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Economists present divergent models but agree Diablo Canyon affects local economy
Summary
Two economists presented modeling of Diablo Canyon’s continued operation: Dr. John Parsons estimated system-wide savings of roughly $7–$20 billion depending on assumptions; Dr. Roland Holst estimated about $420 million annually in county value-added and roughly 1,567 local full‑time equivalent jobs.
Two separate economic presentations framed the fiscal question around Diablo Canyon’s possible life extension.
Dr. John Parsons (presenting remotely) summarized capacity-expansion modeling that used CPUC/RESOLVE inputs and described three modeled scenarios: the 'least cost' and 'base case' both assumed retirement in 2029–2030, while a third kept Diablo Canyon operating to 2044–2045. Parsons said keeping Diablo in the system lowers statewide system costs and summarized headline savings of roughly $7.6 billion (versus the least-cost counterfactual) up to about $20 billion (versus a higher-cost base case), noting the precise figure depends on assumptions about counterfactual investments in offshore wind, long-duration storage and other resources. “Keeping Diablo Canyon lowers the cost… somewhere between 7 and $20,000,000,000,” Parsons said.
Dr. Roland Holst (University of California) presented an economic-impact assessment focused on local and regional effects. He estimated nearly $1 billion in gross state product annually attributable to the facility, about 3,700 full-time-equivalent jobs statewide and roughly $420 million in annual value-added for San Luis Obispo County alone, which he said equates to approximately 1,567 full‑time-equivalent premium local jobs and substantial annual tax receipts. “Nearly $1,000,000,000 in additional gross state product,” Holst said, adding that the plant’s payroll and outage-driven hiring create outsized benefits for local contractors, housing markets and municipal bond pricing.
Both presenters stressed model sensitivity to key assumptions: future technology costs, storage deployment, transmission investments and what counts as the counterfactual grid. Audience members later questioned funding sources and sponsoring relationships behind published studies; several commenters flagged that Parsons’ paper was authored by a lecturer affiliated with MIT and that funding and modeling assumptions deserve scrutiny. The session underscored that economic outcomes depend heavily on modeling choices and on whether the state directs mitigation or unitary-tax replacement funds to host communities.
