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California could lend PG&E $1.4 billion to save Diablo Canyon

A final-minute proposal from Gov. Gavin Newsom could preserve the Diablo Canyon nuclear plant open via 2035, a decade past its present closure date — partly by giving proprietor Pacific Gas & Electric Co. a $1.4-billion forgivable mortgage.

The proposal is a part of draft legislative language distributed to state lawmakers late Thursday night time. The invoice, which has but to be launched within the Legislature, would additionally exempt the Diablo Canyon extension from the California Environmental Quality Act and a number of other different environmental guidelines that nuclear opponents would possibly in any other case use to problem the extension.

Diablo Canyon is California’s single largest energy supply. Officials are anxious that with out it, the state could have hassle holding the lights on — and air conditioners operating — throughout intense summer season warmth waves. Newsom has additionally urged that holding the plant open would assist struggle local weather change as a result of Diablo doesn’t produce planet-warming air pollution.

“Some would say it’s the righteous and right climate decision,” Newsom informed The Times earlier this year.

The 2,250-megawatt energy plant — which generated 6% of the state’s electrical energy in 2021 — is nestled alongside the Central Coast south of Morro Bay. Its destiny has been a topic of controversy for many years, with then-Gov. Jerry Brown railing towards the ability’s development within the late Nineteen Seventies amid a wave of anti-nuclear activism spurred by the Three Mile Island partial meltdown.

It’s been six years since PG&E struck a deal to shut Diablo by 2025, succumbing to public considerations that the plant — which sits close to a number of seismic fault traces — could unfold lethal radiation throughout an earthquake. The U.S. additionally has no long-term storage repository for spent gas, which means radioactive waste is piling up at nuclear crops throughout the nation, together with Diablo.

But since PG&E agreed to exit the atomic power business, the rising urgency of the local weather disaster — which has led to worsening wildfires, warmth waves, storms and droughts — has led some environmentalists to rethink nuclear-plant closures.

It’s an particularly urgent question in California, which has had hassle supplying sufficient energy to preserve the lights on throughout scorching summer season evenings after the solar goes down, when photo voltaic panels cease producing. Parts of the state suffered transient rolling blackouts over two nights in August 2020. There have been a number of shut calls since then.

Nuclear waste canisters close to the Pacific shoreline on the shuttered San Onofre Nuclear Generating Station in San Diego County.

(Allen J. Schaben / Los Angeles Times)

When the Biden administration announced earlier this year that it will give out $6 billion in federal funds to assist rescue nuclear crops going through closure, Newsom mentioned California could be “remiss not to put that on the table as an option.”

But it’s not but clear whether or not PG&E will likely be eligible for the federal funds — therefore the draft invoice circulated by Newsom’s office.

If the Legislature indicators off, the state’s Department of Water Resources could be approved to lend PG&E $1.4 billion. The money could assist pay for the federal license renewal course of, and for upkeep wanted to preserve Diablo working safely.

The utility company would have to repay parts of the mortgage it doesn’t find yourself needing. If federal funding for Diablo in the end got here via, California taxpayers could get all or a part of their money again.

“We’re optimistic that there may be some federal assistance involved in this,” Newsom spokesperson Anthony York mentioned.

Newsom informed The Times earlier this year that for PG&E, altering course on Diablo Canyon was “not their happy place.” But the beleaguered company — which emerged from chapter two years in the past after one in every of its energy traces sparked the deadliest hearth in state historical past — has had little alternative however to associate with the governor’s new course on nuclear energy.

Asked in regards to the draft invoice, PG&E spokesperson Lynsey Paulo mentioned in an e-mail that the monopoly utility “is committed to California’s clean energy future, and as a regulated utility, we are required to follow the energy policies of the state.”

“We understand state leaders’ discussions to potentially extend operations at [Diablo Canyon] are progressing,” Paulo mentioned. “We are proud of the role that [Diablo Canyon] plays in our state, and we stand ready to support should there be a change in state policy, to help ensure grid reliability for our customers and all Californians at the lowest possible cost.”

The Diablo Canyon nuclear plant in the background of the coast and some scrub.

The Diablo Canyon nuclear plant, seen in 2005.

(Michael A. Mariant / Associated Press)

Under the draft invoice, PG&E could be allowed to preserve working Diablo Canyon via 2035 — however negotiations with lawmakers are simply getting underway, and Newsom’s proposal is topic to change. Another document circulated by the governor’s office discusses an preliminary five-year extension via 2030, with an extra 5 years tacked on provided that crucial.

“The final details are being worked out,” York mentioned.

