Dive Brief:

• Pacific Gas & Electric is exploring the possibility of keeping the 2.2 GW Diablo Canyon nuclear plant open beyond its currently scheduled retirement in 2024 and 2025 to support the reliability of California’s electricity system, PG&E Corp. CEO Patti Poppe told analysts during the company’s earnings call Thursday.
• “We continue to remind all engaged parties that the clock is ticking here,” Poppe added, noting that there is a sense of urgency in order to transition from preparing to decommission the plant to instead extending its life.
• The Diablo Canyon nuclear plant contributes to roughly 15% of California’s carbon-free electricity. State regulators in 2018 approved a settlement to close down the plant, but more recently, some experts have been questioning whether it should remain open.

Dive Insight:

California Gov. Gavin Newsom, D, floated the possibility of delaying the closure of the Diablo Canyon nuclear plant in May, noting that the state could try to tap into $6 billion in federal funding that was announced earlier this year for nuclear reactions facing the prospect of retirement. 

California could reduce power sector emissions by more than 10% from 2017 levels and save some $2.6 billion by operating the Diablo Canyon plant through 2035, according to a report released last November from Stanford University and the Massachusetts Institute of Technology. 

Others, however, have pointed out that this would represent a surprising change of course for California. Last year, the California Public Utilities Commission ordered load-serving entities to procure 11.5 GW of new resources by 2026, in order to replace the nuclear plant as well as a suite of natural gas plants facing closure. 

The debate over the future of the Diablo Canyon plant comes as California faces a number of threats to the reliability of its electricity grid. This June, the state passed legislation that authorized $75 million for its Department of Water Resources to sign contracts with generation facilities facing retirement, like Diablo Canyon. 

But keeping the nuclear plant open will not be an easy option, and would require a lot of coordination between the state, multiple regulatory bodies, PG&E and other parties, Poppe said on the call. 

“The most important thing to us right now is that we get certainty on the decision-making,” she said, adding that if the plant were to be kept open, the utility would need to start making several near-term moves, like ordering fuel. 

“This is not an easy option — legislation will have to be passed, the permitting and relicensing of the facility is complex, and so there are a lot of hurdles to be overcome in order to move forward,” she said. 

However, Poppe said that the utility likes the fact that the value of the nuclear plant is being recognized by the state.

“[T]here seems to be kind of a shift in the attitude about the role that nuclear can play in a GHG-free economy,” she said. 

There are certain time constraints that dictate the possibility of keeping the plant open. PG&E believes that legislation will be required to change the permitting and relicensing timeline of the plant, and the state legislature would need to pass any new laws by the end of August, which the governor would then sign in September, Poppe said. 

In addition, PG&E would also need to order casks and fuel for the plant, and “the combination of that timing really does drive the decision-making,” Poppe said. 

Keeping the Diablo Canyon facility online post its scheduled retirement “would take the urgency away from developing robust alternatives … it’s sort of almost the easy way out, in one sense, to keep the plant operating,” Edwin Lyman, director of nuclear power safety with the Union of Concerned Scientists, said.

In addition, given the amount of money that could now be available to the plant from federal and state sources, it makes sense for PG&E to reconsider seismic upgrades to Diablo Canyon that were previously considered too expensive, Lyman said.

“Because if the plant is going to renew its license for 20 years, it would be money well spent to ensure that the seismic risks are addressed,” he added.