PG&E agrees to restore $16.6 million in Diablo Canyon community funding

By Staff Report · Mon Aug 24 2026

SAN LUIS OBISPO COUNTY — San Luis Obispo County and Pacific Gas & Electric Co. have reached an agreement that will provide more than $16 million in community funding tied to the continued operation of the Diablo Canyon Power Plant.

Under the agreement, the county will receive two annual payments of $8.3 million from PG&E. The first partial payment is expected by Dec. 31, with a second payment to follow next year. The funding will be redistributed to eligible local agencies whose budgets have been affected by the decline in unitary tax revenue from the power plant and the expiration of a community mitigation fund.

The agreement addresses the funding gap created when the state extended Diablo Canyon’s operations through 2030 but did not extend the community funding previously established to offset local impacts.

Sen. John Laird (D-Santa Cruz), who authored Senate Bill 931 to restore the funding, said PG&E’s agreement provides the payments the legislation would have required. With the agreement in place, SB 931 will not advance.

“I’m very pleased with this outcome,” Laird said, while noting that three additional years of funding remain unresolved. “There are still three years left (2027-2030) for which the community is still owed payments.”

Assemblymember Dawn Addis (D-Morro Bay), who co-sponsored SB 931, called the agreement an important step toward restoring funding for local communities, schools and public agencies.

“PG&E’s agreement to pay two of five years of the Essential Services Mitigation Fund is an important step forward in supporting our local communities who bear the responsibility of hosting California’s only operating nuclear power plant,” Addis said.

San Luis Obispo County CEO Matt Pontes said the funding will provide stability for local schools, public safety agencies, governments and essential services.

“This agreement is an important win for the communities of San Luis Obispo County,” stated Pontes. “I want to personally thank Senator John Laird and his team, along with PG&E, for working hard to reach a solution that recognizes the importance of Diablo Canyon and the communities that host it."

The agreement comes as the future of Diablo Canyon remains under discussion. Gov. Gavin Newsom recently announced he would not pursue legislation during the remaining weeks of the 2026 legislative session to extend the plant’s operations beyond the currently authorized period.

PG&E said the agreement addresses near-term community needs while recognizing the plant’s role in providing reliable, clean energy. The company said it will continue discussions with state and local officials regarding Diablo Canyon’s role beyond 2030.