MPSC cuts proposal for buying out Palisades power contract to more than $142 million
In a blow to Consumers Energy efforts to buy out the remainder of its Palisades nuclear power plant purchase agreement, the Michigan Public Service Commission (MPSC) announced their securitization plan will be set at $142,151,600.
Consumers Energy had sought $184.6 million in its filing application back in February. Consumers Energy’s wish is to buy out its agreement with Entergy Nuclear Palisades, LLC, at which point Entergy will decide whether it wishes to permanently close the Van Buren County plant.
“The Commission, based on its statutory authorization to approve a special form of bond financing known as securitization, is granting Consumers Energy’s application to recover a payment to Entergy but at a lower amount than requested,” Sally Talberg, chairman at the MPSC, said. “Consumers Energy and Entergy will need to make a decision whether to accept these conditions and proceed with their plan to terminate the power purchase agreement.”
The new securitization bonds cut both payment and transaction costs. Consumers Energy had originally requested $172 million and $12.6 million for these, respectively, but will only be allowed $136,650,000 and $5.5 million instead.
Consumers Energy currently has a power purchase agreement with Entergy that runs until April 2022. However, they recently determined that even with buyout costs, getting out now would save customers money in the long run. Supposing all goes well, Entergy could close the plant as early as October 2018.
To recoup the costs of the buyout, the MPSC has given Consumers approval to utilize surcharges on its full-service electric customers for around six years after the bonds are sold.
