Entergy buys Pilgrim for $80 million

30 November 1998

New Orleans based Entergy Corp has made a significant step in developing its strategy to consolidate its nuclear power activities (see NEI, October 1998, p44). The company is to buy the 670 MWe Pilgrim BWR from BEC Energy, paying $80 million. Pilgrim is located in Plymouth, Massachusetts, and the purchase puts Entergy in a strong position to sell generation services in New England when power markets open to competition in February next year.

Entergy will also receive around $466 million from BEC to cover the decommissioning and clean up costs. The plant is scheduled to cease operation in 2012.

Commenting on the deal, Don Hintz, who will become Entergy President on 1 January 1999, said that he hoped the Pilgrim purchase would be the first of many.

“We believe there will be significant consolidation in the next few years, leading to a small number of owner operators running the nuclear power plants in the US,” he explained.

Entergy considers nuclear operations one of its core competencies and it is aiming to become a national nuclear power company. According to Hintz most of the plants the company is interested in buying are in the North East and Mid West, however he does not consider Entergy’s location, in Mississippi, a problem.

“We have been contacted by a number of utilities interested in selling and we think in the next couple of years a number of plants will become available.” The workers at Pilgrim will have to renegotiate contracts with the take-over, but Hintz suggested there should be few problems. He emphasised Entergy’s good relations with unions at the plants it already operates and said that a contract with the union at Pilgrim was a top priority.

The purchase is dependent on regulatory approval, which Hintz anticipated being completed within the first half of 1999. Should the deal be completed smoothly Hintz believes Entergy could make Pilgrim highly profitable.

“We think we have acquired Pilgrim at market value,” he said. “If we can operate it at high performance levels it should be highly profitable. We think we have got a good deal, favourable when compared with PECO’s purchase of Three Mile Island” (see NEI August 1998 p2).



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