News about Palisades – from “rocky history” to shutdown announcement, reversal, and beyond
Editor’s note: News about Palisades Nuclear Generating Station took so much space on our News Page that we decided to put it somewhere else. Our Palisades Chronology now takes up nine pages.
- Page 1 begins with a link to “Timeline: Palisades’ rocky history” published in The Herald Palladium on December 9 and goes to the end of 2016.
- Page 2 covers January and February, 2017, including MPSC closing its initial case in the matter and opening a new one.
- Page 3 brings our Palisades news up to date on plant problems in March and April, up to news about a November tritium tritium leak that wasn’t made public until it was buried in a routine NRC report on April 28.
- Page 4 starts with a report on MPSC’s public hearing in Lawrence and goes through June, 2017.
- Page 5, July, Part 1 – news on the MPSC legal case and a report on the July 13 program that Bette Pierman organized with Chris Williams, who shared what he’s learned watching the decommissioning at Entergy’s Vermont Yankee plant.
- Page 6, July, Part 2 – a Palisades “Event Report,” an NRC investigation, and the July 26 Open House.
- Page 7 goes from the August 17 report that Palisades fixed its tornado problem to the September 26 MPSC news release about its ruling on Consumers’ PPA buyout plan.
- Page 8 – the last three days of September: Entergy’s decision, reactions, and a seven-year list of security amendments.
- Page 9 – news on how Southwest Michigan is adjusting, Entergy’s license amendment requests, more to come.
Palisades Chronology Page 7: August, 2017, through a September 26 joint news release in reaction to MPSC’s ruling.
Following up on a report from March 30 that Palisades is not ready for a tornado (bottom of Page 3 of our Palisades Chronology), MLive says Entergy has assured them that the problem is fixed. Entergy’s Val Gent said, “The identified vulnerabilities, evaluated by the NRC to be of very low risk, are being addressed in accordance with NRC Enforcement Guidance.”
Entergy has filed an application to ship low-level radioactive waste to Texas.
In a document dated August 24 and posted to the Michigan Public Service Commission’s online docket for Case U-18250 on August 29, Administrative Law Judge Sharon L. Feldman turned the case over to MPSC’s three Commissioners. The Commission has promised a ruling by September 28.
Briefly, the case considers two questions:
- Should Consumers Energy be allowed to buy out the last four years of its 15-year power purchase agreement with Palisades?
- Can Consumers get along without the electricity that Palisades produces?
If MPSC okays the plan, the PPA buyout would take effect in October, 2018. Since the plan would leave Palisades without a customer for its electricity, Entergy would close the plant. The PPA buyout, negotiated in private between Entergy and Consumers, would cost Consumers $172 million. The cost of financing the buyout with a securitization bond would be $184 million, paid for by Consumers’ electric customers over the four cancelled years of the PPA. Consumers contends that purchasing lower-priced electricity from other sources would save ratepayers far more than the surcharge on their electric bills.
Consumers Energy has a plan that “could help offset the loss of generation that it buys from the Covert-based Palisades nuclear plant, which owner Entergy wants to close next year.” MiBiz reports that Consumers is targeting businesses to reduce their electric use during peak demand times.
In a 92-page ruling, the Michigan Public Service Commission said, yes, Consumers can buy out its Palisades power purchase agreement, but not for $172 million. The Commission will allow a PPA buyout payment of only $136 million. Also, rather than paying the total cost ($142 million, including fees) over four years, it should be spread over six years. As for the other issue in the case, MPSC agrees that Consumers can replace Palisades electricity from other sources.
MPSC’s news release says that Consumers and Entergy agree that “the remaining cost of the PPA is higher than the projected cost of buying energy and capacity on the market, and that even with a buyout, Consumers’ customers will save money in the long term.” Commission Chair Sally Talberg said, “Consumers Energy and Entergy will need to make a decision whether to accept these conditions and proceed with their plan to terminate the power purchase agreement.”
As a practical matter, Consumers will no doubt be okay with paying Entergy $36 million less than its asking price. The question is whether Entergy will go along.
MPSC also published this “Issue Brief” that explains the finer points of the case, how the Commission arrived at its ruling, and what the ruling means.
- MLive – “State commission’s ruling could throw wrench in Palisades closure plan”
- Herald-Palladium – “Palisades contract may be terminated”
- CW7 – “Michigan approves Consumers Energy plan to opt out of Palisades energy deal”
- WWMT TV – “Michigan approves Consumers Energy plan to opt out of Palisades energy deal”
- Entergy’s reaction
Now, it is up to Entergy to decide whether they should accept the reduced buyout payment or drop the whole idea and keep trying to figure out how to make a profit on their increasingly expensive electricity. Entergy has announced several plant sales and closings in the past few years, making it clear that they want out of the wholesale nuclear power business. Accepting $36 million less than they requested seems better than accepting no payment at all and trying to make a go of it when they cannot be competitive.
End of Palisades Chronology, Page 9 (more to come)
Quicklinks to our Palisades Chronology pages
- Page 1 – day one, June, 1965, to the end of 2016
- Page 2– January and February, 2017.
- Page 3 – March and April, 2017.
- Page 4 – May and June, 2017.
- Page 5 – Early to mid July, 2017.
- Page 6 – Mid to late July, 2017.
- Page 7 – August, 2017, through September 26.
- Page 8 – The last three days of September, 2017.
- Page 9 – October, 2017.