Pacific Gas and Electric Company (PG&E) agreed to a $16 million payment to San Luis Obispo County and its communities, months after the introduction of a Senate bill that would have kept it on the hook to pay local communities for extended Diablo Canyon nuclear power plant operations.
Authored by State Sen. John Laird (D-Santa Cruz) and Assemblymember Dawn Addis (D-Morro Bay), SB 931 would have required the utility company to cover the essential services mitigation fund, set by the Community Impacts Mitigation Program, for fiscal years 2026-27 and 2027-28.
On Aug. 17, Laird announced the new deal struck by PG&E, adding that its terms mirror SB 931’s requirements.
“When the state extended operations at the Diablo Canyon Power Plant through 2030, it did not extend the community funding established to offset local impacts,” Laird said in a statement. “Today’s agreement is the first step to addressing the funding gap.”
Details of the agreement aren’t publicly available yet. According to Laird, PG&E will pay SLO County the $16 million sum in two installments of $8.3 million, which would be redistributed to San Luis Coastal Unified School District and the cities of SLO, Grover Beach, Arroyo Grande, Pismo Beach, Atascadero, Morro Bay, and Paso Robles.
“I don’t think they were particularly happy with the source of the funding in Senate Bill 931,” Laird told New Times. “So, this gets them to choose where it’s funded from, and we didn’t want it to be from ratepayers and have the rates go up even by a small amount.”
PG&E referred New Times to a statement from Tom Jones, the company’s senior director of regulatory, environmental, and repurposing.
“We appreciate the partnership of Sen. Laird, San Luis Obispo County, and local leaders in reaching this agreement,” Jones’ statement said. “It helps address near-term community needs while recognizing the vital role Diablo Canyon plays in delivering reliable, clean, and affordable energy. We look forward to continuing conversations with state and local leaders, including Diablo Canyon’s role beyond 2030, to ensure local communities and the state both benefit from this critical energy resource.”
PG&E spokesperson Carina Corral told New Times that the $16 million payment is “100 percent shareholder funded.”
Credit: FILE PHOTO BY MARY KATE FIDOPIASTIS
Laird added that under SB 931, the money would have come from “volumetric funds” paid by ratepayers.
“It would have dipped into that pot for $8.3 million each of the two years, and so I think this way, doing it from shareholder funds is more preferable for them,” he said.
The money is supposed to support school district and city budgets, which lost unitary taxes from Diablo Canyon in 2025 when Diablo planned to shut down. The plant is now allowed to operate until 2030.
PG&E’s last major financial agreement with SLO County about Diablo Canyon took place in 2016. Worth $85 million, it was divided among San Luis Coastal school district, the county, and its cities to ease the local economic impacts of the plant’s anticipated closure in 2025.
When Gov. Gavin Newsom and state officials—unwilling to give up a power source that consistently provided 9 percent of California’s total energy—lengthened Diablo Canyon’s life by another five years, SLO County and its agencies expected the mitigation funds to be extended too.
But PG&E refused to pay, until now.
For San Luis Coastal, its $8.3 million annual funding gap prompted $10 million in budget cuts over two years to prepare for the 2026-27 school year.
Now, the school district is poised to receive more than $4 million from PG&E as one-time funding.
‘Now that they’ve [PG&E] established the precedent that they can do it [pay] voluntarily, they can always choose to do it voluntarily for the remaining three years.’
—State Sen. John Laird, D-Santa Cruz
Assistant Superintendent Ryan Pinkerton told New Times that staff hasn’t yet discussed with the school board how the money would be spent. The district is waiting to analyze its property taxes in November for a clearer budge picture.
While PG&E’s decision is a “pleasant surprise,” according to Pinkerton, the district is still cautious.
“Any time we receive one-time funding, it is concerning,” he said via email. “The expectation leads to people wanting to use those funds for ongoing expenditures, i.e. salary increases, increased staffing level, etc. If those funds do not become ongoing, we would be making reductions again in two years. No one wants to do that.”
Annie Aguiñiga Frew, the co-founder of San Luis Coastal Parent Information Network, hopes that someday all the programs and services, like full-time counselors and librarians, that have had to be cut from the budget will be restored.
“My daughters absolutely love the library, and they love reading. … I think it’s a really meaningful and important part of our children’s education,” she said. “Ensuring that we can have full-time library staff, intervention programs, music programs, programs that not just support foundational learning … but also programs that create well-rounded education [are important]. I think this funding through the agreement does help provide some real benefit. This is a great step forward.”
PG&E’s funding agreement only covers two of the five years that Diablo Canyon operations have been extended for. Stakeholders want to work on resolving its funding plan for the remaining three years.
Laird will not pursue SB 931 further since PG&E agreed to pay the county, but future legislation is still an option.
“Now that they’ve established the precedent that they can do it voluntarily, they can always choose to do it voluntarily for the remaining three years,” Laird said of PG&E. “I think it’s their intent to try to get a 15-year reauthorization next year for 2030 to 2045, and if there is such a bill for that, we would try to wrap in the remaining three years. … If there is no extension legislation, then I would do legislation for the other three years.”
In April, the federal Nuclear Regulatory Commission approved PG&E’s application to further extend operating licenses for the plant’s two pressurized water reactors until November 2044 and August 2045.
PG&E still needs approvals from the state to finalize this extension, though Newsom declared that’s a decision he’ll leave up to his successor.
The power company’s agreement with SLO County arrived at the same time it received a $271 million credit payment from the U.S. Department of Energy’s Civil Nuclear Credit Program. PG&E could receive up to $1.1 billion from the federal program to support continued operations at Diablo Canyon. ∆
Reach Staff Writer Bulbul Rajagopal at brajagopal@newtimesslo.com.
This article appears in Aug 27 – Sept 3, 2026.
