Palisades Nuclear Power Plant To Close In 2018

COVERT TOWNSHIP, Mich. (WWJ/AP) - An energy company announced plans Thursday to permanently close the Palisades nuclear power plant in southwestern Michigan in 2018, which could mean hundreds of job cuts for a major employer in the region if regulators approve the closure.

New Orleans-based Entergy Corp. and Michigan-based utility, Consumers Energy, say they've agreed to end a power purchase agreement for the plant that year. They say the move will save Consumers' customers as much as $172 million and affect about 600 employees.

The companies say "market conditions have changed substantially, and more economic alternatives are now available to provide reliable power to the area" since the purchase agreement was made in 2007. The agreement committed Consumers to purchase nearly all of the power that Palisades generates through April 2022.

Ending the purchase agreement is subject to regulatory approvals. If received, Entergy plans to close the plant Oct. 1, 2018.

"We determined that a shutdown in 2018 is prudent when comparing the transaction to the business risks of continued operation," Leo Denault, Entergy's chairman and CEO, said in a statement.

Consumers says it will consider potential job placements in ensuing years of up to 180 appropriately-skilled employees from Palisades into the utility's statewide workforce.

Gov. Rick Snyder said he's acting immediately to help the region adapt to a potential future without Palisades, a major employer and economic engine.

"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 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 for the potential loss of Palisades."

Snyder said he is directing the Michigan Agency for Energy, Michigan Department of Treasury, Michigan Economic Development Corporation, and the Michigan Talent Investment Agency to work with local and private partners to prepare to deliver necessary resources.

"We need to ensure that if this closure occurs, the state is ready to help the employees transition to new opportunities when appropriate," he said. "We also will put economic development efforts in place to help the entire region and assist local governments with their transition plans."

Under Entergy's current plan, Palisades would be refueled as scheduled in the spring and operate through the end of the fuel cycle. As part of the agreement, Consumers Energy also will pay Entergy $172 million to end the power purchase agreement and help Entergy transition to decommissioning the plant.

Republican state Rep. Aric Nesbitt, chairman of the House Committee on Energy Policy, said he wants Entergy to reconsider the decision to close the plant.

"This announcement further threatens Michigan electric reliability after 2018," said Nesbitt, whose district includes the plant. "This is not just a bad decision for our local families, but it is also the wrong decision for Michigan's energy future."

Entergy and the Consumers Energy Foundation plan to provide a total of $10 million over several years in economic development funding for southwestern Michigan as part of an effort to ease the economic effects of the closure.

The plant is in Van Buren County's Covert Township, along Lake Michigan. It started generating electricity in 1971 and can produce enough power for more than 800,000 homes. Consumers Energy is part of Jackson-based CMS Energy Corp.

TM and © Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.