Power company Entergy on Tuesday reported $230 million in consolidated earnings for the first quarter of 2016, down about 23 percent from $298.1 million from the same period in 2015.
In a press release, the company, which owns the Vermont Yankee, Pilgrim, and James A. FitzPatrick nuclear power plants, in addition to other assets, reported first-quarter 2016 earnings per share of $1.28 on an as-reported basis and $1.35 on an operational basis.
During Tuesday’s earnings call, Executive Vice President and Chief Financial Officer Drew Marsh discussed operational earnings, which decreased from $302.7 million in first-quarter 2015 to $242.8 million in 2016. The single most significant factor, he said, was lower wholesale energy prices, which in turn impact consolidated earnings. The nuclear fleet’s average price was down more than $8 per megawatt hour, or 13 percent.
Entergy Chairman and CEO Leo Denault in a statement called the first quarter “a good start to another important year for Entergy.”
“Given the challenges and opportunities ahead, we are confident that we can deliver on our 2016 earnings commitments as well as our Adjusted Utility, Parent & Other long-term outlook,” Denault said. “We accomplished what we set out to do, including the acquisition of the Union Power Station and the finalization of Entergy Arkansas’ rate case. In the quarter we also had industrial sales growth of over 6 percent. Our results are the outcome of the strategy we have been pursuing for some time to create sustainable value for all our stakeholders in 2016 and beyond.”
Entergy listed as a “business highlight” its intention to refuel Pilgrim, which the company announced earlier this month. The plant will cease operations on May 31, 2019. The report notes that the decision to close Vermont Yankee, FitzPatrick, and Pilgrim resulted in $20 million in net income for first-quarter 2016, as opposed to $7 million in the same quarter of 2015.
During Tuesday’s earnings call, Denault said the company has reduced its size, risk, and financial volatility through the sale of the Rhode Island State Energy Center, a natural gas plant, and the shutdown of Vermont Yankee.
“This trend will only accelerate as Pilgrim and FitzPatrick come offline,” Denault said.
FitzPatrick is set to shut down in 2017, followed by Pilgrim two years later. Denault discussed the Nuclear Regulatory Commission’s increased oversight at Pilgrim, which resulted from a series of unplanned shutdowns and safety relief valve concerns in summer 2015. NRC in September 2015 downgraded the plant’s safety rating to Column 4, which is the lowest rating a plant can have while remaining in operation.
“We will inform the NRC when we are ready for (the third and final inspection for increased oversight), which we expect to be in the second half of this year,” Denault said. “Also, after careful consideration of the circumstances surrounding the plant’s operations, we intend to refuel the plant in the spring of 2017 and run the plant safely through its current capacity commitments until its planned shutdown date of May 31, 2019.”
