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Biden administration launches $6 billion nuclear plant bailout

Energy Department credits will be offered to plants facing closure, such as those in Michigan and California

Energy Secretary Jennifer Granholm speaks during a news briefing at the White House in November. (Evan Vucci/AP)
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The Biden administration moved Tuesday to revive America’s troubled nuclear power industry with $6 billion in spending aimed at keeping open financially strapped plants.

The launch of the program, which Energy Department officials framed as a part of the administration’s strategy to fight climate change, would bail out operators of plants in economic distress. The program is funded through the infrastructure package President Biden signed into law last year.

“U. S. nuclear power plants contribute more than half of our carbon-free electricity, and President Biden is committed to keeping these plants active to reach our clean energy goals,” Energy Secretary Jennifer Granholm said in a statement.

While nuclear power is considered by some to be carbon neutral, it has long been controversial among climate activists because of the other environmental risks associated with it.

But the power source is a central part of Biden’s energy transition strategy, which relies on nuclear energy and natural gas to meet the administration’s climate goals, complementing such sources as wind, solar and geothermal power.

Most of the funding the department launched on Tuesday would be allocated through a credit program. It aims to give a financial lifeline to plants facing imminent shutdown for economic reasons. The first round of credits are set aside for plants that have already announced plans to close. There are at least two such operations in the United States: Diablo Canyon in California and Palisades in Michigan.

Nuclear energy has accounted for about 20 percent of the U.S. power supply over the past several decades, declining slightly in the past couple of years, according to the U.S. Energy Information Administration. The planned closures in Michigan and California come after 12 reactors have been permanently shut nationwide since 2012. The latest reactor to close was New York’s Indian Point 3, in the spring of last year.

But the nation still has a sizable nuclear fleet, with 55 plants in 28 states. Most of them have at least two reactors. Many of them have fallen under financial hardship as the prices of renewable energy and natural gas dropped in recent years.

As energy prices rise in the United States and abroad, nuclear is getting a fresh look. In Illinois, plans to retire two plants were recently scrapped after the state legislature funded incentives to keep them running. Other states have made similar moves. In Georgia, two new reactors are scheduled to come online next year. They would be the first new reactors in the United States since 2016.