Entergy Corp. has decided to permanently close the Palisades nuclear power plant on October 1, 2018.

The news comes as a bit of a surprise, because Entergy had a power purchase agreement with Consumers Energy—Michigan’s largest utility and the principal subsidiary of CMS Energy—which committed the company to buying nearly all of the power generated at Palisades through April 2022.

Late last year, however, UBS utilities analyst Julien Dumoulin-Smith suggested that the contract appeared to be potentially break-even or under water. Terminating the deal early was presumably the best option for both companies.

In a press release, Entergy said Consumers’ customers would save as much as $ 172 million over four years, even after paying Entergy $ 172 million to terminate the contract. The early termination payment is expected to “help assure the plant’s transition from operations to decommissioning.”

The 798-MW plant located about five miles south of South Haven, Mich., faced economic difficulties similar to other single-unit facilities, such as the recently closed Fort Calhoun Plant, and the R.E.…

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