Government regulators Thursday granted California’s largest utility an unusual exemption that could allow the state’s last nuclear power plant to continue running after the expiration of its federal operating licenses, a key piece of a contentious proposal to keep the reactors producing electricity for years to come.

The twin-reactor Diablo Canyon plant is scheduled to shut down by 2025. But the federal exemption will permit operator Pacific Gas & Electric to keep producing power while the Nuclear Regulatory Commission reviews an expected application from the utility to extend the plant’s operating run by up to two decades.

PG&E senior vice president Paula Gerfen praised the decision as an important step for the company “to extend our operations beyond 2025 to improve statewide electric system reliability.”

Environmentalists said the NRC staff contorted its own rules in an attempt to keep the aging plant online in what amounted to an ominous sign for plant safety in a region crisscrossed by earthquake faults.

“It’s inconsistent with their own rules,” said Diane Curran, an attorney for the anti-nuclear advocacy group Mothers for Peace, which has long sought to shutter the seaside plant located midway between Los Angeles and San Francisco. “It’s scary.”

The decision marks the latest development in a long-running fight over the operation and safety of the decades-old plant, which Gov. Gavin Newsom says should keep running beyond 2025 to ward off possible blackouts as the state transitions to solar and other renewable energy sources.

Produces 9% of California’s Electricity

The Newsom administration is pushing to expand solar power and other clean energy, as the state aims to cut emissions by 40% below 1990 levels by 2030. Nuclear power doesn’t produce carbon pollution like fossil fuels. But it leaves behind waste that can remain dangerously radioactive for centuries.

Diablo Canyon produces 9% of the state’s electricity.

Newsom’s decision last year to support a longer operating run for Diablo Canyon shocked environmentalists and anti-nuclear advocates because he had once been a leading voice for closing the plant.

The decision by the NRC staff was critical for PG&E’s proposal.

The company has said it intends to submit an application to extend the plant’s life by the end of this year. However, the current operating licenses would likely expire before the NRC’s review could be completed, a process that can take two years or more.

Typically, if a nuclear plant files for a license extension at least five years before the expiration of the existing license, the existing license remains in effect until the NRC’s application review is complete, even if it technically passes the expiration date. But PG&E would not meet the usual five-year benchmark.

One reactor is scheduled to close in November 2024, and its twin in August 2025, and a state analysis predicted it would take federal regulators until late 2026 to act on the application. With the exemption from the NRC staff, the reactors can keep running while the agency conducts the expected review.

In documents submitted to the NRC, the company said the exemption “will not present an undue risk to the public health and safety.”

Anti-nuclear activists and national environmental groups earlier urged the federal agency to reject the exemption, saying in a petition that it amounted to a dangerous shortcut that would expose the public to safety risks. They argued critical safety reviews for an extended run would likely be incomplete by the time the current licenses technically expire.

PG&E initially was part of a complex 2016 agreement with environmentalists and plant worker unions to close the plant by 2025. But the state changed direction last year, and Newsom and the Legislature voided the 2016 pact and opened the way for PG&E to seek a longer operating run.

PG&E officials have said they are eager for certainty about the plant’s future because of the difficulty of reversing course on a plant that was headed for permanent retirement, but now needs to prepare for a potentially longer lifespan.

The proposal comes at a time when the nuclear power industry foresees future growth. The Biden administration last year launched a $6 billion effort to rescue nuclear power plants at risk of closing, citing the need to continue nuclear energy as a carbon-free source of power that helps to combat climate change.

But critics of a longer run for Diablo Canyon have depicted the plan as a huge financial giveaway for PG&E, while warning it would gut state environmental safeguards. Also unknown is how much it will cost to update the plant for a longer lifespan.