Press Release–THE NUCLEAR REACTOR NEXT DOOR: Why A Company With Zero Nuclear Reactor Operating Experience is Receiving Over $8 Billion to Restart Palisades

A company temporarily barred from federal work with the Tennessee Valley Authority is required to pay the federal government a $2 million “administrative” fee in a bribery case.

The same corporation pays a $5 million penalty to escape criminal prosecution related to a New Jersey tax break scheme. This company’s Chief Financial Officer files a whistleblower lawsuit alleging he was fired after refusing to submit information to a major potential investor inflating his employer’s revenues by a billion dollars or more. He is quickly countersued.

Welcome to Holtec International, the troubled company at the heart of a new Glenside Productions podcast The Nuclear Reactor Next Door. This series features Beyond Nuclear’s Kevin Kamps who has, with partners coast to coast, successfully campaigned to shut down and block the construction of atomic power plants across the country over the past 30 years.

The first four episodes feature Holtec’s attempt to become the first company to restart a closed nuclear reactor set for decommissioning due to a myriad of financial and safety related challenges.

Choosing controversial Holtec, a company that has never built or operated a nuclear power plant, to restart the Palisades reactor in Covert Township, Michigan might sound like sending a high school football team to face USC at the Rose Bowl. A win here for Holtec and its advocates, the U.S. Nuclear Regulatory Commission (NRC), the State of Michigan and the Department of Energy (DOE) risks raising utility rates at the expense of safer, less expensive renewables.

On top of the $8.3 billion for the Palisades restart, the DOE and the State of Michigan are also working toward a second $7.4 billion subsidy for Holtec.  This funding would help pay for two new reactors at the Palisades site based on a controversial new design that has never operated anywhere. Together these three reactor projects could boost customer energy costs up to 57% above market rates.

The cost of the Palisades subsidy adds up to nearly $30 million per “restored job” at the old, currently closed reactor, far above the average $29,000 state subsidy Michigan paid last year to a group of employers agreeing to hire new workers. For the vast cost of subsidizing a single Palisades worker, renewable energy firms could hire hundreds, even thousands of new workers in a state with abundant wind resources.

In addition renewables, storage and efficiency offers a quicker, safer return on public investment.

Previous owner Entergy, one of the nation’s most experienced nuclear reactor operators, surrendered to the money losing arithmetic at beleaguered Palisades.  High operating costs and the soaring expense of replacing and upgrading long obsolete systems were key considerations.

The obsolete Palisades reactor was shut down in May 2022 after 51 years of operations.

This was welcome news for customers forced to pay energy rates more than 50 percent above those charged customers of nonnuclear plants.  It turns out that this reactor, well beyond its original licensing date, offers a very pricey way of boiling water. Ratepayers simply can’t afford the high cost of electricity from this plant.

This was why Holtec originally purchased Palisades for decommissioning in 2022. Spending $8.3 billion in federal and state subsidies to put this closed plant back in operation does not guarantee a good outcome.

Key components, such as the critical steam generators, are well beyond their operating life span.  Other systems at risk include the vital reactor vessel closure head and the safety critical control rod drive mechanism seals. The latter have been leaking since 1972 and have repeatedly needed major repair.

Beyond that, active maintenance on safety significant systems, structures, and components is overdue. Failure to do a wet layup for the steam generators means they have undergone accelerated corrosion since shut down. This also includes bumping pumps, and stroking valves.

It also includes rotating the turbine-generator, which has been bending under its own weight and could violently fail, a potential threat to the control room and its operators.  Also, the dangerous indoor wet storage pool holding spent nuclear fuel is filled to the brim.

There is no safe, sound place to put new atomic waste that would be the inevitable byproduct of a restart. To accommodate this new waste, inexperienced operator Holtec would need to transfer irradiated nuclear fuel from the pool to new dry casks. They would sit next to cracking casks already stored on the Lake Michigan beach outside Palisades.

This safety critical unit is a dead ringer for the Genkai Unit 1, formerly the most embrittled reactor pressure vessel in Japan. It was quickly closed for good, post-Fukushima, when real world physical data revealed that the embrittlement was actually much worse than the hypotheses and computer modeling had predicted. Because similar testing has not been done on the Palisades reactor pressure vessel, no one knows if it is similarly vulnerable.

