Newsom’s Diablo Proposal Becomes a Bill on Final Day – Can the Governor Get this Approved?

As we have previously reported, Governor Gavin Newsom called on the Legislature to help keep the PG&E-owned Diablo Canyon nuclear power facility online for 10 more years.  With a few hours to go until the deadline on Sunday, SB 846 finally materialized.  But can he get the votes needed to pass both houses of the […]

Diablo Canyon Nuclear Power Facility

As we have previously reported, Governor Gavin Newsom called on the Legislature to help keep the PG&E-owned Diablo Canyon nuclear power facility online for 10 more years.  With a few hours to go until the deadline on Sunday, SB 846 finally materialized.  But can he get the votes needed to pass both houses of the Legislature?

The Case for Diablo

A day after the idea was presented to the Senate, it was the Assembly’s turn to hear the reasons why Diablo Canyon needs to stay on another 10 years.

On Thursday and Friday, the Energy committees in the Senate and Assembly met to hear about Diablo Canyon.

While there was no actual legislation at the time, in a rare move, the Governor’s Office sent outgoing Cabinet Secretary Ana Matosantos to testify in both committees.

Matosantos said, “In order to be able to maintain reliability and to do in the most cost-effective way for California ratepayers and taxpayers, we need a bit more time with these resources.”  She then proceeded to discuss the importance of the Diabo Canyon extension.

While other individuals testified for and against a Diablo Canyon extension, the legislators really matter at this late date. In the Senate hearing, the proposal was lukewarm at best.

Senator Laird asked several pointed questions, including why now; will we have an adequate workforce since several employees retired recently; seismic safety; enough room for additionally spent fuel rods; extension of once-through-cooling at Diablo Canyon; and commitments to kick start renewables.

Senator Becker asked about renewables, potential delays near offshore wind near Diablo Canyon, and seismic safety concerns.

Senator Min focused on more renewable investments and Diablo Canyon’s ability to qualify for federal funds.

Senator Dahle asked whether all state ratepayers will cover the costs and why the state is in such a rush to move a problem that should have been seen.

Senator Hueso asked why ex parte rules were suspended on Diablo Canyon, waiving of some of PG&E’s liability and PG&E’s profits.

Senator Stern focused on renewables and CEQA review.

In the Assembly, the proposal was met by a more friendly audience.

Assemblyman Wood asked about the renewable market delays and whether any state agency is coordinating new renewables.

Assemblyman Mathis stated his support and asked if Diablo is cost worthy of an extension; shouldn’t the state look at expansion?

Assemblyman Muratsuchi asked why the Diablo proposal was coming at the last second, is the legislation necessary, and grid reliability.

Assemblywoman Calderon asked about the profits PG&E will make on this deal and the costs being spread amongst most Californians.

Assemblyman Quirk asked friendly questions about PG&E’s rate of return, impact on utility bills, and grid reliability, and Governor Newsom initially called for the closing of Diablo Canyon.

Assemblyman Ting asked about seismic safety if the state can rely on Diablo Canyon when the plant shut down for 150 days, why the rate of return is so high, reliability issues and is the future problem a peak or baseload issue. 

Assemblywoman Boerner-Horvath asked what the plan for reliability was when Diablo was first discussed about closing and the coastal commission’s involvement in the review of Diablo Canyon.

Assemblywoman Carrillo focused on why this proposal is so late and PG&E’s profits.

A Vehicle for Diablo

After the hearings ended, Capitol insiders waited and waited for bill language.  At 7:56 PM on Sunday, Senate Bill 846 was amended to address Diablo Canyon. This bill will give PG&E $1.4 billion for Diablo Canyon to potentially keep running for at least five more years, with a possible 5 more years after.

The language calls for the Department of Water Resources to issue up to a $1.4 billion loan to PG&E for the extension.  The bill also asks the California Energy Commission to present a cost comparison and operations assessment of the Diablo Canyon powerplant by late 2023.  It also establishes a three-member Independent Safety Committee for Diablo Canyon

Senate Bill 846 only extends the plant until 2030 since the once-through cooling extension for the plant expires on October 31, 2030.

The Hurdles for Passage 

The bill has several hurdles to be passed.  First, the legislature must move at lightning speed.  California has a 72-hour in-print rule for all bills, meaning the bill cannot be heard until Wednesday, August 31 at 7:56 PM.  The bill must also clear both houses before midnight since that is when this two-year legislative session ends.

Aside from having only four hours to pass the bill, the legislation also includes an urgency clause that requires two-thirds approval.  This means 27 aye votes in the Senate and 54 aye votes in the Assembly.

Note: PG&E has until September 6 to request federal funds appropriated to assist nuclear power plants.  {PG&E’s CEO previously stated that the Legislature and Newsom would need legislation to assist with the efforts to seek a relicensing for the facility.  DOE will not inform recipients of the $6 billion fund for nuclear projects until January 2023.