Holtec set to decide by January whether to reopen Michigan nuclear plant

Holtec International, the top US provider of nuclear-plant decommissioning services, expects to decide by January whether to reopen a southwest Michigan reactor that shut down in May.

The prospect of returning the Palisades nuclear power plant to the power grid gained traction in September after Gov. Gretchen Whitmer's office announced Holtec had applied for funding from the $6 billion Civil Nuclear Credit program in July. The company warned it also would need state funding to restart operations, which Whitmer said she is prepared to support.

The federal program created by President Joe Biden's bipartisan infrastructure law says nuclear power reactors must be projected to cease operations because of economic factors. Environment groups that oppose the move argue Palisades doesn't qualify because it is no longer producing or selling electricity.

A key factor is whether the company receives federal funding under a U.S. Department of Energy program aimed at providing aid to struggling nuclear plants, Patrick O’Brien, Holtec’s director of government affairs and communications, told Bloomberg News on Wednesday.

This is the first time Holtec has announced a deadline for making a decision on reopening Palisades.

Holtec took over the Palisades plant in June from Entergy Corp., which has said the facility was no longer economically viable.

Reactors have struggled to compete against cheaper and cleaner natural gas and renewables, with a dozen US facilities having closed in the past decade. No U.S. nuclear site has ever been restarted after shutting down, O’Brien told Bloomberg, but the chances of Palisades being brought back online began to improve after Michigan Governor Gretchen Whitmer voiced support for the idea in September.

“There’s a growing sentiment that the ability to reopen Palisades might become reality,” O’Brien said Wednesday.

There are hurdles to reopening. Palisades shut down more than a week early in May as a "a conservative decision based on equipment performance," U.S. Nuclear Regulatory Commission Public Affairs Officer Prema Chandrathil said at the time. The control rod drive mechanism had a degrading seal.

The Nuclear Regulatory Commission transferred Palisades' license from Entergy to Holtec "for the purpose of decommissioning Palisades" on June 28, the NRC said. All fuel was removed from the reactor on June 13.

The NRC has never received a request to return a nuclear plant to the grid after it was permanently defueled, so it is unclear what is in store for Holtec should it pursue a reopening of Palisades, NRC Senior Public Affairs Officer Viktoria Mitlyng said.

Holtec would face challenges, including finding workers for the plant, since many have already retired or moved to other Entergy sites. Jupiter, Florida-based Holtec specializes in tearing down retired reactors and would have to find a company to run Palisades. The plant would also need new fuel rods, and would require maintenance before it could go back into service.

Additionally, the Nuclear Regulatory Commission would have to approve restarting Palisades, a process O’Brien said could be onerous.

Holtec applied in July for funding under the federal Civil Nuclear Credit Program, and Whitmer has endorsed the plan, which would bolster Michigan’s economy and reduce carbon emissions linked to climate change.

The Civil Nuclear Credit Program was designed to help existing nuclear plants with subsidies that help them overcome the economic challenges nuclear power has faced since the price of natural gas dropped. To qualify for credits, plant owners must demonstrate their plants are closing because of economic factors, that the closures will result in increased air pollution and the Nuclear Regulatory Commission must be able to provide "reasonable assurance" that the reactor can be operated with its current license and pose no significant safety hazards.

“There are some hurdles to cross,” O’Brien told Bloomberg, “but nothing insurmountable.”

Another hurdle is the proposed reopening faces opposition from the Michigan Sierra Club, Michigan Wildlife Conservancy, Northern Michigan Environmental Action Council and anti-nuclear groups across Michigan and the United States that sent Energy Secretary Jennifer Granholm a letter in late September.

"It is unequivocally clear that the (program envisions) subsidizing only operating reactors under the Civil Nuclear Credit Program," according to the letter from environmental groups sent to Granholm. "The program simply does not conntemplate funding a closed reactor that has terminated operations."

Detroit News Staff Writer Carol Thompson and Bloomberg News contributed.