Entergy Nuclear of New Orleans, Louisiana, has agreed to purchase another operating nuclear plant at the Indian Point station in New York from Consolidated Edison, following a competitive bidding process.
If federal and state regulators agree, Entergy will pay $502 million for unit 2, plus approximately $100 million for the unit’s fuel. Con Edison agreed to complete its replacement of the plant’s steam generators, which is currently under way, as a condition of the sale. Replacement is due for completion by the end of the year, an Entergy spokesman said, and it should allow the unit to be uprated from 950MW to 970MW. The steam generators have already been replaced at Indian Point 3.
The purchase price amounts to approximately $384 per kilowatt of nuclear generation, since Con Edison is also throwing in the small Indian Point 1 reactor, which has been shut down since the early 1970s, plus three small natural gas-fired turbines and other assets, into the deal. The decommissioning trust funds for each unit were also transferred to Entergy. Unit 1 will be retained in safe storage until units 2 and 3 are shut down and the three units will be decommissoned together.
When the transaction closes, expected in 2001, all three Indian Point units will be in the hands of a single owner for the first time in their 25-year history. Entergy previously agreed to buy Indian Point 3, along with the James A FitzPatrick plant, from the New York Power Authority in a separate agreement that has recently been closed. Entergy expects Indian Point 2 and 3 to operate more cost effectively under a single owner.
The two units are currently licensed until 2014, but an Entergy spokesman said the company would probably apply for life extension. The extension would be for between five and 20 years, he said, depending on the economic conditions at the time of the application, which would probably be around 2012.
The latest agreement will give Entergy four operating nuclear plants in the US Northeast. In addition to Indian Point 2 and 3 and FitzPatrick, Entergy purchased the Pilgrim nuclear station in Massachusetts in 1999.
“With four plants in the Northeast, we expect to create savings through sharing resources in best safety practices, performance management, purchasing, training, licensing and environmental areas — all of which should make these plants more productive and competitive. Our commitment to New York is to provide a safe, low cost power supply and a brighter future of new career opportunities for Con Edison's nuclear employees,” said Jerry Yelverton, CEO of Entergy Nuclear. Among Entergy’s first customers will be Con Edison: although the region’s power market has been deregulated, in an agreement intended to give Edison secure energy suppies Entergy has agreed to sell all of Indian Point’s electricity back to Con Edison until 2004.
The auction of Indian Point 1 and 2 was managed by Morgan Stanley Dean Witter.
