By Tom Kleckner and William Opalka
Exelon announced Tuesday it has purchased the James A. FitzPatrick nuclear plant for $110 million from Entergy.
Officials from both companies were joined by Gov. Andrew Cuomo at the plant’s gates to announce the deal, which is subject to regulatory approval.
“We are pleased to have reached an agreement for the continued operation of FitzPatrick,” Exelon CEO Chris Crane said in a statement. “We look forward to bringing FitzPatrick’s highly skilled team of professionals into the Exelon Generation nuclear program, and to continue delivering to New York the environmental, economic and grid reliability benefits of this important energy asset.”
Entergy executives had reiterated last week that the company did not intend to continue operating the troubled plant in upstate New York beyond January 2017.
“There are no plans to continue to run the plant under Entergy ownership,” Bill Mohl, president of Entergy Wholesale Commodities, told analysts during the corporation’s second-quarter earnings call Aug. 2.
The company had announced plans to shut down both FitzPatrick and the Pilgrim nuclear plant in Massachusetts, but it recently said it had opened negotiations with Exelon over FitzPatrick. (See Entergy in Talks to Sell FitzPatrick to Exelon.)
Mohl told analysts if Entergy and Exelon are able to gain regulatory approvals for the transaction, refueling activities would begin in January. Otherwise, the decommissioning process would begin instead.
“We’ve made a commitment to reduce the size of the EWC footprint,” Mohl said. “If we’re unable to reach commercial agreements with Exelon or we’re not able to achieve those regulatory approvals, we’ll begin the regular decommissioning process and stay on the same path that we have previously been on.”
New York’s Public Service Commission on Aug. 1 unanimously approved 12-year subsidies for the state’s nuclear power plants on Lake Ontario, which have been buffeted by market forces. (See New York Adopts Clean Energy Standard, Nuclear Subsidy.)
Entergy reported second-quarter net income of $572.6 million ($3.11/share). That beat analyst expectations of $1.05/share, as polled by Thomson Reuters.
Revenue dropped to $2.46 billion, from $2.71 billion in the second quarter of 2015. The company said its March purchase of a 1,980-MW natural gas plant in southern Arkansas helped support revenue during the quarter.
Company shares, up 18.9% this year before the earnings announcement, have dropped 94 cents since, closing at $80.33 on Aug. 3.
