California's Diablo Canyon nuclear plant gets a $1.4 billion loan to stay open

The Diablo Canyon nuclear plant will live to deliver power to the grid another day.

In a bipartisan vote, California lawmakers backed Gov. Gavin Newsom’s pitch to lend utility PG&E $1.4 billion to keep the plant open for five more years. Assuming PG&E’s bid to extend its operations wins federal approval, the plant will run at least through 2030.

Located on the state’s central coast, the plant was slated to close in 2025 due in part to concerns that its location adjacent to a fault line left it vulnerable to earthquakes. However, in the midst of dangerous heat waves that led to rolling blackouts in 2019 and subsequent years, Newsom began to reconsider the plant’s fate.

Diablo Canyon is California’s single largest source of electricity, generating 6% of the state’s power in 2021. Not only that — that electricity comes without carbon emissions. Because nuclear plants can run 24/7, it also means that carbon-free power doesn’t come with the intermittency concerns that solar and wind do.

Newsom said this week that keeping Diablo Canyon “is critical in the context of making sure we have energy reliability going forward,” which echoes what the nuclear industry has been saying as it tries to chart a course to being part of the climate solution.

“That energy provides baseload and reliability and affordability that will complement and allow us to stack all of the green energy that we’re bringing online at record rates,” Newsom said of nuclear power more broadly.

However, in addition to the potential safety concerns that led to PG&E’s decision to ultimately shutter Diablo Canyon six years ago, some environmental advocates worry that relying on nuclear power could put the state’s renewable energy goals in jeopardy. The nonprofit Friends of the Earth described Newsom’s now-successful attempt to keep the plant open as “reckless beyond belief.” The group has cited the risk of earthquakes and the cost of nuclear power — which is generally more expensive than renewables and fossil fuels — as reasons for the state and PG&E to move forward with shuttering the plant.

While Newsom initially raised the idea of bailing out Diablo Canyon in May, he officially introduced the proposal to lend PG&E money two weeks ago, and lobbied the legislature throughout August. Central to his plea was the argument that a shutdown could prompt more rolling blackouts, which put vulnerable Californians at risk.

The vote in support of Newsom’s plan comes as yet another brutal heatwave is expected to torch California, and potentially test the grid’s reliability yet again. The state legislature also set a new target of reducing carbon emissions at least 85% by 2045. Diablo Canyon may be shuttered by then, but it will help buy time for renewables and battery storage to come online.