Pacific Gas and Electric’s Diablo Canyon Power Plant will be the first recipient of federal funds being made available to shore up operations at U.S. nuclear plants that face imminent closure.

The Department of Energy on Jan. 17 awarded the California utility $1.1 billion to help maintain operations at the 2,200-MW nuclear plant, whose two units had been slated for closure in 2024 and 2025.

DOE is providing the money through the Civil Nuclear Credit (CNC) Program, established in 2022 with $6 billion from the Infrastructure Investment and Jobs Act (IIJA) to head off the shutdown of nuclear plants from economic factors. Under the terms of the program, applicants must commit to “best efforts” to use uranium produced in the U.S. and seek to rely on domestic providers of other services.

PG&E is the first plant operator to win money under the first funding cycle of the CNC program. The utility will receive credits in installments paid over four years, “with the amount of the annual payment to be adjusted based on a number of factors, including actual costs incurred to extend the operation of the Diablo Canyon Power Plant,” according to DOE.

The first payment is scheduled for 2025 and will be based on the plant’s operations over 2023/24.

“Preserving the nation’s nuclear fleet is critical not only to reaching America’s clean energy goals, but also to ensuring that homes and businesses across the country have reliable energy,” Maria Robinson, director of DOE’s Grid Deployment Office, said in a statement about the award. “Today’s announcement demonstrates the [Biden] administration’s commitment to domestic nuclear energy by preserving existing generation while we continue to support a stronger nuclear power industry.”

Located on the West Coast near Avila Beach, Calif., the 2,200-MW Diablo Canyon plant provides about 9% of California’s in-state generation and 15% of its emissions-free energy.

The plant had been scheduled to close in stages starting this year, largely in response to concerns about its vulnerability to earthquakes. Those concerns increased sharply in the aftermath of the 2011 major accident and radiation release at the Fukushima Daiichi nuclear plant, which was caused by an earthquake and ensuing tsunami.

But since California’s rolling blackouts of 2020, state officials — including Gov. Gavin Newsom — have expressed growing worries about how to maintain grid reliability without the plant as the state works to meet ambitious targets to reduce its economywide carbon emissions. In 2022, Newsom signed Senate Bill 846, which directed the California Public Utilities Commission to authorize an extension for Diablo Canyon by December 2023.

The CPUC last month voted 3-0 to keep Units 1 and 2 at the plant running until 2029 and 2030, respectively. In approving the extension, the commission said it would continue to evaluate whether the cost of continued operation becomes “too high to justify incurring,” as outlined in SB 846. (See California PUC Votes to Extend Diablo Canyon Nuclear Plant 5 Years.)

PG&E is still awaiting approval for an extension to its operating license from the U.S. Nuclear Regulatory Commission after filing a renewal application last November.