SUPPLEMENTARY INFORMATION:

The text of the exemption is attached.

Authority:42 U.S.C. 2011 et seq.

Attachment—Exemption

NUCLEAR REGULATORY COMMISSION

Docket No. 50-255

Palisades Energy, LLC; Palisades Nuclear Plant; Exemption

I. Background

Palisades Energy, LLC (Palisades Energy, the licensee), is the holder of Renewed Facility Operating License No. DPR-20, which authorizes operation of the Palisades Nuclear Plant (Palisades). The license provides, among other things, that the facility is subject to all rules, regulations, and orders of the U.S. Nuclear Regulatory Commission (NRC, the Commission) now or hereafter in effect. The facility consists of one pressurized-water reactor located in Van Buren County, Michigan.

Palisades Energy became subject to the work hour requirements in Title 10 of the Code of Federal Regulations (10 CFR) Part 26, “Fitness for Duty Programs,” Section 26.205, “Work hours,” after Palisades entered an outage status on August 25, 2025. The regulatory history of the Palisades restart effort as it relates to the work hour requirements is presented in the third work hours exemption issued to Palisades Energy on March 18, 2026 (91 Federal Register [FR] 13073). However, in the fourth work hours exemption issued to Palisades Energy on June 18, 2026, (91 FR 38035), the NRC staff determined that a graded Fitness for Duty (FFD) approach for fatigue management could be applied to Palisades until nine days before initial fuel load due to a combination of factors that include the NRC staff's risk assessment, continued applicability of the remainder of Subpart I to 10 CFR part 26, and the unique circumstances of restarting a decommissioning power reactor. Therefore, the NRC staff issued an exemption for the Palisades Nuclear Plant to allow the use of the less restrictive outage work hour limitations until nine days before the start of the unit's initial fuel load into the reactor for various covered individuals as described in that exemption, which includes 10 CFR 26.4(a)(1) [Operations] personnel.

II. Request/Action

By letter dated July 10, 2026 (ML26191A405), the licensee requested a one-time exemption from the Fitness for Duty (FFD) Program work hour requirements in 10 CFR 26.205(d), “Work hour controls,” pursuant to 10 CFR 26.9, “Specific exemptions.” Specifically, the licensee requested to use the outage work hour controls in 10 CFR 26.205(d)(4) in lieu of the non-outage work hour controls described in 10 CFR 26.205(d)(3) and (d)(7) for a period of no more than 60 days commencing with core reload, or until Palisades is connected to the electrical grid, whichever occurs first, for individuals specified in Paragraphs (a)(1) of 10 CFR 26.4, “FFD program applicability to categories of individuals.”

Section 26.205(d)(3) of 10 CFR requires licensees to comply with the requirements for individuals to have a minimum number of days off per week depending on the duration of shift schedules, averaged over the shift cycle, and the duties being performed. Individuals working 8-hour shift schedules shall have at least 1 day off per week, and individuals who are working 10-hour shift schedules shall have at least 2 days off per week. Individuals working 12-hour shift schedules while performing the duties described in 10 CFR 26.4(a)(1) through (a)(3) shall have at least 2.5 days off per week and individuals working 12-hour shift schedules while performing duties described in 10 CFR 26.4(a)(4) shall have at least 2 days off per week. Section 26.205(d)(7) of 10 CFR, requires licensees to comply with the requirements for maximum average work hours wherein individuals may not work more than a weekly average of 54 hours, calculated using an averaging period of up to 6 weeks, which advances by 7 consecutive calendar days at the finish of every averaging period. The licensee seeks a one-time exemption from the requirements of 10 CFR 26.205(d)(3) and (d)(7).

The requirements in 10 CFR 26.205(d)(4) provide that during the first 60 days of a unit outage, licensees need not meet the requirements of 10 CFR 26.205(d)(3) or (d)(7) for individuals specified in 10 CFR 26.4(a)(1) through (a)(4), while those individuals are working on outage activities. However, 10 CFR 26.205(d)(4) does require the licensee to ensure individuals specified in 10 CFR 26.4(a)(1) through (a)(3) have at least 3 days off in each successive ( i.e., non-rolling) 15-day period, and that the individuals specified in 10 CFR 26.4(a)(4) have at least 1 day off in any 7-day period. This is collectively known as the outage minimum days off (MDO) requirement.

