Biden administration offers conditional $1.52B to Holtec Palisades to recommission Michigan nuclear power plant

As a loan guarantee for Holtec Palisades, the U.S. Department of Energy (DOE) announced that its Loan Programs Office (LPO) agreed to a conditional commitment of up to $1.52 billion to Holtec Palisades to finance the restoration of its Michigan nuclear power plant.

That plant is an 800 MW station located in Covert Township, Mich., and its restoration would allow it to resume service that has been offline since May 2022. This would be predicated on upgrades to allow it to produce baseload clean power until at least 2051, if it passes all U.S. Nuclear Regulatory Commission (NRC) licensing approvals.

“Today, Holtec has secured a $1.5 billion conditional commitment for a loan from the U.S. Department of Energy to reopen the Palisades Nuclear Power Plant, protecting 600 good-paying, high-skill jobs and clean, reliable power for 800,000 homes,” Michigan Gov. Gretchen Whitmer said. “Once open, Palisades will be the first successfully restarted nuclear power plant in American history, driving $363 million of regional economic impact and helping Michigan lead the future of clean energy.”

According to the DOE, this project could help avoid 4.47 million tons of CO2 emissions annually for a 25-year lifespan, equivalent to removing roughly 970,000 gas-powered cars from the road. Given its source, the plant will provide round the clock power for the Midcontinent Independent System Operator’s (MISO) resource portfolio and shore up regional energy supplies as more coal plants retire.

Holtec noted it has already secured long-term Power Purchase Agreements (PPAs) for the potential plant’s full power output with rural electric co-ops Wolverine Power Cooperative and Hoosier Energy in Michigan, Illinois and Indiana.

The Biden administration added that the facility’s employees would largely be workers who had already worked at the plant for more than 20 years, and approximately 45 percent of its workforce will be union labor positions on restart. The loan guarantee would also back more than 1,000 jobs during the facility’s regularly scheduled refueling and maintenance periods every 18 months.

“Nuclear power is our single largest source of carbon free electricity, directly supporting 100,000 jobs across the country and hundreds of thousands more indirectly,” U.S. Secretary of Energy Jennifer Granholm. “President Biden’s Investing in America agenda is supporting and expanding this vibrant clean energy workforce here in Michigan with significant funding for the Holtec Palisades nuclear power plant.”

This project is the first to be offered a conditional commitment through the DOE’s Energy Infrastructure Reinvestment (EIR) program, as provided for by the Inflation Reduction Act. Funds of this kind allow the government to back projects that retool, repower, repurpose or replace energy infrastructure that has ended operations or to deploy energy infrastructure to cut, utilize or sequester air pollutants or greenhouse gas emissions. Benefiting companies – like Holtec – must satisfy certain technical, legal, environmental and financial conditions to actually benefit from the loan.