Report: Biden Administration Will Provide $1.5 Billion for Palisades Nuclear Restart

The Palisades nuclear power plant in Michigan could be another step closer to restarting, with reports saying the Biden administration in February will announce $1.5 billion in funding for the project.

Holtec International Corp. purchased the 800-MW facility from Entergy in 2022, after Entergy closed the nuclear plant. Holtec was prepared to decommission the site in Covert Township, but has since pivoted to possibly restarting operations contingent on funding from the federal government.

The Biden administration has said nuclear power is important to meet the country’s goals to reduce carbon emissions, including decarbonizing the power sector by 2035. Holtec officials have said that approval of the government’s financial support would help start a two-year process to reopen Palisades.

Bloomberg News on Jan. 30 reported that the White House is set to support the restart as part of its financing plan for nuclear power. Bloomberg, citing “people familiar with the matter,” said the funding would get conditional backing from the U.S. Dept. of Energy (DOE). The news service said a spokeswoman for the DOE’s Loan Programs Office declined to comment due to confidentiality concerns. The report said an announcement is expected in late February.

Bloomberg reported that Nick Culp, a Holtec spokesman, said the company was “very optimistic” about the DOE loan process. “This is a historic opportunity for the country and Michigan,” Culp said. “As we transition away from fossil fuels, nuclear is going to be a critical part of not only reaching our climate goals but doing so in a way that ensures the lights stay on.”

Kelly Trice, president of Holtec Nuclear Generation and Decommissioning, in a statement said restarting Palisades “will soon be a reality,” adding that “the repowering of Palisades ensures Michigan has sufficient energy to meet future demand and mitigate the impact of climate change, while creating hundreds of high-paying Michigan jobs, expanding the local tax base, and unleashing economic opportunity within the region and beyond.”

Holtec has said about 220 workers are currently still at the plant. The company said it would need to add about 300 more staff to support a restart. The plant employed about 600 workers when it was fully operational.

Federal Funding Program

The funding from the Biden administration is part of the government’s $6 billion Civil Nuclear Credit Program announced in 2021. The program was created by the Bipartisan Infrastructure Law passed by Congress that same year. The state of Michigan also has budgeted at least $150 million in funding to support the plant’s transition, with Democratic Gov. Gretchen Whitmer and other officials saying they welcome a resumption of the facility’s power generation.

Stacey LaRouche, a spokesperson for Whitmer, in a statement said the governor is “proud to support Holtec and local, state and federal partners” in pursuing the plant’s reopening. “Our state is once again leading by example, as Palisades remains on track to becoming the first successfully restarted nuclear power plant in American history,” LaRouche said.

Michigan lawmakers in November 2023 passed bills mandating that the state receive 100% of its energy from clean resources by 2040, with nuclear power considered part of that goal.

Power Offtake Agreement

Holtec, a diversified energy technology group, last year announced an agreement with Wolverine Power Cooperative, a Michigan-based not-for-profit power cooperative. The deal is designed to support the restart of the Palisades plant. Palisades was taken offline in May 2022.

Wolverine agreed to purchase as much as two-thirds of power produced from Palisades. Hoosier Energy, a second power cooperative that serves customers in Indiana and Illinois, agreed to buy the rest.

The deal also gives Wolverine some rights that are in line with Holtec’s announced plan to install small modular reactors (SMRs) at the Palisades site. Holtec has said the company would like to build two 300-MW SMRs in addition to restarting the existing plant.

Jerrold Vincent, co-founder of Nuclearn.ai, a software company serving the nuclear power industry, told POWER in the wake of the offtake agreement, “The decision to shut down Palisades Nuclear Generating Station … was a low point for the domestic nuclear power industry. Thankfully much progress has been made in the last few years to recognize the critical importance of nuclear power in a carbon-free energy future and improve the economics of nuclear power by leveraging new technologies [such as artificial intelligence].  The PPA [power purchase agreement] deal between Holtec and Wolverine is overwhelming evidence that nuclear power is economically viable and an important carbon-free source of energy.”

The federal government’s nuclear power program earlier pledged $1.1 billion to support continued operation of the Diablo Canyon power plant in California. Diablo Canyon, which was scheduled to shut down in 2025, could now operate at least through much of 2030. The facility is California’s only operating nuclear plant.

—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).