JACKSON, Mich., Dec. 8, 2016 /PRNewswire/ -- Consumers Energy has reached agreement with Entergy Corporation for early termination of its contract to purchase power from the Palisades nuclear plant. Regulatory approval of the agreement is expected to lower customer costs by as much as $172 million, as well as drive additional investment by Consumers Energy in clean energy, reliability and customer demand-reduction technologies, leading to further customer savings.
"We have a comprehensive plan to ensure ongoing reliability and affordability for our 1.8 million electric customers," said Patti Poppe, president and chief executive officer for Consumers Energy. That plan includes continued excellent power plant performance by Consumers Energy, robust waste-reducing energy efficiency programs, and adding more renewable energy and clean natural gas-fired generation to the company's portfolio.
Since the power purchase contract began in 2007 as a condition of the sale of Palisades from Consumers Energy to Entergy a number of things have changed. Entergy started to reduce its merchant footprint. At the same time, market conditions have changed and less expensive alternatives are now available to provide affordable power to the region.
Under the original 15-year power purchase agreement, Consumers Energy was scheduled to purchase almost 100 percent of the power generated by Palisades through April 2022. Consumers Energy will seek approval from the Michigan Public Service Commission for early termination of the power purchase agreement in 2018.
Entergy has announced its separate, independent decision to close its Palisades plant on October 1, 2018. Prior to that date, Consumers Energy's contract with Palisades will support electric reliability in Michigan and be available during the summer months of 2017 and 2018 when demand for electricity is higher. Separately, as part of Consumers Energy's ongoing talent recruitment efforts, it will consider potential job placements in ensuing years of up to 180 appropriately-skilled employees from Palisades into the utility's statewide workforce.
Supporting southwest Michigan during this community transition process is a key focus for Consumers Energy. Accordingly, the Consumers Energy Foundation will contribute $2 million to support economic development and community transition initiatives, consulting with the Council of Michigan Foundations and local stakeholders. Separately, Entergy is committing $8 million, for a total of $10 million by the two companies.
"We're committed to working with State and regional organizations to ensure the ongoing economic vibrancy of southwest Michigan," said Poppe.
Consumers Energy, Michigan's largest utility, is the principal subsidiary of CMS Energy (NYSE: CMS), providing natural gas and electricity to 6.7 million of the state's 10 million residents in all 68 Lower Peninsula counties.
Important information for investors
This news release contains "forward-looking statements." The forward-looking statements are subject to risks and uncertainties that could cause CMS Energy's and Consumers Energy's results to differ materially. All forward-looking statements should be considered in the context of the risk and other factors detailed from time to time in CMS Energy's and Consumers Energy's Securities and Exchange Commission filings.
Investors and others should note that CMS Energy routinely posts important information on its website and considers the Investor Relations section, www.cmsenergy.com/investor-relations, a channel of distribution.
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Benefits of early termination of power purchase contract
CUSTOMER SAVINGS: Estimated at $172 million. Depending on usage, savings of between 1-1.5% per customer.
RELIABILITY: Continued strong reliability
CLEAN POWER: More investments in Michigan-based clean energy
DEMAND-REDUCTION: Technologies that reduce energy waste and save customers money
Community transition investment
PLEDGE TO SUPPORT: Committing $2 million through Consumers Energy Foundation to support community transition. Entergy is committing $8 million, for $10 million total.
WORKFORCE REVIEW: Consideration of up to 180 appropriately-skilled workers from Palisades plant to Consumers Energy over time.
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SOURCE Consumers Energy