3 Min Read
Feb 8 (Reuters) - U.S. power company Entergy Corp's new CEO said Friday that some of its merchant nuclear power plants are in "challenging economic situations," but the company has not made any decisions to shut any of its nuclear plants.
"We have not made any decisions to shut down any of our merchant nuclear plants," Entergy CEO Leo Denault said on the company's fourth-quarter earnings call.
But, he said, "We are continually assessing our businesses and investments," and noted, "Our plans must be flexible to adapt to high and low price markets and must balance short- and long-term views."
Entergy is fighting New York and Vermont to keep the giant Indian Point nuclear plant in New York near New York City, and the Vermont Yankee reactor in Vermont, operating for another 20 years or so.
At least one energy analyst that follows the nuclear industry, however, has put Entergy's Vermont Yankee and FitzPatrick reactor in New York on a list of possible nuclear plants to shut due to weak gas and power prices, among other things.
Two other generators have already decided to shut nuclear plants in 2013 - Dominion Resources Inc will shut its Kewaunee reactor in Wisconsin later this year and Duke Energy Corp this week retired its damaged Crystal River Reactor in Florida.
Natural gas prices in 2012 hit a 13-year low and are still weak. Gas-fired power plants set the price for electricity in much of the country.
Those weak gas prices, caused by record shale production, have pushed power prices to near decade lows, hurting profit margins for generators - especially merchant generators in competitive, deregulated states like in the Northeast and New York where prices are set by the market.
"Near-term power prices are challenging for some merchant nuclear generating units in certain competitive markets," Denault said, noting the company was "bullish longer-term relative to the current forward curve."
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."
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."
Denault said Entergy would continue to advocate for markets that value what nuclear plants offer, including "a source of clean energy with effectively zero air emissions, grid reliability supported by low forced outage rates and fuel diversity and jobs and other contributions to the regional economy."