PG&E to refund ratepayers $43 million for unplanned outage at Diablo Canyon
AI-generated summary reviewed by our newsroom.
- PG&E must refund $43.2 million to customers after an unplanned outage in 2021.
- California regulators said that inadequate testing caused the unplanned outage.
- The refund begins in January through rate adjustments.
PG&E customers will get a break on their electricity costs next year thanks to a $43.2 million ratepayer refund — the cost of delivering replacement power across California when Unit 2 of the Diablo Canyon nuclear power plant shut down unexpectedly for repairs in 2021.
But they won’t be getting a check in the mail, and they may not even notice a difference on their electric bills.
Unit 2 of the power plant closed for repairs four times in 2020 and 2021, forcing PG&E to buy replacement power to keep its customers’ lights on.
PG&E charged ratepayers for that power, but the California Public Utilities Commission said the utility company should foot the bill for the fourth outage, according to its June 26 decision.
According to the commission, the fourth outage could have been prevented if PG&E had properly tested the equipment in the Unit 2 generator — and PG&E shouldn’t charge customers for the company’s mistake, the commission said.
On June 26, the California Public Utilities Commission ordered PG&E to refund ratepayers for the cost of replacement power delivered when Unit 2 shut down from Feb. 2 to March 1, 2021.
Alliance for Nuclear Responsibility executive director David Weisman celebrated the decision.
“We are happy that some measure of justice for ratepayers was delivered,” he said.
PG&E, however, was ”disappointed” by the decision, noting that the power plant is regularly inspected for safety, a statement from the utility company said.
“We are confident we have taken the right steps to ensure safe and reliable operation of Diablo Canyon to support overall grid reliability and provide electricity to 4 million Californians,” the statement said. “This example demonstrates our commitment to safety: We closely monitor after work is performed to confirm it meets our rigorous standards and take proactive steps as necessary to ensure long-term safe and reliable operation.”
How will customers receive the refund?
When PG&E issues the refund, ratepayers won’t get a check in the mail. In fact, it won’t even appear as a line item on their bill.
Instead, the $43 million refund will be factored into PG&E’s rates for 2026, starting in January, PG&E said.
Customers may notice a slight decrease in their overall electricity costs, but nothing more than the usual fluctuation between bills each month.
The refund will be distributed between all customers who originally paid for the replacement power during the outage, which includes bundled electric customers and Community Choice Aggregation customers.
The refund per customer will vary depending on their electricity usage, PG&E said.
Unplanned outages at the power plant
The Diablo Canyon nuclear power plant is nestled in the hills south of Avila Beach. At the facility, nuclear reactions inside two core reactors power steam turbines, which generate electricity.
On four occasions, PG&E shut down Unit 2 due to “excessive vibrations” in the stator, which is a key component of the electric generator on the non-nuclear side of the plant, the proposed decision said.
The commission said PG&E could charge ratepayers for the first three outages, which lasted from July 17 to Aug. 2, 2020, then Oct. 15 to Nov. 26, 2020, and Dec. 2, 2020, to Jan. 12, 2021.
Those outages were fixed by tightening the necessary bolts, the proposed decision said.
But the fourth outage, which lasted from Feb. 2 to March 1, 2021, could have been prevented by proper design verification testing, the commission said.
The commission ordered PG&E to return $43.2 million to ratepayers to compensate for that outage.
How will PG&E pay for unplanned outages at Diablo in the future?
Senate Bill 846 created the Diablo Canyon Extended Operations liquidated damages balancing account, which PG&E can use to pay for replacement power when there are unplanned outages at the power plant.
Ratepayers contribute $12.5 million to the account each month, until the balance reaches $300 million, the bill said. If PG&E spends any of that money, ratepayers will pay into the fund until it is replenished.
If an unplanned outage occurs at the power plant, PG&E must apply to the California Public Utilities Commission as usual for funding to pay for replacement power. If the commission determines that the outage was caused by unreasonable management decisions made by PG&E, the utility company can use the liquidated damages balancing account to cover the cost of replacement power.
Gov. Gavin Newsom signed the bill in 2022, so PG&E can’t use the fund for the aforementioned outage from 2021. But PG&E can use the account to fund the cost of future outages.
PG&E noted that when the power plant eventually closes, the utility company will refund the liquidated damages balancing account funding to statewide electric customers.
Weisman said he’s concerned that PG&E will have less of an incentive to manage the power plant responsibly if the utility can use the funding for unplanned outages — even if those outages are the company’s fault.
“More or less, PG&E is now allowed to blunder up to $300 million of our money with no accountability,” Weisman said. “It’s a field day to make mistakes because there is no penalty for not being a good manager.”
This story was originally published July 10, 2025 at 9:23 AM.
