COVERT, MI (WKZO AM/FM) — The Palisades Nuclear Plant will not be closing next year after all. Entergy and Consumers Energy have announced this morning that they plan to continue operating the aging nuclear facility in Covert until the spring of 2022, under their existing power purchase agreement.
In the end it was all about the money.
The two firms say the Michigan Public Service Commission’s order granting Consumers Energy only $136.6 million instead of the $172 million it requested to buy out the contract prompted them to cancel the deal and to keep the plant open for an additional four more years.
Of course this is good news for the 600 employees at the plant and for the Covert community and school system which are heavily reliant on the tax base that comes from the nuclear plant on the Lake Michigan Shore. The wages and the tax base will continue to be pumped into the regional economy.
It not clear who will pick up the tab for the more expensive energy being generated by the nuclear plant, compared to the costs of generating with natural gas, but that assumes there are natural gas plants in other states that can replace the mega-watts that are generated at the Covert plant.
WMU Nuclear Physicist Paul Pancella thinks it will be mostly a wash for customers because the industry is so highly regulated.
He says the issue with the plant is that it’s so old that it may be unreliable, as we have seen often over the last few years, with various system breakdowns. He doubts it would pose a risk of a major melt-down however.
Pancella says the accountants are calling the shot on this deal, figuring the cost of running the plant against the power that will be generated and they factored that against the failure to convince the MPSC that they deserve the extra $35.4-million they requested, which apparently was the difference-maker.
