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PG&E to receive $1.1 billion in federal funds for nuclear power plant operations

Posted at 11:19 AM, Nov 21, 2022
and last updated 2022-11-22 20:03:14-05

Pacific Gas and Electric Company (PG&E) is expected to receive approximately $1.1 billion from the U.S. Department of Energy (DOE) to keep Diablo Canyon Power Plant in operation.

The award is conditional and the final terms are subject to negotiation with the DOE.

PG&E filed an application for the federal funding on September 2, the same day Gov. Gavin Newsom signed Senate Bill 846 into law, allowing for extended operations at the power plant for an extra five years as the State of California works to transition to more renewable sources of energy.

The operating licenses for Diablo Canyon's two units are currently scheduled to expire in 2024 and 2025.

The money will come from the $6 billion Civil Nuclear Credit Program which was created to support the continued operation of nuclear energy facilities. It will help PG&E pay back a $1.4 billion loan from the state's Department of Water Resources that was authorized by the passage of SB 846.

The Civil Nuclear Credit Program is funded by President Biden's Bipartisan Infrastructure Law.

"This is a critical step toward ensuring that our domestic nuclear fleet will continue providing reliable and affordable power to Americans as the nation's largest source of clean electricity," U.S. Secretary of Energy Jennifer M. Granholm said in a press release Monday. "Nuclear energy will help us meet President Biden's climate goals, and with these historic investments in clean energy, we can protect these facilities and the communities they serve."

According to the DOE, Diablo Canyon Power Plant produces approximately 16GWh of electricity each year, or about 15% of the state's carbon-free energy.

“This is another very positive step forward to extend the operating life of Diablo Canyon Power Plant to ensure electrical reliability for all Californians,” PG&E Corporation Chief Executive Officer Patti Poppe said in a press release Monday. “While there are key federal and state approvals remaining before us in this multi-year process, we remain focused on continuing to provide reliable, low-cost, carbon-free energy to the people of California, while safely operating one of the top performing plants in the country.”

On October 31, PG&E requested that the U.S. Nuclear Regulatory Commission (NRC) resume its review of the utility's earlier application to renew the power plant's two operating licenses. That application was withdrawn in 2018 after PG&E decided to close the plant.

Friends of the Earth, which was among several environmental action groups that sent a letter to the NRC opposing the license renewals, responded to the DOE award in a series of tweets Monday, saying, "This approval comes before the State of California and U.S. Nuclear Regulatory have completed or even started their regulatory reviews. We cannot continue to throw money at nuclear energy. Diablo Canyon should not continue to operate."

In order to continue operations, PG&E must also receive regulatory approvals from several other agencies such as the State Lands Commission, California Energy Commission, California Coastal Commission, and California Public Utilities Commission.