By Wayne Barber
Entergy’s efforts to sell the retired Vermont Yankee nuclear plant after its retirement could set a pattern for the nuclear power plant operator, Chairman and CEO Leo Denault said Wednesday.
“As we move toward the complete wind-down of our merchant operations we will continue to look for opportunities to divest our nuclear assets post-shutdown for the purposes of decommissioning,” Denault said during the company’s quarterly earning call with financial analysts.
He added, though, that if Entergy can’t seal firm deals with potential buyers that his company is ready and able to close the nuclear plants, place them in SAFSTOR mode for a period of decades, and then finally carry out decommissioning.
Entergy closed Vermont Yankee at the end of 2014 and in November 2016 announced plans to sell the plant to New York City-based decommissioning specialist NorthStar Group Services. The companies hope to close the sale by the end of 2018.
Entergy has filed a license transfer application for Vermont Yankee with the Nuclear Regulatory Commission, which will be necessary for the sale to go through. The matter is also before the Vermont Public Utility Commission (PUC), which plans public and technical hearings on the matter early next year, Entergy indicated in its earnings report materials.
“Vermont has been very engaged” in the document discovery process, in which organizations authorized to intervene in the sale are seeking access to documents related to the proposed sale and decommissioning, Denault said. While the regulatory process has slowed a bit – for example, the PUC hearings were originally scheduled for this fall — it should not affect the date of sale closure, he said.
Along with retiring Vermont Yankee, Entergy is abandoning its NRC 20-year license renewal applications for its two Indian Point plant reactors in New York state and will retire both by May 2021. The company plans to retire its Palisades plant in Michigan in October 2018 and the Pilgrim facility in Massachusetts will be retired by June 2019.
These stations comprise the non-utility, or “merchant,” nuclear assets for subsidiary Entergy Wholesale Commodities. Within the past year, Entergy sold its FitzPatrick nuclear plant in New York to Exelon.
An AREVA-NorthStar joint venture, Accelerated Decommissioning Partners, is already looking to buy Pilgrim and Palisades for decommissioning.
Entergy’s regulated nuclear fleet encompasses the dual-reactor Arkansas Nuclear One; the River Bend and Waterford 3 facilities in Louisiana; and the Grand Gulf nuclear plant in Mississippi.
In its second-quarter 2017 earnings release this week, Entergy Corp. reported $410 million in earnings ($2.27 per share) on an as-reported basis, and $561 million ($3.11 per share) on an operational basis. The as-reported earnings dropped by $157 million from the same quarter of 2016, while operational earnings rose by $3 million. Entergy Wholesale Commodities brought in net income attributable to Entergy Corp. of $223 million ($1.24 per share), dropping from $250 million ($1.39 per share) on a year-over-year basis. The quarterly numbers were better on an operational basis here as well: rising from $241 million in 2016 to $375 million in the latest quarter.
While regulatory approval for the Vermont Yankee sale remains pending, preliminary decommissioning operations are underway. AREVA Nuclear Materials, the U.S. branch of the French nuclear company, announced in July that it had signed a deal to extract and ship the reactor pressure vessel and internal reactor parts at Vermont Yankee for NorthStar. The plant’s prospective owner is also conducting early engineering and design activities, the Brattleboro Reformer reported this week.
Majority interest in NorthStar has also changed hands during the sale process: J.F. Lehman & Co. announced in June that it had taken an ownership stake in the company, in partnership with Medley Capital.
“[W]e are excited to partner with the [NorthStar] senior management team to pursue,” Alex Harman, Partner at JFLCO, said in a news release. “We’re very pleased to have the Company and its outstanding leadership team join the JFLCO family,” he added. Terms of the “recapitalization” were not revealed in the June 13 news release.
