For the closure of the plant, Entergy and Consumers Energy have agreed for early termination of their power purchase agreement (PPA) for the Covert Township located nuclear power plant.
Entergy has cited the changing market conditions and the availability of more economic alternatives for power as the reasons behind its closure decision. The company entered into the PPA with Consumers Energy in 2007.
Michigan utility’s customers could be able to their power costs by about $172m over four years if the transaction goes through following regulatory approvals.
Closure of the Palisades Power Plant will also depend on the regulatory approval for the PPA termination.
Over, the early termination is likely to result in savings of $344m, out of which $172m will be paid to Entergy by Consumers Energy.
Entergy chairman and CEO Leo Denault said: “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.
"We determined that a shutdown in 2018 is prudent when comparing the transaction to the business risks of continued operation.”
Under the original PPA, Consumers Energy agreed to buy all of the power generated by the Palisades power plant till April 2022.
Following the regulatory clearance to the curent plan, Palisades will be refueled in the spring of 2017 and will operate until the fuel ends before having a permanent closure on October 1, 2018.
Entergy will use proceeds for the plant’s transition from the operational to the decommissioning stage besides taking steps to comply the requirements of the US Nuclear Regulatory Commission.
Image: Photo of Palisades Nuclear Plant. Photo: courtesy of Unknown/Wikipedia.
