Entergy (NYSE:ETR) Chairman and CEO Leo Denault stressed Sept. 13 that the decision to close the Vermont Yankee nuclear plant in 2014 was “purely economic.”
Denault also told the Barclays 2013 CEO Energy-Power Conference in New York that observers shouldn’t confuse the situation at Vermont Yankee with the one at Indian Point Units 2 and 3, which are located about an hour outside of New York City.
Entergy said in August that it would close the 600-MW single unit nuclear plant in Vermont despite winning various legal battles to keep it open.
Despite excellent performance numbers (including a 92% capacity factor), the financial numbers were not strong, Denault said. Vermont Yankee was in the process of going from “marginally break even” toward negative, Denault said. “The numbers were the numbers,” Denault said.
The Vermont Yankee retirement decision was driven by sustained low power prices, high costs and wholesale electricity market design issues in the region, according to Entergy.
Vermont Yankee’s retirement is expected to be “modestly accretive to operational earnings within two years after shutdown,” Denault said. It will lower the risk profile for Entergy’s non-utility nuclear business.
“Indian Point is at the other end of the spectrum.” Indian Point is a large two-unit plant in a higher priced power market, Denault said. Each Indian Point unit can generate more than 1,000 MW.
Indian Point got some good news recently. In August the Nuclear Regulatory Commission (NRC) acknowledged that Indian Point 2 can run beyond expiration of its current license on Sept. 28, Denault said
Both Indian Point nuclear units applied for 20-year license extension from NRC several years ago.
The CEO also said in his presentation that New York State Environmental Conservation expert report filed in June said closed-cycle cooling is very costly, highly challenging and “not clearly available” for Indian Point.
Both Indian Point and Vermont Yankee are part of Entergy Wholesale Commodities (EWC), which has six nuclear units at five sites that generate roughly 5,000 MW.
The CEO also stressed the Entergy position that capacity markets don’t adequately compensate operators of baseload generation. Denault said he was pleased to see FERC’s recent tariff changes to set up a new Lower Hudson Valley capacity zone, which could affect Indian Point.
As for nuclear operations at its regulated utility nuclear plants in the South, Entergy is investing $230m in post-Fukushima upgrades to make the plants better able to withstand severe weather events.
Denault mum on MISO timing specifics
Denault declined analysts’ requests to provide some additional specifics on the integration of some of its southern subsidiaries into the Midcontinent Independent System Operator (MISO) transmission network.
“I can’t give you a lot right now and I’ll tell you why: We are getting ready to make a filing” with regulators, Denault told one analyst during the question-and-answer session. That filing should come toward the end of the month, the CEO said.