Economic blow of Diablo Canyon closure to be smaller than expected, UC Berkeley report says

A state-commissioned UC Berkeley report has found the economic impact of the closure of Diablo Canyon nuclear power plant will be significantly less than a previously circulated estimate of approximately $1 billion. 

Previously, a report commissioned by PG&E and authored by the Nuclear Energy Institute and Cal Poly’s Orfalea College of Business found Diablo Canyon contributes approximately $920 million annually to the economies of SLO County and northern Santa Barbara County. The new UC Berkeley report concluded, following the closure of Diablo Canyon in 2025, economic activity in San Luis Obispo County is expected to decrease by $801 million annually, and the decline will almost entirely be offset by growth driven by a recently approved settlement package.

The UC Berkeley report projects a $724 million increase in economic output per year for 10 years following the closure of Diablo Canyon. Hence, a net economic loss of $77 million a year is expected, according to the report.

“We find that the net effect of these factors will be much smaller than previous estimates for DCPP closure,” according to the UC Berkeley. “Previous studies have only considered the negative shocks, whereas we take account of how decommissioning expenditures will substantially offset economic losses attributable to plant closure.”

A state-approved settlement package consists of PG&E doling out $85 million to local government agencies as compensation for lost tax revenue. Additionally, the utility will spend approximately $350 million on an employee retention program. 

The funding is expected to generate significant stimulus to the San Luis Obispo County economy.

Following the closure of Diablo Canyon, there will be an estimated loss of 2,908 full-time equivalent jobs, the majority of which consist of direct employment from the nuclear plant. But, the report states the local economy will gain about 4,934 full-time equivalent jobs annually for 10 years after the closure of the nuclear plant.

The study was commissioned as a result of SB 968, authored by state Sen. Bill Monning, which mandated the California Public Utilities Commission have an independent third party conduct an economic impact assessment of the closure of Diablo Canyon. A public forum to discuss the report will be held Friday at 1 p.m. in the SLO County Board of Supervisors chambers.