Entergy Corp. management is touting continued progress in its campaign to divest unregulated nuclear plants as the company transitions to a pure-play utility model.
Speaking on an Oct. 31 conference call to discuss third-quarter earnings, executives updated analysts on their latest efforts to facilitate the shutdown and sale of three of its four nuclear plants under competitive generation subsidiary Entergy Wholesale Commodities.
The company in August announced a deal to sell its Pilgrim and Palisades plants to Holtec International Inc. Pilgrim, located in Massachusetts and owned by Entergy Nuclear Inc. is scheduled to retire in May 2019, while Palisades in Michigan, owned by Entergy Nuclear Palisades LLC, is slated to shut down in April 2022.
Entergy's retired Vermont Yankee plant found a buyer, NorthStar Group Services Inc., in November 2016 to speed up its decommissioning. Indian Point in New York, with its units scheduled for closure by April 2021, does not yet have a buyer.
Chairman and CEO Leo Denault described as "a major milestone" the Nuclear Regulatory Commission's October approval of Vermont Yankee's license transfer to NorthStar. The move was an important step in that process, one which he framed as a model for the nuclear decommissioning industry as a whole.
"The sale of nuclear plants post-shutdown will benefit stakeholders and our industry by accelerating the decommissioning timeline, drawing on industry-leading decommissioning and site remediation expertise and experience, and laying the foundation for potential future business development opportunities in the regions," Denault said.
He added that Entergy awaits a decision from Vermont utility regulators on the matter, which the company expects by the end of November.
With Pilgrim, Entergy and Holtec in September attended the NRC's license transfer application pre-submittal meeting, during which they discussed their decommissioning strategy and other qualifications. Denault said Entergy plans to submit a filing to the federal body by the end of the year.
"Our intent is to follow a path similar to Pilgrim and Palisades and Vermont Yankee on Indian Point. The good news is we have a lot of time," Executive Vice President and CFO Drew Marsh said. "It's going to be a while before those plants are shut down. And we are receiving heightened interest because we've had success with Vermont Yankee [at] the NRC. So we're actually going to take some of that time to get the best deal we can, and we're not going to talk about specifics of the process and where we are in the process as we go along."
"Vermont Yankee is a first-of-a-kind deal," he continued. "So everybody was learning through that process, and certainly the NRC was learning through the process. ... And so our current anticipation is that [we] complete the Pilgrim process by the end of next year. The Palisades process, of course, won't commence until 2022. But we would expect some time second half of 2022 is whenever we would be able to close that particular half of the transaction."
Marsh said he expects the Entergy Wholesale Commodities unit to provide positive net cash to the parent company from 2019 through 2022.
Gas generation updates
Nuclear divestment isn't the only aspect of Entergy's pure-play push. In August, the company's Mississippi utility acquired the 810-MW Choctaw combined-cycle plant from GenOn Energy Inc. for $314 million. Denault said the transaction is expected to close by the end of 2019 following receipt of regulatory approvals.
During an analyst day in June, management said its five-year, $17.7 billion capital plan assumed Entergy Mississippi would build a new combined-cycle facility to meet the utility's capacity requirements. But purchasing Choctaw is more economic, Denault said, freeing up resources for other investments.
All but one of Entergy's new-build gas generation projects are on schedule. The New Orleans Power Station, the March approval of which is clouded by an investigation slamming Entergy New Orleans LLC for sanctioning and facilitating fraudulent support for the plant, is awaiting an air permit from Louisiana regulators before it can further proceed with construction.
This has resulted in a four- to five-month delay, Denault said, pushing its commercial operation date to the second quarter of 2020. But the plant is still anticipated to be completed on budget, he added.
