Not everyone is happy with Gov. Gavin Newsom’s sudden conversion to nuclear power advocate. Newsom has reversed his long opposition to keeping the Diablo Canyon nuclear plant open and now proposes to support the PG&E-owned facility with a $1.4 billion “forgivable” loan from California taxpayers.
The Associated Press obtained a copy of a legislative plan circulated by Democrats in Sacramento that would reject the governor’s funding plan for Diablo Canyon and instead spend $1 billion on new transmission lines, battery storage and renewable energy (nuclear is renewable, but California doesn’t count it toward the state’s renewable energy goals).
In 2016, PG&E reached a complicated agreement with environmentalists and employee unions to close the plant’s reactors by 2025. The deal had the blessing of state utility regulators, then-Governor Jerry Brown and Newsom, lieutenant governor at the time. Newsom now wants the legislature to approve his last-minute plan to keep Diablo Canyon open past 2025, which would require legislative action before the session ends at the stroke of midnight on September 1.
The obvious reason is the need for reliable electricity right now, not years from now when battery storage technology has improved and new transmission lines to distant wind and solar farms are complete.
This puts Pacific Gas & Electric in an excellent negotiating position with the state despite all its past troubles. In 2020, the company pleaded guilty to 84 counts of involuntary manslaughter in connection with the 2018 Camp fire that destroyed the town of Paradise. Over $30 billion in liability from that fire and others led the company to file for bankruptcy protection in January 2019. Earlier, the company had been convicted of criminal charges in connection with a gas pipeline explosion in 2010 that killed eight people in San Bruno.
The State Capitol has been the scene of many thundering speeches and proposals threatening PG&E with a state takeover. Yet here we are, with the governor pushing $1.4 billion of taxpayer funds into the hands of PG&E investors to keep Diablo Canyon running.
PG&E holds all the cards here as the owner of a nuclear power plant that currently provides more than 9% of the state’s electricity. The company has not yet applied for a new operating license from the Nuclear Regulatory Commission to keep the plant open beyond its scheduled closure date.
This isn’t the first time Newsom has supported a rushed deal that helped PG&E. In July 2019, Newsom signed Assembly Bill 1054, which forced ratepayers to pick up half the cost of a new wildfire liability fund that investor-owned utilities could access if they met certain safety conditions.
Taxpayers and ratepayers are getting soaked because Newsom and legislative leaders need PG&E and the state’s other investor-owned utilities to provide resources for the conversion to renewable energy and electric vehicles. The companies’ resources can only come from ratepayers or investors. Since investors can choose not to invest their money in utilities, the state is in the odd position of having to make sure investor-owned utilities including PG&E stay financially strong enough to pay dividends to stockholders and interest to bondholders, not to mention having the funds to pay the claims of wildfire victims.
That’s why Sacramento politicians just can’t stay mad at PG&E. Breaking up is hard to do.