NEW ORLEANS — Power provider Entergy Corp.’s proposal to spin off its wholesale nuclear power plants into a separate company has run into snags long past the time when it had hoped to close the deal.
New York utility regulators may tighten conditions for creation of Enexus Energy Corp. — if they approve of the deal at all. In Vermont, the state Senate voted Wednesday to block operation of Vermont Yankee, one of the nuclear plants that would change owners in a spinoff, after its license expires in 2012. That action could still be reversed.
Entergy says it intends to go ahead with the plan, announced in 2007, to separate its regulated utilities in Louisiana, Mississippi, Texas and Arkansas from six nuclear generating units that sell power on wholesale markets where prices are set by supply and demand — not by public regulators.
“It’s a complex process involving multiple regulators. We are available to work with officials in New York to ensure regulators have the data needed to carefully consider all of the issues in order to reach the right decision and move the transaction to a conclusion,” Entergy spokesman Michael Burns said.
Enexus would own five nuclear operations: Pilgrim Nuclear Station near Plymouth, Mass.; the James A. Fitzpatrick station in Oswego County, N.Y.; two units at the Indian Point Energy Center in Westchester County, N.Y.; Vermont Yankee in Vernon, Vt.; and Palisades Power Plant in Covert, Mich. New Orleans-based Entergy bought the reactors between 1999 and 2007.
Entergy shareholders would get 80 percent of Enexus stock. The remaining 20 percent would be in a trust and shareholders could later exchange Entergy stock for Enexus stock in a tax-free deal.
Entergy CEO Wayne Leonard said the company’s current mix of regulated and wholesale power does not go together. Prices on the nonregulated spot market — though offering potential for greater profits — can fall as quickly as they rise, leading to credit downgrades and higher interest costs, Leonard has said.
But opponents have said the plan would enrich Entergy stockholders at the expense of consumers while failing to guarantee the new company will have the hundreds of millions of dollars eventually required to shut down and dismantle the nuclear plants — potentially leaving taxpayers holding that bill.
In New York, regulators have concerns about the financial stability of the spinoff. In Vermont, Entergy has run into strong anti-nuclear sentiment, compounded by its stumbles in dealing with a radioactive leak at Vermont Yankee.
The New Orleans-based Alliance for Affordable Energy said the Vermont Yankee situation should bring pause to regulators in other states, such as Louisiana, where Entergy has two nuclear generating plants serving regulated power customers and has talked of building another.
“Entergy Corp. has shown that it cannot be trusted to safely operate these facilities or to provide honest, accurate information about the risks involved,” the group said.