Power company Entergy on Tuesday reported higher earnings on both an as-reported and operational basis for the third quarter of the year.
After-tax as-reported earnings rose from $388.2 million ($2.16 per share) in third-quarter 2016 to $398.2 million ($2.21 per share) in the latest earnings period. Operational earnings, on a non-generally accepted accounting principles basis, rose from $415.6 million ($2.31 per share) to $423.7 million ($2.35 per share).
Entergy Wholesale Commodities, which manages the company’s three remaining operational nuclear power plants and provides decommissioning services through its TLG Services subsidiary, brought in $55 million ($0.31 per share) in earned net income in the quarter; that was up from $8 million ($0.04 per share) in 2016. Operational earnings came in at $81 million ($0.45 per share) in the third quarter, rising from $35 million ($0.19 per share) a year ago.
Minus the James A. FitzPatrick Nuclear Power Plant in New York state, which Entergy sold to Exelon in the first quarter, “revenue from nuclear plants increased due to higher capacity prices,” according to the earnings report.
The New Orleans-based company also took in additional income from realized earnings on the trust funds for decommissioning of its nuclear power plants, CEO Leo Denault said during Entergy’s earnings conference call with financial analysts.
Entergy intends to close its remaining nuclear plants in coming years, starting with the Pilgrim Nuclear Power Station in Massachusetts on May 31, 2019, and then the Indian Point Energy Center in 2020-2021. Closure of the Palisades Power Plant in Michigan was recently pushed back from October 2018 to spring 2022 after the dissolution of an agreement for state utility Consumers Energy to buy the companies’ power purchase agreement.
The deal fell through after Michigan’s Public Service Commission said Consumers Energy would only have access to about $136 million in bonds for the contract buyout, roughly $35 million less than requested.
“While we certainly appreciate the merits of terminating the PPA early, any termination must appropriately compensate us for the value of the above market contract,” Denault said. “This decision to continue to operate the plant will preserve value for our owners, while extending our exit from the merchant nuclear business by only a year.”
Talks are continuing on third-party decommissioning of the Entergy Wholesale Commodities nuclear power plants, Rod West, Entergy group president for utility operations, said during the earnings call. The company is waiting on state and federal regulatory approval to sell its shuttered Vermont Yankee plant to NorthStar Group Services for decommissioning, and still hopes to wrap up the deal by the close of 2018, Entergy spokeswoman Kay Jones said. Talks are continuing regarding a similar deal for selling Palisades and Pilgrim to a NorthStar-AREVA joint venture.
Entergy still expects operational earnings of $6.80 to $7.40 per share for the entire year, according to its press release.
