COVERT — Entergy Corp. announced this morning that it will close the Palisades Power Plant in Southwest Michigan.
The New Orleans-based energy company said it had agreed to an early termination of a power purchase agreement (PPA) with Jackson-based Consumers Energy, which sold the nulcear plant to Entergy in 2007 and had a deal to buy power from the facility through April 2022. The termination agreement requires regulatory approval.
By terminating the agreement, Consumers will be able to pass on as much as $172 million in savings to customers over the next four years, according to a joint statement from the two companies.
Entergy Chairman and CEO Leo Denault said that the early shutdown in 2018 would be “prudent when comparing the transaction to the business risks of continued operation.”
The Palisades Plant, which sits on the shores of Lake Michigan south of South Haven, has a long history of environmental problems, with multiple reported shutdowns occurring over the last several years as a result of leaks.
The plant opened in 1971 and was sold to Entergy in 2007 by Consumers Energy, who continued to purchase energy generated there.
“We have a comprehensive plan to ensure ongoing reliability and affordability for our 1.8 million electric customers,” Patti Poppe, president and CEO of Jackson-based Consumers Energy, said in a statement.
That plan includes continued excellent power plant performance by Consumers Energy, robust waste-reducing energy efficiency programs, and adding more renewable energy and clean natural gas-fired generation to the company’s portfolio.
The nuclear plant, which is scheduled to close on Oct. 1, 2018, employs about 600 people.
The announcement of the closure spurred Gov. Rick Snyder to put resources in play to prepare to help the affected workers.
“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.”
MiBiz energy news coverage is supported by Consumers Energy, a public utility that provides natural gas and electricity to 6.6 million Michigan residents. For more information, visit consumersenergy.com. This sponsorship is advertising. It has no effect on editorial consideration in MiBiz.