Biden to Offer $1.5 Billion Loan to Restart Michigan Nuclear Power Plant

Ari Natter
·3 min read
74

(Bloomberg) -- The Biden administration is poised to lend $1.5 billion for what what would be the first restart of a shuttered US nuclear reactor, the latest sign of strengthening federal government support for the atomic industry.

Most Read from Bloomberg

The funding, which is set to get conditional backing from the US Energy Department, will be offered as soon as next month to closely held Holtec International Corp. to restart its Palisades nuclear plant in Michigan, according to people familiar with the matter.

Holtec has said a restart of the reactor is contingent on a federal loan. Without such support, the company has said it would decommission the site.

The financing comes as the Biden administration prioritizes maintaining the nation’s fleet of nuclear plants to help meet its ambitious climate goals — including a plan to decarbonize the electricity grid by 2035. More than a dozen reactors have closed since 2013 amid competition from cheaper power from natural gas and renewables, and the Energy Department has warned that as many of half of the nation’s nuclear reactors are at risk of closing due to economic factors.

A spokeswoman for the Energy Department’s Loan Programs Office declined to comment, citing business confidentiality.

Nick Culp, a Holtec spokesman, said the company was “very optimistic” about the Energy Department loan process.

“This is a historic opportunity for the country and Michigan,” Culp said. “As we transition away from fossil fuels, nuclear is going to be a critical part of not only reaching our climate goals but doing so in a way that ensures the lights stay on.”

Holtec acquired the 800-megawatt power plant in 2022 after Entergy Corp. closed it due to financial reasons, but began pushing forward with plans to restart after pleas from Michigan Governor Gretchen Whitmer.

The Juniper, Florida-based company’s plans for a restart got a boost after Wolverine Power Cooperative, a local power company, agreed to buy as much as two-thirds of the plant’s output starting as soon as late 2025, though additional hurdles, including sign off from federal nuclear regulators, remains.

The funding would be backed by a loan guarantee program designed to revitalize old energy plants that was created in President Joe Biden’s climate law. If successful, Palisades would be the first nuclear reactor financed by the Biden administration.

The announcement, expected in late February, comes as Republicans have targeted the Energy Department loan program as they seek to score a political victory in an election year. But the funding has backing from several Republicans including Michigan Representative Bill Huizenga, who was the led signer of a letter from nine lawmakers urging Energy Secretary Granholm to approve the loan.

“Repowering Palisades could significantly grow the region’s economy, strengthen our domestic energy security, and return safe, reliable, and carbon-free generation back to the electrical grid,” wrote the lawmakers, who included five Republicans.

(Adds details of lawmakers supporting the funding.)

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.