The pending return of Palisades is the second big win for the U.S. nuclear sector in as many weeks. On Sept. 1, the California legislature voted to provide funds to assure the continued operation of the Diablo Canyon nuclear plant. That plant provides nearly 10 percent of the juice in California and it is coming in particularly handy during the vicious heat wave that’s been baking the Golden State.
The move to save Diablo Canyon follows last September’s vote by the Illinois legislature to appropriate some $700 million to subsidize the continued operation of the Byron and Dresden nuclear plants in that state. Thus, over the past 12 months, four nuclear plants that were slated for permanent closure have been rescued from the wrecking ball.
The cheapest and easiest way to reduce future emissions is to keep existing nuclear plants open and operating. Last year, Reiner Kuhr, an adjunct professor at the University of Massachusetts-Lowell who worked in the electric power sector for 45 years, studied the cost of mitigating carbon dioxide emissions with various technologies. Kuhr has told me that he found carbon dioxide mitigation costs range from “under $20 per ton to keep existing nuclear running longer, to over $800 per ton for rooftop solar. Most of the solar and wind projects being heavily promoted are well over $200 per ton.” Kuhr determined that if the government assumes the social cost of carbon is $50 per ton, the only cost-effective option “is extending the life of existing nuclear plants.”
I had heard different scenarios in recent months about how Holtec might leverage the Palisades site, but hadn’t heard that it would seek federal money to keep the plant operating. Holtec President and CEO Kris Singh said Whitmer has been “instrumental” in supporting the company’s efforts. “We look forward to continuing to work with the administration, as well as our federal, state and community partners to make this hope a reality,” he said.
As I reported in these pages on May 29, the 811-megawatt Palisades plant was shut down after 50 years of operation. In fact, it closed on the same day that the North American Electric Reliability Corporation issued a report saying the U.S. electric grid doesn’t have enough generation capacity.
Despite the warning, New Orleans-based Entergy Corporation, the plant’s then-owner, went ahead with the closure. In June, Entergy sold Palisades to Holtec.
While the deal to save Palisades is not done, the fact that Holtec and Whitmer are seeking to keep it open indicates there is strong support for making it happen. This is good news for affordability, reliability and resilience.
When nuclear plants close, they are inevitably replaced by natural gas-fired power plants. And because natural gas prices are soaring, that means higher rates for consumers. Indeed, after the closure of the Indian Point Energy Center in New York, electricity rates and emissions skyrocketed. According to the independent market monitor who works for the New York Independent System Operator, the agency that manages the state’s electric grid, electricity prices “generally increased as a result of the retirement of Indian Point.” Emissions also jumped. Power-sector emissions in New York totaled 28.5 million tons in 2021, an increase of 4.5 million tons compared to 2019, prior to the plant’s premature closure.
The rescue of the Byron and Dresden plants is already saving Illinois consumers cash. In May, the Chicago Sun-Times published an editorial saying ComEd customers “are going to get an unexpected payout of $1 billion, yes, billion, from the state’s nuclear plants.” The paper explained that “negotiators expected — based on existing prices — that customers would pay some $700 million to keep the nuclear plants going. That would have been a lot of money to fork over, but it was necessary to get a deal on moving the state away from fossil fuels. Instead, ratepayers will get a return of $1 billion.” Illinois ratepayers will get credits on their bills of “about $19.71 a month, saving the average family $237 per year.”
I will reiterate that the deal to save Palisades isn’t final. That said, the announcement that Holtec and Whitmer want to save the plant is hugely important. Further, it appears to represent a big shift in how Democratic politicians are viewing nuclear energy. California and Illinois are deep-blue states. Michigan remains a swing state, but it has gone for Democratic presidential candidates in seven of the last eight elections.
Finally, saving Palisades would be a big win for the Biden administration. To be clear, I’ve been a vocal critic of the energy and climate policies being promoted by President Biden and his appointees. Energy Secretary Jennifer Granholm has repeatedly stumbled when it comes to basic facts about the industry. But she’s also the former governor of Michigan. If she, Whitmer, and the Biden administration save Palisades, and do so right after Diablo, Byron, and Dresden were saved, it would give them some solid wins that they could use while campaigning before the November midterm elections. A win is a win, and Biden needs all the wins he can get.
Regardless of your politics, the move to rescue Palisades is a most-excellent development.