At the end of 2025, the Palisades Nuclear Generating Station is expected to become the first decommissioned reactor brought back online in the United States. With the backing of both the Department of Energy and the state of Michigan, the plant, which was decommissioned in 2022, is slated to supply 800 megawatts of power to MISO.
But traditional nuclear isn’t the operator Holtec International’s only focus. If all goes well, five years later, the Palisades site will also host two small modular reactors, which will provide an additional 600MW.
Restarting a reactor is no small feat. But licensing commercial SMRs is equally complex. That part of Holtec’s ambitious project will be funded separately from the effort to bring the large-scale reactor back online — requiring entirely new licenses, and intensive testing of the chosen site. And, unlike the original reactor, it doesn’t yet have significant state and federal backing.
Nuclear Regulatory Commission requirements for SMRs are currently the same as for traditional nuclear plants, despite their significantly smaller footprint. And while there’s an ongoing effort to develop a new licensing framework for the advanced technology, it’s not expected to be finalized for implementation until at least 2027.
So Holtec is now in the midst of acquiring two separate licenses for its advanced reactors, explained Patrick O’Brien, who leads government affairs and communications for the company. That’s the traditional method for licensing reactors, he added, which involves both a construction permit and an operating license, obtained sequentially.
(Vogtle, the country’s newest traditional reactor that recently came online in Georgia, actually used a different approach for its Units 3 and 4. Developers applied for a single combined license that locks in plant designs before construction begins — an approach designed to be faster, but less flexible. However, it still took more than a decade to get Vogtle’s first reactor online, thanks in large part to construction challenges.)
At Palisades, the two-part approach will offer Holtec more flexibility during the construction phase — which may be beneficial for a new reactor design like the SMR-300, designed by Holtec internally. Another benefit, O’Brien said, is that Holtec can apply for a limited work authorization alongside the initial construction permit, allowing them to start preparing the site earlier.
Holtec is on track to apply for that limited work authorization by the end of this year. Then, they plan to apply for the construction permit closer to 2027, and the operating license sometime in 2029. It’s a lengthy, expensive process rife with stumbling blocks — some of which have blocked Holtec’s peers.
But the project is well on its way, O’Brien told Latitude Media. Holtec has already hired extensively to support the SMR project, and the company is hopeful that its approach to the technology itself can help control costs and delays. For instance, O’Brien said Holtec believes it controls around 75% of the supply chain for its reactors.
“That’ll be a key piece of what we do in trying to deploy these and keep the costs as expected and under control, which we know that’s been a challenge for the nuclear industry over the last 40 years, and has sunk some projects,” he said.
The road to operations for SMRs
In the lead-up to filing their first set of applications, Holtec and its partners — including manufacturing partner Hyundai — have been busy.
“We’ve done a lot of work preemptively with the NRC,” said O’Brien, “basically going area by area through the design process and saying ‘here’s where we are, give us feedback or ask us questions in a pre-application way.’”
Holtec is confident that by the time it submits its full application, they’ll have answered at least 90% of the commission’s questions and ironed out many questions already.
For example, Holtec had initially planned on a 160-MW reactor design without pumps and motors, one that relied entirely on gravity-driven circulation for reactor coolant flow. But during those pre-application discussions with NRC, regulators expressed concerns about using a system that is untested in U.S. licensing, and about the design’s lower power output. Holtec therefore revised its design. Adding back in the more traditional pumps, O’Brien explained, allowed the company to operate the SMRs at a higher power output, which helped make Holtec’s design “more commercially viable with Palisades.”
The company has also been working to select and scope the site where the SMRs will eventually be installed, as required for the preliminary safety analysis report that will ultimately support the construction permit application.
Fugro, a Dutch multinational specializing in geo-data, is one of a handful of specialized firms brought in to help, via the licensing firm Enercon. Fugro has spent the last several months evaluating the geologic, geophysical, and geotechnical conditions for the chosen site in Michigan. The company is responsible for two key safety analyses: subsurface stability and slope stability. In other words, Fugro needs to ensure the foundations for the SMRs are solid.
Developing a three-dimensional visualization of the subsurface requires an extensive site investigation that to date has included drilling, sampling, and rock coring, explained Osman El Menchawi, who leads Fugro’s site screening work in North America.
