It’s no secret that nuclear power plants are being retired faster than they are being replaced by new ones. What may not be as well known is that U.S. nuclear power plants generated more electricity last year than ever before. And that happened with less total capacity than was available in 2010, the year when the previous record nuclear power generation was posted. No new record is likely anytime soon, though, as more and more nuclear plants are set to be shut down.
Entergy Inc. (NYSE: ETR) is among the nuclear power generators that will be getting out of the business, choosing instead to focus on its utility rather than its merchant power operations. To that end, Entergy said this morning that it has reached an agreement with a subsidiary of privately held Holtec International under which Holtec will purchase and decommission Entergy’s Indian Point reactors in New York. The sale of the Indian Point units marks Entergy’s complete exit from the nuclear merchant power business.
Indian Point’s number one unit has been shut down since 1974, unit number two will be shut down in 2020 and unit three will shut down in 2021. At that time, Holtec will begin decommissioning (tearing down) the plants. The company has created a joint-venture firm with Canada’s SNC-Lavalin Group to perform the decommissioning work.
The transaction becomes effective following the shutdown of Indian Point unit three and must still be approved by the U.S. Nuclear Regulatory Commission and the New York Public Service Commission. The decommissioning plan, which Holtec expects to file by the end of this year, also must be approved by the state’s Department of Environmental Conservation.
Dr. Kris Singh, Holtec’s president and CEO, said:
Our industry-leading expertise and deep experience permit us to complete decommissioning at Indian Point decades sooner than if Entergy remained the owner and performed decommissioning itself. The potential for the site to be released decades sooner for redevelopment could deliver significant benefits to local community stakeholders and the local economy.
Late last month, a bipartisan group of U.S. Senators introduced legislation known as the Nuclear Energy Leadership Act that seeks to reestablish U.S. leadership in nuclear energy by putting the federal government in the position of an early adopter of advanced nuclear reactors.
Entergy stock traded up about 0.4% early Tuesday, at $95.07 in a 52-week range of $75.45 to $96.87. The consensus price target on the stock is $99.46.