Entergy announces new team to lead Vermont Yankee

first_img# In response to numerous concerns and issues that have been raised by Governor Douglas, Vermont Department of Public Service Commissioner O’Brien, state and federal legislative leaders and the public at large, Entergy Corporation has pledged to place the highest priority on restoring trust with Vermonters.Curt L Hébert, Jr, a past chairman of the Federal Energy Regulatory Commission has been designated to lead a team of Entergy specialists addressing Vermont Yankee matters. Hébert serves as Entergy’s executive vice president for external affairs and reports directly to J. Wayne Leonard, Entergy’s chairman and chief executive officer.The team has already begun to meet with public, business, labor and civic leaders in Vermont. Two Entergy officials with long experience in Vermont will play expanded roles on the team. They are Brian Cosgrove, who will manage relations with state government, and Larry Smith, who will coordinate communications and media relations.Among members of the team are Arthur Wiese, Entergy Corporation’s vice president for corporate communications; Kenneth Theobalds, vice president for government relations for Entergy’s Northeastern nuclear operations; Donald Vinci, vice president of business development for Entergy Nuclear; James Steets, vice president for Northeastern nuclear communications; and Allison Graves, director of federal energy policy.“This situation needs to be fixed and through Curt’s leadership and direct engagement with Vermont leaders, I have every confidence it will be fixed as quickly as possible.  We must and will do better.  Entergy’s own standards, and our duty to Vermonters, demand it,” said Leonard. Meanwhile, DPS Commissioner David O’Brien told a legislative commission yesterday that he thought that removing lead negotiator Jay Thayer from his senior position at Vermont Yankee was “tokenism” on the company’s part. He said Entergy would have to do something “miraculous” to win back the trust of state officials earn the approval of the Legislature to relicense the plant.Entergy Vermont Yankee is seeking a 20-year extension to its license beyond its 2012 decommissioning. On January 7, Yankee officials reported tritium was found in a monitoring well at the plant in Vernon. An underground cement trench and another well, just this week, were also found to contain the radioactive isotope. Tritium is associated with nuclear fission. Yankee officials acknowledge it must be leaking from the plant, but have yet to find the source. Since the first finding, it was revealed that Yankee officials in 2008 and 2009 made inaccurate statements, some under oath, saying that there were no underground piping systems carrying radioactive material. That revelation eventually led to the state’s congressional delegation going straight to the Nuclear Regulatory Commission to ask for an investigation, and then, last week, to Governor Douglas pulling his support for the plant until the leak is found and fixed and the company earning back the state’s trust. Douglas had been one of Yankee’s strongest supporters. Following that political pressure, Thayer was removed.“Entergy values and deeply respects our relationship with the state of Vermont and its business community and we are committed to Vermont for the long-term.  Since buying the plant in 2002 we have made more than $190 million in long-term investments at Vermont Yankee to make it a world-class nuclear facility,” said Hébert.“We are placing the highest priority on finding the cause of the tritium and remediating any contamination.  At the same time, we must reconcile the conflicting statements made to the Department of Public Service. To this end we have engaged the services of an independent, outside law firm to fully investigate the matter, and most importantly, to make sure it does not happen again,” said Hébert.The work of the specialized team dedicated to the company’s interaction with the Vermont officials is concurrent with Entergy’s ongoing investigation to identify the source of the elevated tritium concentrations in monitoring wells. That investigation is overseen by Entergy Nuclear senior management, including Michael Balduzzi, senior vice president and chief operating officer, and Timothy Mitchell, senior vice president for engineering and technical services.Entergy Corporation reiterated a number of other steps it is taking to address these matters, including the following items.   · Entergy retained an outside law firm to conduct a thorough, independent investigation pertaining to the company’s communications with the Vermont Department of Public Service. · Entergy is cooperating with all state and federal inquiries that the relevant agencies are conducting.· Entergy has installed additional testing wells at Vermont Yankee to monitor for tritium and increased the frequency of testing in order to conclusively determine the source of the tritium so that a remediation plan can be proposed to the U.S. Nuclear Regulatory Commission.· Entergy has dispatched a project team of more than 20 highly skilled professionals to Vermont Yankee to ensure a fast, comprehensive assessment of the tritium situation.· Entergy has unequivocally acknowledged its responsibility for the controversy. One Entergy executive involved has issued a public apology.  