While the fleet at Entergy (NYSE:ETR) “is one of the cleanest in the nation” for carbon dioxide emissions, the company has a hard time seeing the Environmental Protection Agency’s Clean Power Plan being successful, Entergy CEO Leo Denault said July 29.
On average the Entergy fleet CO2 emissions are less than what EPA is seeking from new power plants. That’s thanks largely to the Entergy nuclear fleet, Denault said during the company’s quarterly earnings call.
But Denault doubts the proposal for existing plants will bring about a 30% CO2 reduction by 2030.
The CO2 proposal is probably the most complex that EPA has ever issued. “Its impact would not match the agency’s stated objectives,” Denault said. “At this point we have more questions than answers.”
The Entergy CEO said that’s a shared sentiment through much of the power industry. The state-by-state calculations behind what will be required to achieve a 30% reduction, while still ensuring reliability, are not clear Entergy officials said.
Entergy is having “a hard time to find a reason to be optimistic” on the EPA proposal, said Entergy Executive Vice President and Chief Administrative Officer Rod West.
EPA just started regional field hearings on the CO2 proposal for existing plants, which was issued June 2.
When asked by a financial analyst, Entergy executives said they have seen little sign that the EPA CO2 proposal has reduced opposition to license renewal of the two Indian Point nuclear units among certain New York state policymakers.
The New York State Department of Environmental Conservation (DEC) is debating a proposal that could force the two nuclear units offline for a prolonged period every spring and summer in order to reduce fish kills.
In June the New York ISO again found Indian Point nuclear station a critical part of the generation mix for the state of New York, Entergy officials said. Entergy executives said during the call that New York would have trouble meeting its reserve margin targets
“Track 1” of the Indian Point license renewal proceedings is pending before the Nuclear Regulatory Commission (NRC). Hearings on Track 2 are currently expected to commence in 2015, Entergy said in its earnings materials. Various state hearings are also scheduled on Indian Point in 2015.
During the call, Entergy officials said that high production and mild weather have kept natural gas prices low lately. That could gradually start to change in 2015 with another round of coal plant retirements; greater utility demand for gas; CO2 price pressures and lower-than-expected efficiency gains, according to Entergy.
Entergy Wholesale Commodities continue to decrease the typical number of days needed for refueling and maintenance outages, Denault said. Entergy also continues to benefit from good economic growth in many of its service areas, Denault said.