Arkansas Nuclear accident could cost Entergy $215m

A fatal heavy equipment accident earlier this spring at Arkansas Nuclear One Unit 1 could cost Entergy (NYSE:ETR) up to $215m although the reactor is still expected to return to service by the end of the year.

That’s according to an 8-K financial form Entergy filed May 20 with the Securities & Exchange Commission (SEC). It marks Entergy’s most detailed report yet of the potential financial impact of the March 31 refueling accident that killed one contract worker and injured several others.

The total cost of assessment, debris removal, and replacing damaged property and equipment is currently estimated to be in the range of $130m to $215m, Entergy said in the 8-K.

In addition, Entergy Arkansas incurred replacement power costs for ANO 2 power during its outage and expects to incur incremental replacement power costs for ANO 1 power to the extent its outage extends beyond the originally-planned duration of the refueling outage. The utility has recovery mechanisms in place designed to recover its prudently-incurred fuel and purchased power costs,

ANO is a nuclear station that includes two pressurized water reactors (PWRs) in Russellville, Ark. Together Units 1 and 2 can generate more than 1,800 MW.

On March 31, during a scheduled refueling outage at ANO 1, a contractor-owned and operated heavy-lifting apparatus collapsed while moving the generator stator out of the turbine building. The collapse resulted in the death of an  ironworker and injuries to several other contract workers, caused ANO 2 to shut down, and damaged the ANO turbine building. The turbine building serves both ANO 1 and 2 and is a non-radiological area of the plant.

Entergy and its insurer, Nuclear Electric Insurance Limited (NEIL), have taken differing positions on compensation.

“NEIL has notified Entergy that it believes that a $50 million course of construction sub-limit applies to any loss associated with the lifting apparatus failure and stator drop at ANO. Entergy has responded that it disagrees with NEIL’s position and is evaluating its options for enforcing its rights under the policy,” according to the filing.

Unit 2 returned to service April 28, nearly a month after the accident. The NRC is expected to issue a written report on the accident in June.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.