The decision was based on several factors, including the low price of natural gas, a wholesale market that created artificially low energy and capacity prices in the region, and the high cost structure for the plant.
Entergy said in a release it plans to recognize an after-tax impairment charge of approximately $181 million in 3Q 2013, in addition to an expected $55 to $60 million associated with future severance and employee retention costs through the end of next year. The company needs the NRC minimum of $566 million for decommissioning, and the decommissioning trust has a balance of $582 million as of July 31.
The company said it âremains committed to nuclear as an important long-term component of its generating portfolio, and for meeting the nationâs energy needs.â
Marvin Fertel, president and chief executive officer of the Nuclear Energy Institute, said the closure is proof that the markets are flawed.
"This announcement, and the retirement of Wisconsinâs high-performing Kewaunee nuclear facility earlier this year, is jarring evidence that market reform is essential to ensure that the nation maintains a diversified portfolio of electricity options," Fertel said in a statement. "Failure to do so will jeopardize reliable electricity supplies and leave consumers vulnerable to steep or long-term electricity price swings."
Vermont Yankee has been in the middle of many court and regulatory battles. An appeals court ruled in mid-August that the state could not shut the plant down because it was under the jurisdiction of the U.S. Nuclear Regulatory Commission (NRC). The plant was also the site of numerous tritium leaks throughout 2010 and part of 2011. Entergy also tried to sell the plant in 2011, but no buyer stepped up.
The plant began operating in 1972. Entergy acquired the plant from Vermont Yankee Nuclear Power Corp. in 2002, and the plant received its 20-year license renewal in March 2011, extending the license until 2032. It is the fourth U.S. nuclear plant that will be decommissioned behind Dominion (NYSE: D)'s Kewaunee, Duke Energy (NYSE: DUK)'s Crystal River and Southern California Edison's San Onofre nuclear plants.
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