“It’s very important that we understand the geologic history of the site itself,” Menchawi said. And because the SMRs will be located at a different section of the Palisades site from the large-scale reactor, all of that work had to be done from scratch. (The SMRs will share certain infrastructure, like the existing switchyard and radiation protection, with the restarted reactor.)
Now that the initial on-site investigation has been completed, El Menchawi said, Fugro is back in the lab, testing the samples retrieved from Palisades. In the coming months, they’ll put together as many as a dozen separate safety-related reports, which will support Holtec’s construction permit application.
Funding, public and private
Funding, however, remains a somewhat open question. Holtec has a long-term power purchase agreement with Wolverine Power Cooperative, and that agreement includes a clause to add SMR-generated power.
Up to now, though, most of the project has been funded internally by Holtec, which has had an SMR program since 2011.
“There have been a lot of dollars expended to get us to where we are now,” O’Brien said. “To get us through construction, and finalized licensing, that’s still being determined.”
Holtec is in discussions with potential financing partners for the project’s completion, and the company is still deciding how it wants to structure those partnerships, he said.
One potential source of funding is the federal government, including through DOE, if and when funds from the Inflation Reduction Act and Bipartisan Infrastructure Law are unfrozen. Holtec has already applied for “first mover” funding via the agency’s Generation 3 SMR Program, which offers up to $900 million from the infrastructure law for domestic SMR deployment.
There have been a lot of dollars expended to get us to where we are now. To get us through construction, and finalized licensing, [the funding is] still being determined.
But O’Brien also emphasized that Holtec has private options as well. There’s been interest in nuclear from both Wall Street and from the hyperscalers, he added — and that kind of backing “will allow these projects to be successful, and mitigate risks,” even if federal funding doesn’t come through as quickly as they’d like. Just today, a group of large energy users including Amazon, Google, Meta, and Occidental announced a pledge to help triple global nuclear capacity by 2050.
The restart project, however, is both more high-profile and potentially more vulnerable to federal funding uncertainty.
Plans to bring the Palisades reactor back online date back to before Holtec acquired the site from Entergy in 2022 — and several years before hyperscalers started expressing interest in nuclear both old and new. Shortly after acquisition was made official, Holtec started seeking out funding to help bring the reactor back online, with the encouragement of Michigan Governor Gretchen Whitmer.
The company first applied for federal funding via the DOE Civil Nuclear Credit program, which had awarded over $1 billion to keep the Diablo Canyon Power Plant online in early 2024. But Palisades ultimately wasn’t the right fit for that program, O’Brien said, which is geared more towards plants that are in danger of shutting down and need help to stay operational. Instead, Holtec focused on obtaining funding from DOE’s Loan Programs Office.
In September 2024, LPO announced it had finalized a $1.52 billion loan to help finance the restart of Palisades’ large-scale nuclear reactor. Holtec has already received the first tranche of that loan, which was dispersed in January, Latitude Media has confirmed.
O’Brien said Holtec has already submitted a request for a second disbursement, and expects it to hit their bank account in the coming weeks. Each disbursement, he said, is relatively small — in the tens of millions, not hundreds of millions of dollars.
However, given the fact that the presidency has changed hands since Holtec’s loan was finalized, nothing is certain. The Loan Programs Office has undergone significant layoffs, and there is some question about whether the office will honor loans issued under former director Jigar Shah (even though skipping out on any finalized contracts would no doubt provoke a legal fight).
Given the enormous workforce Holtec has had to bring on board to help revive Palisades — 560 employees and around a thousand contractors on site — if the LPO disbursements were to be frozen, it could be “challenging,” O’Brien said.
Nevertheless, O’Brien said the Palisades project has been “full steam ahead.” That’s partly because the project also has internal funding, as well as additional funding from the state of Michigan.
But it’s also down to the Trump administration’s support for nuclear power; new LPO director John Sneed has reportedly mentioned nuclear specifically as a priority.
“We haven’t had any indications that our loans are a challenge for the administration,” O’Brien said. “I think we fit right into what’s desired for clean baseload power from this administration that can run 24/7, that is beneficial to the economy, and to national security.”
