Friday, August 29, 2025

California Legislature Passes Bill That Could Extend Lifeline For Diablo Canyon Nuclear Plant

The state’s bicameral legislature passed a bill that aims to establish a fund that will empower California to augment its power generating capacity to a more strategically sustainable sufficiency. The policy move is seen to potentially extend the lifeline of the 2,240-MW Diablo Canyon Nuclear Power Plant, set to fully close in August 2025.

The legislature body passed Assembly Bill 205 Energy chiefly establishes the 2022 California Arrearage Payment Program that allots around US$2.0 billion financial assistance to power utilities’ customers. The legislation also includes proposing the creation of the Strategic Reliability Reserve Fund to aid the state in ensuring electric grid reliability.

“The Strategic Reliability Reserve Fund is hereby created in the State Treasury… the moneys in the fund and the accounts contained in the fund are hereby continuously appropriated without regard to fiscal year to be expended by the commission for purposes of adding resources to the electrical grid to ensure electrical grid reliability and support the clean energy transition,” the bill read.

In the state’s preliminary summary for 2022 Budget Act, it has earmarked US$2.2 billion “to support the Strategic Reliability Reserve” and US$550 million “to support distributed backup electricity backup assets and utility scale assets to support energy reliability.”

“This funding enables California to decide at a later date to reverse the slated premature closures of Diablo Canyon units 1 and 2 in 2024 and 2025,” said American Nuclear Society President Steven Arndt and CEO Craig Piercy in a joint statement.

However, the bill also outlines the prioritization of the allocation. The Department of Water Resources, tasked with fund oversight, is ordered to prioritize “investments in feasible, cost-effective zero-emission resources, and then feasible, cost-effective conventional resources.”

Specifically, the bill identifies the Electricity Supply Strategic Reliability Reserve which allows the department to utilize the fund for, among others, the “extension of the operating life of existing generating facilities planned for retirement.”

Pacific Gas & Electric Co., which manages the Diablo Canyon nuclear plant, has earlier announced the voluntary plan to permanently close down the plant upon the expiration of its respective operating licenses–November 2024 for Unit 1 and August 2025 for Unit 2. 

However, California Governor Gavin Newsom said in April that the plant’s closure might hit the state’s energy security given the global supply instability.

The AB 205 is a win for the state’s administration, with Newsom continuously negotiating with the state legislature to pass a bill that would address energy sufficiency. But the bill, criticized as a “fossil-fuel heavy response,” faced pushback originating from climate change concerns.

The latest version of the bill is seen as a win-win for both concerns.

The bill passed both houses–64-13 voted in favor in the lower house, 27-8 voted in favor in the upper house–and now awaits Newsom’s signature to make it a state law.


Information for this briefing was found via PowerMag. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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