The Palisades dollar: Van Buren faces uncertainty with plant closing

By Tony Wittkowski | Business Reporter | The Herald-Palladium

COVERT — To say Covert Township and Van Buren County have benefited from the Palisades nuclear power plant is an understatement.

The power plant employs 600 workers, produces enough energy to power 800,000 homes a year and pays millions in annual property taxes.

Those reasons made it all the more painful when news broke Thursday morning that Palisades would be shuttered in less than two years. It came as a surprise to many as Consumers Energy was committed to a power purchase agreement with Palisades through 2022.

Measuring the plant’s economic impact on Covert Township and Van Buren County can be hard to determine, economic analysts say.

Van Buren County Treasurer Karen Makay said Entergy has three major parcels that account for the majority of the plant’s property taxes. Combining those parcels, Makay said Covert Township received $9.9 million in taxes from the plant for 2016. According to plant officials, Palisades paid $10.5 million in property taxes for 2016.

Overall, the plant accounts for more than 7 percent of Van Buren County’s tax base, Makay said. It’s unknown what amount of property taxes Entergy would pay when the plant sits idle after 2018.

In addition to property taxes, Palisades provides $67 million in annual wages and benefits for its 600 employees. Plant employees primarily live in Van Buren, Berrien, Allegan and Kalamazoo counties.

Zachary Morris, Kinexus’ economic development consultant for Van Buren County, said the fiscal impact of the plant closing creates a ripple effect among the workers’ communities.

Plant employees have houses, which they pay property taxes for. The money they make from Palisades’ payroll is spent at local restaurants, gas stations, schools as well as area hotels – which benefit from a lot of contractors who stay close whenever the plant deals with outages.

Palisades spokesman Val Gent said they are committed to treating employees fairly by offering a retention program once the plant shuts down in October 2018.

“We recognize the significant, positive role our employees play in the community and the impact the plant has on the local economy,” Gent said in an email.

Gent said Palisades will retain a portion of the existing staff to help work through the various stages of the decommissioning process. In addition, Entergy has committed to finding opportunities for any employee willing to relocate to the regulated utility business in the Gulf South.

Since Consumers Energy ended the power agreement, it is expected to result in $344 million in savings – $172 million of which is expected to lower Consumers Energy customers’ costs over the early termination period from 2018 to 2022.

Committees and funding

To support the community during the transition, Entergy – which owns the plant – and the Consumers Energy Foundation will provide a total of $10 million over several years in economic development funding for Southwest Michigan.

Of the $10 million, the Consumers Energy Foundation will contribute $2 million and Entergy will give $8 million. The process for reviewing requests for funds and distributing them will be announced later, with a focus on sustainable economic development that will broaden the community’s tax base, Gent said.

Of the 600 Palisades workers, Consumers Energy said they would consider up to “180 appropriately skilled workers” from the Palisades plant to Consumers Energy over time.

Kinexus will help Van Buren County with the Palisades transition through the development of a Joint Adjustment Committee. The committee will consist of company and worker representatives, along with community members.

“We have not officially formed this yet, but we are in the process of doing so,” Morris said of the committee. “The main focus will be to lessen the impact by taking a look at the community and the people who will be losing their jobs.”

Because a lot of the plant’s workers are involved in the STEM field – science, technology, engineering and math – Morris believes they’ll be in demand.

As the closure begins to take shape in the coming years, Morris said it’s too early to determine how Covert Township and Van Buren County will react fiscally when Palisades closes its doors for the last time.

“We don’t fully understand the economic impact it’s going to have at this point,” he said. “It all depends on how many will stay on with Palisades, how many will retire and how many take jobs elsewhere. The impact probably won’t be known for some time.”

Contact Tony Wittkowski at twittkowski@TheHP.com or (269) 932-0358. Follow him on Twitter: @tonywittkowski.

(Author’s Note: This article was originally published on Dec. 9, 2016)

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