nuclear-news

Holtec hogs the money, but Michigan ratepayers will foot the bill for reactor resuscitation.

  July 9, 2023 by beyondnuclearinternational By Jeff Alson

The 52-year old Palisades nuclear power plant near South Haven, Michigan, on the shore of Lake Michigan near both Chicago and Grand Rapids, is one of the oldest and most degraded reactors in the country. In 2006, Palisades’ original owner, Consumers Energy, cited a wide range of major safety concerns when it sold the plant to Entergy, including that Palisades had one of the most embrittled reactor vessels in the country, needed a new reactor vessel head and steam generator, and had suffered from control rod drive mechanism seal leaks since it first opened. 

As natural gas, and then wind and solar, became cheaper and cheaper, Palisades’ electricity became increasingly uncompetitive. Michigan ratepayers subsidized its electricity for years, sometimes paying as much as 57% above market rates. Trying to minimize additional costs, Entergy refused to invest in the most important safety repairs.

In 2018, Entergy announced it would sell the old and dangerous plant to Holtec, a decommissioning company, and the U.S. Nuclear Regulatory Commission (NRC) approved. The plant was formally closed on May 20, 2022, nuclear fuel was removed on June 13, and the plant was sold to Holtec on June 28, 2022. 

The NRC then terminated Palisades’ operating license.

For four years, from 2018 through 2022, every major stakeholder—Entergy, the NRC, the Michigan Public Service Commission, energy and environmental NGOs, groups representing electricity consumers, and, notably, Michigan Governor Gretchen Whitmer—agreed that Palisades should be shut down. 

The Governor’s own MI Healthy Climate Plan, released in April 2022, appropriately ignored Palisades’ imminent closure, since there are far cheaper and safer alternatives to reduce greenhouse gas emissions. 

What changed? Holtec saw an opportunity to feed from the public trough by getting billions of dollars of corporate welfare, from both the state and federal government, to raise Palisades from the dead.

Holtec has requested a $300 million subsidy from Michigan taxpayers and in late June got a $150 million blank check from the Michigan legislature added to the current state budget without any public debate whatsoever. More ominous, Holtec also wants Michigan ratepayers to, once again, be forced to buy electricity at above-market prices that could significantly raise Michigan’s electricity rates, already the highest in the Midwest.

For example, when operating properly, the 700 megawatt Palisades plant can generate about 6 billion kilowatt-hours of electricity per year. If this electricity were just one cent per kilowatt-hour more expensive than market prices, ratepayers would have to pay an extra $60 million per year. If it were five cents more expensive, the total subsidy would increase to $300 million per year. If Palisades operated for another 5 or 10 years, the total ratepayer subsidy could reach into the billions of dollars.

Holtec will likely apply for multiple federal subsidies as well. To reopen Palisades, Holtec has already applied to the Department of Energy (DOE) for a billion dollar nuclear loan guarantee under the 2022 Inflation Reduction Act, and may apply for an additional $1.2 billion from the 2021 Infrastructure bill. Separately, Holtec has applied to DOE for $7.4 billion in loan guarantees under the 2005 Energy Policy Act for one or more future small modular nuclear reactors.

Michigan taxpayers and ratepayers have had too many nuclear white elephants: ……………………………………………………………….

Jeff Alson is an Alliance to Halt Fermi 3 board member and an environmental engineer who worked on auto pollution issues for 40 years at the U.S. Environmental Protection Agency.  https://beyondnuclearinternational.org/2023/07/09/holtec-hogs-the-money/

July 11, 2023 - Posted by Christina Macpherson | business and costs, USA