UPDATE 2-Entergy Miss. Grand Gulf reactor reduced due fire

(Updates with company comment)

NEW YORK, Nov 18 (Reuters) - Entergy Corp (ETR.N) reduced the 1,266-megawatt Grand Gulf nuclear power station in Mississippi on Nov. 17 due to a fire in a protected area, the company told the U.S. Nuclear Regulatory Commission in a report.

A spokeswoman for the plant said teams were investigating the incident to determine the source of the oil and make any necessary repairs.

She said the fire caused only minor damage and did not pose any danger to public or workers.

She could not say when the unit would return to full power due in part to competitive reasons.

The fire was under one of the reactor feedwater pumps. It involved oil accumulated under the feedwater pump. Operators tripped the pump, which reduced the reactor from full power to 48 percent.

Operators were able to increase the plant output to about 65 percent where it was holding early Tuesday, the spokeswoman noted.

Because the fire lasted more than 15 minutes in a protected area, the company declared an unusual event to the NRC. An unusual event is the lowest of the NRC's emergency classifications.

The Grand Gulf station, which entered service in 1985, is located in Port Gibson in Claiborne County about 130 miles north of Baton Rouge, Louisiana.

One MW powers about 500 homes in Mississippi.

Entergy operates the station for its owners, Entergy (90 percent) and South Mississippi Electric Power Association (10 percent).

In 2007, the NRC issued Entergy an Early Site Permit for the Grand Gulf site, which is valid for up to 20 years and allows the company or another applicant to build one or more reactors on the site. Before building new reactors, however, any applicant must first seek NRC approval for a combined construction and operating license.

In February 2008, Entergy filed with the NRC through NuStart Energy Development LLC for permission to build and operate one of General Electric Co (GE.N)/Hitachi Ltd's (6501.T) 1,550 MW Economic Simplified Boiling Water Reactors (ESBWR) at Grand Gulf. The company however has not yet decided whether it will build the new reactor.

If the company decides to move forward with the new reactor, it could cost an estimated $6.2 billion (at an industry estimate of about $4,000 per kilowatt) and could enter service post 2017.

The company also said it plans to file with the NRC in January 2010 to renew the existing reactor's original 40-year operating license for another 20 years.

Entergy, of New Orleans, Louisiana, owns and operates about 30,000 MW of generating capacity, markets energy commodities, and transmits and distributes power to 2.7 million customers in Arkansas, Louisiana, Mississippi and Texas. (Reporting by Scott DiSavino; Editing by John Picinich)