The Department of Energy (DOE) has conditionally awarded $1.1 billion in federal funding to Pacific Gas and Electric Co. (PG&E) to support extending operations at California’s last remaining nuclear power plant.

PG&E’s 2.2 GW Diablo Canyon Power Plant (DCPP) in San Luis Obispo County provides about 17% of California’s carbon-free electricity and 8.6% of the state’s total electricity. The funds would be made available through the Civil Nuclear Credit Program.

“This is another very positive step forward to extend the operating life of Diablo Canyon Power Plant to ensure electrical reliability for all Californians,” said PG&E CEO Patti Poppe. “While there are key federal and state approvals remaining before us in this multi-year process, we remain focused on continuing to provide reliable, low-cost, carbon-free energy to the people of California, while safely operating one of the top performing plants in the country.”

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DOE Secretary Jennifer Granholm weighed in as well.

“This is a critical step toward ensuring that our domestic nuclear fleet will continue providing reliable and affordable power to Americans as the nation’s largest source of clean electricity,” Granholm said. “Nuclear energy will help us meet President Biden’s climate goals, and with these historic investments in clean energy, we can protect these facilities and the communities they serve.”

California’s Senate Bill (SB) 846, which Gov. Gavin Newsom signed into law on Sept. 2, sought to extend DCPP’s operations for five years beyond its current license expiration in 2025. 

The idea was “to improve statewide energy system reliability and reduce greenhouse gas emissions while additional renewable energy and carbon-free resources come online,” DOE said.

California last month also authorized a loan of up to $1.4 billion from the Department of Water Resources to support extending the life of DCPP.

SB 846 directed PG&E to apply for any available federal funds to pay back the loan. PG&E applied for the DOE funds the same day that Newsom signed SB 846.

The final amount of federal funds awarded to PG&E “will be determined following completion of each year of the award period, and amounts awarded will be based on actual costs,” DOE said. 

California’s SB 100 passed in 2018 calls for a carbon-free electricity sector by 2045.

Newsom, meanwhile, issued an executive order in 2020 requiring all new vehicle sales to be zero-emission by 2035. 

The state will need to roughly triple its current electricity grid capacity to meet the 2045 target while electrifying other sectors such as transport to meet its economy-wide climate goals, according to an inter-agency report released last year by the California Energy Commission (CEC), the California Public Utilities Commission and the California Air Resources Board. 

Natural gas accounted for 50.2% of California’s in-state power generation and 37.9% of the state’s total electricity mix in 2021, according to CEC.