Coming to your electric bill: Monthly charge to extend Diablo Canyon’s life

Folks who hate nuclear energy — and, judging by my inbox, there are quite a few of you — rejoiced when San Onofre stopped splitting atoms more than a decade ago. But Southern Californians may be surprised to learn that, unless things radically change, they’ll be paying for nuclear energy again soon.

In something of an all-for-one, one-for-all move, customers of Southern California Edison and San Diego Gas & Electric are slated to kick in another $1.25 or so a month (Edison) and 87 cents a month (SDG&E) to extend the life of the aging Diablo Canyon Nuclear Power Plant, run by Pacific Gas & Electric (whose customers are slated to pay $2.07 a month).

But that’s just for next year, and critics say those numbers grossly underestimate what folks would actually have to pay in future years. Worse is that, if PG&E collects more money than it needs for Diablo, it could keep it for projects in its area, while Southern Californians would get squat.

All this may not be welcome news. Electric bills have essentially doubled over the past decade. There’s no permanent home for radioactive waste. But the official idea is that the Central Coast’s Diablo — California’s last operating commercial nuclear power plant — will smooth the transition from fossil fuel past to greenhouse gas-free future “without compromising system reliability,” legislators said when they made the plan two years ago.

It’s not an inexpensive proposition. Keeping Diablo humming through 2030 — five years longer than its planned shut-down date — is an $8 billion-ish to $10 billion-ish to $12 billion-ish endeavor, depending on whose numbers you believe.

The pressing question is: Do we really need Diablo? California has added an impressive array of new energy resources over recent years, and more will come online during the Diablo extension period.

The California Public Utilities Commission is to make final decisions on who pays what by year’s end. Folks might want to chime in now, while they can.

Hot, hot, hot

Despite this summer’s dragon-breath heat, there have been no rolling blackouts due to energy shortages. No frantic requests to conserve power to keep others’ lights on.

Turns out that California has added 18,500 megawatts of new resources between 2020 and 2024 — enough to power some 14 million homes — and another 11,000 megawatts are slated to come online by 2028, according to data from the California Public Utilities Commission.

Most of these new resources are green — battery storage, solar or a combination of both.

“We are glad to be doing our part in adding battery electric storage systems that support grid reliability, especially this summer with the repeated heat waves,” said Southern California Edison spokesman Jeff Monford. “The results speak for themselves.”

It’s a very different scenario than in 2022, when California was fighting monstrous wildfires and pandemic-era supply chain snags. That’s when legislators passed, and the governor signed, Senate Bill 846, authorizing Diablo’s extension through 2030, along with a $1.4 billion loan from the state to PG&E “to facilitate the extension of the plant.”

“Extreme heat leads to August 2020 rotating outages,” said a Senate analysis of the Diablo extension bill. “For the first time in 20 years, California experienced rotating electricity outages when the electric grid operator, the CAISO, forced electricity outages in order to balance electricity supply and demand on Friday, August 14 and Saturday, August 15, 2020. The outages occurred in the midst of an extreme heat wave affecting much of the western United States….

“(T)he threat of the loss of power and the need for all-hands-on-deck emergency actions raised concerns about the state’s ability to prepare the electric grid for future extreme heat events,” it said. “In transitioning to a reliable, clean, and affordable resource mix, resource planning targets have not kept pace to ensure sufficient resources that can be relied upon to meet demand in the early evening hours. This made balancing demand and supply more challenging during the extreme heat wave.”

Legislators acknowledged their distaste for nuclear and engineered an out.

SB 846 “provides an off-ramp to the extension by allowing the CPUC to retire the plant early if new renewable energy and zero-carbon resources are built, interconnected, and determined to be adequate substitutes” for Diablo, the analysis said.

Exit here?

“The legislative proponents of SB 846 assured skeptical constituents that they built offramps into the process if the Diablo extension became too expensive or unnecessary,” said David Weisman, executive director of the Alliance For Nuclear Responsibility.

“Well, it’s time for them to switch on their right turn blinkers and take the next exit ramp, before they drive ratepayers into a $10 billion pileup.”

The extension is not reasonable, prudent or cost-effective, attorney John Geesman — a former California Energy Commission member — recently told the CPUC. Changed conditions in California’s electrical markets since 2022, along with a doubling in projected costs, have upended the economic logic of the extension.

Weisman said it’s like a “taxation without representation” thing for Southern California customers of Edison and SDG&E. They’d be paying for bonuses PG&E gave its workers — for a period of time before the extension even starts. It looks like an enormous financial gift to PG&E, he said.

A PG&E spokesperson has said the $10 billion-plus figures incorrectly include billions in unrelated costs. The company has pegged the cost at $8.3 billion, and “the financial benefits exceed the costs.”

Legislators — who could work to change all this — have been getting angry screeds from constituents. Some are starting to waver. There was quibbling over the loan to PG&E, if and when it would be repaid, whether taxpayers could be out hundreds of millions if the extension falls through.

Gov. Gavin Newscom corralled them, however, and the $400 million loan to PG&E survived. But there’s a wellspring of anger out there.

“The final budget deal with the Governor represents a total capitulation to PG&E and its shareholders,” Utility Reform Network attorney Matthew Freedman told the Sacramento Bee. “This $400 million will never be paid back to the general fund, forcing taxpayers to absorb the costs.”

And precisely what those costs will be won’t be transparent.

Utilities and critics alike asked the CPUC to break out Diablo extension charges as a separate line on electric bills, so folks can easily see what it’s costing them. The CPUC said no, that’s not necessary, and wants to fold it into “public purpose programs” charges, inscrutable to the Average Jo.

Proceed with caution

The folks who run the grid, the California Independent System Operator, celebrate the growth in clean energy.

“(R)ecord-setting solar generation and battery output” that “marks the fifth consecutive year that solar has hit new peaks within the ISO footprint, while battery storage has become a major resource for grid reliability in just the last few years,” said a recent post.

But officials also urge caution.

“It’s important to keep these records in perspective and not to overstate their significance,” wrote Amber Motley, CAISO’s director of short-term forecasting, in June. “There’s still a long way to go to reach the state’s much larger goal of having a 100% carbon-free grid by 2045, but this spring’s advances are significant steps in that direction.”

Big enough steps to ditch Diablo? We’ll be reaching out to lawmakers in coming weeks to take their temperatures on all this.

“The Newsom administration should congratulate themselves for having performed the remarkable task of accelerating the battery plus storage revolution that, in the summer of 2022, they foresaw as an impossibility, thus necessitating SB 846 and the perpetuation of Diablo,” Alliance For Nuclear Responsibility’s Weisman said. “They should declare victory, take a bow and return Diablo to its original retirement dates.”