In the exemption request, the licensee stated they re-evaluated the operational support necessary to safely conduct core reload, startup, and plant restoration activities through synchronization to the electrical grid. Pursuant to 10 CFR 26.5, for the purposes of Part 26, a unit outage means, for electricity-generation units, that the reactor unit is disconnected from the electrical grid. The licensee asserted that the outage work hour provisions of 10 CFR 26.205(d)(4) are necessary for Operations personnel during the requested exemption period. Concurrently with this exemption request, the licensee requested that the portion of the previous exemption from 10 CFR 26.205(d)(3) and (d)(7) for 10 CFR 26.4(a)(1) [Operations] personnel currently in effect until nine days before core reload be rescinded and replaced by this exemption.

III. Discussion

Pursuant to 10 CFR 26.9, the Commission may, upon application by any interested person or upon its own initiative, grant exemptions from the requirements of 10 CFR part 26 when the exemptions are authorized by law and will not endanger life or property or the common defense and security; and are otherwise in the public interest.

A. The Exemption Is Authorized by Law

The exemption would authorize a one-time exemption from the requirements of 10 CFR 26.205(d)(3) and (d)(7) for personnel performing duties under 10 CFR 26.4(a)(1) to allow the use of the less restrictive work hour controls in 10 CFR 26.205(d)(4) for a period not to exceed 60 days commencing with core reload, or until Palisades is connected to the electrical grid. As stated, 10 CFR 26.9 allows the NRC to grant exemptions from the requirements of 10 CFR part 26. After reviewing the exemption, the NRC staff has determined that granting the proposed exemption will not result in a violation of the Atomic Energy Act of 1954, as amended, other laws, or the Commission's regulations. Therefore, the exemption is authorized by law.

B. The Exemption Will Not Endanger Life or Property

The purpose of Subpart I, “Managing Fatigue,” of 10 CFR part 26 is to ensure that worker fatigue does not compromise the abilities of individuals to perform their duties safely and competently. The purpose of 10 CFR 26.205(d)(4) is to provide licensees flexibility for a limited period in scheduling required days off while accommodating more intense work schedules associated with a unit outage.

During the proposed exemption period, personnel performing duties in 10 CFR 26.4(a)(1) would be permitted to work in accordance with the outage MDO requirements for up to a 60-day period. In the July 10, 2026, submittal, the licensee asserted that the exemption and the use of the outage work hour controls are “necessary for Operations personnel during this period to maintain continuity of experienced operators and supervisors, minimize personnel turnovers, preserve operational knowledge, and support effective decision-making during safety-significant startup evolutions.” In addition, the licensee asserted that the requested exemption provides “necessary flexibility to safely complete remaining restart activities while maintaining fatigue-management protections, enhancing human performance, and supporting safe, reliable startup execution.” The licensee also requested that the previously issued exemption on June 18, 2026, (ML26156A018) be rescinded for 10 CFR 26.4(a)(1) personnel and replaced with this exemption request dated July 10, 2026. The exemption issued on June 18, 2026, applied to personnel performing duties specified in 10 CFR 26.4(a)(1), (a)(2), (a)(3), (a)(4) and granted the licensee to utilize the outage work hour controls in 10 CFR 26.205(d)(4) until nine days before initial fuel load. The licensee seeks to rescind the portion of the fourth exemption specifically for 10 CFR 26.4(a)(1) personnel and instead utilize the flexibility provided by the MDO requirements under this fifth exemption for 10 CFR 26.4(a)(1) personnel.

Palisades Energy provides several reasons for the proposed exemption. The licensee stated that the exemption period will encompass safety-significant activities that require heightened operational focus, close coordination across plant organizations, and ( printed page 53671) conservative decision-making by experienced licensed operators and supervisors. The licensee described reactor startup as a highly operationally intensive period requiring continuous oversight by Reactor Operators and Senior Reactor Operators to direct fuel load activities, authorize plant mode changes, ensure Technical Specification compliance, and manage plant evolutions. In addition, Operations personnel will perform system restorations, integrated testing, plant configuration changes, operator training, and emergent issue resolution, which the licensee stated significantly increases operational workload and the need for continuity of experienced staff.

