COVERT TWP. — The odds of a Southwest Michigan nuclear plant coming back to life after recently closing have improved as the owner pursues targeted federal funding for distressed nuclear facilities.
Palisades nuclear plant owner Holtec International in early July applied for funding under the Civil Nuclear Credit Program, a $6 billion U.S. Department of Energy program announced this year to save uneconomic nuclear plants. These power plants are not only local economic engines, but also sources of carbon-free power that can help meet emission-reduction targets.
Holtec’s funding application came weeks after former Palisades nuclear plant owner Entergy Corp. closed the facility in late May and transferred ownership to a Holtec subsidiary for permanent decommissioning.
Amid efforts by Gov. Gretchen Whitmer’s administration to keep the plant open, Holtec has maintained that it would consider doing so through a buyer or potentially securing federal funding, said Patrick O’Brien, Holtec’s senior manager of government affairs and communications.
“We’re committed to support the state and the country at large to have nuclear energy meet their needs,” O’Brien told MiBiz. “Since we’ve taken over, anything we’ve done to the plant has been with a mindset that we could restart it.”
O’Brien said the federal funding could act as a bridge to keep the plant open until more advanced and modular nuclear energy technology is deployed, likely after 2030.
However, reopening Palisades still involves “a lot of hurdles” and remains contingent on several moving parts. Beyond federal funding approval, Holtec also would require an as-yet undetermined financial commitment from the state, O’Brien said.
Holtec also would need to identify a third party to operate Palisades, complete maintenance and delayed capital improvements, purchase fuel, secure a power purchase agreement to sell power from the plant, and restaff the 800 megawatt facility with about 400 employees, O’Brien said.
“But this is a positive step,” he said of the application. “There are a lot of moving parts.”
The state has sought to keep or reopen Palisades for several months, including as it officially closed on May 20 this year.
In a Friday letter to U.S. Energy Secretary Jennifer Granholm, Whitmer formally backed Holtec’s application for the federal credit program.
“Keeping Palisades open is critical for Michigan's competitiveness and future economic development opportunities,” Whitmer wrote, adding that the state would “do our part should (Holtec) receive funding through the CNC program, including identifying state funding and facilitating a power purchase agreement.”
The federal Civil Nuclear Credit program — funded through the Infrastructure Investment and Jobs Act — aims to directly subsidize U.S. nuclear plants at risk of closure. Palisades and the Diablo Canyon Power Plant in southern California are the two most at-risk plants in the country with recent or near decommissioning targets. The DOE has extended its funding deadline targets since announcing the program earlier this year.
Nuclear plants across the country have recently closed — or are at risk of prematurely closing — because of competitive energy market prices, particularly from natural gas. Other states, including Illinois, have enacted ratepayer subsidies to keep nuclear facilities in operation.
Nuclear power also has become increasingly important as a climate change tool, including for states like Michigan that have set long-term carbon-reduction targets. However, absent direct subsidies, the plants are rarely valued for their carbon-free characteristics.