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Diablo Canyon Nuclear Plant Generates $3 Billion in Economic Activity

by Michael Abrams, published

The Diablo Canyon Power Plant (DCPP), in San Luis Obispo, is the last functioning nuclear plant in California. Regardless of predispositions on nuclear energy, the plant provides a large amount of carbon free energy. Its presence also generates economic activity on the local, state, and national level.


study supported by Pacific Gas & Electric (PG&E), and prepared by Cal Poly San Luis Obispo, delved into the broad economic impact of DCPP. This ranges from the personal expenditures of employees to the materials purchased to keep the plant running.

Diablo Canyon's two operation licenses expire in 2024 and 2025 and PG&E is continually seeking license renewal.

The study estimated the economic impact for 2027 if DCPP license renewal is successful. When accounting for impact on all levels, over $3 billion is said to be generated in 2027. As of 2011, total impact is at $2 billion.

Employees pay for housing, shop at local businesses, eat at restaurants, purchase services, and pay taxes.

The plant generates, transmits, and distributes energy across the state. The plant also requires maintenance and additional construction, which require materials from other companies. All of this feeds into the economic activity outlook for 2027:

Diablo Canyon Nuclear Plant Generates $3 Billion in Economic Activity

Direct impact includes the value of the energy produced by the plant itself. Indirect impact is the revenue generated by other parties as a consequence of the plant's operation. Induced impact is a consequence of indirect impact. Those stimulated by indirect impact go on to participate in the economy.

A chain reaction occurs in the economic activity, as with any other job market. About $1.5 billion is circulated within the San Luis Obispo area, with about $300 million more on the state level, eventually creating high levels of indirect and induced economic activity on a national scale.

The same principals apply when looking at the amount of jobs created:

Diablo Canyon Nuclear Plant Generates $3 Billion in Economic Activity

The study says the land would primarily be used for cattle grazing and nuclear waste storage if DCPP were to be decommissioned. Charts in the study display the economic loss decommissioning would bring. Only $15.2 million of impact with 71 jobs are estimated in DCPP's absence.

What if the area was converted to a wind farm? Based on 

wind maps from the California Energy Commission, the coastal area of San Luis Obispo has wind potential. However, the amount of potential energy production is not as robust as nuclear capabilities.

Concerns about the fault lines and earthquake potential in the region are to be addressed by seismic testing. It has been an obstacle for PG&E, but these concerns are not likely to go away so long as DCPP is operational.

The San Onofre nuclear plant, in San Diego, was permanently shutdown last month. Southern California Edison, owners of San Onofre, had anticipated this, but peak demand for energy this summer will be difficult to meet.

PG&E hopes to avoid this fate, not just for energy demands, but its economic influence with the plant.

(The entire study and all its details can be read through and downloaded here.)

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