Nuclear

DOE amends criteria for program aimed at saving nation’s nuclear fleet

The U.S. Department of Energy (DOE) amended eligibility requirements for the Civil Nuclear Credit (CNC) program.

It could be advantageous for PG&E’s Diablo Canyon Power Plant.

The U.S. Department of Energy (DOE) amended eligibility requirements for the Civil Nuclear Credit (CNC) program.

CNC is a $6 billion fund aimed at supporting the continued operation of U.S. nuclear plants. It was born out of the infrastructure bill signed into law in November 2021. The program allows reactor owners and operators to apply for and bid on credits to support their continued operations.

The DOE’s amendment removes the rule that nuclear reactors applying for credits not be eligible if they recover more than 50 percent of their costs from cost-of-service regulation or regulated contracts.

The change came in response to a request from California Governor Gavin Newsom, who is now considering delaying the long-planned closure of Diablo Canyon, the state’s last operating nuclear plant.

In a letter sent to the DOE in May, Gov. Newsom stated the 50 percent regulated rate recovery exclusion “is overly broad, especially where cost-of-service does not cover the costs for which funding is being sought.”

The governor explained in the case of Diablo Canyon, in order to extend operations beyond the current license expirations, the reactor owner “would incur significant transition costs over the next four years to perform necessary studies, invest in plant enhancements, and obtain licenses and permits.”

Gov. Newsom noted the losses are the kind of adverse economic factors already threatening the continued operation of nuclear reactors.

The DOE agreed as it announced the amended rule.

“After assessing programmatic goals and public comments, DOE believes this change better supports the intent of Bipartisan Infrastructure Law and the goals of the CNC Program to keep clean, reliable electricity on the grid,” the agency said.

The department also said it would extend the CNC Program application period for another 60 days until September 6, 2022. PG&E, the California utility which operates Diablo Canyon, had asked for an extension.

The Biden Administration has identified the nation’s fleet of nuclear reactors as an important clean energy resource. Shifting energy markets and other economic factors have led to the early closure of 13 U.S. reactors since 2013.

In California, PG&E announced the closing plan for Diablo Canyon as part of a deal with environmentalists and union workers in 2016, at the time citing a “recognition that California’s new energy policies will significantly reduce the need for Diablo Canyon’s electricity output.”

But Newsom’s recent comments highlights that the thinking has shifted, as the state looks for reliable power sources amid a changing global climate, while California gradually shifts to solar, wind and other renewables.