AUG 27 – SEP 7, 2026
Two things happened last week at the same address in Covert, Michigan.
On August 28 the NRC gave Holtec permission to start digging for two reactors that do not have a construction permit. Two days later, on the same site, the company began loading fuel into an 800 MW reactor that has been shut down since 2022.
Both are milestones. Only one of them is close to producing electricity, and it is not the one with the new paperwork.
Permission to dig, not to build
The NRC granted SMR, LLC and Palisades SMR, LLC, both Holtec subsidiaries, an exemption from 10 CFR 50.10(c) on dockets 50-616 and 50-617. It lets them build support-of-excavation walls at the Pioneer Units 1 and 2 site and leave them there permanently, before the agency issues a limited work authorization.
Support-of-excavation walls are what keep a deep hole from becoming a shallow one. Diaphragm walls, soldier pile soil-mix walls, perimeter cutoff walls. When the plant is done they get retired in place and the gap between them and the real structures is backfilled to grade. They have no function in the finished facility. They hold back dirt for a few years, and then they are dirt.
Under 10 CFR 50.10 that still counts as construction, so it normally waits for the LWA. Holtec asked for relief on December 31, 2025, filed alongside Part 1 of its phased construction permit application, supplemented the request in July, and got an answer eight months after asking.
The finding is worth reading closely. Special circumstances exist, the NRC wrote, because compliance “would result in undue hardship or other costs that are significantly in excess of those contemplated when the regulation was adopted.” Building temporary walls, ripping them out, and building permanent ones costs money and schedule, and the rule was not drafted with a 2030 SMR target in mind.
That is a defensible call, and the agency does not dress it up. The cost-and-schedule reasoning is stated as cost-and-schedule reasoning. The safety finding is separate and narrow: the walls carry no safety function once the plant exists, and staged geologic mapping during excavation preserves the NRC’s ability to check the site later. Environmental assessment issued August 25, finding of no significant impact.
Two SMR-300 units, roughly 300 MW each. Part 2 of the construction permit application is due no later than eighteen months after the Part 1 filing. Holtec calls the program Mission 2030.
At the same address
Over the weekend of August 30, Holtec began loading 204 fuel assemblies into the Palisades reactor. About 800 MW. Commercial operation since 1971, shut down in May 2022, and now the first attempt in American history to bring a commercial reactor back out of decommissioning, underwritten by a DOE loan guarantee of up to $1.52 billion.
Palisades has not gone critical. It has not synchronized. Holtec missed an end-of-2025 target and a February 2026 target, and now declines to name a date at all, saying the plant restarts when it is ready for long-term operation. The contract to deliver power lands in March 2027. The refurbishment has been running more than two years.
So: regulatory permission to dig a hole for two reactors that do not exist, and fuel going into a reactor that has existed for fifty-five years and still is not making electricity.
Wyoming already ran this play
None of this is new. It has a control case, and the control case has already reported out.
In May 2025 the NRC granted US SFR Owner, LLC, a TerraPower subsidiary, an exemption under 10 CFR 50.10(a)(1)(iv) for Kemmerer Power Station Unit 1 in Lincoln County, Wyoming. Same regulation, same idea: clear the non-safety work ahead of the permit so the schedule does not sit idle waiting on a docket.
It worked. TerraPower broke ground on non-nuclear work in June 2024. Exemption in May 2025. Construction permit in March 2026, the first the NRC has issued for a commercial advanced reactor. Official construction start April 23, 2026.
Twenty-one months from groundbreaking to permission to build. The front end did its job.
The target for first power is now 2030 or 2031. The original target was 2028.
The clock that binds
MISO’s April forecast puts footprint peak load at 121 GW in 2025 and 163 GW in 2035, up 35%, with data centers taking a fifth of the region’s electricity by 2030 and a quarter by 2040 in its mid case. It expects 8 to 14 GW of data center capacity to energize in 2026 and 2027 alone. In August a single 2,015 MW large-load request entered the MISO queue with no customer named on the record.
Against that, in Covert: about 800 MW that was already built, already licensed, already standing on the lakeshore with a federal loan behind it. It is not on the system.
The permitting story is real. Exemptions are being granted, permits are being issued, and the NRC is moving on advanced reactors faster than it has in decades. The Palisades exemption is a small, sensible piece of that. But nothing in the last two weeks suggests the binding constraint on firm capacity is a federal docket. The constraint is fuel handling, welding, steam generator inspections, operator qualification, and the ordinary grinding difficulty of making a large machine run correctly.
Permitting is the fast part.
That is not an argument against permitting reform. It is a warning about what reform actually buys, which is months at the front of a project whose slippage happens at the back. Anyone building a 2030 load-and-resource balance on announced nuclear COD dates should price the difference between a permit and a plant.
Palisades criticality. The next real milestone is a sustained chain reaction, then synchronization. If neither happens by the end of October, the March 2027 power contract gets tight.
Pioneer Part 2. The second half of the phased construction permit application is due to the NRC no later than eighteen months after the December 31 Part 1 filing, so by the end of June 2027. Watch whether it lands early. Mission 2030 has no slack in it.
The Pioneer EIS. The NRC noticed its intent to prepare an environmental impact statement in June. The draft is the next substantive gate on the limited work authorization, and it is a longer pole than any exemption.
Sources: Federal Register, “SMR, LLC; Palisades SMR, LLC; Pioneer Units 1 and 2; Exemption” (August 28, 2026), and the associated environmental assessment and finding of no significant impact (August 25, 2026, ML26230A249); NRC dockets 50-616 and 50-617, including the February 27, 2026 phased construction permit and limited work authorization notice and the June 15, 2026 notice of intent to prepare an environmental impact statement; Federal Register, “US SFR Owner, LLC; Kemmerer Power Station, Unit 1; Exemption” (May 15, 2025), docket 50-613; American Nuclear Society Nuclear Newswire; Holtec International; US Department of Energy Loan Programs Office; MISO long-range load forecast, April 2026.
Dynawatt is an independent brief compiled from public sources (ISO/RTO interconnection queues, FERC notices (Federal Register), ERCOT Large Load Working Group, PJM stakeholder committees, NRC ADAMS (reactor licensing), and DOE Loan Programs Office / EDF announcements). It is informational, non-advocacy, and not investment advice.