Even as the Department of Energy this week opened the door for a shuttered Michigan nuclear plant to qualify for its billion-dollar bailout program, the company aiming to restart the facility said it would look for federal funding elsewhere.
Holtec International, which owns Palisades Nuclear Generating Station, applied for a DOE loan last week with the goal of securing funds to repower the plant, company communications director Patrick O’Brien told RadWaste Monitor via email Thursday.
This comes as DOE Thursday published guidelines for the second round of funding under its civil nuclear credits program, a roughly $6 billion bailout authorized under the November 2021 Infrastructure Investment and Jobs Act (IIJA). In addition to operating nuclear plants that are at risk of closure, reactors “that have ceased operations after November 15, 2021” are also eligible for a bailout under this funding round, the agency said.
DOE “interprets the [civil nuclear credits] Program pursuant to the IIJA to be directed at assisting nuclear reactors that were in operation on or after the date of enactment of the IIJA on November 15, 2021, and which otherwise are eligible for certification pursuant to this Guidance,” the agency said.
That language appeared to make the Covert, Mich., Palisades plant, which shut down in May 2022, eligible for a bailout.
Despite that, O’Brien said that Holtec is sticking with DOE’s loan office for Palisades restart funding, and won’t apply for a credit because “the structure and timing for funding fits better with the loan program.”
The decision to apply through the loan office was “based on our better understanding of the [civil nuclear credits] grant program at that time,” O’Brien said.
DOE offers loan guarantees for nuclear power under a program authorized by the 2005 Energy Policy Act. According to the agency, that law unlocked loan funding to help “eliminate gaps in commercial financing for energy projects in the United States that utilize innovative technology to reduce, avoid, or sequester greenhouse gas emissions.”
Holtec had previously said that it would apply with DOE for a nuclear credit, which it would use to solicit a willing buyer who could restart the Covert, Mich., facility. The company’s first bid on a federal bailout was rejected in November.
Among the application criteria DOE laid out for an already-closed nuclear power plant, interested operators must “identify the portion of costs that would be incurred” to restart the facility, and must describe how a bailout might affect their ability to access the shuttered plant’s decommissioning trust fund.
Applicants will also have to provide a written notice of intent to apply with the Nuclear Regulatory Commission for a new operating license, and they must provide a “milestone-based plan for the Nuclear Reactor to pursue an authorization from the NRC to resume operation,” DOE said.
Holtec told NRC in a Feb. 1 letter that it had a “regulatory path” for bringing Palisades back online, although the public version of that letter is heavily redacted. A pair of anti-nuclear groups have filed a Freedom of Information Act request with the agency to secure an unredacted copy of the letter.
Even if it managed to secure a federal bailout for Palisades, Holtec would likely face an uphill battle to bring it back online. NRC Commissioner Bradley Crowell told RadWaste Monitor in an interview Feb. 7 that the company would be “starting from scratch” in its efforts to restart the facility.
DOE in November awarded around $1.1 billion — more or less the entirety of the funding available in the first round of bailouts — to California’s Diablo Canyon Power Plant. The agency plans to award credits over a five-year period, annualized at around $1.2 billion per year.
