COVERT, MI - Palisades nuclear power plant will close in 2018.

Entergy Corp., the plant's owners, made the announcement in a news release Thursday, Dec. 8.

"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," said Leo Denault, Entergy's chairman and chief executive officer, in the release.

"We determined that a shutdown in 2018 is prudent when comparing the transaction to the business risks of continued operation," he said.

Entergy and Consumers Energy have agreed to an early termination of their power purchase agreement for the Palisades plant, located in Van Buren County's Covert Township near South Haven, in 2018.

Entergy noted the agreement is subject to regulatory approvals. It said that "assuming regulatory approvals are obtained for the PPA termination, Entergy intends to shut down the Palisades nuclear power plant permanently on Oct. 1, 2018."

The original agreement committed Consumers Energy to purchase nearly all of the power that Palisades generates through April 2022. Under the plan now, Palisades will be refueled as scheduled in the spring of 2017 and operate through the end of the fuel cycle, then permanently shut down in late 2018.

Entergy said that since it purchased Palisades from Consumers Energy in 2007 "market conditions have changed substantially, and more economic alternatives are now available to provide reliable power to the region."

"The transaction is expected to result in $344 million in savings, $172 million of which is expected to lower Consumers Energy customers' costs over the early termination period from 2018 to 2022, and $172 million of which Consumers Energy will pay to Entergy for early PPA termination," the release said. "The early termination payment to Entergy will help assure the plant's transition from operations to decommissioning, maintaining our commitment to meet U.S. Nuclear Regulatory Commission requirements."

Palisades has long been Van Buren County's largest taxpayer and a major player in the region's economy.

"To support the community during the transition, Entergy and the Consumers Energy Foundation will provide a total of $10 million over several years in economic development funding for the Southwest Michigan region," the release said.

Of the $10 million, the Consumers Energy Foundation will contribute $2 million and Entergy $8 million. The companies will consult with the Council of Michigan Foundations and local stakeholders as it relates to the distribution of these funds.

"The process for reviewing requests for funds and distributing them will be announced later, with a focus on sustainable economic development that will broaden the community's tax base," the release said.

"Entergy is committed to treating our employees fairly throughout this process and will assist employees who want to relocate within Entergy or leave the company," said Bill Mohl, president of Entergy Wholesale Commodities, a business unit within Entergy. "Additionally, Consumers Energy has committed to work closely with Entergy as part of its ongoing talent recruitment efforts and will consider potential placement of up to 180 appropriately skilled employees from Palisades into the utility's workforce over time."

Palisades is licensed by the NRC to operate through March 24, 2031.

The 45-year-old Palisades plant, one of the country's oldest nuclear power plants, has been under elevated scrutiny from the federal regulators in recent years, with numerous unplanned shutdowns due to problems.

The Nuclear Regulatory Commission determined that the plant operated safely in 2015, but it was under increased NRC oversight for the first three quarters of 2015 due to its failure to accurately calculate radiation doses to workers during an activity in 2014. It began to receive the normal level of NRC oversight during the last quarter of 2015.

The plant's reactor is one of the most "embrittled" reactors at U.S. nuclear facilities, putting it at risk of cracking. The NRC in 2014 began a three-year review of results of tests on the reactor.

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