Two Midwestern electric cooperatives will receive over $1 billion in federal support to help reopen the idled Palisades nuclear plant in Michigan, a project the co-ops say will bolster reliability and deliver carbon-free power in the region.
The U.S. Department of Agriculture announced Monday that Wolverine Power Cooperative and Hoosier Energy will receive a combined $1.3 billion from the USDA’s Empowering Rural America (New ERA) program to fund power purchase agreements with Palisades’ owner, Holtec International.
Once reopened, Palisades will be the first nuclear plant in the U.S. to be recommissioned.
“The New ERA program showcases what is possible when the government prioritizes voluntary, flexible decision-making and allows electric co-ops to take a tailored approach to respond to local needs,” NRECA CEO Jim Matheson said.
The Sept. 30 announcement included an awards ceremony at the 800-megawatt plant attended by co-op officials, Deputy Agriculture Secretary Xochitl Torres Small, Deputy Energy Secretary David Turk and other Biden administration officials.
NRECA was heavily involved in shaping the New ERA Program, which was created by the Inflation Reduction Act of 2022. It was designed specifically for electric cooperatives to purchase or build new energy systems and is being administered by USDA’s Rural Utilities Service.
Wolverine will receive over $650 million to buy about 435 MW of energy from Palisades. Hoosier will receive more than $675 million to support the purchase of about 370 MW of Palisades’ capacity as well as about 250 MW of solar energy to serve members in Indiana and Illinois.
The awards will cover about a quarter of the co-ops’ power purchase agreements with Holtec, a senior Biden administration official said during a call with reporters.
The Palisades restart is also receiving federal support from the Department of Energy. The DOE said Monday that it had closed on a previously announced $1.52 billion loan guarantee for Holtec to support recommissioning Palisades. The loan guarantee was the first to close under the IRA’s Energy Infrastructure Reinvestment program, which provides financing to repower or replace closed energy infrastructure or reduce or avoid greenhouse gas emissions at existing energy facilities.
“The New ERA grant opportunity inspired Wolverine to think big about decarbonization,” said Eric Baker, president and CEO of the Cadillac, Michigan-based generation and transmission cooperative. “The power purchase agreement, essential for the historic restart of the Palisades plant, required an innovative and creative spirit that I believe is unique to cooperatives.”
Donna Walker, CEO of Bloomington, Indiana-based Hoosier, said the Palisades project “is a tremendous win for electric cooperatives and demonstrates our ability to collaborate and innovate for our members and the hundreds of thousands of member-consumers we serve.”
Holtec suspended operations at the Palisades plant in May 2022, with plans to decommission the facility. But the need for reliable baseload power and Michigan’s mandate for 100% carbon-free energy by 2040 prompted Wolverine and Hoosier to look at helping Holtec revive the plant.
The two G&Ts have roughly 30-year power purchase agreements with Palisades, with each committed to buying about half the plant’s electric output.
“The primary elements of our strategic objectives are all addressed with this,” Baker said. “It’s price stability, price competitiveness, electric reliability … investment in our local communities, and our goals to advance decarbonization efforts. This deal is the best opportunity we have to address all five of these objectives.”
The member-owned nature of co-ops also allowed the G&Ts to act swiftly on the plan, he added.
“I can’t imagine another business structure that could move as quickly as cooperatives when we work together,” Baker said.
Walker echoed those sentiments. “The Palisades agreement is an ideal fit for Hoosier Energy’s long-range resource plan priorities, delivering baseload reliability and resource adequacy, portfolio diversity, rate stability and predictability, low wholesale rates, and environmental sustainability,” she said.
Baker said Holtec is aiming to reopen the plant in the fall of 2025. The plant’s restart is projected to create or retain up to 600 jobs in Michigan and support more than 1,000 jobs during the facility’s regularly scheduled refueling and maintenance periods every 18 months, according to the DOE.
The Palisades New ERA awards are part of $7.3 billion in funding under the first round of the program, with more announcements expected soon.
Molly Christian is a staff writer at NRECA.