As a group of legislators are working behind the scenes to cancel some of Governor Gavin Newsom’s most expensive policies for the state, and his plans may have to be put on hold.
A surprise decision to cancel a $400 million loan to keep Diablo Canyon, the state’s last nuclear power plant, running was made by lawmakers on Thursday.
Senate and Assembly Votes
This choice has pitted them in opposition against Governor Gavin Newsom, who has bet everything on keeping the lights on at the plant as environmental warming increases.
The latest development in the ongoing budget negotiations is the Senate and Assembly votes.
Top Priority
Diablo Canyon’s continued operation has been a top priority for Newsom, who argues that it is essential to the state’s transition to renewable energy sources and the prevention of blackouts.
Yet, following months of discussion, legislators have at last set a boundary. This move could make way for one of the greatest public showdowns against Newsom that the state has seen yet.
Huge Amounts of Power
The nuclear facility is based in San Luis Obispo County.
The plant operates two nuclear units. According to the power plant’s official website, the units collectively generate “18,000 gigawatt-hours of clean and reliable electricity annually.” However, the plan to extend the facility has been met with criticism from environmental groups and delays from the California legislature.
Ongoing Negotiations
The California Department of Finance’s spokesperson, H.D. Palmer, explained that negotiations are ongoing and that these legislative votes do not imply that lawmakers have reached an agreement with the governor.
According to Palmer’s description, it more closely resembles an “agreement between the Senate and the Assembly – not an agreement with the governor.”
Resistance From Lawmakers
The escalating cost estimates are a major reason lawmakers are resisting. At the point when the project was first proposed, estimates put the running expenses at $5.2 billion for the initial five years.
Environmentalists and nuclear opponents have now expressed concern that the cost of maintaining Diablo Canyon has nearly doubled, reaching almost $12 billion.
‘It’s Really Quite Shocking’
John Geesman, a former member of the California Energy Commission and a representative of the Alliance for Nuclear Responsibility, a group opposing the plant’s federal license renewals, stated, “It’s really quite shocking.”
Numerous Californians are concerned about rising energy costs as a result of this significant figure. Pacific Gas & Electric (PG&E), the plant’s operator, contends that these new figures are exaggerated and incorrect.
Actual Cost
PG&E representative Suzanne Hosn says the $12 billion figure incorporates inconsequential expenses and claims the actual cost is around $8.3 billion. She insists that the advantages justify the drawbacks.
Since its opening in the middle of the 1980s, Diablo Canyon, which is situated on a bluff between Los Angeles and San Francisco, has sparked controversy. This plant has become a hot topic as nuclear power may make a comeback in the fight against global warming.
Plant Plans
After years of ongoing discussion between PG&E, environmentalists and labor unions, Diablo Canyon was scheduled to close by 2025 in 2016. However, Newsom argued that the plant was required to prevent blackouts, and that plan was scrapped in 2022.
A $1.4 billion state loan to PG&E was included in Newsom’s new agreement, with the goal of keeping the plant running until at least 2030.
A Huge Investment
Amid a shocking budget deficit, costs of up to $12 billion for the Diablo Canyon plant are an enormous investment in green energy.
The Alliance for Nuclear Responsibility told the Public Utilities Commission in May that the high cost of the power plant would be “by far the largest financial commitment to a single energy project the commission has ever been asked to endorse.”
A U-Turn from Two Years Ago
In September 2022, both chambers of California’s legislature approved a plan to extend Diablo Canyon’s license until 2027.
However, the legislature has backtracked on this extension as they voted to cancel the $400 million loan payment. The anxiety is that while the $400 million payment might be manageable, the operational costs may not be feasible given California’s dire financial situation.
Opposition From Environmental Groups
The license extension of the Diablo Canyon plant was not an easy journey.
Three climate groups filed a motion for the immediate closure of the plant in March this year. The groups argued the nuclear plant posed an “unacceptable safety risk.” San Luis Obispo Mothers for Peace, Environmental Working Group and Friends of the Earth also requested a hearing as they claimed the plant’s proximity to earthquake faults could cause a nuclear meltdown.
