Holtec strikes PPA deal with Wolverine for shuttered Palisades nuclear plant

Holtec announced on Tuesday that it signed a power purchase agreement with Wolverine Power Cooperative for the mothballed Palisades nuclear plant in Michigan.

Why it matters: The agreement, first reported by Axios, would mark the first time a U.S. nuclear power plant is restarted after being shut down for decommissioning.

Catch up fast: Entergy, the publicly traded power provider, closed the Southwestern Michigan plant last year, after 51 years of operation. Holtec, a privately owned energy company, acquired the site a month later.

The latest: Holtec's PPA deal with Wolverine is a crucial step toward reopening the plant.

Details: The agreement contains a contract expansion provision to include up to two small modular reactors (SMRs rated at 300 MWe each) that Holtec intends to build and commission at the Palisades site, the company said in its press release.

• The two SMRs would translate into the elimination of nearly 7 million tons of carbon dioxide each year from Michigan's air, or a whopping 200 million tons of CO2 over the course of Palisades' projected service life, according to the company.
• Holtec CEO Kris Singh thanked Michigan Governor Gretchen Whitmer, state legislators, and the Dept. of Energy for the role they played in the agreement.
• Wolverine Power Cooperative is a non-profit energy provider to rural communities in Michigan.
• The PPA deal is "a significant milestone to ensure assured operation of the facility and an enhanced carbon-free energy future for Michigan," Holtec said in the announcement.

Yes, but: The site and its development is ultimately contingent on a $1 billion loan from the DOE. Holtec expects a decision by the government by the end of the year, a person familiar with the matter tells Axios.

Context: Nuclear energy generates nearly one-fifth of U.S. electricity.

• It's also the country's single largest source of zero-emissions electricity, and the only one that can generate it around the clock.
• That's driven political leaders and grid operators to begin taking steps in recent years to reopen or extending the life of aging nuclear plants slated for decommissioning.

Zoom in: Last November, the Energy Department awarded credits worth up to $1.1 billion to keep California's Diablo Canyon nuclear plant running. The nearly 40-year-0ld plant had been slated for permanent shutdown.

• The agency that month rejected an application from Holtec for the Palisades plant. Holtec subsequently applied to a different Energy Department program for funding to reopen the nuclear site.