Several news stories have asserted that California has a “glut” of solar power that is being wasted and sold at a loss to other states. The problem is that the stories mischaracterize the situation, both in cause and magnitude.
The Diablo Canyon nuclear power units were scheduled to be retired in 2024 and 2025 due to having reached the end of their license and concerns around public safety from the aging plant. As a result, state energy regulators launched an aggressive renewable energy and battery storage procurement process in 2018 following the decision to close Diablo Canyon. Those added resources are now coming online to offset the anticipated loss of energy output from Diablo Canyon’s closure.
However, despite those additional renewable resources, the state legislature and Governor Newsom then extended the life of Diablo Canyon in 2022 to 2030. Diablo Canyon’s 2,200 megawatts of around-the-clock energy production – which adds up to 18 million megawatt hours a year – is the true source of grid management issues, particularly during the spring when the majority of energy curtailments occur.
This imbalance is exacerbated by the large swings in the state’s hydropower production, from 17 million megawatt hours during a dry 2022 to 30 million megawatt hours in a wet 2023. These swings are inherent in California’s power system, and related curtailments were common for decades before solar was on the scene. In other words, California will always need to have excess energy in wet years if it wants sufficient power in the other two-thirds of the years that are average or dry. Diablo Canyon’s year-round, around the clock output only makes that glut worse.
Not only is Diablo Canyon’s extension clogging up transmission lines and driving curtailment, it is also a high cost energy resource. PG&E initially claimed the Diablo Canyon power would cost about 5.5 cent per kilowatt hour, which is near the average cost of the California Independent System Operator’s (CAISO) energy purchases. Instead, PG&E is asking the California Public Utilities Commission to charge more than 9 cents per kilowatt hour, nearly double the cost of the average energy purchase.
Instead of blaming and halting California’s clean energy progress, an easier solution that would solve most of the curtailment issue would be to shut down Diablo Canyon from March to May, when energy demand is lowest in the state. This is when loads are lowest and hydro output the highest. Reducing at least some of Diablo Canyon’s 18 million megawatt hours per year, would more than offset the 3.2 million megawatt hours of solar energy that were curtailed in 2024. Diablo Canyon would still be available to meet summertime peaks. That would save ratepayers money and reduce the need to sell excess generation at a loss.
California is already addressing other causes of curtailments by installing more storage capacity. It would be foolish to reduce solar generation now when we will need it in the near future to match the additional storage capacity.
Economics Outside the Cube 
California taxpayers gave PG&E a huge, supposedly safe loan. The losses are already mounting
https://calmatters.org/economy/2025/08/diablo-canyon-loan/
Despite promises from Newsom’s administration and legislators at the time, CalMatters found the state may be required to forgive as much as $588 million, about 42% of the loan.
That’s partly because the maximum available federal award would never have covered the full loan. PG&E applied for even less than was available because an incentive fee allowed under the 2022 law isn’t eligible for federal reimbursement.
One source of funding that could make up the difference—profit from the plant—is, by PG&E projections, unlikely to materialize. The only other avenue the state is considering—using federal money for nuclear waste storage—would cover a fraction of the shortfall and may not be legal.
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If Diablo Canyon was shut down for 3 months per year to avoid curtailment, at 5.5 cents per kWh, ratepayers would save about $250 million annually. That would both recover the $588 million shortfall in about two years and offset most, if not all, of the costs incurred by curtailment of solar output.
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California’s solar, wind curtailment jumped 29% in 2024: EIA
https://www.utilitydive.com/news/solar-wind-curtailments-increasing-california-caiso/749420/
California is pursuing options such as using excess renewable energy to make hydrogen, said the Energy Information Administration.
Note on this article: First, there’s a typo here because 3.4 million MWH is more than the entire California electricity use. This is most likely in kWh. Second, the corrected value of 3.4 TWH is only 1.2% of California electricity consumption. And third, 2024 was the third year in a row of above average hydro production year (plus Diablo Canyon ran beyond its scheduled retirement.)
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KPBS in LA covered this story here: https://www.kpbs.org/news/science-technology/2024/12/11/diablo-canyon-nuclear-plant-produces-too-much-power-too-expensive
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Appreciate your clear explanation of why Diablo Canyon is a problem. Even better, you propose a solution, given that Newsom has pushed through extension of its operation. And the CPUC thinks it’s OK when PG&E gets ratepayers to pay nearly double market rate?
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The PUC allocated some of the costs to SCE and SDG&E.
CPUC approves $723 million in ratepayer costs to extend life of Diablo Canyon nuclear plant
“Although the plant is operated by Pacific Gas and Electric Co., the expense will be shared by customers of all three of the state’s investor-owned power companies — PG&E, Southern California Edison and San Diego Gas & Electric.”
Wonder if the PUC/CEC evaluated loading some the costs to the public utilities in the state, ie LADWP and SMUD, etc,…
Mark Miller
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It was the Legislature that made this rule, and the munis made sure that they were beyond the reach of the deal. It would have only touched the ones in the CAISO in any case, which leaves out DWP and SMUD.
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Thanks for the info Richard.
Did the legislature approve the allocation approach back when Gov Newsom supported keeping the plant open, or did it happen later on?
I saw that the CAISO grid held up fairly well during the summer of 2024- summer-market-performance-report-september-2024.pdf
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The allocation is embedded in the legislation which was contemporary with the governor’s support of running Diablo in 2022.
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