US Gives PG&E Up to $1.1 Billion to Save California’s Last Nuclear Plant

Ari Natter
Updated ·2 min read
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(Bloomberg) — The Biden administration awarded PG&E Corp. as much as $1.1 billion to help save California’s last two reactors, under a program designed to reinvigorate the US nuclear power industry.

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The Energy Department funding for two units at the company’s Diablo Canyon nuclear power plant, which previously were scheduled to be shut down in 2024 and 2025, “creates a path” for the power station to stay open, the agency said Monday in a statement.

US reactors have struggled to compete against cheaper and cleaner natural gas and renewables, and more than a dozen have closed in the past decade. But now there’s growing recognition of the value of facilities that generate carbon-free power around the clock. The awards for Diablo Canyon are the first from a $6 billion program introduced this year to aid nuclear plants at risk of early retirement because they’re unprofitable.

“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,” Energy Secretary Jennifer Granholm said in a statement. “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.”

Reactors supply more emission-free power than all of the nation’s renewable sources combined, but the Energy Department has warned that as many as half of the US fleet may be at risk of shutting down due to economic factors. The Biden administration has said maintaining the nuclear fleet is needed to help meet its ambitious climate goals, including a carbon-free electric grid by 2035 and achieving a net-zero emission economy by 2050.

California’s gas-fired power plants have been retiring faster than the can be replaced by renewable energy. Legislators voted in September to extend the life of Diablo Canyon through 2030. Under the plan, the state would lend $1.4 billion to help keep open the facility near Avila Beach, California, contingent upon PG&E getting money from federal government to repay the loan.

(Updates with comment from Energy Secretary in fourth paragraph.)

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