Entergy’s 850-MW James A. FitzPatrick nuclear plant located near Oswego, N.Y., may be the next reactor doomed to close on profitability woes.
Entergy’s CEO Leo Denault told attendees at the Barclays CEO EnergyPower Conference on Sept. 10 that the company will need to decide by the end of this year whether to go forward with plans to refuel the FitzPatrick plant in Fall 2016.
The single-unit 1975-built reactor is one of six merchant nuclear plants that Entergy operates in the Northeast. Competition from low-cost gas and subsidized wind power has undercut power prices, making it difficult for FitzPatrick to make money (see POWER‘s latest story on how Exelon is dealing with similar issues).
The plant is located in an area with few transmission constraints and a lot of capacity, Denault said. Entergy will need to consider “what’s the right value play as well as what’s the right allocation of resources. And does that free up cash that we could use elsewhere,” he said.
Media widely reported last week that local, state, and federal officials are trying to persuade the company to proceed with the refueling outage to preserve FitzPatrick’s 600 jobs.
Entergy in December 2014 shuttered its Vermont Yankee Nuclear Power Plant because it was unprofitable. The Louisiana-based company acknowledged that the FitzPatrick plant, which gained the Nuclear Regulatory Commission’s green light to run until 2034, has been flailing financially for two years now. However, the company is determined to continue operating its two Indian Point units in New York despite strong opposition by New York Gov. Andrew Cuomo and environmental advocacy groups, Denault said, because its a “primary source of value earnings and … cash flow.”
“The economies of scale, skill, scope and power markets that [Indian Point] serves, that provides the majority of the muscle behind EWC,” he said.
At the conference last week, Denault also revealed that the company didn’t foresee Entergy Wholesale Commodities (EWC), its subsidiary that owns and operates the six nuclear plants, getting any bigger—and that Entergy was mostly just focused on managing the subsidiary’s risk and operating its fleet.
“Certainly it’s been volatile within the EWC business as it relates to power prices, but we’ve made some progress there, too, in terms of the things that we said we needed the do to be able to manage that going forward,” he said.
—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)
[Edited 9/15/15 to complete name of Vermont Yankee Nuclear Power Plant.]