Entergy completes new combined-cycle gas plant; retires Vermont Yankee

Entergy (NYSE:ETR) recently brought online a combined-cycle natural gas plant in Louisiana; announced plans to purchase gas-fueled generation in Arkansas and carried out early retirement of a nuclear power plant in Vermont.

Those are a few of the natural gas and nuclear power highlights, Entergy management shared during a Feb. 5 earnings call.

“At the Utility, we began the deployment of our capital program via the proposed purchase of the Union Power Station and the start of commercial operations at Ninemile 6, the Utility’s first self-build plant in three decades,” said Chairman and CEO Leo Denault.

Entergy placed the 560-MW Ninemile 6 natural gas combined-cycle unit in service in Louisiana during late December.

Also during December, Entergy announced that it had signed an agreement to buy nearly 2,000 MW of combined-capacity at the Union Power station in Arkansas.

Entergy is buying Union for a purchase price of $948m. The purchase is contingent upon Entergy’s regulated utility getting necessary approvals, including full cost recovery, from regulatory agencies. Entergy expects to close the Union deal late this year.

In addition, Denault talked about Entergy’s wholesale nuclear plant operations, particularly the December retirement of the 620-MW Vermont Yankee reactor.

The Vermont Yankee closure highlighted “market flaws.” The market constraints in the Northeast are now drawing more attention and hopefully some good will come from this and prevent more “unwarranted plant retirements,” Denault said.

Entergy did see it earnings decline attributable to the Vermont Yankee shutdown. Vermont Yankee’s contribution to 2014 operational earnings, which closed at the end of 2014, was approximately $40m.

There has been some more encouraging news of late for Entergy’s two Indian Point nuclear units in the state of New York.

A New York court issued an important ruling finding that Indian Point is not required to acquire a “coastal zone management” application from certain New York agencies. The state court in New York ruled that Indian Point is grandfathered and does not need a coastal zone management approval.

Indian Point supplies 25% of the power for New York City and surrounding areas.

Entergy is making progress on its Nuclear Regulatory Commission (NRC) license renewal case at Indian Point, Denault said. “Track 2” hearings on the 20-year license renewal application are scheduled in 2015.

Entergy enjoyed a roughly 92% nuclear fleet capacity factor during the quarter.

Entergy is also planning the $187m Lake Charles transmission project in Louisiana, one of the largest transmission infrastructure projects in Entergy history, Denault said.

Entergy reported fourth quarter 2014 earnings per share (EPS) of 66 cents on an as-reported basis and 75 cents on an operational basis and full year EPS of $5.22 on an as-reported basis and $5.83 on an operational basis.

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.