Closure Agreement / News

“Entergy mulls fate of New York nuclear plant as it moves to ‘pure play utility'”

“Entergy has a fairly small window to decide to extend the operation of its 2,069-MW Indian Point nuclear plant in New York if the state has not found suitable replacement power by the time the merchant facility is targeted for retirement in 2021, company officials said Wednesday.

The New Orleans-based company is moving ahead with its strategy to transition to a “pure play utility” in several years by shutting or selling its merchant nuclear generation fleet, Leo Denault, Entergy chairman and CEO, told analysts Wednesday during a conference call to discuss the company’s fourth-quarter earnings.

“The decision to close the merchant nuclear plants was a difficult one,” he said, driven by “adverse economics,” not operating or employee issues.

In January, the company reached a deal with New York officials to close Indian Point’s 1,028-MW Unit 1 by April 2020, and 1,041-MW Unit 2 a year later. New York City gets 25% of its power from the Buchanan-based plant.

“The plant will run for several more years to allow New York to replace this important generation resource,” he said, but a replacement power source has not yet been identified.

In the latter half of 2017, the New York Independent System Operator is expected to perform an updated load and resource study that will explore potential resources that could take Indian Point’s place.

The study should provide some answers as to any reliability and security issues that may be created by Indian Point’s closing.

In any event, Entergy officials said they will need to know by the second half of 2018 if the plant’s operation should be extended to perhaps to 2024 or 2025. If so, Entergy most likely would want to negotiate a power purchase agreement with the state, officials said.

Entergy, in the meantime, is preparing to close its 811-MW Palisades nuclear plant in Michigan in 2018 and its 688-MW Pilgrim nuclear plant in Massachusetts in 2019.

Later this year, probably in Q2, Entergy expects to close on the sale, to Chicago-based Exelon, of its 838-MW James A. FitzPatrick nuclear plant in upstate New York, the nation’s largest nuclear generator. Exelon agreed to pay $100 million, including assumption of certain liabilities, plus $10 million in non-refundable fees for FitzPatrick.

“We are delivering on the promise of portfolio transformation,” Denault said. To replace some of the merchant generation, the company is adding more natural gas and renewables to its generation mix.

In late January, Entergy broke ground for the 980-MW St. Charles Power Station, a combined-cycle natural gas plant in Montz, Louisiana. The $869 million facility is scheduled for commercial operation in June 2019.

According to company spokeswoman Kay Jones, Entergy is wrapping up permitting and other activities on several other combined-cycle gas plants including 994-MW, $872 million Lake Charles in Louisiana and 993-MW, $937 million Montgomery County Power Station in Texas. They are set for commercial operation in June 2020 and the summer of 2021, respectively.

Entergy also is pursuing the 226-MW, $216 million New Orleans Power Station, a gas-fired combustion turbine project.

Last year, Entergy began laying the groundwork for an “integrated energy network” featuring installation of automated metering infrastructure. “We’ve made filings with regulators in four jurisdictions to implement advanced metering and plan to file with Texas this year, Denault said, adding “we expect meter deployment in 2019.”

Overall, Entergy plans to spend about $10.4 billion from 2017-2019 on its multi-state generation, transmission and distribution system.

The company posted a loss of $1.77 billion, or $9.88/share, in the fourth quarter, reversing a $99.6 million, or 56 cents/share, profit a year ago, largely because of an impairment related to its merchant nuclear plants.

Q4 utility revenue was $1.42 billion in the latest quarter, compared with $1.81 billion in Q4 2015.

Entergy serves 2.9 million utility customers in Arkansas, Louisiana, Mississippi and Texas.”

To read the complete article, click the link below:

http://www.platts.com/latest-news/electric-power/louisville-kentucky/entergy-mulls-fate-of-new-york-nuclear-plant-21907828

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s