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News + PoliticsNewsom wants emergency $1.4 billion PG&E nuclear bailout—now

Newsom wants emergency $1.4 billion PG&E nuclear bailout—now

Fast-track bill would override state regulation and give criminal utility taxpayer money for a plant that isn't safe—and guv wants a vote this week.


Gov. Gavin  Newsom just released an immensely complicated bill that includes stunning taxpayer giveaways to PG&E, changes the way energy prices are set in California, and would keep alive a nuclear power plant that is not only aging but no longer meets federal safety standards.

And he’s asking the state Legislature to vote on it Wednesday/31.

“This is terrible,” Loretta Lynch, former president of the California Public Utilities Commission and an energy-policy expert, told me.

The plant doesn’t meet current safety standards—but Newsom wants to keep it running.

The bill has substantial opposition, not only from environmental groups but from news outlets: Four decades ago, all of the major daily papers in California supported nuclear power. They all backed PG&E’s plans for the Diablo Canyon nuke, and made excuses for all of PG&E’s mistakes.

Today, the Los Angeles Times and the San Francisco Chronicle are questioning or opposing this deal. Two of the most respected energy experts in the world, Amory Lovins and Ed Smeloff, say it’s a bad idea.

And yet, Newsom is pushing this forward at breakneck speed, seeking emergency authorization to keep the plant operating.

Among the very serious problems with the new bill (which runs 66 pages and most legislators will never read before the vote):

—Newsom wants the taxpayers, even those who will never use PG&E power, to hand the company $1.4 billion to keep the plant going, and $300 million of that will go directly to shareholders. “The Legislature just decided that paying for summer school lunches at $1 billion was too expensive,” Lynch said.

Of course, the PG&E ratepayers have already paid for the plant, many times over, with higher electric rates.

—The bill overrides the authority of the state PUC and sets in law the very high rates that consumers would be forced to pay for the Diablo power. “It sets PG&E’s profit, and takes that authority away from the PUC,” Lynch said.

—More: the ratepayers will be paying PG&E for power that right now goes into the grid at times for free. Diablo Canyon generates power every day, all day, and at times the grid doesn’t need that power. But under this bill, we would pay for it anyway. “I’ve never heard of a statute setting rates for the price of power in 2030,” Lynch told me.

—The ratepayers, including most of the residents of Northern California, have already started paying the cost of shutting down the plant. We have been paying for several years for the upfront decommissioning costs, the costs of worker retraining, and community benefits.

—For the past five years, since the company agreed to a deal to shut down Diablo, PG&E has done very little long-term maintenance; the idea was that the nuke would be offline by 2025. To keep it going, the company would have to spend an untold amount of money just to catch up with deferred maintenance, if it’s even possible. The bill includes a $300 million public insurance policy in case of problems, even if PG&E was at fault.

—Diablo Canyon doesn’t come close to meeting the current federal standards for licensing a nuclear plant, so even after spending all this money, the federal Nuclear Regulatory Commission might nix the idea. After the Fukushima disaster, which was caused by an earthquake, the NRC upgraded standards for these plants. Diablo is right on the edge of an active earthquake fault, and Lynch said that under the new rules, the plant doesn’t qualify for an operating license.

So the guv and PG&E are pushing, hard, for a bill that would undo years of hard work and negotiations, give a utility that has be found guilty of multiple felonies and has been horribly mismanaged a no-string taxpayer bailout, and leave a dangerous creaky old plant in place much longer than anyone planned for.

Newsom needs a two-thirds vote of both houses for the emergency bill. I have contacted all of SF’s state legislators to ask their positions, and none of them have responded. I will update if they do.

48 Hills welcomes comments in the form of letters to the editor, which you can submit here. We also invite you to join the conversation on our FacebookTwitter, and Instagram

Tim Redmond
Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.


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