The licensee asserted that applying outage work-hour controls during the exemption period will support safer startup execution by reducing unnecessary turnovers, preserving operational knowledge, and ensuring critical operational decisions are made by personnel most familiar with current plant conditions. Palisades Energy stated that outage controls provide greater staffing stability, improve oversight and mentoring opportunities for less experienced operators, enhance troubleshooting and issue resolution, and support efficient completion of startup testing and system restoration while maintaining established fatigue-management protections.

Palisades Energy noted that it maintains sufficient licensed operator staffing to meet the requirements of 10 CFR 50.54(m) and to safely conduct startup activities. However, the licensee stated that the exemption is necessary to maintain continuity of experienced Operations personnel during the startup period.

The licensee asserted that the proposed exemption will not endanger life or property because the requested relief is limited to Operations personnel for up to 60 days under a highly controlled environment with extensive procedural guidance, management oversight, testing requirements, and operational reviews. The licensee stated that Operations personnel routinely work under outage work-hour controls during refueling outages, consistent with industry practice, and that applying these controls during the exemption period enhances nuclear safety by maintaining continuity, reducing turnovers, preserving plant status awareness, and supporting conservative decisions during safety-significant evolutions. The licensee added that using outage controls minimizes risks associated with personnel transitions, loss of operational context, and fragmented ownership of plant conditions.

In the section of the submittal titled “Mitigating Strategy” the licensee proposed two commitments and several fatigue management actions for the duration of the exemption. The first commitment includes continued compliance with the work hour limitations in 10 CFR 26.205(d)(1), the rest breaks in 10 CFR 26.205(d)(2), and compliance with the outage MDO requirements in 10 CFR 26.205(d)(4) in lieu of the requirements in 10 CFR 26.205(d)(3) and (d)(7). The second commitment is to ensure a portion of weekly supervisory observations are dedicated to fatigue awareness, fatigue indicators, fitness-for-duty behaviors, and worker readiness. The fatigue management actions include items such as providing reasonable opportunities for restorative sleep, monitoring work duration, schedules, and shift rotations, and evaluation of fatigue-related concerns into the corrective action program. In addition, the licensee proposed enhancements to their behavioral observation program including supervisory engagement in the field, individual responsibility to identify and report fatigue, and reinforcement of stop-work authority and conservative decision making. Further, the licensee stated that the personnel performing the duties specified in 10 CFR 26.4(a)(1) have not utilized previous work-hour exemptions and have complied with the work hour requirements of 10 CFR 26.205(d)(7) since August 2025.

The NRC reviewed the exemption request, justification, and mitigation strategy and determined that additional clarification and information was needed to evaluate if the exemption request will not endanger life and property. The NRC staff issued draft request for confirmatory information (RCI) and request for additional information (RAI) to the licensee on July 23, 2026, and held clarification calls with the licensee on July 28, 2026, and July 30, 2026. By letter dated July 30, 2026, (ML26212A004), the NRC staff issued a final RCI and RAI to the licensee that requested additional details about the applicable personnel, the risk of cumulative fatigue, and the potential benefits or impacts to the schedule, fatigue limits, and continuity of operations. The licensee submitted a response to the RCI and RAIs on July 30, 2026 (ML26211A374) which is discussed below.

