WASHINGTON, Sept 18 (Reuters) - The U.S. nuclear power

regulator said on Wednesday that inspections found issues at the

Palisades nuclear reactor in Michigan that owner Holtec wants to

restart, after a two-year closure, with $1.52 billion in U.S.

financing.

Holtec bought Palisades in 2022 with the intent to

decommission it. But now it wants to reopen Palisades late next

year amid a surge in U.S. power demand from artificial

intelligence, electric vehicles and crypto currencies. It would

be the first time a shuttered U.S. nuclear plant reopened.

"Preliminary results identified a large number of steam

generator tubes with indications that require further analysis

and/or repair," a notice on the Nuclear Regulatory Commission's

website said about the two steam generators at Palisades. More

analysis, testing, and repairs would occur over the next few

months, it said.

Holtec said on its website that inspections of the steam

generators identified "the need for additional maintenance

activities."

When asked about potential additional costs or delays,

Patrick O'Brien, a Holtec spokesperson, said such issues are

under evaluation but the company "doesn't expect anything

significant time wise" and any extra costs "would be within our

scope as we planned conservatively."

The U.S. Loan Programs Office, part of the Department of

Energy, issued Holtec the $1.52 billion conditional loan

guarantee in March. The administration of President Joe Biden

believes nuclear power is critical in the fight to curb climate

change.

Alan Blind, engineering director at the plant from 2006 to

2013, estimated on Wednesday that repairs to the steam

generators would cost over $500 million and add two to three

years to any restart.

Edwin Lyman, a physicist and a nuclear safety expert at the

Union of Concerned Scientists, said more needs to be known about

the plant's condition. "The public deserves the unvarnished

truth ... before more taxpayer and ratepayer dollars are poured

down what could be a very deep rathole," he said.