Eversheds Sutherland Advises Wolverine Power Cooperative and Hoosier Energy in Historic Power Purchase Agreement for Restart of Palisades Nuclear Power Plant

Holtec International (Holtec), a diversified energy technology company, and Wolverine Power Cooperative (Wolverine), a not-for-profit power generation cooperative based in Michigan, announced yesterday that they have entered into a long-term agreement that will pave the way for the restart of the 800-megawatt Palisades Nuclear Power Plant in Covert Township, Michigan.

The foundation of this partnership is a long-term power purchase agreement, with Wolverine committing to purchase up to two-thirds of the carbon-free power generated by the Palisades Nuclear Power Plant for its Michigan-based member rural electric cooperatives. Wolverine’s non-profit rural electric cooperative project partner, Hoosier Energy, will purchase the balance.

“We are thrilled to enter into this partnership,” said Kelly Trice, President of Holtec Nuclear Generation and Decommissioning. “The executed power purchase agreement represents a significant milestone in our journey towards reopening the plant, a historic moment for Michigan and the country. The repowering of Palisades ensures Michigan has sufficient energy to meet future demand and mitigate the impact of climate change, while creating hundreds of high-paying Michigan jobs, expanding the local tax base, and unleashing economic opportunity within the region and beyond. With key support from federal partners, Governor Whitmer, the Michigan legislature, and the local plant community, this will soon be a reality.”

Wolverine’s member rural electric cooperatives provide electricity to rural homes, businesses, and public schools across more than half of Michigan’s lower peninsula, with a power supply portfolio that is already 60% carbon-free. This agreement will further enhance Wolverine and its members’ leadership in carbon-free energy and their commitment to delivering reliable, affordable, and clean power to their communities well into the future.

“Ensuring reliable and affordable electricity in Michigan is crucial,” said Eric Baker, CEO of Wolverine. “The restart of Palisades offers a practical, long-term solution to electric reliability in our state and aligns with Michigan’s ambitious goals to reduce carbon emissions.”

Following Holtec’s acquisition of the Palisades Nuclear Power Plant in June 2022, after the May 2022 shutdown, the plant is now on track to become the first successfully restarted nuclear power plant in the United States, thanks to the strong support it has received from its community, state, and federal partners. Palisades has a proven history of safe and reliable operations, operating in the US Nuclear Regulatory Commission’s (NRC’s) highest safety category, completing consecutive record-breaking production runs prior to early shutdown, and being recognized within the industry as a high performing plant.

In early 2023, Holtec submitted an application with the U.S. Department of Energy’s Loan Programs Office for federal loan funding to repower Palisades. The company is working cooperatively with the Department to move the loan application process forward. Holtec has also participated in several constructive public meetings with the U.S. Nuclear Regulatory Commission staff to discuss the proposed regulatory path to reauthorize operations at Palisades within the agency’s existing regulatory framework.

The repowering of the Palisades Nuclear Power Plant will greatly enhance electric reliability by generating consistent and carbon-free energy in Michigan. It also will decrease Michigan’s reliance on energy imports. During operation, 600 Michigan residents were employed full-time at Palisades in highly-skilled jobs with an average salary of $117,000. The plant brought an additional 1,000 specialty workers into the local community every 18 months to support scheduled refueling and maintenance. During operation, Palisades paid more than $10 million in property taxes every year to support local schools, law enforcement, fire protection, parks, libraries, and other community resources, making it one of the largest taxpayers in Van Buren County. The Economic Growth Institute at the University of Michigan concluded in an economic assessment recently published in August 2023 that the early closure of Palisades resulted in the loss (direct, indirect, and induced) of 739 jobs and over $259 million in output within Berrien, Cass, and Van Buren counties alone.

Eversheds Sutherland acted as legal advisor to long-term clients Wolverine Power Cooperative and Hoosier Energy in this transaction. Partners Herbert Short and Tom Warren led the Eversheds Sutherland team, with primary assistance from Counsels Alyssa Walker and Allison Salvia and Associate Alexandra Franklin, together with support from many other attorneys throughout Eversheds Sutherland.

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