(The Center Square) – The Biden Administration announced Monday it would award Pacific Gas & Electric $1.1 billion in federal funding to extend operation of the Diablo Canyon Power Plant, the state’s last nuclear power plant.

The funding comes after lawmakers passed Senate Bill 846 on the final night of the legislative session, giving lawmakers the option to make up to $1.4 billion available to PG&E to extend the life of the power plant. The plant was initially set to start shutting down in 2024, but under SB 846, the first reactor can remain operational until 2029 with the second reactor shutting down in 2030. Newsom signed the bill into law in September.

Newsom and lawmakers argued it was necessary to extend the life of Diablo Canyon until more renewable energy resources become available. As lawmakers debated the bill on the final night of the legislative session, the majority ultimately agreed that temporarily extending the plant’s operation was necessary to keep the lights on for Californians and ensure energy reliability.

Last month, the state authorized a loan of up to $1.4 billion from the Department of Water Resources to PG&E to support extended operation of the power plant. The $1.1 billion in federal funding will be used to help PG&E pay back most of the loan, according to the governor’s office.

The federal funding does not mean Diablo Canyon is guaranteed to remain open longer than originally planned, as any extension requires approval from federal, state, and local regulatory entities, according to the governor's office. 

“Amid intensifying climate impacts in the West and across the country, California is focused on meeting our bold climate and clean energy goals while tackling the challenges of extreme weather that puts lives at risk and strains our grid,” Newsom said in a statement Monday. “This investment creates a path forward for a limited-term extension of the Diablo Canyon Power Plant to support reliability statewide and provide an onramp for more clean energy projects to come online.”

Newsom signed SB 846 as a record-breaking heatwave caused temperatures to swell to over 100 degrees in several parts of the state. California’s power grid experienced record-breaking demand in September, though state narrowly avoided ordering rolling outages, crediting consumer energy conservation.

As climate change drives more intense heat waves and fire seasons in the West, Newsom and lawmakers have emphasized the need to ensure energy reliability. This year’s state budget included $2.2 billion in one-time funding to support “strategic energy reserve resources” when the grid is stressed.

The federal funding comes as part of the U.S. Department of Energy’s Civil Nuclear Credit Program, which made $6 billion available throughout the Bipartisan Infrastructure Law to help preserve existing U.S. reactors. PG&E has been conditionally awarded a $1.1 billion portion, but final award amounts will be determined after the completion of each year of the award period, the company said in a news release.

“This is another very positive step forward to extend the operating life of Diablo Canyon Power Plant to ensure electrical reliability for all Californians,” PG&E Corporation Chief Executive Officer Patti Poppe said in a statement. “While there are key federal and state approvals remaining before us in this multi-year process, we remain focused on continuing to provide reliable, low-cost, carbon-free energy to the people of California, while safely operating one of the top performing plants in the country.”