With Palisades and Three Mile Island Unit Restarts Imminent, Can More Retired Reactors Follow?

Last month, Constellation Energy made national headlines when it announced plans to restart its shuttered Three Mile Island Unit 1 (TMI-1) nuclear plant in 2028. The 835-MW unit in Pennsylvania joins Holtec International's 800-MW Palisades nuclear plant, which could come back online in Michigan in October of next year. The two units are on a short but growing list of nuclear reactors that have recently retired and plan to return to service. NextEra CEO John Ketchum said in July that his company is considering restarting the 601-MW Duane Arnold Energy Center in Iowa.

Constellation plans to spend about $1.6 billion on the TMI-1 restart, the company said in a September 20 investor presentation, which will involve "significant investment" in major plant systems, a three-year re-licensing process with the U.S. Nuclear Regulatory Commission, and a concurrent three-year interconnection application and study process involving PJM Interconnection and the Federal Energy Regulatory Commission.

According to the investor presentation, Constellation has already inspected key electrical system components at TMI-1, initiated repairs to the training simulator, and begun procuring nuclear fuel and long-lead-time materials and equipment. Future major activities include additional inspections, testing and repair work, installation of the plant's main power transformer, and workforce development.

Palisades Nuclear Plant. Holtec International expects to restore the plant to operation in October 2025.

Image courtesy of Holtec International

On Wednesday, Reuters reported that Constellation has ordered a power transformer worth about $100 million for the TMI-1 restart. A Constellation spokesperson told Utility Dive that the cost in the report includes indirect expenses, such as upgrading a bridge and disassembling and reassembling a security checkpoint along the transformer's transportation route.

The company's plans reveal the enormous technical, regulatory, and financial requirements involved in restarting a nuclear plant, even one that was only recently retired after 45 years of reliable operation. Constellation is seeking federal loan guarantees for all of the estimated $1.6 billion it expects to spend on the TMI-1 restart, The Washington Post reported earlier this month. But the spokesperson said, "Constellation is still reviewing its financing options, has not secured any loan guarantees, and the project does not require loan guarantees to proceed."

Meanwhile, state and federal agencies have committed nearly $2 billion to the Palisades project. Palisades retired in 2022, three years after TMI-1, and only limited decommissioning work had been done before Holtec decided to restart it. Holtec International plans to contribute up to $500 million of its own money to the Palisades restart, said Patrick O'Brien, its director of government affairs and communications.

How many retired nuclear plants could be brought back online?

Of the more than two dozen U.S. nuclear reactors that have shut down over the past 50 years, Palisades, TMI-1, and Duane Arnold are the most obvious candidates for restart, said Keith Drudy, chief commercial officer at nuclear industry consulting firm Studsvik Scandpower.

"These are the only three we hear publicly discussed, and they are also likely the easiest to operate," Drudy said. "If funding were sufficient, there might be one or two other units, such as the 2.2-GW San Onofre nuclear plant in Southern California, but their chances of success are very small."

"I don't think you're talking about restarting 20 plants in the United States."

— Patrick White, research director at the Nuclear Innovation Alliance

Restarting Palisades, TMI-1, and Duane Arnold would bring 2,236 MW of conventional nuclear capacity to the grid to meet growing electricity demand from data centers, high-tech manufacturing, and electric transportation. Drudy noted that a Microsoft power purchase agreement underpins the Three Mile Island restart, with power pricing "potentially double-digit percentages above wholesale market expectations," indicating that some industrial and technology electricity consumers are willing to pay a premium for reliable, low-carbon power.

But as the multi-billion-dollar budgets for the Palisades and TMI-1 restart projects show, the tailwinds driving renewed interest in the nuclear industry could soon meet economic reality. According to the World Nuclear Association, in Japan, the eight nuclear plant owners that temporarily shut down after the 2011 Fukushima Daiichi accident spent up to $1 billion per reactor over the following six years, totaling about $17 billion on restarts. NextEra's Ketchum said in July that his company would only restart Duane Arnold if it could do so "in a way that is essentially risk-free with adequate mitigations," adding, "There are some things we still need to work through."

Patrick White, research director at the Nuclear Innovation Alliance, said that given the physical and economic realities of bringing even recently retired reactors back online, the number of viable reactor restart candidates in the U.S. could be in the single digits. "I don't think you're talking about restarting 20 plants in the United States," he said.

Drudy explained that as the decommissioning process progresses, the cost of reversing the work increases. "At some point, you've taken the plant apart enough that it's no longer economical to rebuild it," he said.

O'Brien said that is the case at the three other nuclear plants Holtec now owns and is decommissioning, including the 636-MW Oyster Creek plant in New Jersey, the 677-MW Pilgrim plant in Massachusetts, and the 2,083-MW Indian Point Energy Center in New York. Although Holtec is considering adding small modular reactor capacity at Oyster Creek, O'Brien said too much decommissioning work has been completed on the conventional generation assets at those three plants to make a Palisades-style restart feasible. "You're past the point of restarting those plants... unless you put a new reactor in the reactor vessel," he said.

What does restarting a retired nuclear plant involve?

Holtec's situation highlights a key risk determinant for potential restart project sponsors: the condition of the retired unit. Kate Fowler, global nuclear leader at Marsh McLennan, a commercial insurance and risk consulting firm, said the time elapsed since shutdown is one factor in assessing a unit's condition, but the bigger question is how well the plant was maintained during that period.

