US releases $57 million in financing to help reopen Michigan reactor

By Timothy Gardner

WASHINGTON (Reuters) -The U.S. Department of Energy said on Monday it has disbursed $57 million of an up to $1.52 billion loan guarantee for Holtec's Palisades nuclear plant in Michigan, which the company hopes will be the first U.S. commercial reactor to restart after ceasing operations.

The conditional loan guarantee was part of an effort by the administration of former President Joe Biden to support nuclear energy, which generates virtually emissions-free power, to curb climate change and to help satisfy rising electricity demand from artificial intelligence, electric vehicles and digital currency.

The department's first disbursement on the loan guarantee, about $38 million, occurred in January after its Loan Programs Office closed the financing last year.

"Today’s action is yet another step toward advancing President (Donald) Trump’s commitment to increase domestic energy production, bolster our security and lower costs for the American people," Energy Secretary Chris Wright said in a release.

Power company Entergy closed the 80-megawatt Palisades reactor in Michigan in 2022, after the plant generated electricity for more than 50 years. It shut two weeks ahead of schedule over a glitch with a control rod, despite a $6 billion federal program to save nuclear plants suffering from rising costs.

Holtec wants to reopen the plant in the fourth quarter of 2025, but still needs permits from the Nuclear Regulatory Commission. Holtec is repairing steam generators at Palisades as the standard procedure for maintaining the units was not followed when the plant went into shutdown.

Pat O'Brien, a Holtec spokesperson, said the company was "well on our way to helping unleash American energy."

(Reporting by Timothy GardnerEditing by Marguerita Choy)