What we do know is that the shutdown of Genkai and the meltdown of reactors at Fukushima has so far cost Japan over $600 billion. These setbacks help explain why people like Kevin Kamps are concerned about Palisades.

Growing up in nearby Kalamazoo, he loved swimming in Lake Michigan at Van Buren State Park. Warmed by Palisades’ thermal wastewater discharges, a hot spot in the often chilly big lake became a favorite of local boaters, sunbathers, and fishermen, who could also camp and picnic next door at Van Buren State Park.  But Palisades’ thermal wastewater discharge pathway was also used for toxic chemical and radioactive wastewater discharges into Lake Michigan, for more than 50 years.

After learning about frightening meltdowns that led to the shutdown of Three Mile Island 2 near Harrisburg, Pennsylvania on March 28, 1979, and Monroe, Michigan’s Fermi 1 reactor on October 5, 1966, Kamps began studying the inherent risks of commercial nuclear power.  The potential dangers of cancer causing radiation releases led his list of concerns.

He was also worried about the high cost of this expensive, slow to build technology. Inevitably soaring costs for nuclear power would lead to higher rates for customers. Another problem was the fact that no insurance company was willing to cover losses caused by atomic power plant radiation disasters.

Now the radioactive waste specialist at Beyond Nuclear, he leads a coalition of more than 135 groups battling the  $15.7 billion Holtec plan to restart Palisades and add two controversial new reactors generating even more nuclear waste.

As he explains in The Nuclear Reactor Next Door podcast, the Nuclear Regulatory Commission, mostly funded by assessments on atomic power plant operators, is a questionable watchdog.  This agency has already rejected one attempt by environmental intervenors to halt the Palisades restart.

“They told us to go jump in a Great Lake,” says Kamps.

Even worse, filing a lawsuit against this proposal is next to impossible until the end of the licensing process.

For the nuclear power industry, which effectively lavishes hundreds of millions of dollars on lobbying and political campaigns, the Palisades master plan is a desperate comeback strategy. Due to a seemingly endless series of economic and safety challenges, 39 of the nation’s 131 reactors have shut down.

That number would be even higher were it not for the fact that states like California, Illinois, and New York are collectively spending billions bailing out old reactors otherwise previously scheduled for closing. Today none of these programs come close to matching what Holtec has in mind for Palisades, by far the single largest bailout of a nuclear power plant.

This is all part of the industry continuation bias after dozens of nuclear reactors have been cancelled in the planning or construction phase.

In this century just three nuclear reactors have opened in the United States.  One in Tennessee had so many startup problems it took 42 years to finish.  Westinghouse, one of the big players in American nuclear power plant construction for decades, filed for bankruptcy after being hit by billions in cost overruns on new Georgia and South Carolina nuclear plants. In Georgia those high construction and operating costs are partially covered by customers in the form of much higher rates statewide.

Eager to cash in on the nuclear power dream Michigan, utilities and government leaders have bet and lost big on this expensive energy source for more than 70 years. Since the 1950s the state has been a disappointing laboratory for experimental reactor projects like Fermi 1, sold by Detroit Edison on the idea that it could “breed” its own nuclear fuel.

Shortly after the world’s only “fast breeder” reactor began operating in 1966, an accident triggered a meltdown. This crippled reactor located near Monroe never delivered the promised power, and was quietly shut down.  Following the industry’s media relations playbook at that time, Detroit Edison effectively blacked out the story for almost nine years.

Panicked executives were convinced that telling the truth would kill another Fermi reactor under construction next door.  The terrifying details were finally revealed in John G. Fuller’s 1975 classic We Almost Lost Detroit exposé of a near Great Lakes catastrophe. Detroit Edison wrote down a loss of more than a $750 million in today’s dollar figures.  Half a century later this mothballed plant is still waiting for decommissioning. Instead of breeding promised nuclear fuel it has left behind a toxic legacy of radioactive nuclear waste and contamination for more than half a century.

In the 1980s two reactors in Midland were abandoned because the ground below couldn’t handle their weight. The loss adjusted for inflation was $13 billion. No other Michigan construction project cancellation comes close to matching this extraordinary cost and waste.

In this podcast Kamps also tells the story of a series of major radioactive releases at the Big Rock Point reactor near Charlevoix and Petoskey. Although the shuttered reactor was shipped out by rail, giant nuclear storage casks remain in the midst of this beautiful tourist area on the Lake Michigan shoreline.

