SACRAMENTO – California ratepayers might have to foot a staggering $45 billion-plus cost to keep the aging Pacific Gas & Electric, or PG&E, Diablo Canyon nuclear power plant online beyond its slated 2025 closure, a new Environmental Working Group analysis finds.
The outrageous price tag is the estimated cost for operating the plant from 2021 to 2045, or hundreds of millions of dollars every year, EWG says. And that’s just the expense of prolonging the troubled facility’s life. It doesn’t account for the enormous extra costs that would be incurred following a major disaster like a reactor leak or an earthquake that damages the plant.
EWG used testimony recently filed by the Utility Reform Network, or TURN, in PG&E’s current rate case to parse the capital and operating expenses of the plant. EWG considered PG&E’s estimates for the plant costs, which likely lowball the true expense, and TURN’s assessment of the plant expenses, which may be closer to the actual burden.
EWG estimates it will likely amount to hundreds of millions of dollars every year, for total costs ranging from more than $20 billion to nearly $45 billion from 2023 through 2045 – or more.
That’s just the base cost of running the facility. The alarming figure doesn’t account for the additional massive costs that would come from a disaster at the plant, like an earthquake or a nuclear reactor leak, or unanticipated maintenance and security costs that often plague old nuclear power plants.
That cost – reaching tens of billions of dollars – will be passed on to 15.8 million Californians already fleeced by PG&E’s exorbitant electricity bills. According to EWG estimates, keeping Diablo Canyon open could add from $55 to $124 a year to the typical utility bill, considering the cost of the facility as a fixed charge over 23 years.
Or it could be even higher because these costs, at the moment, are highly speculative and the older Diablo Canyon gets, the higher the capital and operating costs will become to keep it online and providing electricity.
An extension of the facility’s life for 20 years after its scheduled 2025 shutdown could also generate other large costs just to ensure its ongoing operation. Many aging nuclear power plants are notorious for wasting millions of dollars on unanticipated maintenance and security costs.
“Keeping Diablo Canyon open past its closure date is a terrible idea for many reasons, including the staggering price tag that unwitting ratepayers will face for keeping the dilapidated and dangerous nuclear plant operating,” said EWG President and Bay Area resident Ken Cook.
“Let’s be clear, the tens of billions it will cost to keep Diablo Canyon operating will ultimately be borne by PG&E’s ratepayers, who already pay some of the highest electricity bills in the country, while the monopoly’s shareholders will reap additional profits,” said Cook.
About the analysis, senior EWG energy advisor and co-author of the report Grant Smith
said, “We do not see how keeping Diablo Canyon online will save ratepayers money, as its supporters claim.” These costs are also entirely avoidable, because the power this problematic plant generates could easily be replaced by new clean energy investments.”
An unnecessary nuclear facility
What’s just as outrageous as the potential $45 billion-plus cost of extending Diablo Canyon’s life is the fact that the state has no need to keep the plant open after the scheduled 2025 closure.
California has committed to getting 100 percent of its electricity from clean energy sources like solar and wind by 2045. The state is making great progress, and on April 30, 2022, 100 percent of its electricity came from clean energy. Solar produced more than 12,300 megawatts of the 18,000 megawatts needed at the time to power the entire state. The rest came from wind, geothermal and hydropower. There’s simply no need for Diablo Canyon.
Diablo Canyon generates between 6 and 8 percent of California’s electricity annually, which could easily come from clean, safe and renewable sources. The billions of dollars that would be wasted to keep the nuclear plant running would be better spent on new renewable power and other clean energy options that can benefit both the environment and ratepayers.
“California added enough renewables in the past year to match the power output of Diablo Canyon,” said EWG’s Smith. He advocates for investing in wind, solar and other clean energy strategies, including demand response, which helps reduce pressure on the electric grid.
There’s no reason to wait to find a new approach. Californians have shown they are willing to adapt to demand response programs. In September 2022, the state avoided blackouts, largely thanks to residents conserving power by turning off air conditioning, appliances and lights.
“Proven, reliable clean energy choices such as energy efficiency, solar, wind, battery storage and demand response are far safer options than allowing Diablo Canyon to continue operating,” Smith said.
Noted energy analyst Amory Lovins told the California Energy Commission in August 2022 that state data show that within two years of closing a nuclear plant, the electricity generated by renewable and distributed energy fully replace the power generation that would be lost by closing the plant.
Mark Jacobson, director of the Atmosphere and Energy Program at Stanford University, recently noted that the California Independent System Operator – which oversees the operation of the state’s bulk electric power system – said the state added 2,500 megawatts of renewable power capacity and output in just over a year, equal to Diablo Canyon’s maximum output alone.
The danger of Diablo Canyon
Diablo Canyon, located on California’s central coast in San Luis Obispo, sits atop a web of fault lines and rests above a cliff below the Pacific Ocean, putting it at heightened risk of damage from an earthquake, tsunami or both.
The facility was set to close both of its two reactor units by 2025, following a carefully crafted 2018 deal between PG&E, unions and environmentalists. The deal had the support of state regulators and then-Lieutenant Gov. Gavin Newsom, who was elected governor in 2018.
That deal is now at risk of collapsing after Newsom, worried about the specter of electricity blackouts during summer 2022 heat wave, last year pressured the state legislature to pass a bill to prolong the plant’s life. The legislature approved a plan to give the monopoly utility PG&E a $1.4 billion “forgivable loan” to keep the aging facility operating until 2030.
Ignoring its own licensing rules, the U.S. Department of Energy has also stepped in. It provided PG&E with a $1.1 billion taxpayer-funded, near-term lifeline to keep the plant operating, under the federal infrastructure legislation’s Civil Nuclear Credit Program to save struggling nuclear power plants.
And the Nuclear Regulatory Commission violated its own rules by sidestepping a required environmental impact statement and allowing PG&E to file for a license extension by the end of the year, instead of five years before the requested extension date.
PG&E is expected to ask for a 20-year license extension that would allow the nuclear plant to operate until 2045. But according to Nuclear Regulatory Commission rules, the utility could file for a shorter period. PG&E has until the end of year to file its application and has notified the California Public Utilities Commission it will pass on any of the costs of extending the life of Diablo Canyon to ratepayers across the state, including those outside the company’s service area.
The Environmental Working Group (EWG) is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.