DOE Offers $1.52B Conditional Commitment to Holtec Palisades to Recommission Its Nuclear Power Plant

Published: April 3, 2024 |

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The U.S. Department of Energy (DOE) through its Loan Programs Office (LPO) announced the offer of a conditional commitment of up to $1.52 billion for a loan guarantee to Holtec Palisades to finance the restoration and resumption of service of an 800-MW electric nuclear generating station in Covert Township, Michigan.

The project aims to bring back online the Palisades Nuclear Plant, which ceased operations in May 2022, and upgrade it to produce baseload clean power until at least 2051, subject to U.S. Nuclear Regulatory Commission (NRC) licensing approvals.

If finalized, Holtec Palisades will help reinforce American’s status as a global energy leader while also driving critical investments in energy communities to create good-paying job opportunities, support economic revitalization, and strengthen domestic supply chains.

“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,” said U.S. Secretary of Energy Jennifer Granholm.

“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,” said Michigan Governor Gretchen Whitmer.

“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,” added Whitmer.

The project is expected to support or retain up to 600 high-quality jobs in Michigan — many of them filled by workers who have been at the plant for more than 20 years — with approximately 45 percent of the workforce at the site being good-paying union labor upon restart. In addition to the workers supported by the facility’s restart, if finalized the loan guarantee would support more than 1,000 jobs during the facility’s regularly scheduled refueling and maintenance periods every 18 months.

The project is anticipated to avoid 4.47 million tons of CO₂ emissions per year for a total of 111 million tons of CO₂ emissions during the projected 25 years of operations. Once operational, the Palisades Nuclear Plant will provide around-the-clock, zero-emissions electricity generation — a vital addition to Midcontinent Independent System Operator’s (MISO) resource mix as coal plants are retired. Holtec Palisades has already procured signed long-term power purchase agreements (PPAs) for the full power output with rural electric co-ops Wolverine Power Cooperative and Hoosier Energy in Michigan, Illinois, and Indiana.

SUPPORTING ECONOMIC DEVELOPMENT IN AMERICA’S ENERGY COMMUNITIES

Holtec Palisades is the first project to be offered a conditional commitment through the Energy Infrastructure Reinvestment (EIR) program under Title 17 Clean Energy Financing Section 1706. EIR can finance projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or greenhouse gas emissions. This project will repower existing energy infrastructure that has been nonoperational and support reinvestment in the community.

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 will not be part of the project that may be financed under this conditional commitment. The two units will potentially add an additional 800 MW of generation capacity at the site, take advantage of existing infrastructure, and spur the domestic development of new reactor technologies.

BUILDING AN INCLUSIVE CLEAN ENERGY FUTURE

The project also supports the Justice40 Initiative, which set the goal that 40 percent of overall benefits of certain federal investments flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution.

The Palisades Nuclear Plant is located in a disadvantaged community, where residents face higher energy costs than 97 percent of communities in the United States. In addition, LPO works with all borrowers to create good-paying local jobs during construction, operations, and throughout the life of the loan and to adhere to a strong community benefits plan that will provide information and opportunities for meaningful community input and engagement regarding the plant and its operations.

Holtec is committed to remaining an actively engaged community partner to ensure the public and interested stakeholders are well informed of site activities and can seek information and provide feedback to the company, both directly to Holtec and through the relevant NRC restart process.

Since the plant’s infrastructure already exists, the project does not involve traditional major construction activities, but it will require inspections, testing, refurbishment, rebuilding, and replacement of existing equipment. Holtec is currently pursuing a reauthorization of the Palisades operating license with the NRC, the Federal agency responsible for regulating and licensing commercial nuclear power plants in the United States. To date, Holtec has submitted three NRC licensing requests in pursuit of license reauthorization and anticipates submitting the remainder in spring 2024.

While this conditional commitment demonstrates the department’s intent to finance the project, the company must satisfy certain technical, legal, environmental, and financial conditions before the department enters into definitive financing documents and funds the loan.

The Bipartisan Infrastructure Law and Inflation Reduction Act provided expanded authority for LPO to finance energy infrastructure and commercial clean energy projects. Across all LPO’s new and improved programs, DOE has attracted 203 active applications for projects across the country totaling more than $261 billion in requested loans and loan guarantees.

For more information about LPO’s strategic debt financing to transform America’s energy and transportation future, view LPO’s monthly application activity report, financing programs, and portfolio project pages.

Holtec International is a diversified energy technology company with its headquarters located in Jupiter, Florida. The company is widely recognized as the foremost technology innovator in the field of carbon-free power generation, specifically commercial nuclear and solar energy.

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