PG&E tells Senate Diablo Canyon meets federal safety reviews; lawmakers press for firm loan repayment, coastal permits and local tax fixes

Pacific Gas & Electric Company told a State Senate oversight hearing that Diablo Canyon Power Plant meets the Nuclear Regulatory Commission’s safety and environmental requirements for continued operation, while senators pressed PG&E and state officials for clearer guarantees about loan repayment, coastal approvals, seismic testing and local tax impacts.

“Unit 1 and Unit 2’s average capacity factor…was 94% last year. That's rain or shine — available night and day, 24 hours a day,” Maureen Zawalek, PG&E vice president for nuclear business and technical services, told the committee. Zawalek said PG&E filed a federal license renewal application for up to 20 additional years in November 2023 and that the NRC issued an environmental impact statement in June 2025 that supports continued operations.

Why this matters: SB 846 authorized a five‑year extension of Diablo Canyon operations while imposing reporting, seismic and other implementation conditions and created a state loan (administered by the Department of Water Resources) that PG&E will repay — in part — using federal civil nuclear credits. Committee members said the state must be confident the loan will be repaid and that local governments should not be left with revenue shortfalls.

Key points from PG&E and senators:

• Loan and federal credits: PG&E and DWR said DOE civil nuclear credits were pursued and a credit‑payment agreement was signed in January 2024; DWR and PG&E said credits will be placed in escrow and used to repay the DWR loan. DWR staff told the committee the first DOE credit could be awarded at the end of the year once the extended‑operations period begins. Senator John Laird pressed for a binding path to make sure any remaining shortfall in loan repayment would not fall to taxpayers; PG&E and DWR did not provide a legislative guarantee that an identified remaining gap would be covered by non‑taxpayer sources.

• Seismic and materials work: PG&E said the Nuclear Regulatory Commission documented safety findings in June 2025 and that a reactor vessel surveillance capsule pulled this spring will provide an additional confirmation. Senator Laird noted capsule test results would not be available until April 2026; PG&E said the NRC’s June 2025 safety evaluation already concluded the plant is acceptable to operate through extended license terms, and that the capsule will provide further confirmation.

• Spent fuel and storage: PG&E told the committee the site has adequate on‑site storage capacity to hold spent fuel for 60 years (a mix of pool and dry storage arrangements consistent with federal safety assessments).

• Coastal permits and local tax impacts: PG&E has an ongoing application process with the California Coastal Commission and the regional water board for Clean Water Act (401) certification; the company said it is working with commissions and expects decisions early next year. Senators indicated the Coastal Commission completeness clock tied to SB 846 had not started in the sense of a final, “deemed complete” filing, and asked PG&E to expedite the outstanding items. The committee also discussed the unitary property tax revenue that helped local governments after shutdown was anticipated; PG&E said it and the state previously provided $185 million to San Luis Obispo County as planning and mitigation funding and that future changes to unitary tax treatment would require legislative action.

• Economic and GHG impacts: PG&E cited an analysis that keeping Diablo online through the current extension reduces statewide energy costs and yields an estimated $3.2 billion in customer benefits through 2030, and annualized environmental benefits equivalent to avoiding greenhouse gas emissions from about 1.6 million cars across the extension period.

Senators said the hearing left several items requiring follow‑up — most prominently a concrete, legislative or contractual assurance on how any remaining loan shortfall would be covered so taxpayers and local governments would not face a liability. The panel also requested further, written updates on Coastal Commission application status, the capsule test schedule and any outstanding deficiencies identified by independent safety reviewers.