Entergy Watch: New CEO admits times are tough at Entergy's merchant reactors

As reported by Reuters, Entergy Nuclear's new CEO and Chairman of the Board, Leo P. Denault (pictured left), has admitted "its merchant nuclear power plants are in 'challenging economic situations,'" and "'[n]ear-term power prices are challenging for some merchant nuclear generating units in certain competitive markets.'" The admission came during a fourth-quarter earnings call.

The article continues:

"He said some plants are in the more challenging economic situations for a variety of reasons, including 'the market for both energy and capacity, their size, their contracting positions and the investment required to maintain the safety and integrity of the plants.' (emphasis added)

He would not name the plants but said, 'There are years when certain plants' cash flows can be negative at today's forward price curve.'"

UBS has concluded that the financial pressures could force Entergy to close Vermont Yankee, FitzPatrick in New York, and even Pilgrim near Boston yet this year.

All three reactors are nearly, or even more than, 40 years old, and recipients, despite their age-degradation risks, of U.S. Nuclear Regulatory Commission (NRC) rubberstamps for 20-year license extensions. They are also exact replicas of Fukushima Daiichi Units 1 to 4 -- General Electric Mark I Boiling Water Reactors.

Additional Entergy reactors have received NRC 20-year license extensions as well: Arkansas Nuclear One, Units 1 & 2; Palisades in Michigan; and Cooper in Nebraska (another Mark I GE BWR, which Entergy operates on behalf of owner Nebraska Public Power District).

Entergy's reactors at Indian Point Units 1 & 2 near New York City, as well as Grand Gulf 1 in Mississippi, have applied for 20-year license extensions.

A Dominion spokesman admitted last October that the high cost of making needed safety repairs was a major factor in the nuclear utility's decision to close Kewaunee in Wisconsin by mid-2013. It was the first announced closure of an atomic reactor in the U.S. in 15 years.