Entergy Plans to Close Michigan Nuclear Plant in 2018
DOW JONES & COMPANY, INC. 10:05 AM ET 12/8/2016
Symbol Last Price Change
ETR 70.21up -0.23 (-0.33%)
CMS 40.57down 0 (0%)
QUOTES AS OF 10:05:40 AM ET 12/08/2016
Entergy Corp. (ETR) said it intends to close the Palisades Nuclear Power Plant in Michigan in October of 2018, part of the company's efforts to reduce its merchant power fleet amid low prices in the wholesale market.
Separately, Entergy(ETR) said its also reached a deal with Michigan's largest utility CMS Energy Corp.(CMS) subsidiary Consumers Energy for the early termination of its agreement to purchase power from the Palisades plant. Both moves require regulatory approvals.
The planned shutdown is expected to impact roughly 600 employees that run the Palisades plant.
"We determined that a shutdown in 2018 is prudent when comparing the transaction to the business risks of continued operation," Entergy(ETR) Chief Executive Leo Denault said in prepared remarks on Thursday.
In addition to reducing its merchant fleet, which generates electricity sold in wholesale markets, Entergy(ETR) also has been closing and selling a number of its nuclear operations amid regulatory challenges and public policies the company previously has said disadvantage nuclear plants.
Entergy (ETR) expects to post fourth-quarter pretax write-downs of roughly $390 million related to the moves, with additional charges of $55 million related to severance and employee-retention expenses through the end of 2018.
The agreement is expected to result in savings of $344 million, of which half with go toward lowering costs for Consumers Energy customers over four years, with the rest to be paid to Entergy(ETR).
Entergy (ETR) and Consumers Energy also plan to provide a total of $10 million of economic development funding for the Southwest Michigan region over several years during the transition.
Bill Mohl, president of Entergy's(ETR) wholesale commodities business, said that Consumers Energy has committed to work closely with Entergy(ETR) as part of its talent recruitment efforts and will consider the potential hiring of as many as 180 employees from the Palisades plant.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
12-08-161005ET
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