Michigan Governor Urges DOE to Support Palisades Nuclear Plant’s Reopening

Michigan’s governor has asked the Department of Energy (DOE) to support Holtec International’s efforts to “save” the 800-MW Palisades nuclear power plant, marking a potential turnaround for the facility in Southwest Michigan, which was taken offline for the final time on May 20, 2022, after 50 years of operation.

Michigan Gov. Gretchen Whitmer’s in a Sept. 9 letter asked DOE Energy Secretary Jennifer Granholm to support Holtec’s plans “to repower and reopen” Palisades, a single pressurized water reactor in Covert, Michigan, that had operated since 1971. The plant’s closure in May by its former operator, Entergy Nuclear, was widely lamented by the nuclear industry and environmental groups. While Entergy said it believes nuclear power will be essential to the nation’s goal of mitigating the impact of climate change, the company closed the plant as part of a bigger strategic plan for the company to exit the merchant nuclear generation and focus its utility operations in the Gulf South.

State efforts to save the plant, which employed 600 workers while operational, have continued, however. “Keeping Palisades open is critical for Michigan’s competitiveness and future economic development opportunities,” the governor wrote on Friday. “We are ready to do our part should they receive funding through the [Civil Nuclear Credit (CNC)] program, including identifying state funding and facilitating a power purchase agreement.”

Palisades Power Plant was a single-unit pressurized water reactor nuclear station with a capacity of about 800 MW. Courtesy: Entergy

A Potential Lifeline: The DOE’s Civil Nuclear Credit Program

Camden, New Jersey–headquartered Holtec International, which acquired the Big Rock Point site from Entergy in June, confirmed it has submitted a federal grant application to the Department of Energy’s (DOE’s) CNC program.

The April 2022–unveiled program will dole out $6 billion in appropriations (in specific allocations of $1.2 billion per year for fiscal years 2022 to 2026) from the November 2021–enacted Infrastructure Investment and Jobs Act as civil nuclear credits to preserve the existing U.S. nuclear fleet. After the DOE revised eligibility criteria for the program in June—in response to a request by California’s governor’s office to address limitations affecting Pacific Gas & Electric’s (PG&E’s) 2.2-GW Diablo Canyon Power Plant—the agency extended the submission deadline for first-cycle CNC certification applications to Sept. 6. The submission period has now closed.

The first CNC award cycle, now currently underway, prioritizes reactors that are most at risk of imminent closure and have already announced their intention to cease operations prior to Sept. 30, 2026. While the DOE has yet to issue guidance for the second cycle, which the DOE will likely initiate in the first quarter of fiscal year 2023, the DOE has indicated the second cycle will not be limited to nuclear reactors that have publicly announced intentions to retire. It will likely include owners or operators of nuclear reactors that receive payments from state programs, such as zero-emission credits and clean energy contracts.

In her letter, notably, Gov. Whitmer also called for the DOE’s support of a federal loan guarantee for Palisades through the DOE’s Loan Program Office (LPO). Holtec International has not indicated it has applied for a loan guarantee for the Palisades Nuclear Facility. Holtec, however, appears making headway on a loan application for building the company’s four “first-mover” SMR-160 small modular reactors (SMRs). Holtec’s SMR loan application identifies two potential locations for its $7.4 billion plan: one within Entergy’s service area, and the other at Holtec’s now-shuttered Oyster Creek nuclear plant, which it purchased from Exelon in 2018.

During a Sept. 2 Cowen’s Energy Transition Podcast Series podcast, LPO Director Jigar Shah said the federal loan office has received 77 applications seeking almost $81 billion worth of loan proceeds, which represent roughly $150 billion worth of projects. Shah noted LPO has an additional $40 billion of loan authority that it will allocate to projects that meet Title 17 criteria for innovation. “If you meet that criteria, we really are agnostic to the fossil, nuclear, versus renewable energy and efficient energy title,” he said. “In general, whether it’s Diablo Canyon or the Palisades Nuclear Plant that’s recently been shut down in Michigan, or whether it’s other plants, if they want our assistance to be able to make sure that they can upgrade the plant so they can last for the next so many years, we’re here to serve,” he said.

New Owner Holtec Hopeful That Palisades Will Reopen

Whitmer on Friday said the formal request to the DOE comes “after months of hard work and collaboration” to save the Palisades plant, indicating Holtec has been working with the state to reopen the plant. In a statement on Friday, Holtec’s president and CEO, Dr. Kris Singh, applauded Whitmer’s leadership in “recognizing the vital importance of Palisades to Michigan’s clean energy future as a source of safe and reliable carbon-free electricity.” Singh added that the company will look forward to We look forward to “continuing to work with the administration as well as our federal, state, and community partners to make this hope a reality.”

In tandem, however, Holtec is continuing with efforts at the Nuclear Regulatory Commission (NRC) to complete the dismantling, decontamination, and remediation of Palisades to NRC standards by 2041. The company’s decommissioning arm, Holtec Decommissioning International, on Dec. 23, 2020, submitted a post-shutdown decommissioning report to the NRC. The report includes a site-specific decommissioning cost estimate and an overview of Holtec’s planned activities, schedule, projected costs, and environmental impacts for decommissioning the Palisades plant. The NRC on Friday announced it would hold a decommissioning plan public meeting for the Michigan plant on Sept. 22.

Sonal Patel is a POWER senior associate editor (@sonalcpatel@POWERmagazine).

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