The tax, known as a unitary tax, has historically provided millions of dollars to San Luis Obispo County, local cities and public schools.
Diablo Canyon generates nearly 10% of California’s electricity. In 2023, the California Energy Commission said the nuclear power plant was needed for grid reliability, though critics argue advancements in renewable energy make it unnecessary.
Diablo Canyon gets an extension, but not the unitary tax
After decades of controversy Diablo Canyon was scheduled to shut down last year. But in 2022, Gov. Gavin Newsom signed SB 846, a bill keeping the plant running until 2030.
Laird, whose district includes parts of San Luis Obispo County, says he thought the unitary tax would be addressed separately when he worked on SB 846.
“At the time, my office inquired of the board of equalization, and they said there's an administrative process, this will be taken care of administratively” Laird said. “It turns out, that was not the case.”
The unitary tax was actually set to expire alongside Diablo Canyon's planned closure, but with the plant now operating until 2030, Laird said the state legislature will need to act to bring back the tax. He says he plans to introduce a bill before the end of February.
Budget cuts and missing revenue
San Luis Coastal Unified School District cut more than $5 million from its budget in December, citing reduced funding from ending the unitary tax.
Pacific Gas and Electric, which operates Diablo Canyon, released a statement that says any changes to Diablo Canyon’s tax structure would require legislative action.
“We believe a solution that is backed by legislation is required to give the school district the stability it requires,” the statement said.
San Luis Obispo County Supervisor Dawn Ortiz-Legg called reinstating the tax a matter of “fiscal fairness.”
“We want those revenues to come back in because there's things that we need to do, whether it's childcare, whether it's health services, whether it's repairing roads,” Ortiz-Legg said. “All of this helps.”
Local governments rally around Diablo Canyon and the unitary tax
In December, the San Luis Obispo County Board of Supervisors drafted a letter to the state legislature.
The letter supports Diablo Canyon’s continued operations for another two decades and urges the legislature to address the missing revenue.
Kate Ballantyne, the Assistant CEO for San Luis Obispo County, said the letter is “purposefully broad” in suggesting how lost revenue from the unitary tax could be replaced
“There may be other mechanisms [besides the current tax treatment] that may fit better,” Ballantyne said. “Through working with PG&E and the legislature, we hope we can come to some sort of consensus on how that could happen.”
The Grover Beach City Council decided to sign onto the letter at a meeting in January. Mayor Kassi Dee supported both the plant and the unitary tax.
“ I'm a lifelong resident of Grover Beach. I've had [the] Diablo Canyon Power Plant in my peripherals my entire life,” Dee said.
The City of San Luis Obispo will consider whether to join in supporting the letter at a city council meeting Tuesday evening.
SLO County officials hope to deliver the letter with support from local cities and other entities to the state legislature in February.
