The U.S. Energy Department on Monday finalized a $1.5 billion loan guarantee to help Holtec International restart the Palisades nuclear power in southwest Michigan, an effort that will be bolstered by $1.3 billion in federal grants for two rural cooperatives that plan to buy electricity generated by the facility.

The plant near South Haven was shut down in 2022 after operating over a 50-year period.

“This is the first time in American history, and I want to underscore first time in American history, that a nuclear plant will be restarted,” said Deputy Energy Secretary David Turk, who will announce the loan closing in a visit to the facility Monday afternoon. He called it a “stellar example” of the Biden-Harris administration’s clean energy and industrial strategies, adding that nuclear is “critical to meeting net-zero goals. It’s safe, reliable, scalable and clean.”

In a call with reporters, Turk projected increased demand of about 15% on the grid in coming years, partly due to artificial intelligence, data centers and the country’s “manufacturing renaissance.”

Holtec remains in the midst of securing licensing transfers and amendments needed to reopen amid opposition from anti-nuclear advocates, including residents who live near the facility. The U.S. Nuclear Regulatory Commission is conducting environmental and safety reviews. 

The conditional commitment of up to $1.52 billion for a loan guarantee, made available through the 2022 Inflation Reduction Act, was announced in March. The state has committed $300 million to bringing the plant back online.

Holtec, which purchased the facility to decommission it, hopes to reopen the 800-megawatt plant by late 2025 and employ roughly 600 workers. The company has added hundreds of jobs this year, bringing the total to around 500.

During Monday’s event, Deputy Agriculture Secretary Xochitl Torres Small will highlight $1.3 billion in funding to back the relaunch and reduce the cost of electricity — $650 million for Cadillac-based Wolverine Power Cooperative and $675 million for Bloomington, Indiana-based Hoosier Energy.

Wolverine, which has seven members, plans to purchase 435 megawatts to help provide power to their 280,000 customers. Hoosier, which serves 760,000 customers in Indiana and Illinois, plans to purchase 370 megawatts.

“Every dollar will go straight to the communities they serve, and that will hep reduce wholesale power costs, provide community benefits, and keep electricity reliable and affordable,” Torres Small said.

The Biden administration first announced the Empowering Rural America grants on Sept. 5.

“The New ERA grant opportunity inspired Wolverine to think big about decarbonization,” Wolverine president and CEO Eric Baker said then. “The power purchase agreement, essential for the historic restart of the Palisades plant, enables us to achieve two critical goals: protecting Michigan’s electric reliability and advancing decarbonization.”

A 2023 state law requires that power providers meet an 80% clean energy standard in 2035 and 100% in 2040 — renewables, nuclear and natural gas, if carbon-capture technology is used.

Energy Secretary Jennifer Granholm said nuclear power is America’s largest source of carbon-free electricity, supporting hundreds of thousands of direct and indirect jobs and “will play a crucial role in tackling the climate crisis and protecting public health and the environment from its impacts.”