Entergy to cut jobs, mulls future of wholesale nuclear
HOUSTON (Reuters) - Power company Entergy Corp (ETR.N) is mulling the future of its wholesale nuclear operation and plans to cut 800 jobs to save up to $250 million by 2016, Chief Executive Officer Leo Denault told investors on Tuesday.
As part of his reorganization plan to simplify Entergy's corporate structure, Denault said the company is studying options for its non-utility owned power plants, mainly its aging nuclear plants operating in the U.S. Northeast which face falling wholesale prices and a difficult regulatory environment.
"As we consider strategic alternatives for (Entergy Wholesale), all options are on the table," Denault said.
Denault, who took the reins of New Orleans-based Entergy earlier this year after the retirement of J. Wayne Leonard, outlined seven strategic imperatives he said he hopes will make the company easier "to follow, predict and value."
Denault's top priority is to complete the integration of Entergy's transmission grid into the Midcontinent Independent System Operator, or MISO, and to obtain approval of the divestiture of the transmission assets to ITC Holdings Inc (ITC.N) from state regulators by year end.
The transaction, a spin-off and merger, has received approval from federal regulators, but regulators in four states have questioned whether the plan would increase transmission rates for Entergy customers without providing sufficient benefits.
To satisfy state regulators, Entergy's utility units and ITC are offering a total of $453 million in rate mitigation to customers to offset ITC's request for a higher rate of return.
"We believe that the benefits for our customers, employees and communities are real," Denault said. "This rate mitigation plan puts us and ITC on the hook to deliver them."
Entergy also said its 834-megawatt Unit 1 at its Arkansas nuclear power plant may return to service in August, several months ahead of the company's last estimate.
The unit has been shut since late March after an industrial accident during a refueling outage killed one worker.
The plant is located near Russellville about 75 miles northwest of Little Rock.