The San Luis Obispo City Council declined to sign a letter that supports the extension of Diablo Canyon Power Plant’s operations for 20 years and advocates for the continuation of a tax that funds the local school district. Instead, the council opted to write its own letter, to be made public at Tuesday’s council meeting.
The city said it hopes to gather its own information rather than signing the letter that was signed by Grover Beach and Arroyo Grande.
At the core of the issue is a unitary tax PG&E, the nuclear plant’s operator, had to pay through 2025 which funded a significant portion of San Luis Coastal Unified School District’s budget. Now that the unitary tax is no longer in effect, the district is left with a significant funding gap.
The tax was supposed to end at the same time as Diablo Canyon’s scheduled decommissioning after 2025, but the state extended the plant’s operations by five years to 2030.
During the 2024-25 school year, the district received $3 million from the unitary tax that PG&E was required to pay. This year, the district is facing a $5-7 million deficit which might cause them to lose school resources and programs.
Emily Goodman, one of the co-founders of the San Luis Coastal Parent Information Network, noted how this is going to impact schools.
“[The school district] has historically received a significant amount of their budget, not just from PG&E, but basically from property taxes since we’re a basic aid district,” Goodman said.
Goodman noted that the decrease in PG&E funding and the school’s added high deficit might cause school services like music programs, library resources, counselors and staff to be cut.
In 2026, PG&E is only required to pay the district $700,000 in property taxes, because the unitary tax is no longer in effect. Also, that property tax is already significantly less than previous years of property taxes due to the depreciating value of their land from their most recent land evaluation by the Board of Equalization, according to the San Luis Coastal Parents Information Network.
Currently, State Senator John Laird, who represents San Luis Obispo, is working to create legislation that reinstates the unitary tax since, Laird told KSBY, it was not reinstated during the plant’s extension period.
The city has historically never taken a position on whether licenses should be extended, according to the city council’s public correspondence. Most of the council agreed that they didn’t want to break that precedent by approving the letter as is, especially considering Diablo Canyon’s extension can be a complex issue.
“As of today, I would not take a position, and I really question whether we should at all at any point in the future,” Councilmember Michael Boswell said
Boswell noted that he believes this issue has a relatively small impact on the city, but he recognizes that the community has strong opinions on the plant.
SLO County sent out letters to agencies that previously received any funds from the plant on Dec. 16, 2025. PG&E hopes to present this letter to the Nuclear Regulatory Commission, which has the power to approve their 20-year extension plan.
“The unitary tax seems like a simple one too. But the more I talk to folks about it, it’s like peeling back the layers of an onion,” Councilmember Michelle Shoresman said. “It gets complicated very quickly. I think some refinement in the language would be good.”
SLO City Council does not have jurisdiction to decide whether or not the plant is extended — the letter serves to show city support of the decision.
Impact on schools
The school district relied on the “Community Mitigation Grant” in the past, which gave the district money as the plant was depreciating in value.
In 2016, PG&E decided not renew their plant license because of growing environmental concerns. The last unit of Diablo Canyon was scheduled to close in 2025. Each year after PG&E decided to end the Diablo Canyon’s operations, the plant would depreciate in value.
This led to PG&E payments decreasing each year up until the plant was supposed to shut down.
To lessen the economic impact on schools, PG&E paid the district about $4 million each year along with paying the unitary tax. This grant was set to last until the plant closed in 2025, according to SLO County, but in 2022, Gavin Newsom extended the plant’s operations until 2030. Power outages during 2020 and high energy demands projects in 2022 pushed lawmakers to make the decision, according to Nuclear Newswire.
In the 2024-2025 year, PG&E owed SLO County about $10 million. Now, they say based on their most recent evaluation from the Board of Equalization, they only owe the county $700,000 in 2026.
Goodman noted that she and other supporters of PG&E providing more money to the county are talking to the Board of Equalization about their current evaluation of the plant and what future evaluation looks like.
Annie Aguiñiga Frew, another founder of the parent network and a political science Cal Poly professor, added why the network believes PG&E should financially support local schools.
“You’re here, be a good neighbor,” Frew said. “Just the way that we are supporting the local businesses community as residents, as community members, I think that is a part of collectiveness.”
Goodman said she hopes to see funding either through increasing the unitary tax payments or establishing another grant system.
Local economic impact
Rachel Whalen, the county’s governmental affair coordinator, noted that Diablo Canyon provides about 1300 head-of-household jobs for county citizens and provides about 10% of California’s carbon free energy. She urged the city council to sign the letter supporting the plant’s new measures.
“At a time when California is facing growing challenges relating to energy affordability and reliability, losing Diablo Canyon would be a significant setback,” Whalen said.
In response to being asked about the impact of unitary tax on the school district, PG&E noted that they have paid more than $185 million to SLO County with an additional $85 million because of the grant.
Any change to funding after the grant ended has to be done through legislative action, according to PG&E.