When the Palisades Nuclear Power Plant in Michigan finishes its historic restart later this year, its closely watched comeback will in large measure be attributable to the vision and innovation of two electric cooperatives.

The commitment of Wolverine Power Cooperative in Cadillac, Michigan, and Hoosier Energy in Bloomington, Indiana, to purchase 54% and 46% of Palisades’ output was the critical component for plant owner Holtec to undertake the ambitious project. The 30-year agreements helped launch Palisades’ $2.3 billion journey, from being mothballed in 2022 after more than 50 years of service to coming back online with its 800 megawatts of power and 600 employees by the end of 2025.

“They were very eager partners and understood that what we’re trying to do to restart Palisades is a first-of-a-kind endeavor,” says Nick Culp, senior manager of government affairs and communications for Holtec Palisades. “Securing a long-term, reliable revenue stream was absolutely essential to closing our $1.52 billion loan with the Energy Department” for recommissioning the nuclear plant.

Holtec acquired the shuttered Palisades in June 2022 with a plan to decommission the facility. But the company changed gears as demand for clean energy in the region rapidly increased and got the DOE loan early in 2023 to return the plant to service.

Over $1 billion in investments were needed in short order to modernize and refurbish the reactor and other facilities. Plus, hiring and training personnel, acquiring fuel, and maintenance to meet safety inspections would require continuous investments to operate the plant.

“That’s typical for any U.S. nuclear power plant, so having a guaranteed revenue stream was very important to demonstrate that this investment would continually be maintained,” says Culp. Holtec had not encountered electric co-ops until Baker called last year. He found an immediate rapport with the company’s “creative culture that likes to do bold things” and explained how the co-op model was a great fit for their recommissioning plan.

“No. 1, our financial strength. Second, our long-term, patient view in investing and making commitments that benefit members over the long term for affordability and reliability. Third, our creativity and innovative spirit to move quickly,” says Baker. “A G&T is a community of co-ops. When we bring our collective size and strong balance sheets together, that community is very powerful.”

Wolverine, with its distribution member co-ops, was still drafting its letter of intent to Holtec when Baker pitched the idea of joining several G&Ts.

Michigan depends on energy imports to keep the lights on 90% of the time, so Palisades is essential for reliability. The plant will also help ensure the G&T meets Michigan’s new decarbonization requirements, Baker says.

“Reliability, affordability and decarbonization,” says Baker. “We achieve all three locally, and to do this in partnership with another G&T is very rewarding.”

In September, the G&Ts were announced as recipients of the USDA’s Empowering Rural America (New ERA) grant program, with funding to apply toward their purchase contracts. Wolverine expects to receive about $650 million to buy 435 MW from Palisades and Hoosier nearly $677 million for 370 MW of nuclear power and 250 MW of solar energy from other sources.

The restart also means a return of good-paying jobs at Palisades and for the small communities around the plant.

“What was extremely appealing to us was the fact that these are rural, not-for-profit entities,” says Culp. “Together, we’re meeting a need here in Michigan for reaching carbon-free generation targets. It demonstrates how rural cooperatives are helping to lead that effort throughout the country.”