DOE amends Civil Nuclear Credit programme criteria

01 July 2022

The US Department of Energy (DOE) has amended eligibility criteria for the current award cycle under its USD6 billion programme to support the continued operation of US nuclear reactors under threat of premature closure, and extended the deadline for submissions. The revision was one of those requested by California Governor Gavin Newsom as the state considers delaying the planned closure of its only nuclear power plant, Diablo Canyon.

Diablo Canyon (Image: US Nuclear Regulatory Commission/PG&ERC)

The DOE opened the applications process for the first award cycle of the USD6 billion Civil Nuclear Credit (CNC) programme in May. It has now amended its guidance to replace the requirement that a nuclear reactor applying for credits under the CNC programme must not recover more than 50% of its costs from cost-of-service regulation or regulated contracts.

"US nuclear power plants are important clean energy assets and preserving our existing fleet will maintain nearly half a million good-paying jobs in the nuclear industry," Assistant Secretary for Nuclear Energy Kathryn Huff said. "The amended CNC Guidance supports the intent of President Biden's Bipartisan Infrastructure Law to keep the reactors online that sustain local economies and today provide our nation's single largest source of carbon-free electricity."

The USA's current fleet of reactors is a vital resource to achieve the Administration's goal of net-zero emissions economy-wide by 2050, DOE said, but "shifting energy markets and other factors" have resulted in the premature retirement of 13 commercial US since 2013, leading to rising carbon emissions in those regions, poorer air quality, and job losses. The CNC programme aims to "equitably address" these challenges while supporting clean energy goals.

Pacific Gas and Electric Company's two-unit Diablo Canyon plant has been California's only nuclear generating capacity since the premature retirement in 2013 of units 2 and 3 at Southern California Edison's San Onofre plant. The company in August 2016 announced plans to retire Diablo Canyon at the end of the reactors' current 40-year operating licences, which expire in November 2024 for unit 1 and August 2025 for unit 2.

However, the past year has seen numerous calls for that decision to be reconsidered to help the state reach its decarbonisation goals and in the face of reliability challenges. In April, Newsom told the editorial board of the LA Times that he was considering keeping the plant open and intended to apply for the federal funds.

In May, Newsom's office wrote to the DOE requesting a change to the requirement on cost recovery, saying that continued operation for a plant such as Diablo Canyon would incur significant "transition costs" which would not be recoverable through sales of its output into the Californian electricity market.

"This change made in the Amended Guidance was one of three requests by the Office of the Governor of California in a letter dated 23 May 2022," the DOE said yesterday. The proposed change, which has been open to public comment, "better supports the intent" of the Bipartisan Infrastructure Law and the goals of the programme, it added.

DOE has extended the deadline for applications and bids by 60 days, to 6 September, to give potential applicants sufficient time to prepare submissions in accordance with the amended guidance.

Researched and written by World Nuclear News