Entergy to close Palisades nuclear plant in 2018
Entergy Corp. announced plans last week to permanently close the issue-plagued Palisades nuclear power plant in Southwest Michigan in late 2018, part of the company’s strategy to reduce its reliance on nuclear amid low wholesale prices.
Entergy and Michigan-based Consumers Energy say they’ve agreed to end a power purchase agreement for the plant. The planned shutdown is expected to impact 600 employees and save Consumers customers $172 million.
Entergy and Consumers officials said “market conditions have changed substantially” since the agreement was made in 2007. The agreement obligated Consumers to purchase energy from Palisades through April 2022. Entergy says they plan to close the plant in October, 2018, subject to regulatory approvals.
“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,” said Leo Denault, Entergy’s chairman and chief executive officer. “We determined that a shutdown in 2018 is prudent when comparing the transaction to the business risks of continued operation.”
Entergy has been in the process of reducing its merchant fleet, which has been losing profitability in the face of low wholesale prices. In addition, it has been closing and selling its nuclear plants, including its Fitzpatrick nuclear facility in New York, citing regulatory challenges and state policies which disadvantage nuclear power in order to prop up renewable sources.
Michigan Gov. Rick Snyder said last week he is acting to help the region adapt to the closure of the plant, which is a major employer and economic driver.
“The responsible thing to do is put a plan into action now to help our neighbors in Southwest Michigan prepare for a significant change in their communities,” 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. We cannot wait for that decision to start preparing the community and its residents to the potential loss of Palisades.”
Under Entergy’s plan, Palisades would be refueled as scheduled next spring and operate through the end of its fuel cycle. Entergy and Consumers Energy say they plan to invest $10 million over several years in economic development funding for southwestern Michigan in order to help offset the economic effects of the closure.
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