With three nuclear power plants closed and two abandoned, only three reactors are still operating in Michigan: Fermi Unit 2 in Monroe County; and Cook Units 1 and 2 in Bridgman.

All these challenges have contributed to public skepticism toward nuclear power.  Adding to anxiety are disastrous reactor meltdowns at Ukraine’s Chernobyl reactor (a Soviet Socialist Republic at the time) and the three Fukushima meltdowns.

In the wake of these tragedies governments such as Japan and Germany, have shut down dozens of reactors. A key factor in these decisions has been well documented reports on the many cancer deaths and other maladies caused by these unprecedented disasters.

Another industry challenge faced by Holtec is finding a safe permanent place to dispose of radioactive nuclear fuel residing at both existing and decommissioned reactors. The amount of plutonium-239 in all this spent reactor fuel at nuclear power plants nationwide vastly exceeds the amount in our nation’s entire nuclear weapons inventory. With reprocessing, some of the plutonium from this stockpile of spent nuclear fuel could potentially be usable in nuclear weapons. This makes reprocessing of commercial irradiated nuclear fuel a significant nuclear weapons proliferation risk.

An attempt by Holtec to open a national repository in New Mexico would require a national nuclear fuel transport campaign. That high-risk proposal is being opposed by lawsuits led by an environmental coalition, including important alliances with the States of Texas and New Mexcio and their members of Congress.

At Palisades some of that radioactive spent fuel may be barged on Lake Michigan to the port of Muskegon. This  proposal, mapped out by the Department of Energy in 2002, is now being considered by Holtec and government officials.  If implemented it could endanger the future of the Great Lakes watershed, the world’s largest freshwater reserve.

This vast resource provides drinking water for more than 40 million people in eight U.S. states, two Canadian provinces, and a very large number of Indigenous Nations.  Should one of the 120- to 180-ton spent nuclear fuel casks slip off a barge, retrieval from Lake Michigan could be a suicide mission.

Kamps explains that leakage from these casks would contaminate Lake Michigan with hazardous radioactivity. Even worse, water infiltration into the breached cask could trigger an inadvertent criticality in the waste.

There is enough fissile material in the waste — Uranium-235, Plutonium-239 — that if a critical mass forms in the disaster, infiltrating water from Lake Michigan could serve as a neutron moderator, sparking a chain reaction in the waste.

On top of these problems, Holtec and the Nuclear Regulatory Commission’s plan to simultaneously quicken the pace of new reactor construction at Palisades and Big Rock Point has been hurt by bad industry news.  The first of these so called Small Modular Reactors (they are neither small nor modular) projects in Idaho was cancelled in January.

The deal breaker was soaring costs beyond the reach of the owner.  This came as a big blow to SMR cheerleaders like billionaire Bill Gates who has not backed up his national media enthusiasm with his own money.

All these setbacks undercut the industry myth created in 1954 by U.S. Atomic Energy Commission Chairman Lewis Strauss, recently portrayed in the movie Oppenheimer.  He promised a group of science writers that nuclear energy would be “too cheap to meter.”

Seventy years later, as Kamps points out in The Nuclear Reactor Next Door podcast, it appears Strauss’s crystal ball was broken. Energy rates in countries like France, heavily powered by nuclear reactors, are generally much higher than those paid in communities relying on other sources.

Problems include high construction and operational costs, nuclear fuel expenses, regulatory requirements, safety and security issues, and the challenges of radioactive waste disposal.  Against this history of meltdowns, plant abandonments, cancellations and many billions in cost overruns, the struggling American nuclear power industry sees Holtec’s Palisades restart as a way to head off unwanted competition in the form of safe, reliable and less expensive alternatives.

Some in the nuclear industry see Holtec’s seemingly impossible dream as the lucrative government subsidized pathway to bringing closed reactors back from the dead. Eager to avoid delays, this first time nuclear power plant operator is in a rush to restart Palisades by August 2025.

Despite these formidable obstacles, the restart plan is getting a warm reception from the Nuclear Regulatory Commission’s chair Christopher Hanson, whose roots are in the South Haven community next door to Palisades. He and a majority of his fellow commissioners, as well as the NRC staff, have rolled out the red carpet for Holtec, holding seven major meetings over the past year to make up out of whole cloth a regulatory pathway for this unprecedented restart.

