5 Min Read
* New York wants to shut Indian Point reactors
* Vermont wants to shut Vermont Yankee reactor
* Entergy expects all reactors to continue running
By Scott DiSavino
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 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 also 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 and the Vermont Yankee reactor in Vermont operating for another 20 years or so.
At least one energy analyst, 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 plants set the price for power 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 those in deregulated states like New York and Vermont 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 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 plants."
Without naming reactors, he said, "There are years when certain plants' cash flows can be negative at today's forward price curve."
Vermont Governor Peter Shumlin and others want to shut Vermont Yankee in part because they do not think it is safe.
The U.S. Nuclear Regulatory Commission (NRC), which oversees the nation's nuclear plants, however, says the plant is safe.
Entergy wants to keep Vermont Yankee running until 2032, when its renewed federal operating license expires.
To shut the plant, Vermont is appealing a federal judge's decision in 2012 that the state cannot shut the plant.
Entergy's Denault said the U.S. Second Circuit Court of Appeals could decide the appeal by midyear.
Another case is ongoing at the Vermont Supreme Court related to a claim by an anti-nuclear group that the plant is operating in violation of past state Public Service Board orders.
"Given the federal district court rulings and the absence of any state ruling prohibiting operation, we will continue to operate until final decisions are reached in the federal case and in the certificate of public good proceeding before the (state Public Service Board)," Denault said.
The Vermont Public Service Board has scheduled hearings through August on the plant's request for a new certificate of public good, which the reactor needs to keep operating, with a decision expected by the end of the year, Denault said.
New York Governor Andrew Cuomo and others want the two reactors at Indian Point to shut when their federal operating licenses expire in 2013 and 2015.
They want the reactors shut in part because the plant is located within the heavily populated New York metropolitan area, which is home to about 20 million people.
The NRC says Indian Point, like Vermont Yankee, is safe.
Entergy is seeking new 20-year operating licenses from the NRC for the Indian Point reactors.
Denault said Entergy expects the Indian Point renewal process "to continue for many years during which we have the right to continue to operate the units."
Separately, the New York Public Service Commission in November directed New York City power company Consolidated Edison Inc and the New York Power Authority (NYPA) to develop a reliability contingency plan for the potential retirement of Indian Point by the end of 2015.
Con Edison said it would take a combination of new generation, transmission and demand response programs to replace Indian Point.
Con Edison and others have said the shutdown of Indian Point, which provides about a quarter of New York City's power, could boost electric costs in the Big Apple.
"Given the status of the NRC proceeding, we fully expect the plant will be operating well beyond 2015," Denault said.