March 05, 2021

Caroline Cox

Palisades Nuclear: The Promises and Perils of Decommissioning

The Palisades Nuclear Generating Station sits along the shore of Lake Michigan, abutting vacation cabins and hiking trails. Construction began on the nuclear power plant in 1967, and now, over 50 years later, the plant is heading for closure.

For the local community, the news is a mixed blessing. The ensuing decommissioning could reduce concern about such a close nuclear facility, but it also brings worry about whether the cleanup will be done properly.

The Promises and Perils of Decommissioning

Decommissioning is the process by which nuclear power plants close, safely store nuclear waste and other radiological material, and make the former site usable for other purposes once more. Site reclamation—restoring disturbed lands to their former state through backfilling, replanting, and other methods—often occurs during decommissioning. Much like coal mine reclamation, however, decommissioning faces enormous financial hurdles.

The primary challenges are that this cleanup can take decades and quickly drain decommissioning trust funds. For example, Connecticut’s Haddam Neck plant shut down in 1997 and took 10 years to complete at a cost of over $1.2 billion. Decommissioning Wisconsin’s Kewaunee power plant is expected to cost over $1 billion and take until 2073. Ensuring adequate funding for these long-term cleanup projects, then, is essential to restoring these former power plants to safe and public use.

ELPC’s work with the FirstEnergy Solutions (FES) bankruptcy illustrates the difficulty of ensuring adequate decommissioning funding. In 2019, ELPC petitioned to intervene in FES’s application at the NRC to transfer its license to the reorganized entities that would emerge from its bankruptcy. ELPC pointed out the prior decommissioning trust fund shortfalls and the lack of information on how the reorganized entity would provide sufficient financial assurances to cover decommissioning. Although the NRC granted the transfer application, ELPC’s petition and its work in the bankruptcy court made more public the need for better decommissioning funding.

The License Transfer Application

ELPC continues to push for adequate decommissioning funding, this time with regard to the Palisades nuclear plant. In December 2020, Palisades’ current owner, Entergy Corp., applied to the Nuclear Regulatory Commission (NRC) to transfer its federal license to operate the plant to Holtec International. Under the application’s terms, Entergy would shutdown and defuel the reactor in the spring of 2022 and then hand over the plant to Holtec for decommissioning.

For those living near the Palisades facility, Holtec’s optimistic view of decommissioning is likely insufficient to make the decommissioning process feel safe.

Holtec hopes to dramatically accelerate the decommissioning in order to profit off of the cleanup.  Holtec optimistically estimates that it can finish radiological decommissioning by 2041 for only $443.2 million.  An additional $166.2 million would cover managing the spent nuclear fuel and another $34.7 million would pay for site restoration. Most importantly, Holtec claims that the $552 million decommissioning trust fund balance—intended for radiological decommissioning only—could cover all three obligations.

The problem is that Holtec paints too rosy a picture of both the decommissioning costs and the growth of the decommissioning trust fund. Should the costs run over the estimates, Holtec does not have other sources of decommissioning or funding. For those living near the Palisades facility, Holtec’s optimistic view of decommissioning is likely insufficient to make the decommissioning process feel safe.

ELPC Petitions for More Substantial Decommissioning Assurances

On Wednesday, February 24, ELPC filed a petition with the NRC to intervene and requested a hearing on Entergy’s license transfer application. ELPC’s petition echoes other recent petitions to the Nuclear Regulatory Commission for hearings on Holtec’s decommissioning strategy. ELPC does not believe that the Holtec meets the stringent financial qualifications necessary under federal regulations for the Commission to approve the requested transfer. Without the needed financial qualifications and financial assurances for a permit, an insufficient decommissioning process will occur.

ELPC is not alone in its concern. The Michigan Attorney General also submitted a petition to intervene on behalf of the people Michigan and have an administrative hearing on the application. A coalition of environmental groups—Beyond Nuclear, Don’t Waste Michigan, and Michigan Safe Energy Future—also submitted a petition to highlight Holtec’s underestimation of the decommissioning expenses and the need for a supplemental environmental impact statement.

This outpouring of concern underscores the importance of holding companies accountable for their long-term environmental obligations. Over 50 years after its construction, the Palisades plant is headed for closure. ELPC is working to make sure that in another 50 years the plant’s former land is safely restored.