Gov. Whitmer wants federal aid to keep nuclear plant open

Michigan’s Democratic governor wants a nuclear power plant on Lake Michigan to stay open and she’s asking the federal government to pay for it.

But the owner of the Palisades Power Plant says it’s too late — the plant will be shut down in May as scheduled.

The Biden administration on Tuesday launched a $6 billion effort to rescue nuclear power plants at risk of closing, citing the need to continue nuclear energy as a carbon-free source of power that helps to combat climate change. The Department of Energy’s civil nuclear credit program is intended to bail out financially distressed owners or operators of nuclear power reactors.

Gov. Gretchen Whitmer wrote to Energy Secretary Jennifer Granholm Wednesday to say the state will support a "compelling" application to the program and she intends to do everything she can to keep the plant open.

"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," she wrote.

Palisades’ owner, Entergy, said in response to the letter that their focus remains on the safe and orderly shutdown of the facility in May, though they’ll continue to talk with qualified nuclear plant owners or operators who may want to purchase and continue operating Palisades.

Palisades is licensed to operate until 2031, but is scheduled to shut down because of operating losses and the expiration of a power purchase agreement. A dozen U.S. commercial nuclear power reactors have closed in the past decade before their licenses expired, largely due to competition from cheaper natural gas, massive operating losses due to low electricity prices and escalating costs, or the cost of major repairs.

Entergy said it can’t operate the plant past May because it did not order new nuclear fuel, and employees there are transferring to other parts of the business or retiring.

The new program is the largest federal investment in saving financially distressed nuclear reactors. Taxpayer and environmental advocates, including Friends of the Earth, say billions of tax dollars should not be spent to support the nuclear industry when doing so won’t solve the climate crisis.

"While Department of Energy is taking some precautions, it’s still acting like it has an obligation to burn federal dollars that would be better spent on solar, wind and energy efficiency," said Sarah Lutz, climate campaigner at Friends of the Earth. "Secretary Granholm is shortsightedly banking on an energy option that will tie us to fossil fuels and dangerous emissions. Propping up failing nuclear reactors rather than pursuing a fair transition for workers and communities is not the way to secure energy independence or a sustainable grid."

Owners or operators of nuclear power reactors that are expected to shut down for economic reasons can apply for funding to avoid closing prematurely. The first round of awards will prioritize reactors that have already announced plans to close.

Another energy company, Constellation, announced plans in August 2020 to close four reactors in Illinois, at the Byron and Dresden nuclear plants, but reversed those decisions after Illinois’ governor signed climate legislation into law in September that provided hundreds of millions of dollars to keep plants open.

A Constellation spokesperson said Wednesday that though none of their plants are eligible during this initial award cycle because they’re not on the verge of closing, they’ll assess whether they can apply in future rounds. Bill Gibbons said they greatly appreciate the support and urgency reflected in the new program.

California is slated to close its last remaining nuclear power plant, Diablo Canyon, in 2025. Officials there think they can replace it with new solar, wind and battery storage resources, though skeptics have questioned whether California’s all-in renewable plan can work in a state of nearly 40 million people.

The California Public Utilities Commission has said it would likely take seismic upgrades and changes to the cooling systems, which could cost more than $1 billion, to continue operations at Diablo Canyon beyond 2025. When asked if it will seek any federal funding to keep operating, PG&E, which operates Diablo Canyon, said Wednesday that as a regulated utility it’s required to follow the energy policies of the state and the state has not changed its position regarding the future of nuclear energy in California at this time.

PG&E spokesperson Suzanne Hosn added that the plan to retire Diablo Canyon was introduced in 2016 and approved by the California Public Utilities Commission, the state legislature, and governor in 2018.