US Administration signs off on federal funding for Diablo Canyon

19 January 2024

The US Administration has signed the credit award and payment agreement finalising the USD1.1 billion in credit payments awarded under the Civil Nuclear Credit (CNC) programme to help keep the Diablo Canyon nuclear power plant in operation.

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

The payments are through the Civil Nuclear Credit (CNC) programme, a USD6 billion strategic investment under the Bipartisan Infrastructure Law to help keep the USA's existing reactor fleet in operation. The Pacific Gas and Electric Company (PG&E) plant was conditionally awarded the credit in November 2022.

"Preserving the nation's nuclear fleet is critical not only to reaching America's clean energy goals, but also to ensuring that homes and businesses across the country have reliable energy," said Maria Robinson, director of the US Department of Energy's Grid Deployment Office. The announcement "demonstrates the Administration's commitment to domestic nuclear energy by preserving existing generation, while we continue to support a stronger nuclear power industry", she added.

The payments will be made in instalments over four years of operation from 2023, with the amounts adjusted to reflect factors including the actual costs of keeping the two-unit plant in operation. The first payment, to be made in 2025, will be based on the operation of the plant in 2023 and 2024.

While nuclear power currently provides nearly 50% of the USA's carbon-free electricity, shifting energy markets and other economic factors have resulted in the early closures of some 13 of the country's commercial reactors  since 2012. The CNC programme - part of the Bipartisan Infrastructure Law signed by President Joe Biden in November 2021 - aims to address those challenges by allocating credits to "certified" reactors which can show that they are projected to close for economic reasons and that closure will lead to a rise in air pollutants and carbon emissions.

PG&E had agreed in 2016 that the two-unit Diablo Canyon plant would close at the end of its current licences - in 2024 for unit 1 and 2025 for unit 2. At that time, it was thought that the plant's output would no longer be required as California focused on an energy policy centred on efficiency, renewables and storage. However, in September 2022 - as California's energy grid saw its highest-ever peak demand during a record-breaking heatwave - the state passed a law allowing the two nuclear units that provide 9% of California's power generation to continue operation.

Researched and written by World Nuclear News