UPDATE 2-Entergy scraps nuke spinoff after NY opposition

* Company will take 40-45 cent/share charge

* Increased quarterly dividend to 83 cts/share

* Shares fall 1 percent

(Adds details on regulatory issues, updates share price)

By Matt Daily

NEW YORK, April 5 (Reuters) - Entergy Corp ETR.N scrapped a planned spinoff of several of its nuclear power plants after New York regulators blocked the move and the utility owner said it would take more than $75 million in charges from the effort.

The setback also came just days after New York’s environmental regulators denied a request to renew water permits at the company’s Indian Point plant, setting back efforts for a 20-year renewal of its operating permit.

The move to cancel the spinoff is the latest setback for Entergy Chief Executive Officer Wayne Leonard, whose regulatory woes tied to the northern nuclear operations come on top of turmoil with utility commissions in the four states where the company provides regulated electric service to 2.7 million customers.

Entergy had planned to spin off six reactors, including three in New York, into a new company called Enexus Energy Corp. The reactors, which are not owned by Entergy’s utilities, are capable of generating 5,000 megawatts, enough to supply about 4 million households.

The company, the second-largest U.S. nuclear power plant operator, said it would unwind the business infrastructure associated with the spinoff and take a charge of 40 cents to 45 cents per share, or $75.7 million to $85.1 million.

The company had long hoped to split up to take advantage of what it believed would be a premium for nuclear power plants under more restrictive pollution and carbon dioxide emissions.

Leonard criticized the New York Public Service Commission, which ruled on March 25 that the split was not in the public interest.

“Two years of testimony, technical conferences and hearings, was more than anybody expected. We were frustrated by what seemed to be a constantly moving target for approval,” he told a conference call.

Leonard said the company had not yet received a formal order from New York rejecting the proposed spinoff, but said any legal challenges it could potentially lodge would take a “protracted period of time.”

Entergy has had difficulties with regulators in the past, and a decade of complaints about power grid congestion led state regulators in Louisiana, Arkansas, Mississippi and Texas to form a special committee last year to oversee the company’s grid planning.

“We will be assessing our options, but internally we are moving on,” he said.

New Orleans-based Entergy’s plan to create the first stand-alone nuclear power company in the United States had faced significant hurdles, especially from regulators in New York. Also, state senators in Vermont voted in February to shut down a reactor in 2012 when its license expires after the discovery of a tritium leak.

Separately, Entergy said its board authorized an increase in its quarterly dividend to 83 cents per share from 75 cents, payable on June 1.

Leonard also said denial of the Indian Point water permit renewal did not mean the company would not ultimately receive the needed approvals and it had several other steps in the process in which it expected it would win the permits.

Entergy shares were down about 1 percent at $80.49 in late afternoon trading. (Reporting by Matt Daily; additional reporting by Eileen O’Grady in Houston; editing by Dave Zimmerman, Lisa Von Ahn and Andre Grenon)