friday proposed extending the life of the state’s last operating nuclear power plant by at least 5 to 10 years to maintain reliable power supplies in the climate-change era.

Under a complex agreement struck between state agencies, labor unions, environmentalists and plant owner PG&E, the plant was scheduled to shut down by 2025.

The Newsom administration's draft proposal, obtained by The Associated Press, includes a possible state loan to PG&E of as much as $1.4 billion.

The proposal was confirmed by Newsom spokesman Anthony York. The bill says impacts of climate change are occurring sooner than anticipated and are simultaneously driving up electrical demand while reducing power supplies.

“The governor has been clear for months about the potential need to extend the life of Diablo Canyon,” York said. He added that Newsom's administration has stressed the need to keep all options on the table to maintain reliable power and that “this proposal reflects the continued need to keep that flexibility.”

The proposal said the continued operation of the Diablo Canyon Power Plant beyond 2025 is “critical to ensure statewide energy system reliability.”

Nuclear power doesn’t produce carbon pollution like fossil fuels do, but it does leave behind waste that remains dangerously radioactive for centuries.

The plant has been controversial from its very inception more than half a century ago. Opponents have cited seismic risks at the plant site, the facility's impact on the local marine environment and potential health risks to nearby communities. More recently, critics have raised questions about whether the aging plant is safe to run indefinitely.

The Newsom proposal was obtained just hours ahead of a Friday afternoon California Energy Commission meeting on the state’s energy needs and the role that the seaside plant near San Luis Obispo might play in meeting them.

Newsom's plan was met by immediate criticism from environmentalists who called it a huge financial giveaway for PG&E that pushes aside state environmental safeguards.

If approved, the state would “give PG&E over $1 billion in loans at below the interest rate even state agencies charge among themselves,” said David Weisman, legislative director of the Alliance for Nuclear Responsibility, a San Luis Obispo County group that has fought to close Diablo Canyon.

Touching on the fact that PG&E's service area is concentrated in Northern California, Weisman asked: “What are taxpayers in Southern California getting out of this?”

Ralph Cavanagh of the Natural Resources Defense Council said the plan would provide sweeping exemptions from environmental rules, including the California Environmental Quality Act.

“This draft was prepared by someone with little understanding of California energy policy or history,” Cavanagh said.

The Legislature has less than three weeks to determine if it will take an extraordinary step and attempt to extend the life of the plant — a decision that would be made amid looming questions over the cost, who would pay and earthquake safety risks.

The legislative session ends Aug. 31 — when all business is suspended — and only a rare special session called by Newsom could provide a longer period to consider the move.

The Democratic governor, who is seen as a possible future White House candidate, has urged PG&E for months to pursue a longer run beyond a scheduled closing by 2025, warning that the plant's power is needed to maintain reliable service as the state transitions to solar, wind and other renewable sources of energy.

Those raising questions with Newsom include state Sen. John Laird, a Santa Cruz Democrat whose district extends down the coast and includes the seaside power plant near San Luis Obispo.

If the plant is kept open, “Who pays, and is there fairness in who pays?” Laird asked in an interview. “There have been additional earthquake faults discovered near the plant, and seismic upgrades were never totally completed. Will they address that?”

Laird outlined other issues too, including who would pay for maintenance that has been put off because the plant is scheduled to close by 2025; whether there is time for PG&E to order and receive additional radioactive fuel and casks to store spent fuel; and whether electricity from the reactors would get in the way of transmission for wind power that is expected to come on line in coming years, adding that it could cost billions to keep the plant running.

“We are under a tight time-frame,” Laird said. “That begs the question of could they do everything it needs to be extended by 2025?”

“I’m really waiting to see whether ... and how they address all the issues that are associated with a possible extension before I decide what I’m going to do,” Laird said, referring to a possible vote.

For Diablo Canyon, the issue is whether the Newsom administration, in concert with investor-owned PG&E, can find a way to reverse the 2016 agreement among environmentalists, plant worker unions and the utility to close the plant by 2025. The joint decision to shut down the facility was also endorsed by California utility regulators, the Legislature and Gov. Jerry Brown.

PG&E CEO Patti Poppe told investors in a call last month that state legislation would have to be enacted by September to open the way for PG&E to change course.

PG&E, which has long said the plant is seismically safe, hasn’t said much about whether it will push to extend operations beyond 2025. It is assessing that possibility while continuing to plan for closing and dismantling the plant “unless those actions are superseded by new state policies,” PG&E spokesperson Suzanne Hosn said in a statement.

Newsom's push for a longer run for the reactors doesn't square easily with his assessment in 2016, when as lieutenant governor he supported the closure agreement as part of the State Lands Commission.

Seismic issues at the plant “are not insignificant concerns,” he said at the time. “This is not the preeminent site if you’re ... concerned about seismic safety.”