The NRC staff evaluated the licensee's proposed mitigating actions and commitments to manage fatigue for individuals performing duties specified in 10 CFR 26.4(a)(1) during the requested exemption. Palisades Energy requested authorization to implement the outage work-hour controls in 10 CFR 26.205(d)(4), in lieu of the online work-hour requirements in 10 CFR 26.205(d)(3) and (d)(7), for a 60-day period supporting fuel load and startup activities starting with commencement of fuel load. The staff noted that Operations personnel were included in the previous exemption. However, the licensee has demonstrated compliance with the applicable maximum average work hour controls in 26.205(d)(7) and confirmed in the RCIs that Operations personnel have not worked more than 54 hours since at least the end of the first exemption period and will not work more than 54 hours prior to implementation of core load. Additionally, the licensee committed that Operations personnel will not exceed 54 hours per week averaged over a 6-week cycle prior to core-load activities, and will receive at least a 34-hour break in the nine days preceding implementation of outage controls. In support of its request, the licensee requested recession of the previous exemption portion that is applicable individuals performing duties in 10 CFR 26.4(a)(1) [Operations]. These factors provided assurance that cumulative fatigue has been and will be adequately managed prior to the exemption.

The licensee stated that Operations personnel normally work under outage work-hour provisions during refueling outages while performing shutdown, maintenance, testing, restoration, and startup preparations. The staff notes that during the proposed exemption period, Palisades will continue to be in outage period as defined by 10 CFR 26.5 until connected to the electrical grid. While the staff acknowledges that using outage controls is standard industry practice during refueling outages, the overall scope and complexity of Palisades Energy's activities differ from a typical outage because the plant is concurrently restoring a number of safety-significant systems, structures, and components (SSC) to operability in addition to startup activities. These additional activities could increase the amount and intensity of operator tasks or the number and complexity of operational decisions which can contribute to an increased risk of human error and cumulative fatigue.

In response to RAI 1a, the licensee clarified that most safety-related systems required for startup will be restored and have completed Technical Specification surveillance requirements and procedural testing before entering the applicable modes for power ascension. As Operations personnel transition from overseeing large-scale equipment restoration to directing integrated startup evolutions, the licensee expects operator workload to shift toward plant operations, situational awareness, and decision-making. Contracted Operations personnel will supplement licensed operators by performing functions traditionally performed by licensed staff, thereby reducing administrative burden and operator cognitive load.

The licensee made the following assertions regarding staffing and its implications for Operations personnel considering compliance with either the outage or online work hour controls. First, using outage work-hour controls minimizes fatigue risk by continuing to limit maximum hours and continuing to provide minimum break requirements while maintaining stable crew schedules to maintain continuity among experienced operators thereby reducing cognitive burden. Second, compliance with online work-hour provisions would require a five-on/three-off rotation, increasing personnel transitions and reducing continuity. Third, operators returning from their scheduled time off must regain familiarity with evolving plant conditions, ongoing activities, increasing reliance on personnel transitions, shift turnovers, and the transfer of detailed operational knowledge. As a result, Operators may not complete the full transfer of information and context during turnover during a period of rapidly changing plant conditions and decision-making. Finally, the licensee asserts that reducing the frequency of personnel transitions while continuing to manage fatigue through the utilization of outage work hour controls will allow Operators to maintain continuity of plant knowledge, oversight, and decision-making.

Startup activities are highly operationally intensive, requiring licensed operators to direct fuel load, authorize mode changes, ( printed page 53672) determine operability, maintain Technical Specification compliance, and manage plant evolutions. During this exemption period, Operations personnel will conduct startup activities in parallel with system restoration and operability determinations. The staff previously described that outages “increase the risk of human error as a result of higher workload, the performance of more complex and infrequent tasks, and the pressure to meet schedular goals.” (73 FR 16966). However, the licensee asserted that online work hour controls would require more days off to maintain compliance, resulting in additional crew rotations and decreasing staffing flexibility, independent oversight opportunities, and team cohesion.

If granted, the licensee states that the outage work hour controls provide scheduling flexibility, so that it could increase shift staffing from four senior reactor operators (SROs) and three reactor operators (ROs) to six SROs and five ROs. The staff determined that this additional qualified staffing will enhance supervision, oversight, peer checking, and independent verification of startup work activities, thereby reducing the potential for human error during a complex restart evolution. Contracted Operations personnel further support licensed operators by alleviating some traditionally performed licensed operator duties.

