Company buying Palisades nuclear plant hopes to profit by decommissioning faster, more efficiently
The Palisades nuclear power plant will shut down by the spring of 2022. The company that owns Palisades plans to sell it.
Located on the shore of Lake Michigan near South Haven, Palisades is the oldest of three operating nuclear power plants in the state.
Who would want to buy a nuclear plant that’s closing?
There’s opportunity for a company that can decommission a nuclear generating station faster and cheaper – more efficiently – than a utility company could.
“The main objective was to move the risk to a party capable of [decommissioning] and doing it much quicker than we can,” Entergy CFO Drew Marsh told analysts last summer.
A new joint venture between Holtec International, a privately held U.S. company and Canadian-based SNC-Lavalin, has been snapping up Entergy’s nuclear plants. Holtec just announced plans last month to buy Indian Point in New York. If the sales go through, the company would own six reactors at four locations, including Palisades.
Holtec has experience with nuclear waste storage and transportation. As the U.S.’s nuclear fleet retires, this company hopes to be the contractor for hire to decommission the plants.
An alleged bribery scandal involving SNC-Lavalin has been developing in Canada. It’s faced corruption allegations in Mexico, India and Bangladesh too. “Frankly, they’re crooks,” said Kevin Kamps of Beyond Nuclear, which has been keeping tabs on the proposed plans.
How do you make money off a nuclear plant that’s shut down?
The proposed sale includes the plant, the license, Big Rock Point and the waste that's already on site at Palisades. Importantly, the deal includes the decommissioning trust fund that’s been set up for Palisades. At last check, that fund balance is $443 million*, about $36 million under minimum amount the NRC expects it’ll eventually cost to decommission the plant. Currently, Entergy meets those financial requirements because the fund is expected to continue to grow.
Holtec makes dry casks, these giant water heater-looking canisters, where spent fuel is stored. It’ll be able to use its own system to store the fuel. Palisades already has 46 loaded casks with spent fuel on site.
Holtec is also operating under the assumption that the NRC will give it the green light to open a new, underground facility to stash this high level waste.
“We expect Nuclear Regulatory Commission approval in 2020 for this facility,” Holtec Chief Communications Officer Joy Russell recently wrote to a paper in New Jersey. “It will be then up to Congress and the U.S. Department of Energy to provide necessary funding to transport and store the used nuclear fuel… to New Mexico.”
If Holtec can use its own storage casks, and do its own transport to its own storage facility, that would likely make the decommissioning more affordable. Whatever is left over in the trust fund, assuming there’s money left, is presumably Holtec’s to keep as a profit.
Holtec and Entergy say it’s good for the community because they’ll be able to clean up the site faster. NRC gives plants up to 60 years to decommission.
"The potential for the site to be released decades sooner for redevelopment could deliver significant benefits to local community stakeholders and the local economy," president and CEO of Holtec Kris Singh said in a statement.
If the NRC doesn’t approve Holtec’s proposed New Mexico storage site, the company would presumably have to keep the casks on site until the U.S. selects a permanent storage site.
How can the public weigh in as Palisades is decommissioned?
The NRC regulates decommissioning. It ensures a company has the technical expertise and financial resources to decommission a plant. It also completes a radiological survey on the site to make sure radiation levels meet specific standards.
They serve two main goals. To gather public feedback for decommissioning plans and future use. And they try to disseminate accurate, updated information to the public and stakeholders about the decommissioning process.
According to The Boston Globe, the Massachusetts advisory panel grilled a Holtec official last month and the company provided few answers to basic questions.
Where would Holtec International get the money to move spent fuel to a long-term storage site? “It would be irresponsible of me to speculate on how that would be funded,” Andrea Sterdis, Holtec’s vice president of regulatory affairs, told the members of the state’s Nuclear Decommissioning Citizens Advisory Panel. Where was the company getting the money to buy Pilgrim? “That’s proprietary, confidential information,” she said.
Michigan doesn’t have anything like this advisory committee yet. But there are some residents in southwest Michigan who are interested in creating something like it.
In the meantime, the NRC is welcoming the public to an open house this week. It’ll be held Thursday, May 9th at the Covert Township Lions Community Center from 6-7:30 p.m.
"Entergy’s focus remains on operating Palisades safely and reliably and will continue to make the necessary investments into the plant. That investment includes $87 million spent during the recent refueling outage. We will remain engaged and transparent with the community throughout continued operations and as we transition into decommissioning," Palisades spokesperson Val Gent added.
*Correction: An earlier version of this post included an outdated monetary value in the Palisade decommissioning trust fund. As of 2019, the trust fund had $443 million, not $425 million. Entergy calculated that the NRC minimum estimate for decommissioning Palisades also increased. Therefore, the difference between the fund balance and the minimum eventually needed to decommission increased from $30 million to $36 million. The NRC has yet to independently verify this calculation.