WASHINGTON, May 30 (Reuters) - The U.S. on Friday said

Holtec's planned restart of the Palisades nuclear power plant in

Michigan would not harm the environment, a needed step in its

plan to become the first such plant to return from permanent

shutdown.

The Nuclear Regulatory Commission conducted the

environmental review of the Palisades reactor restart with the

Department of Energy's Loan Programs Office.

Opponents of the restart had expressed concerns that steam

generator tubes at Palisades are degraded because standard

maintenance procedures were not followed when the plant went

into shutdown. Holtec says it is plugging the tubes.

The LPO, which supports nuclear projects that are unable to

get bank loans, closed a $1.52 billion loan guarantee for the

Palisades restart in September 2024. President Donald Trump's

administration provided the third disbursement of that

financing, nearly $47 million, in April.

Power company Entergy ( ETR ) shut the 800-megawatt

Palisades reactor in 2022, two weeks ahead of schedule over a

glitch with a control rod. It had generated electricity for more

than 50 years.

Holtec bought the plant to decommission it, but now hopes to

reopen it. U.S. power demand has been rising for the first time

in two decades on the boom in data centers and artificial

intelligence.

Holtec says Palisades could reopen as soon as October. But

it needs additional permits from the NRC. "Pending all federal

reviews and approvals, our restart project is on track and on

budget to bring Palisades back online by the fourth quarter of

the year," said Holtec spokesperson Nick Culp.

Alan Blind, engineering director at the plant from 2006 to

2013, said in an editorial this month that if steam generator

problems lead to a shutdown, it would "erode public confidence,

damage investor trust, and raise serious safety concerns."

The NRC is reviewing Holtec's proposed repairs, said Scott

Burnell, an agency spokesperson. "Holtec must demonstrate the

Palisades steam generators will fulfill their safety functions

before the plant restarts," Burnell said.