Entergy Takes $240 Million Hit to Retire Nuclear Plant
Entergy announced today that, despite regulatory approval through 2032 and $400 million in investments over the past decade, it is retiring its Vermont Yankee nuclear power plant in Q4 2013.
The decision was an "extremely tough call," according to Chairman and CEO Leo Denault, but three main factors forced the closing: (1) shale gas pushing wholesale energy prices down, (2) high costs for the plant relative to its size, and (3) "wholesale market design flaws" that make full compensation impossible for competitive nuclear plants in the region.
Entergy plans to take a $181 million hit in Q3, followed by another $55 million to $60 million in the next year to cover severance and employee retention costs. Since Entergy had previously expected the plant's operational earnings to break even in 2013 before dipping into the red over the next few years, this decision will ultimately add around $150 million to $200 million to cash flow through 2017.
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