The U.S. Court of Appeals here ruled yesterday that the Nuclear Regulatory Commission does not have to consider for licensing purposes the effect an earthquake would have on emergency evacuation plans at California's Diablo Canyon nuclear power plant.

The court's 5-to-4 ruling upholds an NRC decision and means that Diablo Canyon's two units, within three miles of the Hosgri earth fault, may continue operation. The $5.9 billion plant, near San Luis Obispo, Calif., began operating its first unit last May and started its second unit last month.

But in a strongly worded dissent written by Judge Patricia Wald, four justices said "earthquakes should have been considered in the emergency planning for a radiological accident" and noted that if the court's majority is wrong, "history will allow no rehearing."

The San Luis Obispo Mothers for Peace, a group that has fought construction of the nuclear plant for 13 years, had sought withdrawal of Pacific Gas & Electric's licenses to operate the plant.

"It is rather appalling that the U.S. Court of Appeals sitting in Washington just ruled that earthquakes are not important in California," Mothers for Peace member Sandy Silver said. "The whole idea is ludicrous. It defies reason . . . .

"The Nuclear Regulatory Commission told Congress that there is a 50-50 chance of another TMI Three Mile Island accident within the next 20 years," Silver said. "The people of this community just cannot accept those odds."

The five suits decided by the appeals court were the only remaining legal challenges to the Diablo Canyon plant, although the Mothers for Peace group is challenging on-site storage of radioactive waste before the NRC.

Silver said her group has not decided whether to appeal to the Supreme Court.

William H. Briggs Jr., the NRC's solicitor, said he was pleased with the decision "because it upholds the commission on the merits and rejects as groundless claims that it had acted in bad faith" in granting Diablo Canyon's license. "It's been an extraordinarly long and complex process, and it's about time it's over," Briggs said.

A PG&E spokesman said the company was "gratified" that the court upheld the plant's licensing.

The majority opinion, written by Judge Robert H. Bork, said that requiring the NRC to hold hearings on every circumstance that might affect emergency response in a nuclear accident would permit opponents "to hold up licensing for many more years, and probably for a period long enough to make construction of nuclear power plants entirely economically unfeasible."

Joining Bork were Judges Harry T. Edwards, Antonin Scalia and Kenneth W. Starr. Judge Abner Mikva filed a concurring opinion. Joining Wald in dissent were Chief Judge Spottswood W. Robinson III and Judges J. Skelly Wright and Ruth Bader Ginsburg.