COVERT TOWNSHIP — Local officials in Southwest Michigan got a more than $1.2 million boost last week to advance their efforts to prepare for the impending closure of the Palisades nuclear power plant.
State officials announced the funding for the Southwest Michigan Planning Commission, which includes a $969,261 grant from the federal Economic Development Administration and more than $240,000 in matching funds from the Michigan Department of Treasury, the Michigan State Housing and Development Authority and the Consumers Energy Foundation.
The grants will help fund “holistic” economic development efforts over the next three years around the planned 2022 closing of Palisades, which employs roughly 600 people, said John Faul, former Van Buren County administrator who has been appointed as the county’s Palisades project director.
“This is not just a tax base thing, it’s going to require a holistic approach,” Faul told MiBiz, referring to the potential effects on real estate, community involvement of hundreds of workers and potential “multiplier effects” on local businesses.
The grant funding will kick off a series of public forums and an analysis to inventory the plant’s workforce and see where employment effects may be.
“A lot of this is employment-driven, and what that means in terms of people living here making a relatively high wage and what the impact would be if they left,” he said.
Future components of the three-year project will look at where new investments could be made in the county to continue to attract people. Examples of those investments could range from affordable housing and broadband to parks infrastructure.
Faul also noted that the plant closure and decommissioning process “will be a slow draw-down over time.” He said plant owner Entergy Corp. initially plans to keep 250 employees of its 600-person workforce onsite. Entergy is also seeking approval from federal nuclear energy regulators to transfer the plant’s operating license to Holtec International, which would complete the plant’s dismantling, decontamination and remediation by 2041, according to an announcement late last year.
Entergy has previously said that existing employees would have an opportunity to continue working within the company if they are willing to relocate. An Entergy spokesperson could not be reached for comment.
Faul said the worker component to the process will involve attempts to keep some plant employees in the area.
“What do we do to keep them here? Can we develop incubators or take advantage of their knowledge and their skill set? The other side is: If people do move on, what do we do as a community to fill that void?” he said.
Power transition in communities
Across the country, communities with large-scale power plants set to retire in the coming years — particularly nuclear and coal facilities — are grappling with the potential for lost jobs and local tax revenue. In Illinois, for example, local officials have urged state lawmakers to pass a sweeping clean energy bill that includes subsidies to avoid the potential closure of three nuclear plants.
In 2020, Gov. Gretchen Whitmer issued an executive order creating the Energy Transition Impact Project (ETIP) to help communities deal with the reduced tax base, lost employment, site remediation and reduction in services that come with large-scale power plant closures. Holland, Muskegon and Grand Haven are just some Michigan cities where coal plants have closed recently.
“This is an opportunity for us to help bring together resources and expertise to support communities as they chart their economic future,” State Treasurer Rachel Eubanks, who formerly served on the Michigan Public Service Commission, said in a statement about the Palisades funding.
John Egelhaaf, executive director of the Southwest Michigan Planning Commission, is helping to facilitate the various state and local partners through the “tertiary impacts” of decommissioning Palisades.
“This is a much deeper dive into the social and breadth of community impacts across a lot of different fronts,” Egelhaaf said.
Entergy first announced in December 2016 that it planned to close Palisades in 2018. By September 2017, the company said it would fulfill its current power purchase agreement with Consumers Energy and close the plant in 2022 following a ruling by state regulators that would have approved about $42 million less to buy out the power contract than Consumers had sought.
Meanwhile, planning around the plant’s eventual closing has been an ongoing process. A community development fund has been established to collect funding to support the process. For now, the recently approved, three-year federal grant will get the ball rolling.
“We were able to imagine a three-year plan that really anticipated closure and started getting busy with what the community response would be in advance of the closure itself,” Egelhaaf said.
“Oftentimes when people think about a plant closure like this, they think about how they can repurpose the plan. That’s not what the purpose of this whole endeavor is,” he added. “This is really about saying: What do we do to help the community respond in the midst of this thing?”