Michigan regulators trim Consumers Energy's proposed nuclear plant buy-out

Dive Brief:

The Michigan Public Service Commission last week approved $142 million for a securitization plan Consumers Energy Co. proposed to buy out the remainder of its Palisades nuclear plant power purchase agreement with Entergy.
The utility had requested more than $184 million, but regulators concluded the savings for customers would be less than estimated in the proposal.
Entergy is under contract to provide power to Consumers until 2022, but has indicated it could close the nuclear facility next year. Palisades has been operating since the early 1970s.

Dive Insight:

Michigan regulators approved more than $140 million for Consumers to buy out its contract. But at $42 million less than requested, the decision puts Palisades' closure next year in doubt.

According to MLive.com, both Entergy and Consumers have issued statements indicating they would review the decision before determining how to proceed.

"Over the coming days, Entergy will review the ruling by the MPSC with Consumers Energy and assess the conditions that the order imposes on early termination of the power purchase agreement. The outcome of this process will influence whether Entergy reconsiders the decision to permanently shut down Palisades on October 1, 2018 or continues to operate the plant until spring 2022," the company said.

Entergy announced in December 2016 that it intended to close down the plant after striking a deal with Consumers Energy to terminate a power purchase agreement. The facility employs about 600 people.

The Michigan Agency for Energy issued a statement pledging to help prepare for the impact of the pending closure of Palisades, "whether it comes next year or five years from now."

“We will have to learn from the companies what their decision will be regarding when Palisades will close, but whether it is in one year or five years from now, there is an urgent need for community leaders to develop a plan for the future without the Palisades plant operating,” MAE Executive Director Valerie Brader said.

“Priority must be given to figuring out long-range strategies to best mitigate the effect on schools, budgets, jobs, businesses and communities. The state is fully committed to partnering with the community to help in any way," Brader said.

According to MAE, Entergy has said employees at the Palisades plant could remain at work to shut down the plant, or could be relocated to jobs at other company facilities.