Shutdown of Michigan nuclear plant not sounding climate alarms

By Jeffrey Tomich

Threats to close nuclear plants in Illinois and New York triggered hundreds of millions of dollars in annual subsidies to keep the plants open in a last-gasp reprieve to save the jobs, taxes and carbon-free energy they produce.

In Michigan, the likely loss of hundreds of jobs and taxes from the early closure of Entergy Corp.’s 810-megawatt Palisades nuclear plant in the fall of 2018 is likewise causing hand-wringing about the economic consequences.

But the impact on greenhouse gas emissions? Not so much.

“In general, I don’t think the environmental community is going to be urging them to keep Palisades open,” said James Clift, policy director for the Michigan Environmental Council.

Environmental groups for years have been concerned about the long-term safety of the Palisades plant, located in southwest Michigan on the shores of Lake Michigan. A particular concern in recent years is a finding that the 1971 reactor is among the most brittle and at risk of cracking.

Also at issue: how electricity that replaces the Palisades nuclear power will affect carbon dioxide emissions.

Jackson, Mich.-based Consumers Energy, which buys the plant’s output to serve utility customers, said it will use a combination of more wind energy, efficiency, demand response and natural gas to replace capacity from Palisades.

The Michigan Public Service Commission must approve the agreement between the utility and Entergy to terminate a 15-year power purchase agreement before the formal end of the contract in 2022.

The companies announced the agreement to terminate the PPA on Dec. 8, agreeing to equally split the $344 million in savings generated by replacing Palisades output with cheaper power. Consumers Energy agreed to return its share, $172 million, to ratepayers (Energywire, Dec. 9, 2016).

‘Negligible’ effect on fuel diversity

The company indicated in a Jan. 6 filing in response to questions from the PSC that output from Palisades would be replaced from a combination of sources, including a re-dispatch to oil and gas plants, efficiency, wind energy, and out-of-state energy purchases.

The utility indicated that its total CO2 emissions would rise 5.4 percent by 2022 as a result of relying to some level on fossil fuel combustion to replace nuclear output.

“Since the bulk of the replacement energy is occurring from purchases in the [Midcontinent Independent System Operator] energy market, and assumed to be outside of the state of Michigan, there is virtually no impact on the state’s emissions and negligible impact on the state’s fuel diversity,” the utility said.

Consumers also said the effect on its fuel diversity in Michigan is “negligible.”

Without Palisades, the utility will see fossil fuels make up 77 percent of its generation portfolio (59 percent coal and 18 percent natural gas) versus 73 percent with Palisades.

Consumers Energy representatives didn’t respond to telephone and email inquiries.

Meanwhile, the PSC didn’t specify the criteria it will use or a timeline for deciding whether to allow Consumers Energy to terminate the Palisades contract.

Michigan elected officials have urged Entergy to reconsider its decision to close the plant. The Michigan House even passed a resolution in the final days of the lame-duck session last month asking the PSC to reject the contract termination. The resolution cites the 600 jobs that are supported by the plant and its contribution as a source of baseload energy.

Coal on the outs

The proposal to end the Palisades contract comes as Michigan’s electricity sector undergoes a sweeping transformation. More than two dozen aging coal units have been retired or will be in the coming years.

They’re being replaced by cleaner energy from wind farms, natural gas plants and energy efficiency. Still, reliability has been an issue, in part because of geography. Most of Michigan’s Lower Peninsula is surrounded by water, limiting the ability to meet demand by imports from neighboring states.

Gov. Rick Snyder (R) last month signed legislation into law that aims to ensure the lights stay on and factories continue to run during the transition to cleaner energy (Energywire, Dec. 16, 2016). As part of the legislative package, Michigan retained its energy efficiency standard, and the state’s renewable standard was increased to 15 percent by 2022.

In other states, including Illinois and Connecticut, nuclear operators have asked legislators for subsidies to keep uneconomical nuclear plants running. Similar efforts are expected to be proposed in Pennsylvania and Ohio.

So far, there’s been no push in Michigan to pump money into Palisades. And Entergy has shown no desire to lobby for aid.

Environmental advocates, too, believe the loss of carbon-free energy can mostly be compensated for in the long run with more renewables and by reducing energy use.

Clift of the Michigan Environmental Council said the 2018 closure might lead to more reliance on natural gas initially, but with recently enacted state policies to encourage efficiency, demand response and more renewables, there shouldn’t be much effect in terms of CO2 emissions as a result of Palisades’ closure.

“I think [Consumers Energy] can actually remain carbon-neutral into the future,” he said.

Not everyone is convinced. Environmental Progress, a Berkeley, Calif.-based advocacy group that has challenged plans to shut down nuclear plants in other states on grounds that doing so will exacerbate climate change, says the math is simple. Prematurely closing a reactor will inevitably lead to increased greenhouse gas emissions.

“California, New York, Vermont and Michigan are all engaging in the same sleight-of-hand in suggesting that the replacement of zero-carbon power is environmental progress when in reality it is, at best, running in place, and worse, going backward,” said Michael Shellenberger, the group’s founder.