Biden gives PG&E $1 billion to keep the Diablo Canyon nuclear plant open for more than 40 years
Former Vice President Joe Biden told PG&E (PG, Fortune 500) Thursday that the federal utility has agreed to give it $1 billion to keep the Diablo Canyon nuclear plant open for longer than the current 40-year license agreement.
He said the utility has already received an $88 billion federal loan guarantee from the Energy Department for nuclear power plants and was confident that a federal bailout package would not be needed.
“The company has already made a decision that we are not going to make them pay for the energy,” Biden told PG&E’s Chief Executive Officer Kenneth Feinberg during a meeting at the Energy Department. “They are not going to have to pay the cost of the electricity they produce. That means what they had to do is to get the federal government involved.”
Biden said the federal government has agreed to give PG&E another $1 billion to operate the Diablo Canyon nuclear plant until 2060, with another option for 2060 that would extend that deadline to 2075. The remaining $700 million would be paid in the form of a 20-percent revenue-share subsidy for 30 years, he said.
The bailout is to be paid for by PG&E’s customers, rather than through its ratepayers, which were forced to pay for the utilities’ high debt last year resulting from the nuclear plants’ insolvency.
PG&E, which operates the Diablo Canyon and San Onofre nuclear plants, has already been the target of a lawsuit from state Attorney General Xavier Becerra and other environmental groups who argue that the utility should not be allowed to use its customers’ money to pay for its costs when it is already on the hook for the $90 billion it incurred from selling its PG&E stock to repay its debts.
San Onofre and Diablo Canyon, which are less than a mile away from the San Francisco Bay and its two main sources of drinking water, have been the subject of a legal battle since PG&E failed to make its $90 billion bond payments under federal law in July