Published in Energy
The Palisades nuclear power plant in Van Buren County will be permanently decommissioned after being denied federal funding. The Palisades nuclear power plant in Van Buren County will be permanently decommissioned after being denied federal funding. COURTESY PHOTO

State energy regulator says Palisades denial ‘obviously disappointing,’ but other clean energy routes exist

BY Monday, November 21, 2022 06:04pm

COVERT TWP. — While the recent denial of funding to reopen the Palisades nuclear power plant handicaps Michigan’s short-term emission-reduction goals, the state’s top energy regulator says new federal laws will create additional clean energy opportunities.

Palisades owner Holtec International announced late last week that it was denied funding from the U.S. Department of Energy’s Civil Nuclear Credit Program, a $6 billion fund created to bail out unprofitable nuclear plants to preserve their carbon-free electricity. Holtec acquired the plant from Entergy after it closed in late May with the intention of permanently decommissioning the roughly 800-megawatt (MW) plant along the Lake Michigan shoreline in Van Buren County.

In recent months, the creation of the Civil Nuclear Credit Program, as well as in-state funding, opened a potential lifeline for Palisades. However, that door closed on Friday when the DOE, led by former Michigan Gov. Jennifer Granholm, denied Holtec’s funding request. 

A Department of Energy spokesperson declined to disclose the reason for the denial, citing terms in the Civil Nuclear Credit Program.

“It’s obviously disappointing, but I think we knew going in that it was a long shot,” Michigan Public Service Commissioner Chairperson Dan Scripps said. “We were asking DOE to support something that had never been done before … and that it was going to take an awful lot to make it happen. I still think it was a chance worth taking and a fight worth fighting.”

Scripps was referring to the fact that no U.S. nuclear power plant has been reopened after an owner filed a formal notice — known as a letter of permanent secession of operation — to the Nuclear Regulatory Commission that it was being decommissioned, which occurred in the case of Palisades earlier this year.

Holtec Spokesperson Patrick O’Brien said this was a key complicating factor as the company examined reopening Palisades.

“For all intents and purposes, to restart a plant after (the formal notification) is almost like a brand new relicensing” that would take place at the Nuclear Regulatory Commission (NRC), O’Brien told MiBiz. “The NRC doesn’t have a process for restarting something that’s sent in that letter. Other plants have restarted, but no one has restarted after sending that letter in.”

Clean energy and environmental advocates remain divided over Palisades. Supporters, which includes Gov. Gretchen Whitmer, say the plant provides valuable carbon-free power as the state pursues a net-zero emissions target by 2050. In the absence of Palisades’ generating capacity, the state will be more reliant on natural gas for electricity.

“At least today, emissions have gone up as a result (of the plant closing) — 800 MW of baseload, emissions-free power is really useful to have in the portfolio,” Scripps said.

However, longtime critics point to the potential environmental and public health catastrophe that could result from an onsite leak or in the potential scenario of nuclear waste being transferred from the region via a Great Lakes barge.

“Governor Whitmer’s unwise last-second scheme to bail out Palisades with billions of dollars of state and federal taxpayer money, in order to restart it for nine more years of operations, had to be stopped. We are happy Energy Secretary Granholm did so, by denying the federal bailout,” Kevin Kamps, a specialist with the anti-nuclear advocacy group Beyond Nuclear, said in a statement.

While a short-term setback from an emissions perspective, Scripps said the plant was still scheduled to close initially when the state drafted its climate action plan. As well, components of the federal Infrastructure Investment and Jobs Act and the Inflation Reduction Act could create new pathways for renewable energy deployment, as some of the state’s largest utilities have already signaled. Scripps also said there is “real potential” for small-scale nuclear power at the Palisades site, as Holtec has suggested as a future option.

“Those, even aside from losing on nuclear-specific opportunities with Palisades, would give a pretty significant boost to the energy transition and carbon-free resources,” Scripps said of the federal laws, which he noted weren’t included in the state’s climate planning. “It would be great to have Palisades online, but I think there’s still a path (to net zero).”

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