Holtec has applied for a federal credit to repower the recently retired Palisades nuclear plant, and now it has the support from the state’s governor.

Michigan Gov. Gretchen Whitmer called reopening Palisades a “top priority” for the state. She cited the economic benefits and the plant’s 800 MW of reliable, carbon-free power.

“We are ready to do our part should they receive funding through the [civil nuclear credit] program, including identifying state funding and facilitating a power purchase agreement,” Whitmer wrote in a letter to U.S. Department of Energy Secretary Jennifer Granholm.  

Control room operators removed Palisades’ reactor from service on May 20. The plant was originally scheduled to permanently shut down 11 days later. Entergy said operators made the decision to shut down the plant early due to the performance of a control rod drive seal.

Plans called for the plant to be transferred to Holtec for decommissioning under terms of an agreement approved by the Nuclear Regulatory Commission (NRC) in December 2021. Palisades was sold to Holtec in June.

But Holtec applied for a federal grant under the Civil Nuclear Credit (CNC) program on July 5 to restore the plant operations.

A spokesperson for Holtec said that although its decommissioning expertise was the main driver in acquiring the plant, it remained “committed to assisting the State of Michigan and the country at large maintain clean, carbon-free energy production sources to meet the country’s energy needs.”

The company said it believes reactivating the facility could help bridge energy needs until next-generation technologies, like Holtec’s own small modular reactor (SMR), are licensed and ready to deploy.

The spokesperson noted there are still several hurdles to restarting the facility, including identifying a plant operator. He said other challenges include getting financial help from the state of Michigan, maintenance and delayed capital improvements of the facility, procuring a power purchase agreement, upgrading the switchyard and staffing close to 400 people.

Whitmer said she would “do everything I can to keep this plant open, protect jobs, increase Michigan’s competitiveness, lower costs, and expand clean energy production.”

The federal CNC program is a $6 billion fund aimed at supporting the continued operation of U.S. nuclear plants. It was born out of the infrastructure bill signed into law in November 2021. The program allows reactor owners and operators to apply for and bid on credits to support their continued operations.

A recent amendment removed a rule that nuclear reactors applying for credits would not be eligible if they recovered more than 50% of their costs from cost-of-service regulation or regulated contracts.

The change came in response to a request from California Gov. Gavin Newsom, who has supported delaying the long-planned closure of Diablo Canyon, the state’s last operating nuclear plant. On September 1, California state legislators approved a $1.4 billion government loan to keep Diablo Canyon running for another five years.

In her letter, Gov. Whitmer said Palisades employed 600 workers, supported 1,100 jobs and generated $363 million in annual regional economic development.

The plant began commercial operations in 1971.

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