The draft invoice additionally says any state motion wanted to preserve Diablo open could be exempt from the California Environmental Quality Act, higher often known as CEQA. That means businesses reviewing the extension — probably together with the Coastal Commission, the Public Utilities Commission and the State Lands Commission — wouldn’t want to do in depth research of the environmental impacts.

The draft invoice justifies that exemption by stating that continued operation of the nuclear reactors “would entail no material operational or physical changes and no new or materially different adverse environmental impacts.”

“Accordingly, the Legislature finds that continued operations is consistent with the state’s environmental priorities, will not substantially interfere with public trust needs and resources, is otherwise consistent with the public trust doctrine, the Coastal Act, and the California coastal zone management program, and is in the best interests of the state,” the draft invoice says.

At the identical time, the invoice would permit PG&E to proceed with no less than one “adverse environmental impact.”

Diablo Canyon at the moment can’t function previous 2025 partly due to a state regulation ordering coastal energy crops to cease sucking up big quantities of ocean water to cool their mills — a course of that kills fish and different marine life. Shutting down the plant was PG&E’s answer for complying with that rule, quite than spending billions of {dollars} upgrading its gear.

The draft invoice would give PG&E a reprieve, setting a brand new compliance deadline of Oct. 31, 2035. It would additionally require the company to pay an environmental “mitigation fee” of $10 per million gallons of ocean water used, beginning in 2024 — about $8 million yearly, with a 3% enhance to the price every year. That’s way more than the company at the moment pays.

“While an improvement, we would prefer to see the marine life not lost in the first place. And certainly we would prefer the impacts to go away all together,” Sean Bothwell, govt direct of the California Coastkeeper Alliance, mentioned in a textual content message.

There’s not a lot time to introduce a invoice and get it handed earlier than the legislative session ends Aug. 31. And Newsom’s proposal is already going through opposition from environmental teams together with the Sierra Club, Natural Resources Defense Council and California Coastal Protection Network. They say the state must be targeted on changing nuclear energy with cleaner choices.

Dan Jacobson, senior advisor to advocacy group Environment California, mentioned the $1.4 billion PG&E could obtain underneath the draft invoice could be “better spent on renewables, conservation and efficiency.” He worries Diablo will turn out to be a “money pit,” the place “you start to put money in, and all of a sudden PG&E… is going to say they need more.”

“The $1.4 billion turns into $2 billion, turns into $6 billion, turns into $10 billion,” he mentioned.

The Los Angeles Department of Water and Power's Pine Tree wind and solar farm in Kern County.

The Los Angeles Department of Water and Power’s Pine Tree wind and photo voltaic farm in Kern County.

(Irfan Khan / Los Angeles Times)

Unlike photo voltaic and wind farms, nuclear reactors can produce electrical energy across the clock — essential for California and different components of the nation that more and more face the specter of energy shortages, particularly on scorching evenings throughout August and September.

The beautiful development of lithium-ion battery storage has made it simpler and cheaper to financial institution photo voltaic and wind energy for instances of day when the electrical grid is careworn. But there are nonetheless comparatively few battery methods on the grid. And worsening warmth waves — pushed by local weather air pollution — are driving up demand for air-con, which makes use of massive quantities of electrical energy.

State officers are anxious there could be rolling blackouts this summer season, even prematurely of Diablo’s deliberate closure.

“The grid is vulnerable right now,” mentioned Neil Millar, a vice chairman on the California Independent System Operator.

That vulnerability is pushed partly by the retirement of gas-fired energy crops — a significant supply of local weather air pollution, but additionally a key instrument for holding the lights on when the solar goes down. At Newsom’s urging, state lawmakers handed a invoice in June that critics say could assist a number of fuel crops alongside the Southern California coast keep open handed deliberate 2023 closure dates.

Several lawmakers who voted for that invoice — together with state Sen. Henry Stern (D-Los Angeles), an ardent local weather advocate — mentioned continued reliance on fossil fuels is an unlucky necessity whereas California develops cleaner alternate options for holding the lights on 24/7.

In addition to batteries, these alternate options would possibly embody geothermal energy, offshore wind and long-duration storage. California could additionally pay houses to use much less power and coordinate electrical energy provides extra carefully with different states.

“We’re trying to get ahead of a crisis,” Stern mentioned in June. “If we don’t manage this crisis, utilities around the state of California will do whatever they have to do. And in the past, that has meant firing up dirty [gas] plants in disadvantaged communities.”

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It’s but to be seen if the Legislature will likely be equally amendable to Newsom’s plans for Diablo Canyon.

The California Energy Commission will maintain a workshop Friday night to focus on the potential nuclear-plant extension and take public remark. Information on how to be part of the workshop by Zoom or telephone is posted on the commission website.

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