Biden Proposes Changes to Help Rescue California Nuclear Plant

(Bloomberg) -- The US Department of Energy is proposing changes requested by California Governor Gavin Newsom that will allow the state’s last nuclear power plant to qualify for federal financial assistance. 

The Energy Department proposed removing a requirement that would have prevented PG&E Corp.’s Diablo Canyon nuclear power plant from getting a portion of $6 billion in funds the Biden Administration is making available to rescue reactors at risk of closing early because they are losing money. The Energy Department posted the suggested amendment on its website and asked for public comments by June 27. 

Newsom is reconsidering a state plan to retire Diablo Canyon in 2025 because of projected electricity shortages that could lead to blackouts in the state. 

The effort to keep Diablo Canyon open would gain momentum if the plant can qualify for federal financial aid. California’s potential reversal of its anti-nuclear power stance underscores the crisis the state is facing as it seeks to decarbonize its grid. 

Last month, Newsom asked the Energy Department to amend its nuclear funding criteria so Diablo Canyon would be eligible. The federal program was originally designed to help nuclear plants that were financially struggling in competitive wholesale power markets, which wasn’t the case with Diablo Canyon. 

The Energy Department suggested that it would eliminate a requirement that a nuclear reactor applying for funds not recover more than 50% of its costs from regulated rates or contracts. The costs of PG&E’s Diablo Canyon plant are recovered through bill charges to its customers. 

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