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Feds finalize $1.5B for Palisades; Michigan nuclear plant restart seems likely

 Michigan Gov. Gretchen Whitmer, Energy Secretary Jennifer Granholm and others inside the Palisades nuclear power plant
Michigan Gov. Gretchen Whitmer joined former governor and current Energy Secretary Jennifer Granholm in March to celebrate a $1.52 billion federal loan to restart the shuttered Palisades nuclear power plant. On Monday, officials announced they have finalized the loan. (Bridge photo by Kelly House)
  • Federal officials have finalized a $1.52 billion loan for Palisades and announced an additional $1.3 billion in subsidies
  • The plan comes amid growing energy demand from the tech sector and speculation that Palisades could help meet that demand
  • Anti-nuclear activists contend the plant isn’t safe, pointing to issues raised in a recent inspection

Federal officials have finalized a $1.5 billion loan to restart the Palisades nuclear power plant in southwest Michigan, meaning the plant’s owners can begin spending the money on repairs and upgrades. 

Officials with the U.S. Department of Energy and U.S. Department of Agriculture announced the loan closing on Monday while revealing that two rural electric cooperatives will get a combined $1.3 billion to buy power from the facility. 

Bridge Michigan first reported on those grants on Sept. 9, but at the time federal officials declined to offer dollar figures. 

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The announcements bring total public subsidies for Palisades, which is owned by Holtec International, to more than $3.1 billion so far. That includes a $300 million contribution from the state of Michigan.

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Palisades closed in May 2022. Located along Lake Michigan in Covert Township, it was part of a wave of nuclear closures nationwide. The plants can’t produce power as cheaply as natural gas plants, wind turbines or solar panels. 

Environmental activists have celebrated those closures, saying the power poses a risk of meltdowns and leaks. 

But lost nuclear capacity and rising energy demand from artificial intelligence data centers are increasing demand for coal and natural gas, even while climate scientists warn society has mere years to stop burning fossil fuels or risk dire consequences.

That has prompted bipartisan political support to subsidize nuclear energy. Federal officials first announced the $1.52 billion loan in March after vigorous lobbying from Michigan lawmakers on both sides of the aisle.

At the time, U.S. Energy Secretary and former Michigan Gov. Jennifer Granholm said the U.S. needs to triple its nuclear energy supply by midcentury.

“From Day 1, this administration was determined to change the economics of clean energy,” Deputy Energy Secretary David Turk said during a call with reporters to discuss Monday’s announcement. “And we're really starting to see significant results from that.”

Top Biden administration officials plan to visit the facility Monday to celebrate the funding. 

While Holtec has yet to receive the federal Nuclear Regulatory Commission’s permission to reopen the plant, federal officials are increasingly describing the restart as if it’s a done deal.

“This is the first time in American history, and I want to underscore, (the) first time in American history, that a nuclear plant will be restarted,” Turk said.

Activists say they fear federal officials are so eager to reopen the plant that regulators won’t fully vet whether it can be done safely. Foes have repeatedly filed petitions with the NRC expressing concerns about the restart plan.

“This isn't a paperwork game that you're playing here,” Kevin Kamps, a radioactive-waste specialist with the nonprofit Beyond Nuclear, recently told Bridge Michigan. 

“These are major safety concerns.”

The 53-year-old plant has a history of safety violations and federal officials recently issued notice that an inspection revealed flaws with the plant’s steam generator tubes.

Backers of the restart contend past safety issues have been addressed.

The funding comes amid growing speculation Palisades could produce power to meet demand from data centers.

Holtec is seeking additional federal funding to build two more reactors at the facility, and lawmakers are considering proposed tax breaks to attract data center projects to Michigan.

During remarks about the funding for Palisades, federal officials said the data center boom and new domestic manufacturing are expected to cause a 15% increase in US energy demand over the next decade.

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The Department of Energy “has every confidence that we can meet that demand and meet that with clean power,” Turk said. “It's been incredible to see nuclear power become part of that conversation in a way that just wasn't happening before.”

When operational, Palisades was capable of generating 800 megawatts of power – enough to power 800,000 homes – and employed about 600 people. 

Federal nuclear regulators say they will decide by mid-2025 whether to permit the plant’s restart.

Holtec officials hope to open by late 2025, but Jigar Shah, director of the Department of Energy Loan Programs Office, told reporters it will take “a couple of years.”

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