Entergy Corp and CMS Energy subsidiary Consumers Energy have reached an agreement for Entergy to purchase the 798 MWe Palisades Nuclear Plant near South Haven, Michigan in the US, for $380 million.
The acquisition 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 is to sell all of the plant’s output, up to its current 798 MWe, back to Consumers Energy for 15 years.
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 $116 million more pending a favourable federal tax ruling.
Consumers Energy will also pay Entergy $30 million to accept responsibility for the spent fuel at the decommissioned Big Rock Point nuclear plant.
Palisades already has applied for a 20-year extension of its operating licence and expects to receive it in early 2007. Its current operating license expires in 2011.
Pending regulatory approval, the transaction is expected to close in the first quarter of 2007. The acquisition will see Entergy’s nuclear fleet grow to a dozen stations of which the company owns 11.
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