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Tribune News Service
Tribune News Service
Rob Nikolewski

Operators of Diablo Canyon apply for $6 billion federal aid program for nuclear plants

Fresh from getting an extension to keep the last nuclear power plant in California open, Pacific Gas & Electric now looks to receive a chunk of a $6 billion federal program aimed at helping the nation's nuclear fleet remain online.

PG&E turned in paperwork Friday to the U.S. Department of Energy's Civil Nuclear Credit program, created by the Biden administration earlier this year, beating the program's Sept. 6 filing deadline.

The Department of Energy has not indicated if it will give PG&E's application the OK but shortly after SB 846 passed, the department's assistant secretary came out in support.

"I'm extremely pleased to see California extending the operation of Diablo Canyon," Katy Huff said in a statement. "These reactors critically underpin our nation's decarbonization goals and their 24/7 power will support grid stability for consumers in the state during our transition to net zero."

Now that PG&E has turned in its application, the Department of Energy will determine if PG&E is eligible to receive funding and then will determine how much the utility will receive. Diablo Canyon is the only plant that is potentially eligible for the Civil Nuclear Credit's first award period.

The submission came less than two days after California's Legislature, at the urging of Gov. Gavin Newsom, reversed the previously scheduled closure dates of the Diablo Canyon Power Plant in San Luis Obispo.

Introduced as an emergency measure, Senate Bill 846 zoomed through the Assembly on a 67-3 vote and passed the Senate, 31-1, capping a frantic final night of the legislative session.

Under the terms of the bill, Diablo Canyon's Unit 1 reactor can continue to produce electricity up to Oct. 31, 2029, and Unit 2 can continue as long as Oct. 31, 2030. That's five years longer than a 2016 agreement had called for.

Newsom pushed Sacramento lawmakers to pass SB 846, saying the 2,200 megawatts generated by the power plant is needed to ensure short-term reliability to California's increasingly shaky electric grid. The governor signed the bill into law Friday.

"Following the state's direction, we submitted an application seeking Department of Energy funding through its Civil Nuclear Credit program to help lower costs for customers should the plant's operating license be extended," PG&E spokeswoman Suzanne Hosn said in an email to the Union-Tribune Tuesday.

SB 846 included a provision that allows PG&E to access a $1.4 billion forgivable loan from the state's general fund, i.e., taxpayers, "to facilitate the extension of the operating period of the Diablo Canyon power plant."

But in the runup to the vote, the governor's office said the federal government is "expected to cover most if not all of the cost of the loan" and if the Department of Energy turns down PG&E's application, the loan will be terminated.

The bill also establishes a framework for rate recovery and power purchases at the plant that sets fixed and volumetric fees charged to "all load-serving entities" under the jurisdiction of the California Public Utilities Commission. That means utility customers across the state, including those in the San Diego Gas & Electric service territory, will share in the expense — not just PG&E customers.

However, one of the bill's sponsors, Sen. Bill Dodd, D-Napa, cited estimates on the Senate floor that an extension of Diablo Canyon would lead to an increase in monthly bills of no more than 57 cents per month and potential savings of $5.43 per month, "depending upon on load and how much is sold on the system," Dodd said.

A number of environmental groups and opponents of Diablo Canyon lambasted the extension, with Friends of the Earth calling it "reckless beyond belief."

PG&E still has to obtain licenses from the Nuclear Regulatory Commission and receive approval from state agencies. Also, lawsuits over earthquake safety at Diablo that were put aside will now be resurrected, said David Weisman of the Alliance for Nuclear Responsibility, an anti-nuclear group in San Luis Obispo.

"Here's every deadline, here's every report (the state) says needs to be issued, we will be bird-dogging and watching every single step," Weisman said. "We're going to make sure every I is dotted and every T is crossed."

Diablo Canyon produces some 2,200 megawatts of electricity, accounting for almost 9 percent of the state's power supply and 17 percent of California's zero-carbon electricity.

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