Nuclear

DOE rejects funding to reopen Palisades nuclear plant in Michigan

The U.S. Department of Energy (DOE) rejected a funding proposal backed by Michigan’s governor that would have reopened the Palisades Nuclear Plant.

The U.S. Department of Energy (DOE) rejected a request for funding to reopen the Palisades nuclear plant in Michigan, according to plant owner Holtec International.

Holtec bought the 805 MW Palisades in May to decommission it and applied for funding from the initial phase of DOE’s $6 billion Civil Nuclear Credit program. The plant, formerly owned by Entergy, was shut down last spring after generating electricity for more than 50 years.

Holtec said in a statement that it understood that its bid to reopen the shuttered nuclear plant would be a challenge as the reversal in operating status would have been a first for the industry.

Michigan Gov. Gretchen Whitmer supported the plan and called reopening Palisades a “top priority” for the state. She cited the economic benefits and the plant’s 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 DOE Secretary Jennifer Granholm in September.

But the decision did not go in her favor. It comes as President Joe Biden’s administration has supported nuclear, believing it to be essential for combating climate change. The administration wants to make the power grid carbon-free by 2035.

ClearView Energy Partners, a nonpartisan research group, said in September that Palisades’ closure was “likely to be permanent.” Palisades was out of nuclear fuel, faced a control rod drive seal issue that needed to be fixed and likely needed a new company to operate it, as well as a buyer for the power it generates, ClearView told Reuters.

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.

This article includes reporting from The Associated Press.