The staff also considered the benefits of reduced call-ins and fewer on-the-go scheduling changes. Stable outage schedules minimize circadian disruptions and allow personnel to plan rest periods, although night-shift personnel may still experience circadian challenges. Overall, maintaining consistent startup crews reduces information transfers and reacquisitions that could contribute to communication errors and increased cognitive workload.

The NRC evaluated the responses to the RAIs. The Palisades restart project is a first-of-a-kind unique activity where a nuclear power plant in decommissioning status is being returned to operational status. Furthermore, Palisades Energy, LLC is the first NRC licensee to engage in a complex startup evolution of a previously decommissioning nuclear power reactor, which required major restoration of safety-significant systems. In addition, this may be the first time the licensed operators have worked together in operating crews, compromised of a mix of experienced and less experienced operators, who will need to perform many startup activities such as core load, testing, inspections, surveillances, plant configuration changes, operator training, procedural execution, operational readiness verification, and grid synchronization. The staff acknowledge the particular importance of maintaining continuity of operation and crew cohesion throughout these complex and intense activities and the impact of continuity and cohesion on crew dynamics. Continuity and cohesion can lead to crew dynamics demonstrating positive effects such as resilience, adaptability, robust decision-making, shared mental models, questioning attitudes, and coordination. In addition, by reducing information transfers and reacquisitions between licensed operators, the licensee can reduce the potential risk for human error which could occur due to information gaps, communication errors, and increased cognitive workload during the complex startup evolutions.

The NRC staff considered the overall risk profile of the plant during the proposed exemption period. In the fourth exemption, the NRC staff found that the risk profile of Palisades prior to fuel load was substantially different than that of an operating reactor. However, given that Palisades Energy plans to load fuel during this proposed exemption period, the risk profile will now increase to that of an operating reactor. The nuclear safety risk to the public health and safety also increases to that of an operating reactor at the point that fuel is placed in a configuration and environment that enables reactor operation coinciding with licensed operators initiating power ascension activities. The increased risk profile within this exemption is compounded by the restoration of a number of safety-significant systems for safe operations and the first-of-a-kind restart evolution. Specifically in relation to this exemption, this increases the potential number of tasks and decisions, in addition to the need to meet schedule pressure, which increases the potential risk of human error and fatigue.

The NRC staff determined that the mitigating strategy and commitments provided by the licensee during the 60-day exemption period for individuals performing duties specified in 10 CFR 26.4(a)(1) provide assurance that licensee will adequately manage acute and cumulative fatigue. Acute fatigue will be mitigated through ensuring Operations personnel work no more than the maximum work hour limitations specified in 10 CFR 26.205(d)(1) and receive rest breaks between successive work periods specified in 10 CFR 26.205(d)(2)(i). Cumulative fatigue will be mitigated through the 34-hour break in any 9-day period specified in 10 CFR 26.205(d)(2)(ii) and the three days off in each successive ( i.e., non-rolling) 15-day period specified in 10 CFR 26.205(d)(4). The staff determined that there is reasonable assurance that fatigue will be adequately managed for Operations personnel because the individuals will not have worked more than 54 hours per week in the 6-week period prior to commencement of core load and will receive a 34-hour break before the utilization of outage work hour controls. Further, the NRC staff has additional assurance that cumulative fatigue will have been managed prior to core load because Operations personnel have not worked more than 54 hours since the first exemption and the licensee has requested recession of the portion of the previous applicable exemption that covers individuals performing duties in 10 CFR 26.4(a)(1). Therefore, the NRC determined that the requested one-time exemption will not endanger life and property.

C. The Exemption Will Not Endanger the Common Defense and Security

The exemption would authorize a one-time exemption from the requirements of 10 CFR 26.205(d)(3) and (d)(7) to allow the use of the less restrictive work hour controls specified in 10 CFR 26.205(d)(4) for personnel performing duties in 26.4(a)(1) for up to 60-days. The proposed exemption is not applicable to security personnel, nor does it have any relation to or impact on security issues. Therefore, the exemption will not endanger the common defense and security.

