Newsom signs bills to end California's 50-year nuclear ban, and Diablo Canyon owner PG&E holds the option
Two bills signed this week could end California's 50-year ban on new nuclear and put a formal state assessment on the clock. The option value concentrates on one listed balance sheet, PG&E's, the same month analysts cut it over wire costs.
Vincent Jiang · 3 min read
Governor Gavin Newsom signed Senate Bill 925 and Assembly Bill 2647 this week, and the pair could overturn California's 50-year-old ban on building new nuclear plants 1. AB 2647 orders a formal state assessment of new and advanced reactors, cost through fuel cycle, due January 1, 2028 12. SB 925 puts a fusion development plan on the Legislature's desk by December 31, 2029 2. Filed as climate policy, this is a story about one owner: Diablo Canyon, California's only commercial nuclear station, belongs to PG&E 12.
The feds said yes; Sacramento still holds the 2030 gate
On April 2, 2026, the Nuclear Regulatory Commission renewed Diablo Canyon's licenses for 20 years, to November 2044 and August 2045 3. The two-unit, 2.3 GW plant supplies about 9% of the state's electricity 3. But a 2022 state law requires the Legislature to approve any operation past 2030 3, so the plant's future is a Sacramento vote, not a federal one. The demand pushing that vote is already visible: California expects peak load to grow more than 20 GW by 2045 3, and San Jose residents are fighting the data centers driving it, in a city that signed an agreement with PG&E to speed power delivery to big users 4.
The same fortnight squeezed the wires
On October 1 PG&E filed a plan to bury 5,000 miles of line across more than 30 counties from 2028 to 2037, company arithmetic that claims $117 billion of benefits, more than ten times the investment 5. Six days later Ladenburg Thalmann cut its price target to $15.50 from $22, keeping its buy, on undergrounding costs 67; UBS had already dropped the stock to neutral at $14 on September 23 6. PCG closed October 6 at $12.50, down 22% since January, against an $18.81 average target on 17 analysts 68.
Capex has outrun operating cash in six of the last eight quarters
- Operating cash flow
- Capex
Data
| Operating cash flow | Capex | |
|---|---|---|
| Q3 '23 | $1.81B | $2.42B |
| Q4 '23 | $0.48B | $2.61B |
| Q1 '24 | $2.26B | $2.64B |
| Q2 '24 | $0.71B | $2.3B |
| Q3 '24 | $3.13B | $2.61B |
| Q4 '24 | $1.93B | $2.83B |
| Q1 '25 | $2.85B | $2.64B |
| Q2 '25 | $1.06B | $3.07B |
| Q3 '25 | $2.85B | $2.93B |
| Q4 '25 | $1.96B | $3.16B |
| Q1 '26 | $2.43B | $3.36B |
| Q2 '26 | $0.91B | $2.97B |
Sacramento is squeezing PG&E's wires business with one hand and reopening its nuclear door with the other, and both hands reach into the same wallet.
The option is slow and not free
Neither bill touches 2026 earnings. Diablo Canyon runs at a deficit costing ratepayers nine figures a year even with public subsidies, and its through-2030 extension has run to roughly $11.8 billion, up from $8.1 billion forecast in 2023, per filings by the Alliance for Nuclear Responsibility with the state utilities commission 2. New nuclear would be capex on a balance sheet whose capex already outruns its operating cash in six of the last eight quarters 9.
The dates that decide it
Third-quarter earnings land October 22 6. The nuclear assessment is due January 1, 2028 1, the fusion plan December 31, 2029 2. The vote that matters most, the Legislature's call on Diablo Canyon beyond 2030 3, has no date on any calendar yet.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
