As part of President Biden’s Investing in America agenda, the US Government, through the US Department of Energy (DOE) and US Department of Agriculture (USDA), has announced more than $2.8bn to support reliable, affordable, and clean power in the Midwest.
The DOE, via its Loan Programmes Office (LPO), has finalised a loan guarantee of up to $1.52bn under the Inflation Reduction Act’s Energy Infrastructure Reinvestment (EIR) programme to Holtec Palisades. This loan will help finance the restoration and restart of an 800MW nuclear power station in Covert Township, Michigan.
This project represents the DOE’s first attempt to restart an American nuclear power plant, which will generate carbon pollution-free energy. The initiative also aims to safeguard and expand union jobs in Michigan while strengthening the US nuclear energy sector and advancing critical climate and domestic energy goals.
The USDA has also announced more than $1.3bn in Empowering Rural America (New ERA) programme awards for two rural electric cooperatives – Wolverine Power Cooperative and Hoosier Energy. These awards will help lower electricity costs for their members by supporting clean energy from Holtec Palisades and other renewable energy sources.
These initiatives align with the Biden Administration’s broader strategy to encourage the deployment of advanced nuclear technology, as highlighted in the DOE’s newly updated Pathways to Commercial Liftoff: Advanced Nuclear report.
By accelerating the transition to clean energy, these investments will also contribute to a stronger rural economy, help keep energy bills affordable, and create a resilient rural workforce.
The Palisades Nuclear Plant, which ceased operations in May 2022, will be brought back online and upgraded to produce clean baseload power until at least 2051, pending licencing approvals from the US Nuclear Regulatory Commission (NRC).
The NRC has also issued new safety guidance to ensure that the restart is conducted safely and to the highest standards. Once completed, this will mark the first recommissioning of a retired nuclear power plant in US history.
The restart of Holtec Palisades is expected to create or retain up to 600 high-quality jobs in Michigan, many of which will be filled by workers who have been employed at the plant for over 20 years.
Around 45% of the workforce will be unionised upon the restart. Additionally, the loan guarantee will support over 1,000 jobs during the plant’s regularly scheduled refuelling and maintenance cycles, which occur every 18 months. Holtec Palisades has secured a project labour agreement with 15 trade unions involved in the project.
The plant’s restart will also contribute to addressing the climate crisis by preventing an estimated 4.47 million metric tonnes of greenhouse gas emissions annually, totalling approximately 111 million metric tonnes over the plant’s projected 25-year operational life. This is equivalent to the annual emissions of around 882,000 homes. By reducing fossil fuel-based electricity generation, the project will also mitigate other harmful pollutants commonly associated with local health impacts.
Once operational, the Palisades Nuclear Plant will provide reliable, clean, round-the-clock power with zero emissions, offering a crucial addition to the Midcontinent Independent System Operator’s (MISO) resource mix as coal plants are retired.
US Secretary of Energy Jennifer M. Granholm said: “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.”
Holtec Palisades has already signed long-term Power Purchase Agreements for its entire power output with rural electric cooperatives Wolverine Power Cooperative and Hoosier Energy, which serve communities in Michigan, Illinois, and Indiana. This will significantly lower Hoosier Energy’s climate pollution and enable Wolverine to achieve 100% carbon-free energy before 2030, helping rural communities across Michigan reduce their carbon footprint from grid-connected energy to zero.
The USDA’s investments aim to lower energy costs for rural communities. As non-profit wholesale electric suppliers owned by their customers and members, Wolverine and Hoosier Energy will pass 100% of the New ERA grant funds directly to the homes and businesses served by their member electric cooperatives. This ensures that every dollar is channelled directly to the communities, helping reduce wholesale power costs, deliver community benefits, and maintain reliable, affordable electricity.
This marks the first loan guarantee closure under the Energy Infrastructure Reinvestment (EIR) programme, authorised through Title 17 Clean Energy Financing Section 1706 by President Biden’s Inflation Reduction Act.
EIR supports projects that retool, repower, repurpose, or replace non-operational energy infrastructure, or enable active infrastructure to mitigate, reduce, or capture air pollutants and greenhouse gas emissions.
