MIDLAND, Mich. — The federal government announced today that it will give a $1.5 billion loan to Holtec International to restart the Palisades Nuclear Generating Station. At the time of its closure, the nuclear plant provided 6.5% of the state’s electricity and 15% of the state’s clean energy. The Mackinac Center for Public Policy has long been a vocal proponent of the benefits of nuclear energy and spoke out against the plant’s closure for years before it officially shut down.

The southwest Michigan nuclear plant’s closure had been discussed for years before it was eventually shut down in 2022. In the plant’s final days, Gov. Gretchen Whitmer made a last-minute attempt to keep it alive. Requests from the governor and Holtec for federal funds to keep the plant open were denied by U.S. Energy Secretary Jennifer Granholm, who made today’s announcement.

Reopening the plant is necessary for the state to reach Whitmer’s mandate of 100% “clean energy” by 2040. Legislation signed last year makes Michigan’s electric grid heavily dependent on wind and solar energy. But as the Mackinac Center and Northwood University note in a recently published report, the high cost and unreliability of wind and solar pose a serious threat to the stability of the electric grid. In order to have a hope of meeting the new mandates and keeping the grid up and running, Michigan must increase its nuclear energy generation.

Even without the recent mandates, the state should be using nuclear energy. As the same report points out, nuclear energy produces nearly endless amounts of reliable and emission-free electricity. The biggest hurdles are the excessive costs associated with the intense regulatory pressure on the nuclear industry.

Policies from both the federal and state government have damaged competition within the energy industry. The government has created a highly regulated and heavily subsidized market, which constricts real competition among energy sources. This contributed to the closure of Palisades, which struggled to compete against heavily subsidized wind and solar.

While the government shouldn’t be in the business of loaning money to companies of any kind, this loan to Holtec is an attempt to undo the damage caused by government policies. Once Palisades begins operating, Holtec should pay back the loan in full.

“Reopening Palisades is a great first step in expanding energy sources that Michigan residents can rely on at all times, not just when the sun shines and the wind blows,” said Jason Hayes, director of energy and environmental policy. “The loan from the federal government is an attempt to right a wrong that was caused by intrusive government policies. Energy sources should compete on a transparent and level playing field, free from government handouts and interference.”

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