D. The Exemption Is Otherwise in the Public Interest

The proposed exemption would authorize a one-time exemption from the requirements of 10 CFR 26.205(d)(3) and (d)(7) for personnel performing duties under 10 CFR 26.4(a)(1) to utilize the less restrictive work hour controls specified in 10 CFR 26.205(d)(4) for up to 60-days. In considering whether the requested exemption would be in the public interest, the NRC considered several factors including:

• the nature of the licensee's unique situation transitioning from decommissioning back to a power operations licensing basis, which requires restoration of safety-related equipment, core reload, and plant startup activities; and
• the public health and safety interests of the communities that are impacted by the safe restart of the plant.

The NRC staff considered the unique nature of the Palisades Energy restart project, which was in a decommissioning status before transitioning to a power operations licensing basis and is currently working towards restoration of safety-significant SSCs, core load, and initial startup activities to ensure the plant will be safe prior to restart. The licensee asserted that “granting the proposed exemption is in the public interest because it supports the safe and orderly completion of core reload, startup, and restoration activities leading to synchronization of the unit to the electrical grid while maintaining the fatigue-management protections established under the outage work-hour controls of 10 CFR 26.205(d)(4).”

In addition, Palisades asserted that the “scheduling flexibility” enables the continuity of Operations personnel, reduces unnecessary turnovers, preserves operational knowledge, and supports effective coordination across plant organizations. The licensee further asserted that the proposed exemption enhances human performance, strengthens conservative decision-making and configuration control, and promotes the safe, reliable, and efficient return to service by allowing operators and supervisors that have firsthand knowledge of the plant to remain engaged throughout startup activities. The NRC reviewed the licensee's justification and reasoning to support the proposed exemption. However, the staff could not determine how the exemption would be in the public interest. In the July 30, 2026, RAI letter, the NRC staff requested additional details, the benefits to the public, adverse impacts to the public, and the benefits to the Operations personnel, plant operation, and continuity of Operations.

In the licensee's July 30, 2026, letter, Palisades Energy, LLC asserted in response to RAI 2a that the exemption is in the public interest because it provides a net operational safety benefit during the period of core load, ( printed page 53673) startup, and restoration activities while managing fatigue under 10 CFR 26.205(d)(4). The licensee asserted that Operations personnel are not presently fatigued because they have not worked more than 54 hours since entering the initial outage and Operations personnel will receive a 34-hour break immediately prior to startup activities. Palisades Energy added that increased operational safety is gained through improved continuity of licensed operating crews during complex and infrequently performed startup evolutions. The licensee asserted that by allowing startup crews to remain together for longer portions of the restart process, if the exemption is granted, will reduce “turnover-related human performance challenges, preserves shared situational awareness, and supports continuity of oversight and operational decision-making during safety-significant evolutions.” Palisades Energy asserted that by returning critical equipment to service efficiently will result in a reduction of overall plant risk and supports restoration of defense-in-depth which provide a public benefit of enhanced nuclear safety.

In response to RAI 2b, Palisades Energy asserted that, if the exemption is not granted, operations personnel will remain in compliance with the online work hour controls working a schedule consisting of five consecutive days followed by three days off resulting in additional crew rotations and personnel transitions during fuel loading, system restoration, testing, plant heat up, and power ascension. During these activities, crews may not remain intact due to the scheduled time off required under the online work hour controls. As stated in Section B, the licensee asserted that operators who have a three-day break from shift must return and regain familiarity with the plant conditions and ongoing activities before assuming the shift. Palisades Energy asserted that without the exemption, the licensee would rely on personnel turnovers and the transfer of operational knowledge, however, the frequency would create additional opportunities for incomplete information transfer, loss of operational context, and other turnover-related human performance challenges. The licensee asserted that the impact to the public is the loss of operational and human-performance benefits associated with maintaining dedicated startup crews and result in the reduction of continuity, situational awareness, and crew coordination during startup activities. Lastly, the licensee stated that startup activities could be prolonged, resulting in a delayed return to commercial operation and generation of energy.

