Entergy Discusses Nuclear Closures with Financial Analysts

 Entergy Discusses Nuclear Closures with Financial Analysts

While Entergy (NYSE:ETR) has announced closure of two of its remaining non-utility nuclear units, the company said Nov. 2 that the Palisades plant in Michigan along with Indian Point Units 2 and 3 near New York City are in better financial health.
Earlier in the day, Entergy announced plans to retire its 838-MW James A. FitzPatrick nuclear plant in Scriba, N.Y. FitzPatrick will close at the end of the current operating cycle in late 2016 or 2017. The announcement came weeks after Entergy announced retirement no later than 2019 of the Pilgrim nuclear plant in Massachusetts.
Entergy had already closed its 565-MW Vermont Yankee nuclear plant in late 2014.
“New York state officials worked as hard as we did” in efforts to keep FitzPatrick running, but things didn’t work out, Entergy Chairman and CEO Leo Denault said.
Entergy’s decommissioning fund for FitzPatrick meets federal requirements and the company is looking at a “safe storage” option for decommissioning FitzPatrick, Entergy officials said.
“These decisions are difficult,” given the impact that they have on the employees and the community, Denault said. Yet they are the correct business decisions that will “de-risk” the company portfolio, Denault said.
Entergy officials said that ratings agencies have tended to react positively to changes that the company has made with its wholesale power fleet.
Palisades has contracted through 2022. Indian Point serves the Greater New York City market and continues to work through the nuclear plant relicensing process.
The nuclear retirements do result in a “shrinking” of economies of scale for Entergy’s nuclear fleet, company officials said.
One of the utility nuclear plants, Arkansas Nuclear One (ANO) is going to have additional inspection costs because it got placed in the Nuclear Regulatory Commission (NRC) “column 4,” for plants earmarking for the highest degree of NRC scrutiny. Pilgrim also was placed in column 4 and will experience higher costs during its continued operation, Denault said.
Entergy makes natural gas plant moves
Also in October, Entergy announced it had reached an agreement to sell its 583-MW Rhode Island State Energy Center in Johnston, R.I., to a Carlyle Group (NASDAQ:CG) affiliate, Carlyle Power Partners.
Certain Entergy utilities are working to complete the planning acquisition of the 2,000-MW Union power station in Arkansas. Steady regulatory progress has been made and Entergy remains on track to close that power plant purchase by the end of the year.
Entergy continues to plan to self-build other natural gas generation.
In August, two Entergy regulated utilities in Louisiana filed a joint application with the Louisiana Public Service Commission for the proposed 980-MW combined-cycle gas project in St. Charles Parish.
The project, located in the community of Montz, is targeted for commercial operation in mid-2019. The case is LPSC Docket U-33770.

This article was republished with permission.

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