In 2022, the California legislature passed SB 846, authorizing a $1.4 billion loan to Pacific Gas and Electric Company (PG&E) to continue operating Diablo Canyon Power Plant past its scheduled 2025 decommissioning. While the loan was meant to be a “bridge” until PG&E received federal reimbursement, the utility now faces up to a $658.6 million shortfall in repaying it because the company only applied for $1.1 billion in federal awards and will likely only receive $741.4 million of that amount. California taxpayers could end up covering this $658.6 million shortfall. 

Based on DOE’s evaluation of the plant and PG&E’s public filings, we find that PG&E inflated the costs of Diablo Canyon’s capital upgrades and operational costs and should only have requested a loan from the California legislature of $741.4 million. While PG&E has suggested California taxpayers cover the $300 million deficit between the $1.4 billion loan and its $1.1 billion DOE award, this is against the intent of SB 846. Meanwhile, PG&E has generated three consecutive years of record profits. State legislators can protect Californian taxpayers and preserve the state budget by having PG&E repay the full loan amount from excess shareholder profits. 

Authors: Leah C. Stokes, Arjun Krishnaswami and Madeline Ranalli