The licensee asserted in response to RAI 2c that the exemption would provide benefits to plant operation, operations personnel, and continuity of operations by increasing operational continuity, maintaining startup crews, and reducing turnover-related human performance challenges during startup evolutions. For Operations, the licensee asserted that the exemption would provide greater schedule stability and reduces the need for changes in crew composition and short notice call-ins. For plant operation, the licensee asserted that the exemption would support safe and efficient startup allowing licensed operators to maintain continuity of involvement in system restoration and startup activities. For continuity of operations, the licensee asserted that the exemption would allow startup crews to remain together through larger portions of the startup process which reduces the number of personnel transitions and reliance on repeated transfers of operational knowledge. As a result, Palisades Energy asserted that continuity preserves shared situational awareness, crew coordination, and reduces turnover-related human performance challenges with repeated transfers and reacquisition of plant conditions, equipment status, and ongoing activities. The licensee also asserted that the exemption provides management with greater flexibility to address fatigue concerns when identified in addition to additional staffing flexibility.

The NRC evaluated the RAI responses for their public interest considerations. The staff considered that the exemption, if granted, may provide an increased safety benefit to the public because licensed operators will remain together during complex periods of the startup evolutions resulting in increased continuity of operational knowledge, crew cohesion, and crew coordination which could enhance independent oversight, peer verification, and situational awareness. Further, the staff noted that through the usage of outage work hour controls, during the first startup evolution of a reactor from decommissioning status, will provide increased staffing resources, with experienced operators, additional oversight through increased shift staffing, and allow for mentoring opportunities for less experienced operators. The NRC also considered that because crews would remain together longer and have less crew turnover, that it may reduce the frequency and quantity of information transfers and reacquisitions between individual operators and crews changing shifts. It is possible that without complete turnovers, operators may not receive the entire depth of information and context necessary to identify potential events and intervene during the rapidly changing startup evolutions that the licensee is completing for the first time since decommissioning.

As discussed in Section B, the staff noted that the licensee and this complement of both experienced and less experienced licensed operators will be performing a novel and complex startup evolution for the first time together. This restart project is a unique first-of-a-kind activity for the nuclear industry with unique regulatory considerations. The staff's consideration of the public interest takes into account the novel conditions presented by a restart and the increases in safety provided by increased staffing during the exemption period, with consideration of the mitigating factors to address the increased risk of fatigue.

The NRC also considered the potential adverse impacts to the public if the exemption was not granted. For the public, the primary adverse impact would be the delayed return of Palisades to operation and the reliable generation of energy to support Michigan's electrical grid. The staff considered the potential adverse impact on operations and operations personnel if the exemption was not granted. Specifically, without the exemption, Operations personnel will have an increased frequency of crew turnovers because Operations personnel would continue to comply with the online work hour controls resulting in five consecutive days of work followed by three days off. This increase in turnover could increase opportunities for incomplete information transfers and loss of operational context. It may also reduce continuity, crew cohesion, crew coordination, and shared mental models due to the number of personnel and crew transitions over the duration of the complex startup evolutions. These potential impacts could reduce the overall safe and efficient return to service and startup of the plant to benefit the public interest.

The NRC staff considered the potential benefits of the exemption to operations personnel, plant operation, and continuity of operations. For Operations personnel, the exemption would provide the benefit of an outage schedule where individuals receive more predictable and stable schedules ahead of time which provide certainty in planning daily living obligations outside work and reduces or eliminates the number of day-night transitions which could increase the fatigue risk over the proposed exemption period. In addition, an outage schedule could reduce the potential for sudden changes in crew composition and call-ins. For plant operation, the exemption provides the benefit of retaining startup crews together for longer periods of the startup evolutions where crews could maintain operational knowledge, oversight, situational awareness, and shared mental models without extensive.

The factors discussed above benefit the public interest because they improve safety through maintaining continuity of operations and crew cohesion while reducing the potential number of and volume of information transfers and reacquisitions which could negatively impact the safe and efficient restoration of systems and startup activities. These factors can help support operations personnel remain engaged and situationally aware throughout the startup evolutions. In addition, these factors are known to enhance human performance and decision-making which are important for safe and efficient completion of complex and infrequently performed evolutions like startup and power ascension. Lastly, these factors are important at Palisades because Palisades Energy is performing this first-of-a-kind startup evolution with a complement of licensed operators with a range of experience levels and who may be working together for the first time especially in a unique restart project which is returning a decommissioning nuclear power reactor to operational status.

