California regulators have taken a series of steps aimed at keeping the Diablo Canyon Nuclear Power Plant operating into 2030. State energy, utility, and water quality agencies have issued determinations, decisions, or permits tied to Senate Bill 846, while the U.S. Nuclear Regulatory Commission continues its review of Pacific Gas and Electric’s new license renewal application. The plant generates roughly 9% of California’s total electricity, making its continued operation a live question for grid reliability as the state phases in more renewable capacity.
State Energy and Utility Boards Clear the Path
The California Energy Commission approved a staff analysis recommending that the state pursue extending Diablo Canyon’s operations through 2030, finding the plant needed to support grid reliability. That determination cited the plant’s contribution of approximately 9% of total California electricity and roughly 17% of the state’s zero-carbon power, figures that carry real weight as the grid faces growing demand from electrification and extreme heat events. The CEC action was explicitly tied to Senate Bill 846, the 2022 law authored by Senator Bill Dodd that authorized the extension and set the legislative framework every other agency has since followed.
The California Public Utilities Commission then voted to extend Diablo Canyon operations through 2030, approving the cost recovery mechanism PG&E needs to keep the reactors running. Under the CPUC’s implementation of SB 846, Unit 1 may operate no later than October 31, 2029, and Unit 2 no later than October 31, 2030. A proposed decision published by the CPUC in January 2025 laid out the ratemaking details. For California electricity customers, this means nuclear generation costs will continue flowing through PG&E bills for years beyond the original retirement schedule, a tradeoff the CPUC judged acceptable against the risk of supply shortfalls.
Federal License Renewal and Financial Backing
PG&E submitted its Diablo Canyon license renewal application on November 7, 2023, restarting a federal process that had gone dormant for half a decade. The utility had withdrawn a prior renewal application on March 7, 2018, when it still planned to close the plant. Because PG&E missed the normal filing window for timely renewal, it sought an exemption from the Nuclear Regulatory Commission to keep the existing licenses in effect while the new application is under review. That exemption request is a procedural detail with real consequences: without it, the Unit 1 license would expire before the NRC could finish its safety and environmental evaluation, potentially forcing a shutdown that state regulators have spent years trying to prevent.
On the financial side, the U.S. Department of Energy finalized a credit award capped at $1.1 billion for Diablo Canyon under the Civil Nuclear Credit Program. The award covers a four-year performance period from 2023 to 2026, with installment payments adjusted based on costs PG&E actually incurs. That federal money offsets some of the expense that would otherwise land entirely on California ratepayers, but it does not cover the full cost of extended operations. The gap between federal credits and total operating costs is one reason the CPUC cost recovery proceeding matters so much to household electricity bills in PG&E’s service territory.
Water Quality Rules Adjusted for Extended Operations
Diablo Canyon uses a once-through cooling system that draws ocean water and discharges it at higher temperatures, a practice California has been phasing out at coastal power plants for environmental reasons. To align water policy with the SB 846 extension, the State Water Resources Control Board adopted an amendment pushing Diablo Canyon’s final compliance date under the Once-Through Cooling Policy to October 31, 2030. The amendment covered four coastal plants in total, but Diablo Canyon is by far the largest and most politically significant of the group.
More recently, the Central Coast Regional Water Quality Control Board released draft Clean Water Act permits for Diablo Canyon that include stricter effluent limits and increased monitoring requirements. The board described these permits as necessary to extend operations as directed by SB 846. A public comment period will shape the final terms. For coastal communities and marine ecosystems near San Luis Obispo County, the tighter discharge standards represent the state’s attempt to balance continued nuclear generation against the environmental costs of once-through cooling.
What the Extension Means for California’s Energy Mix
Most coverage of the Diablo Canyon extension frames it as a straightforward reliability decision, and the CEC’s own analysis supports that reading. But the extension also underscores a constraint raised in the state’s own reliability analysis: replacing Diablo Canyon’s output fast enough with new resources is challenging on current timelines. The CEC staff analysis recommending the extension discussed timing and availability risks for replacement resources, including storage and other clean generation. Keeping Diablo Canyon open is less a vote of confidence in nuclear power than an admission that alternatives are not arriving on schedule.
The layered approval process also underscores how interdependent California’s climate and energy policies have become. State law requires a rapid buildout of zero-carbon resources, yet the agencies charged with implementing those statutes are now leaning on an existing nuclear plant to bridge the gap. Diablo Canyon’s continued operation preserves a large block of carbon-free generation that, absent comparable replacement resources, could increase reliance on fossil generation in the near term. In that sense, the extension functions as a backstop against backsliding on emissions, even as it complicates the political narrative of an orderly, linear transition to renewables.
Governance, Tradeoffs, and the Road to 2030
The Diablo Canyon decisions also highlight how sprawling California’s governance structure has become around energy issues. The state government now relies on overlapping mandates across the CEC, CPUC, State Water Board, and regional boards, each with its own procedural rules and constituencies. Senate Bill 846 effectively synchronized those bodies around a single outcome by setting statutory deadlines and directing specific agencies to act. That top-down coordination helped avoid conflicting rulings that might have forced an early shutdown, but it also concentrated political accountability at the Legislature, which must now own the consequences if costs rise or environmental impacts prove greater than anticipated.
As Diablo Canyon moves toward the 2030 horizon, the central question is whether California can finally build enough replacement capacity to let the plant retire without risking blackouts or increased emissions. The NRC’s review of PG&E’s license renewal application, the final shape of water quality permits, and future CPUC procurement orders will all determine how firm that date really is. If new offshore wind projects, long-duration storage technologies, and expanded transmission lines materialize on the timelines envisioned in current planning documents, Diablo Canyon could close on schedule as a bridge resource that did its job. If they do not, the political and regulatory pressure to revisit the 2030 cutoff will only intensify, testing whether the state’s commitment to both reliability and decarbonization can hold under strain.
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*This article was researched with the help of AI, with human editors creating the final content.
