Lawsuit challenges $1 billion in federal funding to sustain California's last nuclear power plant

LOS ANGELES — An environmental group has sued the U.S. Energy Department over its decision to award over $1 billion to help keep California’s last nuclear power plant running beyond a planned closure that was set for 2025. The move opens another battlefront in the fight over the future of Diablo Canyon’s twin reactors.

Friends of the Earth, in a complaint filed Tuesday in U.S. District Court in Los Angeles, argued that the award to plant operator Pacific Gas & Electric last year was based on an outdated, flawed analysis that failed to recognize the risk of earthquakes or other serious events.

The complaint called the safety assessment “grossly deficient” and accuses the Energy Department of relying on a 50-year-old environmental analysis.

“The environmental impacts from extending the lifespan of this aging power plant at this point in time have not been adequately addressed or disclosed to the public,” the complaint said.

An email seeking comment was sent to the Energy Department.

Diablo Canyon lies on a bluff overlooking the Pacific midway between Los Angeles and San Francisco. It began operating in the mid-1980s and supplies up to 9% of the state’s electricity on any given day.

In 2016, PG&E, environmental groups and unions representing plant workers agreed to close the facility by 2025. But the Legislature voided the deal in 2022 after Democratic Gov. Gavin Newsom reversed his position and said the power is needed to ward off blackouts as the state transitions to renewables and climate change stresses California's energy system.

Since then, disputes have swirled about the safety of Diablo Canyon's decades-old reactors, whether taxpayers might be saddled with hundreds of millions of dollars in additional costs and even if the electricity is needed in the age of solar and other green energy.

PG&E has long said the twin-domed plant is safe, an assessment endorsed by the Nuclear Regulatory Commission.

The Biden administration approved $1.1 billion in Energy Department funding in January. The financing came through the administration’s civil nuclear credit program, which is intended to bail out financially distressed owners or operators of nuclear power reactors as part of the administration’s effort to cut planet-warming greenhouse gas emissions in half by 2030 compared with 2005 levels.

PG&E has said it wants to keep the plant open to “ensure statewide electrical reliability and combat climate change” at the direction of the state.

The utility is seeking a 20-year extension of its federal licenses, typical in the industry, but emphasized the state would control how long the plant actually runs. A state judge has conditionally approved a blueprint to keep it operating for an additional five years, until 2030.

California is the birthplace of the modern environmental movement and for decades has had a fraught relationship with nuclear power. The fight over Diablo Canyon is playing out as the long-struggling nuclear industry sees a potential rebirth in the era of global warming. Nuclear power doesn’t produce carbon pollution like fossil fuels, but it leaves behind waste that can remain dangerously radioactive for centuries.