Report: Feds will give $1.5 billion to restart Palisades nuclear plant

• The federal government is reportedly poised to offer a $1.5 billion loan to re-start the Palisades nuclear plant
• The plant’s owner, Holtec International, has also secured $150 million in state dollars for the effort
• Proponents say Michigan needs the carbon-free energy that nuclear power provides. Opponents say it’s too costly and environmentally risky

The federal government reportedly plans to dole out $1.5 billion to restart Michigan’s Palisades nuclear power plant. 

Bloomberg on Wednesday reported the U.S. Energy Department is set to award the federal loan by late February to Holtec International. The business news outlet cited “a source with knowledge of the matter” who was not authorized to discuss the loan.

Neither Holtec nor the Department of Energy have confirmed the news. Holtec spokesperson Nick Culp told Bridge Michigan the company is “very optimistic” about its chances. A source in the governor’s office also expressed optimism.

Michigan politicians have already begun publicly celebrating.

Related:

• Michigan company agrees to buy nuclear power from shuttered Palisades plant
• Fresh off Palisades closure, Michigan will study state’s nuclear prospects
• Nuclear power is having a moment in Michigan after Palisades

In a post on the social media platform X, formerly known at Twitter, Rep. Graham Filler, R-St. Johns, called reports of the loan “a great nationwide sign that nuclear energy is growing!”

Stacey LaRouche, a spokesperson for Gov. Gretchen Whitmer, said the governor is “proud to support Holtec and local, state and federal partners” in seeking the plant’s reopening.

“Our state is once again leading by example, as Palisades remains on track to becoming the first successfully restarted nuclear power plant in American history,” LaRouche said.

The Palisades plant, which sits on the shore of Lake Michigan in Van Buren County, pumped out enough carbon-free nuclear energy to power more than 800,000 homes before it shuttered in May 2022 amid financial struggles.

While some laud nuclear power for its ability to produce abundant carbon-free energy, it is more expensive than natural gas, wind and solar. 

Power from Palisades sometimes cost 57 percent more than competing sources, according to Consumers Energy, which had a contract to purchase power from the plant but declined to renew the agreement because of high costs.

The plant’s eventual closure was not a surprise. Its former owner, Entergy, announced plans to close the plant in the mid-2010s. But Michigan politicians became interested in averting a closure in recent years, as the global climate crisis left them looking for ways to wean Michigan off fossil fuels.

In November, the Democratically controlled Legislature passed a series of bills that require Michigan to achieve 100 percent clean energy by 2040. Nuclear power is expected to be part of the transition.

Proponents say Michigan needs the carbon-free energy that nuclear power provides. Opponents say nuclear power is too costly and environmentally risky.

Beyond the federal grant, state lawmakers have so far approved $150 million in state dollars to re-start Palisades. 

Holtec officials have said they may approach the state for more money in the future.

More federal subsidies might also be needed to offset the high cost of delivering power from the plant. Wolverine Rural Electric Cooperative, a Cadillac-based nonprofit power company that has agreed to buy power from Palisades, is seeking federal funding for the effort.

When Holtec bought Palisades in 2022, the company said it planned to decommission the plant. But the message quickly shifted. In addition to re-starting Palisades, Holtec now plans to build two small modular reactors at the southwest Michigan site, enough to power an additional 600,000 homes.

To do so, Holtec would need to overcome obstacles that have stymied other companies’ efforts to bring the emerging small modular technology to market. The company behind America’s first small nuclear reactor project in Utah canceled construction in November, citing cost concerns. 

Holtec hopes to surmount the cost concerns with yet more federal subsidies. The company has applied for a $7.4 billion federal loan to support SMR manufacturing and construction.

When it was fully operational, the Palisades plant employed some 600 workers. Holtec has said it will employ about 520 if reopened.