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Consumers Energy Looking to Buy Existing NatGas-Fired Power Plant in Michigan

Consumers Energy issued a request for proposals to acquire an existing natural gas-fired plant with up to 800 MW of generating capacity in Michigan’s Lower Peninsula, part of its plan to continue shift away from coal and nuclear power.

Meanwhile, the Michigan Public Service Commission (MPSC) plans to hold a pair of public meetings in May to discuss the utility’s request to prematurely terminate its contract for nuclear power with a unit of Entergy Corp.

Jackson, MI-based Consumers on Monday said it was interested in acquiring a simple-cycle or combined-cycle gas generating plant.

"We're taking a varied, balanced approach to ensure our customers have the affordable, reliable and sustainable electricity they need to heat and light their homes, and power their businesses," said Vice President Tim Sparks, who handles energy supply operations.

Consumers and Entergy Nuclear Palisades LLC agreed to terminate in 2018 an existing power purchase agreement (PPA) with the Palisades Nuclear Generating Station. Last December, New Orleans-based Entergy said it would permanently close in October 2018 the Palisades facility on Lake Michigan in Van Buren County.

Consumers and Entergy expect early termination of the PPA, which is subject to MPSC approval, to lower customer costs by up to $172 million over four years. The closure would affect about 600 employees.

Consumers said purchasing an existing gas power plant "is one component of the company's plan to offset the electric capacity and energy currently provided by the Palisades nuclear plant."

Sparks said the approach "will use a diverse set of resources that includes more energy efficiency and demand response programs to facilitate energy waste reduction, purchase of capacity and energy from resources converting from coal as a fuel to natural gas, and through this request for proposals, the purchase of one or more existing natural gas assets."

Notices of intent to bid on the request for proposals are due by April 10, and bids are due by 5 p.m. May 15. Two informational public meetings are scheduled May 8 in Lawrence, MI, to discuss the early termination of the PPA [Case No. U-18250]. The meetings, which are scheduled from 3-5 p.m. and 6-8 p.m., will take place at the Van Buren Conference Center.

Poor economics and safety issues have compelled Entergy to either close or sell some of its fleet of nuclear power plants in recent years. Entergy completed the sale of its James A. Fitzpatrick Nuclear Power Plant in Scriba, NY, to a subsidiary of Exelon Corp. on March 31. It first announced plans to sell the facility in November 2015. Entergy shut down its Vermont Yankee nuclear plant in December 2014. In April 2016, it announced plans to close its Pilgrim Nuclear Power Station in Plymouth, MA, on May 31, 2019.

Last January, Entergy and New York regulators agreed to close two operating units at the troubled Indian Point Energy Center (IPEC). The nuclear-powered facility in Westchester County, NY, is adjacent to the Algonquin Incremental Market (AIM) pipeline project. In March 2016, the Federal Energy Regulatory Commission denied a request by New York officials to halt construction of the AIM project while the state conducted an investigation into incidents at the IPEC.

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