Dive Brief:
- Holtec International will receive a loan guarantee of up to $1.52 billion from the U.S. Department of Energy’s Loan Programs Office to restart operations at the 800-MW Palisades nuclear generating station in southwestern Michigan, the Biden-Harris administration said Monday.
- Two regional electric cooperatives, Hoosier Energy and Wolverine Power Supply Cooperative, will receive about $1.3 billion from the U.S. Department of Agriculture to partially offset power purchases from the reopened facility, the administration said.
- Holtec remains on track to restart Palisades in October 2025, company spokesperson Patrick O’Brien told Utility Dive earlier this month. It would be the first U.S. n
Dive Insight:
DOE in March announced a conditional loan guarantee of up to $1.52 billion for the Palisades restart. Monday’s announcement solidifies DOE’s commitment and, along with the USDA’s awards, represents crucial financing for Holtec’s effort.
The federal funding announcements for Palisades come less than two weeks after Constellation Energy said it would spend $1.6 billion to restart the idled 835-MW reactor at Three Mile Island unit 1 in 2028.
Constellation’s TMI-1 restart is supported by a 20-year PPA with Microsoft, which will use the electricity to run data centers in PJM Interconnection territory. Constellation declined to discuss the terms of the PPA, but the company’s investor presentation on the restart suggests it places a substantial premium on power generated by TMI-1, Studsvik Scandpower Chief Commercial Officer Keith Drudy told Utility Dive last month.
Morgan Stanley analysts estimate Constellation will sell power to Microsoft for $98/MWh compared to market power prices of around $50/MWh. Constellation also expects the unit’s output will receive a roughly $30/MWh clean energy tax credit.
The USDA awards to Hoosier Energy and Wolverine Power Supply Cooperative “will help reduce wholesale power costs, provide community benefits and keep electricity reliable and affordable” for the cooperatives’ residential and commercial members, Deputy Secretary of Agriculture Xochitl Torres Small said in a press briefing.
Under their respective PPAs, Wolverine Power Supply Cooperative will procure 435 MW and Hoosier Energy 369 MW of Palisades’ generation, USDA said earlier this month.
Hoosier Energy will also use a portion of its award to procure 250 MW of renewable energy annually, USDA said.
The USDA award to Wolverine Power Supply Cooperative will help it reach its goal of procuring 100% carbon-free power by 2030, 10 years ahead of Michigan’s 2040 target, Torres Small said. The Palisades PPA is “a key component” of that plan, along with some 400 MW of solar capacity under development across Michigan, the cooperative said in March.
The USDA awards represent about one-quarter of the value of the cooperatives’ PPAs, a senior administration official said in the press briefing.
The DOE loan will fund inspection, testing, restoration, rebuilding and replacement of existing equipment at Palisades, another senior administration official said in the briefing. LPO has received nuclear-related loan requests worth more than $65 billion, the senior administration official added.
“To dominate the industries of the future, we need to supply abundant, affordable, clean power,” National Climate Advisor Ali Zaidi said in the briefing. “Palisades represents that potential.
