Michigan lawmakers sounded off Thursday after Entergy announced that it plans to shut down its Palisades Nuclear Power Plant in October 2018, citing “business risks of continued operation.”
Located in Covert, Mich., Palisades began operation in 1971, held a purchase power agreement through 2022, and a Nuclear Regulatory Commission operating license through 2031. The plant generates 811 megawatts of near carbon-free electricity, according to Entergy, enough to power more than 800,000 homes.
“Entergy recognizes the consequences of a Palisades shutdown for our approximately 600 employees who have run the plant safely and reliably, and for the surrounding community, and we will work closely with both to provide support during the transition,” Entergy Chairman and CEO Leo Denault said in a statement. “We determined that a shutdown in 2018 is prudent when comparing the transaction to the business risks of continued operation.”
State Rep. Aric Nesbitt (R) in a statement Thursday urged the Michigan Public Service Commission (MPSC) to reject Entergy’s plan to prematurely terminate Palisades’ purchase power agreement with state utility Consumers Energy.
“The closure of Palisades will have a devastating effect on Michigan’s electric reliability,” Nesbitt said in a statement. “As MPSC Chair Sally Talberg has testified before the Legislature, Michigan faces serious reliability issues in the near term, even noting that if we do not address these issues, Michigan will be dark in 10 years.”
Gov. Rick Snyder (R) said that no matter the final decision, Michigan must prepare to adapt to a future without Palisades. Snyder did say he’s sure the Michigan Public Service Commission will examine closely the implications of the decision on energy reliability and affordability, as well as environmental impacts.
“Palisades is a major employer and economic engine for the region, so the continued operation of the plant through 2018 and the proposed community contributions would be vital,” Snyder said in a statement. “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.”
Entergy in 2007 purchased Palisades from Consumers Energy, which is Michigan’s largest utility and the principal subsidiary of CMS Energy. According to Entergy, Palisades will be refueled as scheduled in spring 2017 and operate through the end of the fuel cycle, permanently shutting down on Oct. 1, 2018.
According to Entergy, the early termination will mean about in $344 million in savings, $172 million of which is expected to lower Consumers Energy customers’ costs over the early termination period from 2018 to 2022, and $172 million of which Consumers Energy will pay to Entergy for the early power purchase agreement termination. The two companies have agreed to pay $10 million over several years in economic development funding for southwestern Michigan, with Entergy covering 80 percent.
“Entergy is committed to treating our employees fairly throughout this process and will assist employees who want to relocate within Entergy or leave the company,” Entergy Wholesale Commodities President Bill Mohl said in a statement. “Additionally, Consumers Energy has committed to work closely with Entergy as part of its ongoing talent recruitment efforts and will consider potential placement of up to 180 appropriately skilled employees from Palisades into the utility’s workforce over time.”