He has been permanently relieved of his Vermont responsibilities and placed on administrative leave pending the outcome of the full investigation.Entergy Reports Fourth Quarter EarningsEntergy Corporation (NYSE:ETR) of New Orleans, LA, yesterday reported fourth quarter 2009 as-reported earnings of $313.8 million, or $1.64 per share, compared with $170.6 million, or 89 cents per share, for fourth quarter 2008. On an operational basis, Entergy’s fourth quarter 2009 earnings were $334.9 million, or $1.75 per share, compared with $190.7 million, or 99 cents per share, in fourth quarter 2008. For the year, Entergy’s as-reported earnings were $1.2 billion, or $6.30 per share, and operational earnings were $1.3 billion, or $6.67 per share. These results compare with 2008 as-reported earnings of $1.2 billion, or $6.20 per share, and operational earnings of $1.3 billion, or $6.51 per share. Operational Earnings Highlights for Fourth Quarter 2009Utility, Parent & Other’s results were higher due to lower income tax expense, lower non-fuel operation and maintenance expense and higher net revenue.Entergy Nuclear’s earnings decreased as a result of higher income tax and non-fuel operation and maintenance expenses, partially offset by higher net revenue and other income.Entergy’s Non-Nuclear Wholesale Assets’ results improved due to lower income tax expense.“Both our utility and non-utility nuclear businesses delivered strong operational performance during a period of extraordinary global economic and financial uncertainty,” said J. Wayne Leonard, Entergy’s chairman and chief executive officer. “Looking ahead, signs of an improving economic environment, our market-based point-of-view, adherence to our disciplined risk management and the strength of our cash position provide a foundation that supports our strategic, operational and financial goals.”Other Business HighlightsEntergy Texas completed storm recovery for Hurricane Ike in November when it executed $545.9 million of securitization financing. Also, a stipulation agreement was reached with the Louisiana Public Service Commission staff in the storm proceedings in Louisiana.Entergy Texas made a new rate case filing with the Public Utility Commission of Texas at the end of December.The Nuclear Regulatory Commission agreed to extend the expiration date for the spin-off approval to Aug. 1, 2010.Entergy will host a teleconference to discuss this release at 10:00 a.m. CT on Tuesday, Feb. 2, 2010, with access by telephone, 719-457-2080, confirmation code 6584600. The call and presentation slides can also be accessed via Entergy’s Web site at www.entergy.com(link is external). A replay of the teleconference will be available through Feb. 9, 2010, by dialing 719-457-0820, confirmation code 6584600. The replay will also be available on Entergy’s Web site at www.entergy.com(link is external).Utility, Parent & OtherIn fourth quarter 2009, Utility, Parent & Other’s as-reported earnings were $107.0 million, or 56 cents per share, compared to a loss of $82.6 million, or 38 cents per share, in fourth quarter 2008. On an operational basis, fourth quarter 2009 earnings were $116.2 million, or 61 cents per share, compared to a loss of $62.5 million, or 33 cents per share, in fourth quarter 2008. Operational earnings for Utility, Parent & Other in fourth quarter 2009 reflect lower income tax expense associated with the net effect of annual consolidated income tax adjustments across the Entergy companies. A favorable tax reserve adjustment also contributed following issuance by the Louisiana Department of Revenue of a private letter ruling related to securitization of Katrina and Rita storm costs. In addition, the absence of regulatory charges associated with rate proceedings at Entergy Arkansas in 2008 was the primary driver of lower non-fuel operation and maintenance expense, as well as a contributor to the lower income tax expense compared to fourth quarter 2008. Also contributing to the earnings improvement versus the same quarter last year was higher net revenue.Residential sales in fourth quarter 2009, on a weather-adjusted basis, increased 4.6 percent compared to fourth quarter 2008. Commercial and governmental sales, on a weather-adjusted basis, increased 3.0 percent year over year. Industrial sales in the fourth quarter increased 7.1 percent compared to the same quarter of 2008.Residential, commercial and industrial classes reflected sales growth as a result of increasing economic activity in Entergy’s service territory. The improvement in industrial sales in fourth quarter 2009 was driven by the large industrial customer group, particularly in chemicals and refining. Small and mid-sized industrial customers are slowly showing signs of recovery from the recession, but their usage continued to be negatively affected in the current quarter. Also, a portion of the quarter-over-quarter increase in sales for all customer classes was the result of the absence of outages for the September 2008 hurricanes, most notably in the industrial segment. Industrial customers are typically billed at the beginning of the month, and as such these outages for hurricanes Gustav and Ike were reflected in October sales. Near normal weather versus warmer-than-normal weather in fourth quarter 2008 also provided a modest increase in sales volume.For the year 2009, Utility, Parent and Other earned $561.4 million, or $2.88 per share, on an as-reported earnings basis, compared to $422.0 million, or $2.22 per share, in 2008. Operational earnings in 2009 were $588.4 million, or $3.02 per share, compared to $477.4 million, or $2.43 per share, in 2008. The increase in operational earnings in 2009 was driven by higher Utility net revenue with the absence of hurricanes Gustav and Ike in 2008 