(Reuters) - California's utilities regulator on Thursday granted a five-year extension to operate Pacific Gas and Electric's Diablo Canyon power plant, the state's only nuclear facility, to avoid electricity shortages during extreme weather events.
The California Public Utilities Commission (CPUC) approved extended operations at the 2,240-megawatts Diablo Canyon plant's two reactor units until 2029 and 2030, from 2024 and 2025, respectively.
PG&E (NYSE:PCG) can now keep Diablo Canyon running while it awaits a renewed federal operating license, and it must also keep the terms of its $1.4 billion loan agreement with California, the CPUC said in its decision.
PG&E applied on Nov. 7 with the U.S. Nuclear Regulatory Commission for a license renewal, and had previously received approval to keep Diablo Canyon running during the relicensing period.
"Shortfalls could occur under climate-driven extreme events, including the extreme heat events California recently experienced in 2020 and 2022, and the risks are compounded if coincident wildfire risk reduced transmission capacity during peak events," it added.
Separately, the CPUC last month approved a 13% rate hike for PG&E, with most earmarked for wildfire mitigation.
The CPUC could not determine if Diablo Canyon's extension costs are "too high to justify" or "not cost-effective or imprudent," claiming it lacked sufficient information.
Critics of keeping open the plant, located next to the Pacific Ocean in San Luis Obispo County, say the region is vulnerable to earthquakes and that there is no permanent place for disposing of radioactive nuclear waste.
PG&E will be responsible for obtaining substitute capacity during outages, the CPUC said, adding that any excess charges collected in one year must be returned to customers over the next one.
In 2022, the Biden administration approved conditional funding of up to $1.1 billion to prevent the closure of Diablo Canyon, as part of its effort to fight climate change.