Diablo Canyon isn’t closing. Why are PG&E tax payments still in limbo? | Opinion

Diablo Canyon — the last nuclear power plant in California — was scheduled to shut down forever this month. But thanks in part to political maneuvering by a governor worried about catastrophic blackouts, the PG&E plant in Avila Beach is on track to stay open at least five more years.

That should be a bonanza for local governments in San Luis Obispo County that have reaped tax benefits for years.

Tax revenue from Diablo Canyon has helped pay for schools, police and fire, parks and beaches, libraries and roads.

But those tax payments have been declining, and even though the plant’s operating life has been exended, it doesn’t automatically mean the plant will be reassesed and the revenue flow restored. That’s put local agencies in a bind, wondering whether they can count on Diablo dollars in the future.

The San Luis Coastal Unified School District, which enrolls around 7,500 students, has been among the biggest beneficiaries, but it’s seen its PG&E tax revenue decline from roughly $10.5 million in 2016-17 to $3.7 million in 2024-25, according to Assistant Superintendent Ryan Pinkerton.

PG&E does have other assets in the county, which means some tax income will continue, but without Diablo Canyon it will be nothing like it was.

“PG&E has fully depreciated the plant to its land value, significantly reducing its tax obligation — leaving local communities like San Luis Coastal Unified, SLO County, Avila Harbor District and nearby cities without the financial support they once received,” district Superintendent Eric Prater said in an email.

‘That seems only fair’

Local agencies have been preparing for life without Diablo Canyon ever since PG&E announced the 2025 closure date back in 2016.

Within months, SLO County governments managed to negotiate an $85 million settlement from PG&E to help cushion the huge loss in tax revenue, but that money runs out after this year.

Now that it appears the plant will stay open at least five more years — and potentially as long as 20 if its license is renewed — officials want assurance that the unitary tax payments will be reinstated. (Unitary tax calculations are based primarily on expected future earnings, which are directly tied to the plant’s operating life.)

Unfortunately, local officials have been kept in the dark about whether and when the tax payments will resume.

Once again, they are lobbying for what they see as their fair share.

“Our position is straightforward,” Prater said. “As long as the plant stays open, the local communities that were previously supported by unitary tax contributions should continue to receive funding at levels comparable to 2016, before the plant’s closure was announced. If and when the plant closes, a reduction in tax revenues would be expected. That seems only fair.”

Faced with a multi-million-dollar budget deficit, the school district has been forced to cut staff positions and programming, and it even considered eliminating a popular transitional kindergarten program. While the program was saved for now, it may be eliminated in the future uless the revenue crisis is solved.(Because San Luis Coastal is a basic aid district, meaning most of its funding comes from property taxes, the state does not require it to offer transitional kindergarten.)

Parents are keeping a close eye on the situation.

“We are going back to school with 1/2 time counselors, 1/2 time librarians, and more combo classes than I have ever seen,” parent Emily Goodman said in an email. “PG&E must be a responsible corporate neighbor and come to the table in good faith.”

A group of San Luis Coastal parents is researching alternative funding sources, in case the unitary tax doesn’t pan out. Goodman says she intends to write directly to PG&E CEO Patricia Poppe to make a case for renewed funding.

Legislature must correct oversight

PG&E says the tax situation is out of its hands. At an Aug. 19 meeting of the Senate Energy, Utilities and Communities Committee, Maureen Zawalick, a PG&E vice president, said it would require legislative action to reinstate the payments.

“PG&E is fully compliant with our tax laws,” she said, adding that the utility has paid $185 million to SLO County since 2018.

Committee member John Laird, whose state Senate district includes Diablo Canyon, was supportive of a legislative solution.

“That is something we will have to examine, because there is big concern in San Luis Obispo County,” he said.

Following the meeting, Laird confirmed that he’s considering introducing unitary tax legislation next year.

If that’s the only way to get it done, then of course it should happen.

Local governments should not have to grovel for taxes that are rightfully theirs. Nor should they be kept guessing as to whether they can count on millions of dollars in revenue that can help provide essential services.

Hosting a nuclear power plant comes with risks and responsibilities that don’t end when the reactors shut down. Without a permanent storage site for spent fuel, communities like Avila Beach have become long-term — if not permanent — de facto waste sites.

They deserve financial support throughout the operating life of a plant and beyond.

We strongly urge lawmakers to act as quickly as possible to ensure San Luis Obispo County agencies receive every tax dollar they have coming.

This story was originally published August 23, 2025 at 5:00 AM with the headline "Diablo Canyon isn’t closing. Why are PG&E tax payments still in limbo? | Opinion."