End of an atomic era: PG&E to close Diablo Canyon nuclear plant

The Diablo Canyon Power Plant is an electricity-generating nuclear power plant near Avila Beach in San Luis Obispo County, California. PG&E, its owner, announced on June 21, 2016, that it will close the plant in 2025. less The Diablo Canyon Power Plant is an electricity-generating nuclear power plant near Avila Beach in San Luis Obispo County, California. PG&E, its owner, announced on June 21, 2016, that it will close the plant ... more Photo: Nancy Pastor, Nancy Pastor For The SF Chronicl Photo: Nancy Pastor, Nancy Pastor For The SF Chronicl Image 1 of / 37 Caption Close End of an atomic era: PG&E to close Diablo Canyon nuclear plant 1 / 37 Back to Gallery

Pacific Gas and Electric Co. announced Tuesday it will close California’s last nuclear plant, Diablo Canyon, in 2025, ending atomic energy’s more than a half-century history in the state.

The move will shutter a plant whose construction on a seaside cliff surrounded by earthquake faults helped create the antinuclear movement. And yet, some conservationists have fought to keep Diablo Canyon open, arguing California needed its output of greenhouse gas-free electricity to not exacerbate global warming.

As part of an agreement with several environmental groups that have long sought to shutter the plant near San Luis Obispo, PG&E will replace Diablo Canyon exclusively with electricity sources that don’t pump carbon dioxide into the atmosphere. The company also promised to get 55 percent of its total electricity from the sun, wind and other renewable sources by 2031.

Federal regulators had been weighing whether to extend Diablo Canyon’s operating life for another 20 years after its initial licenses expire in 2024 and 2025. But PG&E CEO Tony Earley told The Chronicle that as the company looked into California’s energy needs for the coming decades, it didn’t see a place for Diablo Canyon.

A rising flood of renewable power is pouring onto the state’s electricity grid, and, under California regulations, that power has priority over electricity generated from nuclear reactors or fossil fuel plants. In addition, energy efficiency and the rapid spread of public power projects like San Francisco’s CleanPowerSF are cutting the amount of electricity that PG&E will need to generate or buy for its customers.

“Our analysis continues to show that instead of continuing to run all the time, there will be parts of the year where Diablo will not be needed,” said Earley, who flew to San Luis Obispo to break the news to Diablo’s 1,500 employees in a series of staff meetings Tuesday. “At a plant like Diablo, with large fixed costs, if you effectively only run the plant half the time, you’ve doubled the cost.”

To environmentalists who have called the coastal plant an American Fukushima waiting to happen, the agreement caps a decades-long fight.

“It makes your skin tingle,” said Damon Moglen, senior adviser with Friends of the Earth, a group that formed to oppose Diablo Canyon. The organization had been challenging efforts to extend the plant’s licenses and has now signed the agreement with PG&E to shut it down.

‘21st century solution’

“This was a 20th century mistake, and we’ve got a 21st century solution,” Moglen said. “We’re not only going to close this plant, but we’re going to do it with greenhouse gas-free energy.”

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While Diablo Canyon’s closure remains years away, it comes as another blow to the nuclear industry. Hopes that the battle against climate change would trigger a “nuclear renaissance” in the United States have evaporated, with many utilities and investors concluding that new reactors are too expensive and time-consuming to build.

Meanwhile, competition from power plants burning cheap natural gas has driven several older nuclear plants out of business. While California entered the 21st century with two operating nuclear plants, the San Onofre Nuclear Generating Station near San Diego shut down in 2012 after a small leak of radioactive steam revealed defective equipment. Its owner, Southern California Edison, decided the following year to close it for good.

California law forbids building more nuclear plants until the federal government comes up with a permanent solution for disposing of their radioactive waste.

Bittersweet decision

To PG&E’s Earley, the decision to shut down Diablo Canyon is bittersweet.

As the former chairman of the Nuclear Energy Institute lobbying group, he is a longtime believer in nuclear power. But he says PG&E can find enough affordable renewable power and energy storage solutions to replace Diablo Canyon without significantly raising rates.

“Renewable prices have been going down, particularly photovoltaics, and we have no reason to believe that’s not going to continue,” he said.

In addition, several actions by California officials threatened to complicate Diablo’s future.

The intake and outflow chutes for the plant’s cooling system rest on tidelands leased from the state.

Next week, the State Lands Commission is scheduled to decide whether to require a full environmental impact report before extending those leases, which are due to expire in 2018. Another panel, the California State Water Resources Control Board, was considering forcing PG&E to replace the cooling system with another that would kill fewer fish. One estimate pegged the cost of replacement as high as $14 billion.

“I am sorry to see it go, because from a national energy policy standpoint, we need greenhouse gas-free electricity,” Earley said. “But we are regulated by the state of California, and California’s policies are driving this. I’m not criticizing those policies, but it’s a fact. We’ve got to decide what’s best for the state, for the company and for the employees.”

Employees’ future

The closure agreement calls for determining which employees will be needed to decommission the plant and which can be transferred to other jobs within PG&E, with severance payments planned for the rest.

The agreement — which also includes the International Brotherhood of Electrical Workers, the Coalition of California Utility Employees, the Natural Resources Defense Council, Environment California and the Alliance for Nuclear Responsibility — needs the approval of the California Public Utilities Commission to take effect.

Decommissioning the plant — removing most of its systems and buildings — will cost an estimated $3.8 billion. PG&E customers have, for decades, been slowly paying into a fund to cover that work, whenever it may have been needed. According to documents PG&E filed with the utilities commission in March, the fund had $2.6 billion in it by the end of 2015. PG&E has requested increasing electricity rates by about 51 cents per month to make up the shortfall.

‘Profound moment’

Lt. Gov. Gavin Newsom, a member of the State Lands Commission who raised questions about Diablo’s leases as chair last year, said he was pleased that PG&E could shut down Diablo Canyon without a major impact on rates.

“The idea that the economics — from PG&E’s perspective — work for renewables is a pretty profound moment in energy policy,” Newsom said. “We’ve been asserting it for decades. And here you have a major utility acknowledging a low-carbon, green future.”

David R. Baker is a San Francisco Chronicle staff writer. Email: dbaker@sfchronicle.com

Twitter: @DavidBakerSF