Biden Finalizes $1.1 Billion in Credits to Help Keep California’s Last Nuclear Power Plant Running

Although some environmental groups oppose the extension, the Diablo Canyon Power Plant provides about 17 percent of California’s zero-carbon electricity supply.

Aerial view of the Diablo Canyon Nuclear Power Plant, which sits on the edge of the Pacific Ocean at Avila Beach in San Luis Obispo County, Calif., on March 17, 2011. Mark Ralston/AFP via Getty Images

The Diablo Canyon Power Plant in California received another financial boost from the Biden administration Jan. 17 to help the state’s last operating nuclear power plant continue operations.

The U.S. Department of Energy announced the signing of a $1.1 billion credit award and payment agreement Jan. 17 with Pacific Gas and Electric funded by President Biden’s Infrastructure Law.

The nuclear power operation, located between San Francisco and Los Angeles near San Luis Obispo in Central California, was slated to close in 2025, but state officials decided in 2022 to extend the life of two remaining reactors as additional green energy infrastructure lagged behind consumer energy demands. The state has also agreed to spend $1.4 billion to continue operations.

California’s extreme summer temperatures and wildfires have strained the state’s power grid in the past few years, causing rolling blackouts and government pleas for energy conservation.

Although some environmental groups oppose the extension, the plant employs about 1,300 workers in San Luis Obispo County. It provides about 17 percent of California’s zero-carbon electricity supply and about 9 percent of the state’s electricity.

The Biden administration’s credit program supports the continued operation of nuclear energy facilities in the U.S., offering $6 billion nationally to preserve aging nuclear plants.

“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 energy department’s Grid Deployment Office, in a statement Wednesday.

The energy department announced in November 2022 it had preliminarily selected Diablo for the credits. That selection was finalized this week, according to department officials.

The credits will be paid in installments through 2026.

The amount of annual payments will be adjusted based on a number of factors, including actual costs incurred to extend the operation of the power plant, according to the energy department.

The first payment is slated for 2025 based on operations at the plant in 2023 and 2024, according to the energy department.

Nuclear power provides nearly half of the nation’s carbon-free electricity, the department reported.