Entergy to buy Michigan nuclear plant from Consumers Energy
12 July 2006 -- Entergy Corp. and Consumers Energy, the principal subsidiary of CMS Energy, have reached an agreement for Entergy to purchase the 798-MW Palisades Nuclear Plant near South Haven, Michigan, US, for $380 million.
With the addition of Palisades, Entergy will own 11 nuclear generating reactors and manage another. Palisades is the company's second reactor in the Midwest. Five others are in the South and five are in the Northeast.
The $380 million price represents $242 million for the plant itself, $83 million in nuclear fuel based on current market prices, and $55 million in related assets. The sale also includes the Big Rock Point Independent Spent Fuel Storage Installation and compensates Entergy for accepting this responsibility.
As part of the purchase, Entergy also agreed to sell 100 percent of the plant's output, up to its current 798 MW, back to Consumers Energy for 15 years at a price structure that retains the benefits of the low-cost nuclear generation for Consumers Energy's 1.8 million electric customers.
Other highlights of the sales agreement:
Entergy will assume responsibility for eventual decommissioning of the plant. Consumers Energy will retain $200 million of the current $566 million Palisades decommissioning funds balance, with the later return of $116 million more pending a favorable federal tax ruling.
Consumers Energy will pay Entergy $30 million to accept responsibility for the spent fuel at the decommissioned Big Rock Point nuclear plant, which is located near Charlevoix, Mich.
Palisades has operated at an average capacity factor of 89 percent from 2002 through 2005. The plant set a CMS Energy record in 2004 for the longest continuous operation of any of its electric generating units at 478 days. Palisades already has applied for a 20-year extension of its operating license and expects to receive it in early 2007. Its current operating license expires in 2011.
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