PG&E has lodged an application with the Nuclear Regulatory Commission (NRC) to extend the license of the Diablo Canyon nuclear power plant, California's only functioning nuclear facility. The move follows Governor Newsom's enactment of Senate Bill 846 which allows extended operations at the San Luis Obispo County plant, providing about 9% of California's electricity. This legislation also allowed PG&E to bypass state water laws related to the plant’s cooling system until October 2030 and provided a $1.4 billion forgivable loan from the state.
The application by PG&E aims for a 20-year extension until 2045, but additional state legislation would be necessary due to water law compliance requirements set out in SB 846. An additional $1.1 billion was granted by the U.S. Department of Energy, contingent on NRC approval. The NRC's review of PG&E's application could take up to five years but usually takes between 22 and 30 months.
The plant's once-through cooling system, which pumps nearly 2.5 billion gallons of ocean water daily, is in violation of state laws as it harms native marine life and promotes non-native species growth. In 2016, PG&E announced plans for reactor shutdowns by 2024 and 2025 following a contract with environmental and labor groups to replace nuclear power with renewable sources. However, development delays and supply chain issues in the renewable energy markets have impeded these efforts.
Despite these issues, the NRC has already allowed PG&E to operate Diablo Canyon beyond its initial closure dates. Opposition against the license renewal application comes from anti-nuclear groups like Friends of the Earth who filed a lawsuit alleging violation of the contract to close the plant. The lawsuit was dismissed, but they have petitioned the NRC to shut down the plant due to safety concerns like earthquake risks and potential equipment cracking.
PG&E CEO Patti Poppe and Diablo Canyon's Senior VP Paula Gerfen have affirmed their dedication to the facility’s safe operation and its role in clean energy provision. The plant, located in Avila Beach, Calif., generates power for three million people and is pivotal for California’s clean energy future.
InvestingPro Insights
InvestingPro data and tips suggest a mixed financial outlook for PG&E. The company operates with a significant debt burden, and its short-term obligations exceed its liquid assets. Yet, there are also positive indicators. Revenue growth has been accelerating, and the company has been consistently increasing its earnings per share. Furthermore, 7 analysts have revised their earnings upwards for the upcoming period.
In terms of real-time data, PG&E's market cap stands at 33.39B USD, and it trades at a P/E ratio of 18.47. Over the last twelve months as of Q3 2023, the company's revenue was 22.76B USD, marking a growth of 5.57%. The company's 1-year price total return as of the end of 2023 was 11.28%.
These InvestingPro Tips and data points provide valuable insights into PG&E's financial health. For further detailed analysis and additional tips, consider exploring the InvestingPro platform, which offers over 50 more tips for PG&E.
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