Holtec International’s cost estimate for decommissioning a Michigan nuclear power plant is justifiable, Nuclear Regulatory Commission staff said recently in a review that did not touch on the state’s biggest gripes about the plan.
Excluding unforeseen increases, Holtec, Jupiter, Fla., estimates it will cost about $644 million in 2020 dollars to safely bring down Palisades, which Holtec acquired from Entergy in June. License termination expenses, a regulatory term for the activities that lead to the eventual end of NRC oversight, make up the bulk of Holtec’s estimate at $443 million.
To arrive at that figure, Holtec substituted its own site-specific analysis of the Covert, Mich., site for a generic NRC decommissioning formula. The formula yielded a license termination expense of about $486 million, commission staff wrote in a review of Holtec’s Post Shutdown Decommissioning Activities Report, dated May 2 and published online May 4.
“NRC staff found the justification for a decommissioning cost estimate less than the generic formula reasonable,” staff wrote in their review, which also concluded that Holtec’s decommissioning cost estimate conformed to the commission’s guidelines and regulations.
However, the recently published NRC staff review did not touch on “[e]scalation of future decommissioning costs over the remaining decommissioning project life cycle,” which Michigan, Attorney General Dana Nessel, in formal proceedings before NRC’s Atomic Safety and License Board, contended will exceed Holtec’s assumptions.
Holtec, in its decommissioning cost estimate, built in about $53 million worth of contingency funding, which Nessel in March said is well below the average contingency estimate of $94 million that Holtec baked into its other nuclear power plant decommission projects.
Holtec and Nessel engaged in their back-and-forth over decommissioning costs even as the company maneuvers to get Palisades back online and out of its decommissioning portfolio.
After whiffing on an attempt to secure some of the $6 billion Congress set aside last year to bail out financially troubled nuclear power plants, Holtec is seeking a loan from the Department of Energy, plus hundreds of millions of dollars from Michigan to find a buyer for Palisades and switch the plant back on.
Amid a swell of support for stimulus spending on infrastructure and carbon-free electricity generation, the federal government and the states have in the past year made massive subsidies available to nuclear power plants. Pacific Gas and Electric in 2022 received billions from Washington and California to extend the life of the Diablo Canyon’s two nuclear reactors in Avila Beach, Calif., by about five years.
