On Thursday, the California Coastal Commission voted to approve a permit allowing the Diablo Canyon Power Plant, perched above Avila Beach of San Luis Obispo County,
to continue operating through at least 2030.

The controversial decision was conditioned on Pacific Gas & Electric (PG&E), the plant’s operator, agreeing to permanently conserve 4,000 acres of surrounding land from commercial or residential development.

The decision carries powerful consequences for the state’s energy future.

Diablo Canyon is California’s single largest power plant and its only remaining nuclear facility.

It provides 9 percent of the state’s total electricity, nearly 20 percent of its zero-carbon power.
As energy demand climbs, particularly from artificial intelligence and electrification,
California is expected to need 21 gigawatts of new capacity by 2040 (equivalent to 10 more Diablo Canyons.)

What complicates the picture is that Diablo is advancing along two parallel regulatory tracks:

The state only authorized operation through 2030 under Senate Bill 846,
while PG&E is also seeking a 20-year license renewal from the Nuclear Regulatory Commission,
which would allow the plant to operate until 2045.

That federal application triggers a consistency review under the federal Coastal Zone Management Act,
giving the Coastal Commission dual authority over the five-year and 20-year scenarios.

While Diablo now awaits federal relicensing for an additional 20 years, nine of the commission’s 12 voting members supported the five-year extension.

They cited grid reliability and the state’s growing power demands.

The plant had been set to fully shut down by 2025, under a 2016 agreement between PG&E, environmental groups, and labor unions.
But since then, PG&E has received or requested at least $6.5 billion to support extended operations.

That includes $723 million in ratepayer-funded cost recovery for 2025-26 approved by the California Public Utilities Commission,
and a $1.4 billion state loan that was supposed to be repaid through federal support.

That repayment now looks increasingly unlikely.
According to the loan agreement, the only repayment sources allowed are Department of Energy awards, profits from Diablo Canyon’s final year, or separate federal funds for nuclear waste storage.

PG&E’s own filings suggest none of these may fully cover the cost.
In a January update, PG&E projected it would overspend the loan by $157 million,
and federal awards may fall short by as much as $588 million.

The remaining gap could ultimately be forgiven by the state.

Congressmember Salud Carbajal tied Diablo Canyon to the future of renewables,
specifically a proposed wind farm off the coast of Morro Bay.
“The Morro Bay offshore wind project represents a transformative opportunity for the Central Coast,” Carbajal said in a written statement.
“As the project moves forward, Diablo Canyon will continue supplying reliable power to the region, and its transmission lines will serve as vital infrastructure for the Morro Bay wind farm once it comes online.”
But critics argue that Diablo’s extension is unnecessary, costly, and actively harmful to the state’s renewable goals

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