Company seeks first-time restart of shuttered nuclear plant

A company hopes to restore a dead nuclear power plant to life for the first time in the U.S. The Palisades plant in southwestern Michigan closed in May 2022

A company that tears down closed nuclear power plants wants to do in Michigan what has never been done in the U.S.: restore a dead one to life.

Holtec Decommissioning International bought the Palisades Nuclear Generating Station last June for the stated purpose of dismantling it, weeks after previous owner Entergy shut it down. Fuel was removed from the reactor core. Federal regulators were notified of “permanent cessation of power operations.”

But with support from Democratic Gov. Gretchen Whitmer and leaders in the Lake Michigan community where Palisades was an economic driver for 50 years, Holtec soon kicked off a campaign to bring the plant back. The 800 megawatt facility had generated roughly 5% of the state's electricity.

“Keeping Palisades open is critical for Michigan's competitiveness and future economic development opportunities,” Whitmer said in a letter to Energy Secretary Jennifer Granholm, herself a former Michigan governor, requesting federal funding for the restart.

Activists who long criticized Palisades as poorly maintained and dangerous don't want it resurrected.

They note its years of mechanical problems, including what the Nuclear Regulatory Commission described as among the nation's worst cases of nuclear fuel container weakening. A degrading seal on a device controlling the atomic reaction led Entergy to close the plant nearly two weeks earlier than planned in May 2022.

“This is uncharted risk territory," said Kevin Kamps, radioactive waste specialist for a group called Beyond Nuclear, who vowed to “fight this proposal at every turn” after Holtec pitched it during a March 20 NRC meeting.

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Holtec says a primary reason for its about-face on Palisades was a $6 billion federal initiative to prolong older nuclear facilities, part of President Joe Biden's infrastructure law.

Nuclear is key to his goal of an economy with net zero carbon emissions by 2050. Fission generates no carbon dioxide, the primary global warming gas, although fossil fuels can be used in mining and refining uranium ore for reactors. Its waste remains lethally radioactive for thousands of years.

“Nuclear reactors support energy independence by ensuring the reliable availability of clean, resilient and affordable power,” the Energy Department said in March, announcing a second funding application period for aging plants.

The department awarded up to $1.1 billion last fall to spare the Diablo Canyon plant in California, scheduled for decommissioning in 2024 and 2025.

Palisades was turned down. But the department emphasized that recently shuttered plants would be eligible in the next round. Instead, Holtec is applying for about $1 billion in federal loans under a different program that's “a better fit,” spokesman Patrick O'Brien said.

The company also wants $300 million from the state, said state Rep. Joey Andrews, a Democrat whose district includes the plant.

Holtec Decommissioning President Kelly Trice told the NRC that government assistance was vital, along with regulatory exemptions and finding a utility to buy the power. He didn't disclose the expected Palisades restart cost.

Resurrecting the plant would be “a massive challenge,” said Jacopo Buongiorno, a Massachusetts Institute of Technology nuclear engineering professor.

In addition to hiring and training hundreds of operators and engineers, the company would have to check thousands of parts — making repairs or replacements as needed — and order more uranium fuel.

Palisades' license now prohibits reactor operation, so Holtec would need a revision or rule exemptions for a restart. The NRC would agree only if convinced the plant "has been brought back to working order,” Buongiorno said.

No significant steps have been taken toward dismantling the plant, company Vice President Jean Fleming said during the March meeting. Some 380 employees departed after closure while about 220 remain, handling site and security upgrades and preparing to transfer spent fuel from a cooling pool to dry cask storage.

Holtec hopes to get funding and NRC approval by October. Even then, the restart probably would take a couple of years, Trice said.

Commission regulators told Holtec officials their plan appeared to cover necessary topics but were noncommittal about approval.

“They would have to put applications before technical staff, provide evidence to show that what they're requesting is in accordance with the law and meets our basic requirements for maintaining public health and safety,” said NRC spokesperson Scott Burnell.

If successful, Palisades would become the first U.S. nuclear reactor to restart after its fuel has been removed and its license revised to prohibit further operation, Burnell said.

“Every other U.S. reactor that’s submitted documentation that says, in effect, ‘We have permanently defueled the reactor and are done operating it,’ ... has moved onto decommissioning.”

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Skeptics question Palisades' fitness — and Holtec's financial strategy.

“The plant when it was operating had serious safety issues,” said Edwin Lyman, director of nuclear power safety with the Union of Concerned Scientists. “Now it's been shut down, normal inspection and maintenance procedures have stopped; NRC oversight has stopped.”

Before committing to a restart, Holtec would be confident about getting the plant in good shape, spokesperson O'Brien said. “It would be safe nuclear power, the most heavily regulated industry in the world.”

If the company abandons the plan or is rejected by the NRC, it would revert to dismantling Palisades and restoring the 432-acre (175-hectare) lakeshore site.

Holtec estimated decommissioning costs at $633 million in December, when a trust fund to pay for it totaled $547 million. To close the funding gap, the project would be spread over nearly two decades, with a 10-year slowdown so investment earnings could outpace spending.

Michigan Attorney General Dana Nessel argues the fund is inadequate and Holtec and Entergy are understating decommissioning costs. That could leave taxpayers on the hook, she said in seeking an NRC order that the companies provide an additional $200 million.

The companies said the fund had “a sufficient cushion” and they could get more money if needed.

The NRC hasn't ruled on the issue.

Beyond Nuclear accuses Holtec of improperly dipping into the decommissioning fund — generated through assessments on ratepayers — to bankroll the proposed restart.

Company president Trice told the NRC the fund was “what we're using to pay the salaries right now," according to a recording provided by the anti-nuclear nonprofit.

Kamps of Beyond Nuclear said the remark acknowledged the fund was being used for work unrelated to decommissioning. His group asked the NRC's inspector general to investigate.

Justin Poole, an NRC project manager who led the meeting, said Trice's comment referred to payment of on-site decommissioning workers. Holtec spokesman O’Brien said roughly $44 million had been withdrawn from the fund — only for decommissioning activities. The parent company is covering restart costs, he said.

“Reasonable people can disagree” about the meaning of Trice's comment, said Burnell, the NRC spokesperson.

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Many southwestern Michigan government and business leaders want Palisades restarted.

“A very reliable and steady tax base for our community,” Zack Morris, head of a business development organization, told the NRC.

Andrews, the legislator who supports state funding, said he previously worked in renewable energy and prefers wind and solar. Yet a reliable supplier is needed for when wind doesn't blow or sun doesn't shine, he said, and nuclear beats carbon-spewing coal and natural gas.

But the potential comeback is a nightmare for those who opposed the plant and were relieved it shut down.

“If there's an accident at Palisades, it could make it so we can't live here any more," said Kraig Schultz, whose home is 50 miles (81 kilometers) away but close to Lake Michigan, where he swims and his son surfs. “We're playing a losing game when we keep running something until it fails."

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Follow John Flesher on Twitter: www.twitter.com/JohnFlesher.

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