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When I added Cameco (CCJ), the big Canadian uranium producer, to my Jubak Picks Portfolio on February 22, 2023, I argued that plans by China and India to burn more coal, despite a potentially catastrophic increase in global temperatures, meant that the world would have to put plans to phase out nuclear power on hold. And that a world desperate to avoid the worst climate outcomes would lead to a revived nuclear power industry–and higher uranium sales for Cameco.

Now California has provided a roadmap for exactly how and why this will happen. On Tuesday, the California Energy Commission approved a staff analysis recommending the state extend the operation of the Diablo Canyon Power Plant through 2030 to ensure electricity grid reliability. Officials said a key factor was the data showing California risks energy supply shortfalls during extreme weather events driven by climate change. State legislation requires the CEC to determine the need to extend Diablo Canyon’s license beyond its expiration in 2025. In January 2018, the California Public Utilities Commission approved a proposal by Pacific Gas & Electric, Diablo Canyon’s owner, to retire Unit 1 in 2024 and Unit 2 the following year.

Diablo Canyon supplies about 17% of California’s zero-carbon electricity and 9% of total electricity, according to the CEC.

“As California confronts a rapidly changing climate, extraordinary heat events and record energy demand are becoming increasingly ordinary,” said CEC Vice Chair Siva Gunda. “The state needs to keep all options on the table to protect public health and safety.” That includes maintaining Diablo Canyon’s operations to support reliability statewide in the near term, with an extension allowing more time for additional clean energy projects to come online, he said. The CEC cited an all-time high peak load of 52,061 megawatts on September 6 during a record-breaking 10-day heat wave. That level is nearly 2,000 megawatts higher than the previous record.

In January the U.S. Nuclear Regulatory Commission rejected a request from Pacific Gas & Electric to resume its review of the license renewal application for the 2.2-GW Diablo Canyon plant the utility filed in 2009. The agency told the utility that going back to that application, which PG&E withdrew in 2018 after California opted to retire the nuclear plant by 2025, would “not be consistent with our regulations.” PG&E intends to submit a new application by the end of 2023, a utility spokesperson said then.

My position in Cameco is up 4.86% as of the close on March 3.