California OK’s $1.4 Billion Loan to Keep Last Nuclear Plant Open

Aerial view of the Diablo Canyon Nuclear Power Plant, which sits on the edge of the Pacific Ocean at Avila Beach in San Luis Obispo County, Calif., on March 17, 2011. Mark Ralston/AFP via Getty Images

Fearing more rolling blackouts in California as green energy supplies fall short, state lawmakers have agreed to spend $1.4 billion to keep the state’s last functioning nuclear power plant running.

The state Legislature passed a bill Sept. 1, supporting Gov. Gavin Newsom’s push to reverse plans to close Diablo Canyon Nuclear Power Plant by 2025.

The extension will allow Pacific Gas & Electric (PG&E), operator of the San Luis Obispo plant, to continue operating until 2030. The company agreed six years ago to shutter the plant amid pressure from environmental groups and the local community.

One of Pacific Gas and Electric's Diablo Canyon Power Plant's nuclear reactors in Avila Beach on California's central coast, on Nov. 3, 2008. Michael A. Mariant/AP Photo

The legislation also authorizes a forgivable loan of $1.4 billion by the state to PG&E for the plant’s extended operations.

Sen. Bill Dodd (D-Napa), who introduced the bill, said the state needed nuclear power to keep the lights on.

“This bill is an essential step toward preventing rolling blackouts and increased electricity prices we would pay if forced to buy electricity from out-of-state, dirty carbon-emitting sources,” Dodd said in a statement. “We need to have this option available to keep the lights on and keep making progress towards net zero carbon emissions.”

A PG&E spokesperson told The Epoch Times the company remains committed to the state’s clean energy plans while operating the plant safely.

“PG&E is committed to California’s clean energy future,” PG&E spokeswoman Suzanne Hosn said. “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.”

The decision to extend nuclear power resources comes as California faces a prolonged heat wave during Labor Day weekend. Newsom declared a state of emergency Aug. 31, asking residents to conserve energy.

The heat wave impacted energy resources in multiple states, and a prolonged drought reduced the state’s ability to generate hydroelectric power, Newsom said in a statement.

Several environmental groups opposed the measure, including Environment California, Friends of the Earth, and the Natural Resources Defense Council.

“With Governor Newsom and the legislature working to appropriate climate budget funds and advance ambitious climate legislation in the waning days of the legislative session, this proposal is a dangerous and costly distraction,” the groups said in a joint statement.

Mothers for Peace, a San Luis Obispo-based anti-nuclear group, commented after the measure’s approval, vowing to continue the fight to close the plant by 2025.

“In essence, this vote puts in jeopardy years of deliberate and careful planning to retire the twin reactors, providing a runway for clean, renewable energy,” the group said in a statement. “Further, this vote will cause financial pain to taxpayers and ratepayers, extends the ongoing fear of a seismic event, and exacerbates the environmental damage Diablo Canyon inflicts.”

Although the legislation earned overwhelming bipartisan approval in both houses of the Legislature, some lawmakers shared concerns.

State Sen. John Laird, (D-Santa Cruz) told the California Energy Commission he didn’t think they had all the answers yet about whether the plant’s continued operation was the key to energy reliability in the state.

The senator voiced concerns about safety, cost to taxpayers, waste disposal of spent nuclear fuel, seismic activity analysis in the area, aging cooling technology at the plant, permitting, and land conservation.

Sen. Brian Dahle (R-Redding), who is running against Newsom for governor this year, told PG&E during a Senate Oversight hearing the state is already in “crisis” mode because of the pending shutdown of the nuclear plant.

“Because legislators voted to close this power plant six years ago, we are now in crisis mode since not enough electricity is available with other green sources, and now all California ratepayers will be paying to keep it open,” Dahle said. “I’m very concerned that the ratepayers are going to be paying a lot more.”

Newsom has until the end of September to approve the legislation.