Diablo Canyon Closure: A Tax Conundrum

Diablo Canyon Nuclear Power Plant. Photo by Marya from San Luis Obispo, USA – Flickr, CC BY 2.0

The Diablo Canyon Generating Station, California’s largest and only operational nuclear power plant, is set to be decommissioned in 2025.

Since its inception, the facility has been the target of environmental protests, of which about 1,500 to 2,000 people protesting against factory construction work in 1981.

The plant was built near the Hosgri Rift, a nearby fault line where earthquakes are more likely to occur. This raised concerns among the citizens of San Luis Obispo and the Nuclear Regulatory Commission (NRC) about the potential for seismic core damage.

It turns out that a lot of PG&E the reasons for the plant closure are fiscal in nature. PG&E is struggling financially due to a series of questionable investments and lawsuits related to the mismanagement of security measures. See, for example, the Paradise forest fire.

David Weisman, the outreach coordinator for the Nuclear Accountability Alliance, explained why the plant is closing.

“They’re losing customers to community choice,” Weisman said.

Due to consumers getting their electricity from alternative energy sources, such as the wind or their personal solar collectors, PG&E loses money by generating from the Diablo Canyon facility. Diablo Canyon costs money to operate. The exact numbers are unknown, but estimates are placed at around six cents per kilowatt. And with fewer customers buying its power, it has become more expensive to stay open.

According to Weisman, the average salary for one of the plant’s approximately 24,000 employees is around $157,000.

San Luis Obispo County got $85 million of PG&E following a bill drafted by Senator Bill Monning and signed by the Governor Jerry Brown. SLO County as a whole has already spent all that money, so to keep the Diablo Canyon facility running, the county would have to pay back millions of dollars.

San Luis Obispo will not refund this money and will instead receive the benefits of the closing case rather than keeping the plant running.

“So they know something’s wrong with Diablo, and PG&E is having a toast with all of its shareholders. Everything [the main generator] produces steam,” Weisman said. “Another part of the plant that has nothing to do with cancer, radiation and explosions, can cripple the whole operation.”

According to Weisman, PG&E’s final decision not to renew Diablo Canyon’s license stems from the inability to obtain California Coastal Commission approval for a coastal permit to continue using their water. Wesman added that a Coast Commission representative told a 2014 hearing that Diablo Canyon was the number one predator of marine life in the area.

The only way the factory can stay open is with a proposal from Gavin Newsom. Newsom raised the idea that PG&E might seek a share of $6 billion federal funding from the Biden administration to help nuclear power plants threatened with closure.

“There are several problems with the Biden administration’s plan for a $6 billion bailout of failing nuclear plants,” said Andrew Christie, director of the Local Chapter of the Sierra Club of Santa Lucia. “As an unscalable and inflexible source of energy, nuclear forces a reduction in the amount of wind and solar energy on the power grid. Therefore, a $6 billion subsidy for uneconomical nuclear power plants represents $6 billion dollars that do not support – and in fact hinder – the development of more solar and wind power, and energy efficiency in buildings and appliances.

No new nuclear power plants are scheduled for development in California due to an imposed moratorium issued in 1976 on the construction and licensing of new nuclear fission reactors.


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