The NRC requires extensive systems and equipment inspections and testing before restoring an owner's operating authorization, and even recently retired facilities can have deferred maintenance issues. For example, inspections of the Palisades steam generators earlier this year found "additional maintenance activities requiring on-site and external experts," Holtec said on September 18.

"Everyone is watching to see what happens with Palisades."

— Patrick O'Brien, director of government affairs and communications at Holtec International

Fowler said another important consideration is how much work needs to be done on major plant components and systems before the facility can be safely and legally restarted. Nuclear plants requiring significant new equipment or large-scale reconstruction could carry higher risk premiums than facilities that only need refurbishment. "The question is whether it looks more like a construction project or an extended refueling outage," she said.

White said that may depend on the plant operator's decommissioning strategy. Some retired U.S. nuclear plants quickly entered "substantial dismantlement mode" after closure, while others chose SAFSTOR. According to the NRC, plants in SAFSTOR, sometimes called "deferred dismantlement," are "maintained and monitored in a condition that allows radioactive decay to occur, after which the plant is dismantled and the site decontaminated." White said that because the plant remains largely intact for years, restarting it may involve less reconstruction work.

From that perspective, Studsvik Scandpower's Drudy said Palisades is the "closest to the finish line" among the three most likely restart candidates. "Before they seriously started doing any decommissioning work, they realized they might want to restart it."

That is reflected in Palisades' compressed restart timeline. Holtec purchased Palisades from Entergy in June 2022, applied to the U.S. Department of Energy's Loan Programs Office for restart-related financing in early 2023, and formally initiated the NRC licensing process in October 2023. Holtec now has seven licensing applications under NRC review, most of which are expected to be completed by January. O'Brien said Palisades remains on track to resume operations in October 2025.

Constellation expects bringing TMI-1 back online to take slightly longer, about four years. But even the Palisades effort is far more complex than a long refueling outage. O'Brien said Holtec has already rebuilt the facility's control room simulator, used for personnel training, and is now moving on to projects such as refurbishing the turbine exciter, a year-long process, and flushing the main cooling system.

Drudy said site-specific technical challenges could complicate restart efforts at any retired nuclear facility. For example, he said, Duane Arnold's boiling water reactor might require a "different player" with expertise in that technology, rather than the pressurized water reactors at Palisades and TMI-1. He added that storm-damaged cooling towers, which forced the plant to permanently close two months early, are another uncertainty for Duane Arnold.

White said that even as grid support for more nuclear power grows, basic plant economics still matter. Multi-unit and larger single-unit plants have better economies of scale than smaller single-unit plants, which "may still face challenging economics even with federal support." And depending on how much time remains on a plant's current NRC operating license, project sponsors will need to prepare to apply for renewal, as Holtec is doing at Palisades, White said.

Finishing the job or starting from scratch?

Jeff Merrifield, chairman of the board of the U.S. Nuclear Industry Council, said no nuclear reactor in the United States has ever been successfully restarted after decommissioning work began, and "everyone is watching to see what happens with Palisades." But TVA's 1,150-MW Watts Bar Unit 2 successfully began operation in 2016 after a 20-year construction hiatus. That has raised the possibility of resuming construction of two 1,100-MW AP1000 pressurized water reactors at the V.C. Summer plant, Merrifield said.

Before South Carolina Electric & Gas and Santee Cooper abandoned construction in 2017 amid Westinghouse Electric's (the engineering-procurement-construction contractor) bankruptcy proceedings, construction crews had completed foundation work and made progress on other site infrastructure, "so resuming operations is certainly possible, though it would require a significant amount of work to achieve," he said. But Merrifield said that, like many recently retired nuclear plants, the V.C. Summer site has also undergone substantial dismantlement work, which could add to the cost and complexity of a restart. And "there are a host of other issues around site ownership and state government concerns" that would further complicate the effort, he added. "Personally, I think it's a shame those reactors were stopped from being built," Merrifield said.

Three Mile Island Nuclear Plant. Constellation Energy announced plans in September to restart Unit 1 in 2028.

Image from Marque1313 (Wikimedia Commons)

A state nuclear advisory group visited the V.C. Summer site and found the site "actually in good condition," group member Jim Little told the South Carolina legislature this month. But Little acknowledged there is no regulatory precedent for restarting nuclear construction after a federal license has been terminated, The Post and Courier reported on October 15. A spokesperson for Dominion Energy, the plant's owner, told the newspaper that "there are no plans to resume construction of additional units."

Marsh's Fowler said restarting V.C. Summer would clearly be a "construction project" rather than a refurbishment. But one factor in its favor today that did not exist when construction stopped seven years ago is the operational experience of the thousands of workers who helped build the AP1000 reactors at neighboring Vogtle Units 3 and 4 in Georgia. "There are now people in the U.S. who have brought this technology into operation, which is an advantage for V.C. Summer," she said.

Fowler and Drudy said a strong and active workforce is critical not only for current and future restart projects, but also for efforts to build more nuclear reactors from scratch. At its peak, the Vogtle project employed thousands of construction workers, a feat that would need to be repeated at scale over the coming decades to significantly expand the U.S. nuclear fleet. The numbers involved in restarts may be smaller, but Palisades' workforce has more than doubled from a low of about 220 to roughly 450, according to O'Brien. "Any nuclear asset that keeps our workforce engaged is important," Fowler said.