The Biden administration has finalized a loan to help reopen the Palisades nuclear power plant in Michigan, which is anticipated to become the first-ever decommissioned plant to come back online in the United States.
The Energy and Agriculture departments announced the $1.52 billion loan on Monday, a major show of government support for the clean energy source.
Two rural electric providers, Wolverine Power Cooperative and Hoosier Energy, are also set to be awarded over $1.3 billion to offer discounted electricity to consumers through clean energy produced by the nuclear plant and other sources.
Through the loan agreement, all funding has been secured to reopen the Palisades plant, according to Holtec International, which owns the plant. The company plans to use the funds for inspections, testing, restorations, rebuilding, and equipment replacements, according to CNBC.
The Palisades nuclear plant was shut down in May 2022 after being in operation for five decades. Once brought online, the plant will be the first in the country to be recommissioned after previously being retired. Once approved, the plant is expected to remain open until at least 2051, according to the USDA.
The reopening of the 800-megawatt plant is still subject to approval by the U.S. Nuclear Regulatory Commission, which is expected to issue its decision sometime early next year. Once approved, Holtec plans to restart part of the plant by October 2025.
Holtec spokesman Patrick O’Brien told Reuters that the company is on track with its reopening timeline, saying it does not anticipate any delays or additional costs.
However, earlier this month, regulators revealed that quite a bit of work is still needed. Specifically, regulators said “a large number of steam generator tubes” require further analysis or repair, according to Reuters. O’Brien told the outlet at the time that the problems were under evaluation and not expected to take up a lot of time.
The project is expected to generate and possibly retain up to 600 jobs in the area and an additional 1,000 jobs related to scheduled refueling and maintenance. USDA officials said Monday that bringing the plant back online will also reduce Hoosier Energy’s climate pollution and help Wolverine Power Cooperative reach 100% carbon-free energy before 2030. The energy generated at the plant will be enough to power around 800,000 homes.
“Nuclear power is America’s largest source of carbon-free of electricity, supporting hundreds of thousands of direct and indirect jobs across the country and will play a critical role in tackling the climate crisis and protecting public health and the environment from its impacts,” Energy Secretary Jennifer Granholm said in a statement.
“Under President Biden and Vice President Harris’ leadership, DOE and our partners across the federal government are working around the clock to ensure this vital source of clean electricity—and the vibrant workforce it supports— continues to power our nation for generations to come,” Granholm continued.
The administration has been facing pressure in recent months to offer more support for nuclear energy amid concerns over the reliability of the grid. Much of that has been attributed to increased demand from artificially focused data centers combined with the rollback of traditional power sources such as coal. As the administration has backed environmentally friendly energy sources such as solar and wind, experts say the energy those renewables produce is not keeping up with the rapid increase in demand.
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News of the funding comes just weeks after Constellation Energy revealed its plans to reopen Pennsylvania’s Three Mile Island nuclear plant, the site of the worst nuclear accident in U.S. history, and sell the energy to Microsoft.
The company plans to reopen the plant in 2028 and extend operations until at least 2054.