The US utility Entergy has announced plans to shut down its 805 MW Palisades nuclear power plant (Covert, Michigan, US) permanently in 2022 instead of closing it in October 2018. This announcement comes after the Michigan Public Service Commission (PSC) granted Consumers Energy a recovery of only US$136.6m of the US$172m it requested for the buyout of the power purchase agreement (PPA) with Entergy. Initially, Consumers Energy committed to buying nearly all the power generated at Palisades through April 2022 and Entergy reasoned the plant’s shutdown could save Consumers Energy’ customers as much as US$172m over four years, even after Consumers Energy paid Entergy US$172m to terminate the contract.
Now that the Michigan regulator has cut US$36m out of it, the two companies decided to terminate the transaction and Entergy will then operate the facility until 2022. Entergy stressed out it expects the decision to have a positive impact on its free cash flow (between US$100m and US$150m) and reasserted that it commits to exiting the merchant nuclear power business in 2022.
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