California Lawmakers in Standoff with Gavin Newsom over $400M Loan to Keep Diablo Canyon Open

Source: Sacramento Bee  |  By Ari Plachta

California lawmakers rejected Gov. Gavin Newsom’s bid to include another $400 million for Pacific Gas & Electric Co. in the state budget, in a political standoff that began in 2022 with a bargain to keep the Diablo Canyon Power Plant open. The budget process was a far more unworried affair in 2022, when, at Newsom’s urging, the Legislature approved $1.4 billion in loans to keep the Diablo Canyon plant open to help maintain reliability of the state’s power grid. PG&E had been preparing to shutter it in 2025.

Matt Freedman, staff attorney at The Utility Reform Network, said it’s unclear that the plant is needed to keep the lights on especially as more clean energy sources come online. Yet the state’s bill to keep it open is growing. “Legislators were told that the $1.4 billion would be completely repaid by the federal government. That turned out not to be true, and the delta between the promise and reality is getting larger as time goes on,” he said. He called Newsom’s arrangement with PG&E back in 2022 a “last-second, stinky political deal that provided a series of benefits and protections to PG&E shareholders,” he said, including performance-based disbursements for investors.“Every dollar that goes to Diablo Canyon is a dollar that doesn’t go to some other essential government service.”