Nuclear

DOE closes on $1.5B loan to reopen Palisades nuclear plant

Once complete, this project will be the first recommissioning of a retired nuclear power plant in U.S. history.
DOE closes on $1.5B loan to reopen Palisades nuclear plant
(A photo of the Palisades nuclear plant in Michigan. The plant was retired in 2022.)

The U.S. Department of Energy (DOE) announced the closing of a loan guarantee of up to $1.52 billion to Holtec Palisades to help finance the restoration and resumption of service of an 800-MW nuclear generating station in Covert Township, Michigan.

DOE facilitated the loan through its Loan Programs Office (LPO), under the Inflation Reduction Act’s Energy Infrastructure Reinvestment (EIR) program. It represents a first-of-a-kind effort by DOE to restart an American nuclear power plant.

“Nuclear power is America’s largest source of carbon-free electricity, supporting hundreds of thousands of direct and indirect jobs across the country and will play a critical role in tackling the climate crisis and protecting public health and the environment from its impacts,” said U.S. Secretary of Energy Jennifer M. Granholm. “Under President Biden and Vice President Harris’ leadership, DOE and our partners across the federal government are working around the clock to ensure this vital source of clean electricity— and the vibrant workforce it supports — continues to power our nation for generations to come.”

The Palisades Nuclear Plant, which ceased operations in May 2022, will be brought back online and upgraded to produce power until at least 2051, subject to U.S. Nuclear Regulatory Commission (NRC) licensing approvals. The NRC also issued new guidance meant to ensure the restart is performed safely. Once complete, this project will be the first recommissioning of a retired nuclear power plant in U.S. history.

The restart of Holtec Palisades is projected to create or retain up to 600 jobs in Michigan––many of them filled by workers who have been at the plant for more than 20 years––with approximately 45% of the workforce at the site being union labor upon restart. In addition to the workers supported by the facility’s restart, the loan guarantee will support more than 1,000 jobs during the facility’s regularly scheduled refueling and maintenance periods every 18 months. Holtec Palisades has a project labor agreement in place with 15 trade unions that are supporting the project.

Holtec Palisades has already signed long-term Power Purchase Agreements for the full power output with rural electric co-ops Wolverine Power Cooperative and Hoosier Energy which serve rural communities in Michigan, Illinois, and Indiana.

The Palisades plant is on track to restart in August 2025, according to a July update from the top U.S. nuclear regulatory official. During a Congressional hearing, U.S. Nuclear Regulatory Commission (NRC) Chair Christopher Hanson told U.S. Rep. Tim Walberg (R-Tipton, Michigan) that environmental reviews are going well. He said the agency is reviewing the regulatory filings submitted by Holtec International and expects to have a decision next May.

Holtec acquired the plant in June 2022 just after it was shut down. In early 2023, the company for federal loan funding to repower Palisades, which prompted the DOE loan.

In May Holtec announced several milestones, including re-establishing the plant’s workforce, revitalizing training programs, procurement of plant systems and components, regulatory developments, and firming up of funding streams. Holtec said more than 360 employees were working at the plant, an increase of nearly 150 personnel since the re-start began. The recruitment includes both former plant employees and new hires.

In addition to the main 800 MW reactor, Holtec intends to use the Palisades site as the location for its first two small modular reactor units, which would potentially add an additional 800 MW of generation capacity at the site.

Support has been especially vocal for re-opening Palisades. In May 2023 a bipartisan group of Michigan lawmakers that make up a newly-formed nuclear energy caucus wrote a letter to Gov. Gretchen Whitmer expressing “full support” for the reopening of the plant. Whitmer herself has supported reopening Palisades as more solar and wind power infrastructure is built out.

Palisades began commercial operation in 1971.