State OKs PG&E;’s Upgrade of Diablo Canyon Nuclear Plant

Pacific Gas & Electric Co., California’s largest utility, received state regulatory approval Friday to spend $706 million to replace steam generators at its Diablo Canyon nuclear power plant.

The plan was approved by a unanimous vote of the California Public Utilities Commission in San Francisco, where Pacific Gas & Electric and its parent, PG&E; Corp., are also based.

Replacing the steam generators will prolong the life of the plant, which has two units that can produce about 2,300 megawatts of electricity, according to the utility. It may also boost the company’s earnings, which are based on the amount it has invested in its power system.

“We’re obviously pleased at the approval,” PG&E; spokesman Jeff Lewis said.

A $680-million proposal by Rosemead-based Southern California Edison Co. to replace four deteriorating steam generators at the 2,150-megawatt San Onofre Nuclear Generating Station is before the Public Utilities Commission. Both proposals have sparked protests from groups questioning the cost and the wisdom of keeping the nuclear plants in operation.

Friday’s decision came after a report didn’t find any significant environmental impact from the plan. The replacement of the steam generators will take place in 2008 and 2009 during outages scheduled for refueling the two Diablo Canyon units, Lewis said. The project may take a couple of months to complete at each unit, he said.

Without new steam generators, PG&E; would have been forced to close Diablo Canyon by about 2013 or 2014, Lewis said. Federal licenses for the plant expire in 2025.

Shares of PG&E; Corp. were unchanged at $35.77. The stock has climbed 7.6% this year.

Diablo Canyon is on the coast in San Luis Obispo County. California gets about 13% of its electricity from nuclear power. One megawatt is enough to power about 750 homes.