Entergy announces spin off nuclear business
05 November 2007
US utility Entergy plans to spin off ownership of its nuclear power plants into a new buiness before forming a joint venture with it to operate the units.
Using a range of subsidiaries, the Entergy group owns and operates five nuclear power plants: Pilgrim, in Massachusetts; James A. FitzPatrick and Indian Point in New York; Palisades in Michigan; and Vermont Yankee in Vermont. These total almost 5000 MWe of Entergy's 22,000 MWe generation capacity portfolio.
Under the spin-off plan, approved by the board on 3 November, ownership of Entergy's 'non-utility nuclear business' would be passed to a new wholly owned company, already dubbed SpinCo. With the listed plants as assets the firm would be the only one in the USA to boast 100% low-carbon nuclear electricity generation.
Entergy Corporation shareholders would own 100% of the common equity in Entergy and SpinCo. The two entities would then form a third company as a 50-50 joint venture to undertake the operation of the nuclear plants. Entergy said this strategy would ensure that the 'core nuclear operations expertise' in place at each of the plants remained after the spin-off and added that the joint venture would be capable of fulfilling contract work such as decommissioning and relicensing for other nuclear plant owners. Entergy is already contracted to perform some work at the Cooper nuclear power plant, owned by Nebraska Public Power District.
The third quarter of 2008 was cited as the target timeframe for the spin-off.
The announcement came with Entergy's third-quarter financial results, which showed a $160.9 million profit for the Entergy Nuclear subsidiary as part of an over all profit of $461.2 million for the group. Those third-quarter figures for nuclear were up $54 million and 72,3 million respectively on the same period last year. The increase in nuclear profit was largely due to the addition of the Palisades plant, which Entergy bought in April for $380 million.
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