Entergy to buy Con Edison�s nuclear plants
Entergy Corp., continuing its strategy to buy nuclear power plants, will buy Indian Point units 1 and 2 from Consolidated Edison Inc. for $372 million. Indian Point 1 has been shut down and in storage since the early 1970s and the 970 Mw Indian Point 2 has not operated since February because of steam generator problems. Part of the purchase price includes the replacement of the generators. The plant is expected to be in operation by the end of the year, a Con Edison spokesman said.
Entergy Corp., continuing its strategy to buy US nuclear power plants, will buy Indian Point units 1 and 2 from Consolidated Edison Inc. for $372 million.
Indian Point 1 has been shut down and in storage since the early 1970s, and the 970 Mw Indian Point 2 has not operated since February because of steam generator problems. Part of the purchase price includes replacement of the generators. The plant is expected to be up and running, including the new generators by the end of the year, a Con Edison spokesman said.
With four nuclear power plants operating in the Northeast, Entergy expects to generate operational savings by sharing resources for purchasing, training, licensing, and environmental management, said Jerry Yelverton, chief executive officer of Entergy Nuclear in a statement. Entergy is one of two large utility holding companies pursuing a nuclear strategy in the wholesale electricity market. PECO Energy Co.�s affiliate Amergen is also buying nuclear plants and betting on its expertise and efficiency in nuclear plant operations to keep costs down.
Entergy already owns the Pilgrim nuclear plant and is expected to complete its purchase of Indian Point 3, plus the James FitzPatrick nuclear plant from the Power Authority of the State of the New York later this year. Entergy has five nuclear plants of its own.
Before the Indian Point 2 transaction is completed, Con Edison must replace the nuclear plant�s steam generators and bring the plant back to full power.
Entergy won the bid for the nuclear plants in a supervised auction process. But the sale is still subject to approval by the US Nuclear Regulatory Commission, the Federal Energy Regulatory Commission, the New York Public Service Commission, and other regulatory authorities.
With the sale of the Indian Point plants, Con Edison has disposed of all its generation except for 550 Mw of small gas-fired peaking plants located within New York City, said a Con Edison spokesman. The company was not required to sell its generation under state electric restructuring legislation. But it was �understood� by the Public Utility Commission of New York that Con Edison would become a transmission and distribution utility, according to a company spokesman.
Under the agreement, Entergy will sell Con Edison all Indian Point's output for 3 1/2 years at $36-$46/Mw-hr.The deal will cost Entergy $602 million in cash, including $372 million for the plant, $100 million for fuel, and $130 million for the purchase power agreement and the synergies with Indian Point 3.
With the successful bid for Indian Point 2, Entergy will pay the New York Power Authority an additional $10 million/year for 10 years.
Entergy will get a $403 million trust fund for decommissioning of Indian Point 1 and 2 when the transaction is completed.