As Kamps points out, Holtec’s master plan for Palisades is a losing argument.  The fact is that safer, cleaner nonradioactive power sources — such as renewables, storage, and efficiency — are much quicker and significantly more cost effective to bring on line.  They are not hamstrung by the troubling security, safety, radioactive waste disposal, and regulatory issues plaguing nuclear reactors.

Unlike Palisades, none of these alternatives could become another Chernobyl, Fukushima or Fermi 1. Kamps questions the ability of first time nuclear power plant operator Holtec to restart a reactor it originally committed to decommission. This was but a bait and switch trick or con job, revealed by the fact that Holtec applied to DOE for many billions of dollars in bailouts, just a week after taking ownership of Palisades on June 28, 2022.

Kamps says these $8.3 billion in Palisades reactor restart subsidies would create far more jobs for local Michigan companies if they are spent on wind, solar, and other renewables, along with efficiencies that reduce power demand as well as energy storage. Michigan is especially strong on wind resources. These proven energy sources are much quicker and safer to bring online than new nuclear plants. This energy will cost consumers less than nuclear power minus the risk of a Fukushima style meltdown and radiation disaster.

For the Department of Energy, the timing for restarting Palisades — which has had numerous security breaches and scandals in the past — couldn’t be worse. The wartime battle zone that currently jeopardizes the safety and security of Ukraine’s many nuclear reactors puts an exclamation point on the inherent security risks of atomic power.

A Japanese plan to restart seven of the reactors shut down after the 2011 Fukushima nuclear catastrophe was halted following a New Year’s Day 2024 earthquake nearby.  To offset this bad public relations, the nuclear power industry spends more than $1 million a week on lobbying  and campaign contributions.

One of the industry’s biggest supporters is former Michigan Governor, Jennifer Granholm.  In 2007, her administration allowed hundreds of millions of dollars to be siphoned out of the Palisades decommissioning trust fund, into the pockets of nuclear utilities as pure profit.  Now Secretary of Energy, she is a passionate advocate for nuclear power, leading the charge to reopen Palisades with Governor Gretchen Whitmer.

Higher energy bills from Palisades, much more expensive than renewables, can only be offset with yet more government bailouts. In this case the exorbitant cost of expensive energy from nuclear power is shielded by a Palisades customer subsidy from the U.S. Department of Agriculture, funded by $970 million of Amercian taxpayer money.

All this voodoo nuclear power plant economics accelerates an endless cycle of expensive lobbying and campaign contributions from utilities and plant operators.  There is also a potential conflict of interest at the Nuclear Regulatory Commission.  This agency receives most of its funding from fees paid by reactor operators under its jurisdiction. Restarting Palisades means more income for the NRC.

After being a key part of the campaigns to shut down reactors around the country Kevin Kamps and his colleagues are gaining ground on stopping the restart plan.

“We will resist Holtec’s unprecedented zombie reactor restart, as well as SMR new build schemes, at every twist and turn, including opposing the $15.7 billion and counting of taxpayer and ratepayer bailouts,” said Kamps.

“We are determined to prevent the State of Michigan, DOE, NRC, and Holtec from restarting Palisades, at extreme risk to safety, security, health, and the environment. The Great Lakes shore is one of the worst places in the world for these government and industry schemes to play radioactive Russian roulette, where we could lose everything,” Kamps added.

NOTE TO EDITORS AND REPORTERS: Kevin Kamps at Beyond Nuclear has prepared three new backgrounders: “A People’s History of the Palisades Atomic Reactor” (13 pages); “Nuclear Nightmares: Palisades’ ‘Zombie’ Reactor Restart and SMR New Build Schemes” (3 pages); “Holtec: Criminality, Corruption, Incompetence, and Inexperience” (2 pages).

Kamps has also prepared: a breakdown of the $15.7 billion, and counting, in bailouts at Palisades and Big Rock Point; a major exposé based on Freedom of Information Act revelations regarding Holtec’s ‘nuclear white elephant’ secret plans to build SMRs at all its decommissioning sites, as well as to re-nuclearize Palisades, using many billions of dollars of federal and state taxpayer, as well as ratepayer, bailouts; and a compilation of webposts and breaking news entitled “Newest Nuke Nightmares at Palisades, 2022 to Present.”

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