The NRC staff considered reasons why the proposed exemption may not be in the public interest. For example, compared to the previous exemption before fuel load, the risk level during the proposed exemption will increase as the licensee begins to load fuel into a configuration that will allow manipulation of controls for reactivity. ( printed page 53674) However, as all operating reactors experience this evolution, this risk is balanced by ensuring that Operations personnel are fit for duty and have reliable human performance to perform the intensive and complex work necessary for startup activities and to mitigate the potential for an accident during startup. In order to ensure Operations personnel are fit for duty and have reliable human performance prior to the startup activities, the licensee confirmed in their RCI response that Operations personnel have not and will not work more than 54 hours per week and will receive a 34-hour break in the nine-day period before commencing core load activities.

The NRC staff evaluated the unique nature of the Palisades restart project, the previous work hours and breaks for Operations personnel, the mitigating strategy and commitments, and RAI responses against the balance of public interest considerations. The NRC determined that providing an exemption to permit individuals performing duties in 26.4(a)(1) to use the outage work hour controls in 10 CFR 26.205(d)(4) for up to a 60 day period commencing with core load would be in the public interest. Therefore, the NRC staff finds that approval of the requested exemption is otherwise in the public interest.

E. Environmental Considerations

This action relates to changes to scheduling requirements. The NRC staff has determined that any ground disturbance is limited to previously disturbed areas. Additionally, the NRC staff has determined that the action involves no significant change in the types or significant increase in the amounts of any effluents that may be released offsite, no significant increase in individual or cumulative public or occupational radiation exposure, and no significant increase in the potential for or consequences from radiological accidents. Finally, the NRC staff has determined that a categorical exclusion applies and that special circumstances under 10 CFR 51.22, “Categorical exclusions,” are not present that would preclude reliance on the categorical exclusion. Accordingly, this action meets the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(d)(5). Pursuant to 10 CFR 51.22, no environmental impact statement or environmental assessment need be prepared in connection with the action.

IV. Conclusions

Accordingly, the Commission has determined that, pursuant to 10 CFR 26.9, the exemption is authorized by law, will not endanger life or property or the common defense and security, and is otherwise in the public interest. Therefore, the Commission hereby grants Palisades Energy, LLC a one-time exemption from 10 CFR 26.205(d)(3) and (d)(7) for individuals performing duties in 10 CFR 26.4(a)(1) to allow the use of the outage MDO requirements described in 10 CFR 26.205(d)(4) starting on upon commencement of core load activities and terminating after 60 days or when Palisades is connected to the electrical grid, whichever occurs first. While the exemption is in effect, Palisades Energy will ensure that individuals performing duties in 10 CFR 26.4(a)(1) have at least 3 days off in each successive ( i.e., non-rolling) 15-day period. During the exemption period, Palisades Energy will also ensure that individuals' work hours do not exceed the limits specified in 10 CFR 26.205(d)(1), individuals receive a 10-hour break between successive work periods specified in 10 CFR 26.205(d)(2)(i), and individuals receive a 34-hour break in any 9-day period specified in 10 CFR 26.205(d)(2)(ii).

Additionally, Palisades Energy will use the outage MDO requirements, rest break requirements, maximum work hour limitations, and the mitigating strategy and commitments described in the July 10, 2026, enclosure. These actions and commitments provide reasonable assurance that acute and cumulative fatigue are adequately managed for personnel performing duties in 10 CFR 26.4(a)(1) for a 60-day period commencing on core load, or until connected to the electrical grid, whichever occurs first. Furthermore, the Commission hereby grants the licensee's request and rescinds the fourth exemption granted on June 18, 2026, for Operations personnel described in 26.4(a)(1) and as discussed in Section II of this exemption.

Dated: August 12, 2026.

For the Nuclear Regulatory Commission.

Mahmoud Jardaneh,

Acting Director, Division of Licensing Projects 1, Office of Nuclear Reactor Regulation.

91 FR 53669