California votes to keep last nuclear plant until 2030

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California lawmakers have voted to extend the life of the state’s last nuclear power plant by five years to protect against blackouts, on condition that the federal government pay much of the cost.

The Legislature approved a proposal by Governor Gavin Newsom to keep the PG&E Corp.-owned Diablo Canyon plant running until 2030, rather than closing as planned in 2025. California’s gas-fired power plants pulled out faster than solar and wind installations. can replace them as the state fights climate change. As a result, Newsom offered to extend Diablo Canyon’s lifespan to avoid crashes during the transition.

The move came hours after authorities declared a statewide grid emergency amid a sweltering heat wave, warning of possible power shortages.

The agreement now puts the fate of the plant in the hands of the federal government and PG&E. The bill, pending Newsom’s signature, would give the utility a $1.4 billion loan to keep Diablo Canyon operational through October 2030. But the loan is contingent on PG&E receiving the money. from the US Department of Energy to reimburse the state. The company faces a September 6 deadline to apply for federal funding, part of a $6 billion program to help struggling nuclear power plants.

PG&E must also convince the Nuclear Regulatory Commission to extend the operating licenses of the plant’s two reactors, a process that can take several years. And if, by 2024, California energy regulators decide that power from the plant is ultimately not needed, the state can terminate the loan.

The vote follows two weeks of intense behind-the-scenes negotiations over the fate of the plant. Although Newsom began talking in April about keeping Diablo Canyon open – after years of supporting its closure – he waited until the very end of the legislative session to present a specific proposal, which would have potentially authorized a 10-year extension. The timing angered Democratic lawmakers already reluctant to grant the plant a reprieve.

Environmentalists have fought for decades to close Diablo Canyon, which sits on a coastal bluff between Los Angeles and San Francisco and is surrounded by seismic fault lines. But the prospect of looming power shortages has forced many residents to reconsider ending California’s largest source of carbon-free electricity.

PG&E reached an agreement in 2016 with the state, unions and environmental groups to retire Diablo Canyon’s reactors when their federal operating licenses expire. The decision came in the wake of the Fukushima disaster in Japan in 2011, triggered by an earthquake and tsunami, raising new concerns about the safety of nuclear power.

But rotating blackouts during brutal heatwaves in 2020 helped change the public conversation around Diablo Canyon. Newsom, who is running for re-election in November and is considered a potential presidential candidate, has been keen to prevent further blackouts. And this spring, his administration began warning that supply chain issues were slowing the deployment of solar, wind and large-scale batteries needed to replace gas-fired power plants.

A number of environmental groups have called on the state to stick to its decision to remove the plant anyway. Reviewers said extending Diablo Canyon’s lifespan wouldn’t be safe without expensive seismic and environmental upgrades.

“Allowing these nuclear reactors to operate beyond 2025 puts surrounding communities and the environment at grave risk while potentially costing taxpayers and ratepayers billions of dollars,” Erich Pica, president of Friends of Earth.

At the same time, a group of scientists and energy officials, including two former US Department of Energy secretaries, lobbied to keep the plant open.

Analysts said the approved bill would have little effect on PG&E’s financial performance, partly by design. Legislation prohibits loan money from going to shareholders’ profits. Nor will the company be able to recover the investments made in the plant in the tariffs.

Instead, PG&E will receive a $100 million management fee for each year of extended operation, money that must be spent directly on operating Diablo Canyon, security work, or accelerating the transition. energy. PG&E will also receive other compensation to help it stay competitive with solar farms that can sell extra megawatts at midday at very low prices.

—With help from Will Wade.

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