No Action Was Taken
The environmental groups requested the immediate shutdown of one of the two reactors in Diablo Canyon last year.
Critics have said that these earthquake faults were undetected at the time of the power plant’s construction in the 1960s. After the groups’ call for the reactor shutdown, the Nuclear Regulatory Commission asked agency staff to review the request but took no further action.
Pros and Cons
Despite scientists’ claims that nuclear energy is cleaner than fossil fuels, Diablo Canyon currently produces up to 9% of California’s electricity. However, nuclear power generates radioactive waste, which has become a concern for many environmentalists.
The nuclear industry in the United States is currently recovering. Georgia has recently completed building two new reactors at Plant Vogtle at an expense of around $35 billion.
Nuclear Is Overtaking Other Forms of Power
While other forms of renewable energy are falling in popularity, nuclear power is winning the favor of the American population.
While Americans are still more likely to prefer expanding solar and wind power over nuclear, support for both has dropped by double digits since 2020. However, the share of those who favor nuclear power has grown by 13%.
Americans Are Coming Around to Nuclear
While nuclear power is still a hot topic in American politics, new data shows that the population is slowly adapting to the idea of nuclear power.
According to a new study by the Pew Research Center, the majority of Americans support expanding nuclear power in the country. In total, 56% say they favor more nuclear power plants to generate electricity.
Long Term Goals
The government is more interested in nuclear power than ever. The government sees nuclear as playing a pivotal role in its ambitious environmental roles.
President Joe Biden set a goal to decarbonize the power grid by 2035. His administration considers nuclear power a crucial component of reaching that goal. Nuclear power is especially attractive in California, where increasing droughts limit hydroelectric power.
Budget Deficit
Bill Gates, a businessman, is building a “next-generation” nuclear plant in Wyoming that he claims will change the way power is produced.
Legislators in California are concerned about the financial ramifications of approving such a substantial loan, given the state’s $45 billion budget deficit.
Is the Loan Worth It?
Two years after a $100 billion budget surplus, California’s $45 billion deficit means the loan for the Diablo Canyon loan may not be worth the risk.
Legislators were concerned about the consequences for the state if PG&E failed to pay the state back. Furthermore, if the extension of the nuclear plant fell through for whatever reason, Californian taxpayers could end up hundreds of millions of dollars out of pocket.
Other Environmental Projects Have Been Hit
The staggering budget deficit has forced California’s state governor, Gavin Newsom, to make some difficult decisions and cut public spending.
Two years ago, Newsom and the legislature approved $54.3 billion to go toward the California Climate Commitment. However, in January, Newsom proposed a 7% cut. The budget has now been approved but the budget has been cut by 17%. Climate spending would have covered projects like enhancing coastal resilience, preparations for wildfires and ensuring water security.
California’s Environmental Goals
While the extension of the nuclear facility’s license was canceled for financial reasons, Newsom needs to think of an alternative.
In 2018, a law was passed requiring California to become completely reliant on clean energy sources by 2040. This would include nuclear energy. Other projects to reach this goal include phasing out of gasoline-powered vehicles by 2035.
Overestimating Risks
Lawmakers are concerned about the financial impact on California taxpayers and the possibility of PG&E defaulting on the loan.
Diablo Canyon’s construction began in the 1960s, but critics claim that significant risks were frequently overestimated.
Earthquake Potential
The possibility that an earthquake could cause damage to the plant and release radiation has grown since a fault was discovered in 2008.
Despite these concerns, the Nuclear Regulatory Commission (NRC) supports PG&E’s assertion that the plant is safe.
Concerning the possibility of critical equipment failing, environmental groups demanded that one of the plant’s reactors be immediately shut down the previous year. Although it promised to investigate the reactor, the NRC did not take any immediate action.
The National Nuclear Landscape
No matter how popular nuclear power might become, large-scale construction is not happening fast enough.
Nuclear reactors are shutting down faster than new plants are constructed. Congress recently passed a bipartisan act to loosen the industry’s financial and regulatory challenges, so construction could speed up in the next few years.
