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Published in Energy
Palisades Power Plant in Covert. Palisades Power Plant in Covert. COURTESY PHOTO

Efforts underway to save Palisades nuclear plant from closing

BY Wednesday, April 20, 2022 08:00am

EDITOR’S NOTE: This story has been updated with comments from Entergy Corp.

COVERT — Gov. Gretchen Whitmer and state energy regulators now see a path to keep the Palisades Power Plant in Van Buren County open beyond its scheduled May 31 closing date in hopes of preserving hundreds of jobs and a major clean energy resource.

Officials hope to directly subsidize and keep the nuclear plant open through federal infrastructure funding. The U.S. Department of Energy released guidance on Monday for the $6 billion Civil Nuclear Credit Program, which will allow operators of uneconomic power plants to apply for funding and avoid closing before their operating licenses expire. 

While it is scheduled to close at the end of next month, Palisades’ operating license lasts through 2031.

“Today, we have a new path forward to save Palisades, secure hundreds of good-paying jobs, empower regional economies, and help us fight climate change by generating clean energy,” Whitmer said in a letter today to U.S. Energy Secretary Jennifer Granholm. “The State of Michigan has already had numerous conversations with the plant owner … and leading nuclear operators who may be interested in purchasing the plant and keeping it operational through its 2031 licensure date.”

However, it remains unclear whether the state’s effort to keep Palisades open is successful.

As recently as last week, Palisades owner Entergy Corp. detailed job losses associated with the May 31 closure, telling state officials that 184 jobs would be eliminated “on or around” June 24. The company is scheduled to transfer ownership of the plant to Holtec International, which would oversee the nearly 20-year decommissioning process.

Entergy Spokesperson Nicholas Culp this morning aknowledged contact with government officials about keeping Palisades open beyond May 31, but he said the company remains focused “on the safe and orderly shutdown of the facility in May, followed by transfer of the plant to Holtec Decommissioning International for decommissioning under the terms of a previously executed contract consistent with our announced strategy to exit the merchant power business.” 

Culp added that while Entergy will entertain proposals from potential new buyers and operators, no such formal proposal has been made “that provides an opportunity for continued operations and that eliminates the substantial financial and operational risks associated with unwinding the existing contract with Holtec. We remain on schedule for the plant’s permanent shutdown on our previously announced timeline and currently have no additional comment about the outreach we received.”

Nuclear plant operators have until May 12 to apply for the first round of federal funding. Should Palisades continue operating, it also remains unclear whether it would operate to supply power for state-regulated utilities under a contract, as it has with Consumers Energy, or act as a merchant plant that sells wholesale power on the market.

Nuclear plants across the country have recently closed — or are at risk of prematurely closing — because of competitive energy market prices, particularly from natural gas. Other states, including Illinois, have enacted ratepayer subsidies to keep nuclear facilities in operation. 

Carbon-free, nuclear power has become increasingly important as a climate change tool, including for states like Michigan that have set long-term carbon-reduction targets. However, absent direct subsidies, the plants are rarely valued for their carbon-free characteristics. 

Clean energy advocates have taken varied approaches to nuclear power in recent years, with critics saying that subsidizing nuclear plants takes away from investments in renewable energy and battery storage. Critics also have raised concerns about properly disposing of spent fuel.

Michigan Public Service Commission Chairperson Dan Scripps, who was appointed by Whitmer in 2019, believed before today that it was a “long shot” to save Palisades from decommissioning, given the fast-approaching closure date and Entergy’s contract with Holtec. 

Additionally, such complex federal energy programs rarely move so swiftly, he said.

U.S. Energy Department officials “moved heaven and Earth in a way I’ve never seen before to make a plant like this eligible,” Scripps told MiBiz. “We needed to make a run for it, but I wasn’t sure whether it was possible. Today’s announcement is what we’ve been waiting for and makes it possible.”

Read 638 times Last modified on Wednesday, 20 April 2022 10:13
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