The federal government will provide a $1.5 billion loan to restart a nuclear power plant in southwestern Michigan, officials announced Wednesday.

Holtec International acquired the 800-megawatt Palisades plant in 2022 with plans to dismantle it. But now the emphasis is on restarting it by late 2025, following support from the state of Michigan and the Biden administration.

Gov. Gretchen Whitmer said it would be the first nuclear power plant to be reopened in the U.S. It still faces hurdles, including inspections, testing and the blessing of the U.S. Nuclear Regulatory Commission, known as the NRC.

“Nuclear power is our single largest source of carbon-free electricity, directly supporting 100,000 jobs across the country and hundreds of thousands more indirectly,” said Energy Secretary Jennifer Granholm, a former Michigan governor.

Details on the Palisades Plant

The Palisades plant is along Lake Michigan, a two-hour drive from Chicago. A Michigan utility, CMS Energy, owned it from 1971 until the plant was sold to Louisiana-based utility Entergy in 2007. It was shut down in 2022.

Holtec said it has long-term commitments so far from two electric cooperatives to buy power from the plant.

“The repowering of Palisades will restore safe, around-the-clock generation to hundreds of thousands of households, businesses and manufacturers,” said Kris Singh, Holtec president and chief executive.

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Opposition and Financial Details

Critics, however, have emerged. A coalition opposed to restarting what it derisively calls a “zombie reactor” has requested a hearing at the NRC.

Holtec spokesman Patrick O’Brien said it will take four to five months to finalize the financial deal with the government.

“It is a loan we have to pay back,” he said.

Nuclear Energy in the Spotlight

Nuclear energy is in the spotlight. Thirty-four countries, including the U.S., last week pledged to use it to reduce reliance on fossil fuels. In California, regulators in December said the Diablo Canyon plant could operate through 2030 instead of 2025 to guard against blackouts as the state shifts toward renewable power sources. Owner Pacific Gas & Electric said federal aid helped it repay a state loan.

“There is more enthusiasm toward nuclear power — in Congress, in the industry and also internationally,” said Najmedin Meshkati, an engineering professor at the University of Southern California who has inspected nuclear plants around the world.

But restarting a plant, he said, is not easy.

“It puts the onus and burden on the Nuclear Regulatory Commission and Holtec to double down on efforts to make sure this plant is safe enough and all the safety measures are intact,” Meshkati said of Palisades.