Energy company plans to close Michigan nuclear plant in 2018

AP News
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Posted: Dec 08, 2016 11:03 AM

COVERT TOWNSHIP, Mich. (AP) — An energy company announced plans Thursday to permanently close the Palisades nuclear power plant in southwestern Michigan in 2018, which could mean hundreds of job cuts for a major employer in the region if regulators approve the closure.

New Orleans-based Entergy Corp. and Michigan-based utility, Consumers Energy, said they've agreed to end a power purchase agreement for the plant that year. They said it will save Consumers' customers as much as $172 million from 2018 to 2022 and affect about 600 employees.

The companies said less expensive alternatives now exist to provide power in the region as Consumers adds more renewable energy and natural gas-fired generation.

If ending the purchase agreement is approved by regulators, Entergy said it plans to close the plant Oct. 1, 2018. An earlier agreement committed Consumers to purchase nearly all of the power that Palisades generates through April 2022.

"We determined that a shutdown in 2018 is prudent when comparing the transaction to the business risks of continued operation," Leo Denault, Entergy's chairman and CEO, said in a statement.

Consumers said it will consider potential placement of up to 180 employees from Palisades into the utility's workforce.

Gov. Rick Snyder said he plans to direct the Michigan Agency for Energy, the Michigan Department of Treasury, Michigan Economic Development Corp. and others to help prepare the area for the possible shutdown.

"We need to make sure we use the next two years to wisely plan the use of state and local resources to adapt to whatever decision is made," he said in a statement.

Under Entergy's current plan, Palisades would be refueled as scheduled in the spring and operate through the end of the fuel cycle. As part of the agreement, Consumers Energy also will pay Entergy $172 million to end the power purchase agreement and help Entergy transition to decommissioning the plant.

Republican state Rep. Aric Nesbitt, chairman of the House Committee on Energy Policy, said he wants Entergy to reconsider the decision to close the plant.

"This announcement further threatens Michigan electric reliability after 2018," said Nesbitt, whose district includes the plant. "This is not just a bad decision for our local families, but it is also the wrong decision for Michigan's energy future."

Entergy and the Consumers Energy Foundation plan to provide a total of $10 million over several years in economic development funding for southwestern Michigan as part of an effort to ease the economic effects of the closure.

The plant is in Van Buren County's Covert Township, along Lake Michigan. It started generating electricity in 1971 and can produce enough power for more than 800,000 homes. Consumers Energy is part of Jackson-based CMS Energy Corp.

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This story has been corrected to show that Consumers, not Entergy, could offer new positions to some of the affected employees.