Palisades Nuclear Power Plant May Get a Second Chance with Holtec-Wolverine Agreement

Holtec International, a diversified energy technology company, and Wolverine Power Cooperative, a not-for-profit power generation cooperative based in Michigan, announced that they have entered into a long-term agreement that will “pave the way” for the restart of the 800-MW Palisades Nuclear Power Plant in Covert Township, Michigan (Figure 1).

1. The Palisades nuclear power plant is a single-unit pressurized water reactor nuclear station with a capacity of about 800 MW. It was closed in May 2022, then purchased by Holtec International for decommissioning. Holtec is now seeking to restart the plant. Courtesy: Wolverine Power Cooperative

The Palisades reactor was taken offline for what was expected to be its final time on May 20, 2022. The station was actually scheduled for permanent shutdown on May 31, 2022, but plant operators “made the conservative decision to shut down the plant early due to the performance of a control rod drive seal,” Entergy, the plant owner at the time, said.

Entergy’s decision to close Palisades was part of a larger plan for the company to exit the merchant nuclear generation business. The company had acquired several nuclear units, including Palisades, after deregulation substantially changed the electric industry in the late 1990s. However, its merchant fleet had trouble competing and grew to be seen as a liability, so the company took steps to get out of the merchant business, which included closing several plants and selling one.

Palisades, for its part, had a fairly respectable operating history. In fact, the plant’s last run set a site and world record for a plant of its kind, continuously generating electricity for 577 days following its last refueling. Entergy said at the time that the station was regarded by its peers as one of the top performers in the industry.

Holtec acquired the Palisades plant in June 2022, roughly a month after it was shut down. At the time, Entergy said it completed the sale to Holtec “to ensure a safe and timely decommissioning of the nuclear site.” Kelly Trice, president of Holtec Decommissioning International, a wholly owned subsidiary of Holtec International, said, “We are pleased to be acquiring these facilities to add to our growing decommissioning fleet.” According to the statement, Holtec had filed detailed plans with the U.S. Nuclear Regulatory Commission (NRC) to complete the dismantling, decontamination, and remediation of Palisades to NRC standards by 2041. It said this would be more than 40 years sooner than if Entergy continued to own the facility and selected the maximum 60-year NRC SAFSTOR option for decommissioning. Furthermore, it said “a safe and timely decommissioning is welcomed news for the plant’s community, which stands to benefit from potential site reuse.”

Yet, efforts to save the Palisades plant soon began. Holtec applied for financial support through the Civil Nuclear Credit Program, a $6 billion fund designed to help preserve the existing U.S. reactor fleet and save thousands of high-paying jobs across the country. The program was made possible by the passing of the Bipartisan Infrastructure Law.

Holtec had solid backing from leaders in Michigan. On Sept. 9, 2022, Michigan Gov. Gretchen Whitmer wrote a letter to Energy Secretary Jennifer Granholm in support of Holtec’s plans to repower and reopen Palisades. “Keeping Palisades open is a top priority for the State of Michigan,” Whitmer wrote. “Today, because of the actions of Holtec, we have a path forward to save Palisades, secure 1,700 jobs, and help fight climate change by generating more clean energy,” she added.

Now, more than a year later, Holtec is another step closer to saving the plant as a result of the deal with Wolverine. “The foundation of this partnership is a long-term power purchase agreement, with Wolverine committing to purchase up to two-thirds of the carbon-free power generated by the Palisades Nuclear Power Plant for its Michigan-based member rural electric cooperatives. Wolverine’s non-profit rural electric cooperative project partner, Hoosier Energy, will purchase the balance,” Holtec and Wolverine said in a joint statement.

“We are thrilled to enter into this partnership,” said Trice, whose title is now president of Holtec Nuclear Generation and Decommissioning. “The executed power purchase agreement represents a significant milestone in our journey towards reopening the plant, a historic moment for Michigan and the country. 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. With key support from federal partners, Governor Whitmer, the Michigan legislature, and the local plant community, this will soon be a reality.”

Holtec said it submitted an application with the U.S. Department of Energy’s (DOE’s) Loan Programs Office in early 2023 for federal loan funding to repower Palisades. The company is working cooperatively with the DOE to move the loan application process forward. Holtec said it has also participated in several constructive public meetings with NRC staff to discuss the proposed regulatory path to reauthorize operations at Palisades within the agency’s existing regulatory framework.

During operation, Palisades employed about 600 full-time workers in highly skilled jobs with an average salary of $117,000. The plant brought an additional 1,000 specialty workers into the local community every 18 months to support scheduled refueling and maintenance. The Palisades station reportedly paid more than $10 million in property taxes every year to support local schools, law enforcement, fire protection, parks, libraries, and other community resources, making it one of the largest taxpayers in Van Buren County.

“The restart of Palisades offers a practical, long-term solution to electric reliability in our state and aligns with Michigan’s ambitious goals to reduce carbon emissions,” said Eric Baker, CEO of Wolverine. However, no specific timetable was given for a possible restart.

Aaron Larson is POWER’s executive editor (@POWERmagazine).

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