contributing. Another factor in the improved results at Utility, Parent & Other was lower operation and maintenance expense, due primarily to the absence of Entergy Arkansas regulatory charges noted above. Also contributing to the earnings improvement was a lower overall effective tax rate for Utility, Parent & Other in 2009 versus 2008. Partially offsetting these items was an increase in depreciation and amortization expense in the current year due to increased plant in service.Entergy NuclearEntergy Nuclear earned $169.5 million, or 89 cents per share, on an as-reported basis in fourth quarter 2009, compared to as-reported earnings of $226.6 million, or $1.14 per share, in fourth quarter 2008. On an operational basis, fourth quarter 2009 Entergy Nuclear earnings were $181.5 million, or 95 cents per share, versus $226.6 million, or $1.18 per share, in the last quarter of 2008. Entergy Nuclear’s operational earnings decreased as a result of higher income tax expense in the current quarter due primarily to the net effect of the annual consolidated tax adjustments. Also contributing to the lower results was higher operation and maintenance expense during the quarter due to the absence of refueling outages in the quarter and associated deferral of costs. Partially offsetting these items was higher net revenue as a result of higher generation due to 32 fewer refueling outage days in the current quarter and increased pricing. Higher other income associated with decommissioning trusts also provided an offset to decreased earnings. A smaller impairment recognized on Entergy Nuclear’s decommissioning trust funds in the current period contributed to higher other income, as well as higher earnings realized on decommissioning trust investments in 2009.For the year 2009, Entergy Nuclear earned $631.0 million, or $3.22 per share, on an as-reported basis and $675.0 million, or $3.45 per share, on an operational basis. This compares to as-reported earnings of $797.3 million, or $3.97 per share, and operational earnings of $797.3 million, or $4.07 per share at Entergy Nuclear in 2008. The decline in Entergy Nuclear’s operational earnings in 2009 was due primarily to a higher effective income tax rate as well as an increase in operation and maintenance expense. Impairments on Entergy Nuclear’s decommissioning trust funds in 2009 exceeded amounts recognized in 2008, and were partially offset by higher realized earnings on decommissioning trust investments, also reflected in other income.Non-Nuclear Wholesale AssetsEntergy’s Non-Nuclear Wholesale Assets business earned $37.2 million, or 19 cents per share, on both as-reported and operational bases in fourth quarter 2009 compared to $26.5 million, or 13 cents per share, on an as-reported basis, and $26.5 million, or 14 cents per share, on an operational basis, a year ago. Income tax benefits were the primary drivers in both quarters. The current quarter reflects a tax benefit recognized on a capital loss associated with the sale of stock of a merchant fossil generation subsidiary to a third party. In the fourth quarter 2008, a closing agreement was reached with the Internal Revenue Service allowing a capital loss. As a result, a provision for tax uncertainties that existed on this item was reversed.For the year 2009, Entergy’s Non-Nuclear Wholesale Assets business earned $38.7 million, or 20 cents per share, compared to earnings of $1.3 million, or one cent per share, in 2008. As-reported and operational results were the same in both periods. The earnings increase in 2009 was driven by a decrease in income tax expense due to the fourth quarter 2009 benefit noted above, plus a second quarter decrease in valuation allowance on loss carryovers. Quarterly income tax effects in 2008 were largely offsetting.OutlookEntergy is affirming 2010 earnings guidance in the range of $6.15 to $6.95 per share on an as-reported basis, assuming a business as usual operation for the full year. Operational earnings per share guidance ranges from $6.40 to $7.20 per share and excludes $(0.25) per share of projected dis-synergies associated with the spin-off of Entergy’s non-utility nuclear business and plans to enter into a nuclear services joint venture. Guidance for 2010 does not incorporate a special item for expenses anticipated in connection with outside services provided to pursue the spin-off. The level of these charges in 2010 will vary depending upon resolution of the spin-off.Business SeparationThe announced spin-off of Entergy’s non-utility nuclear business will establish a new independent, publicly traded company, Enexus Energy Corporation. In addition, Entergy and Enexus intend to enter into a nuclear services joint venture, with equal ownership, with the joint venture being named EquaGen LLC. The state regulatory decisions and financing continue as the critical path items in finalizing the spin-off transaction. The transactions are subject to various approvals. Final terms of the transactions and spin-off completion are subject to the approval of the Entergy Board of Directors.Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $10 billion and approximately 15,000 employees.Additional information regarding Entergy’s quarterly results of operations, regulatory proceedings, planned spin-off of its non-utility nuclear business and other operations is available in Entergy’s investor news release dated Feb. 2, 2010, a copy of which has been filed today with the Securities and Exchange Commission on Form 8-K and is available on Entergy’s investor relations Web site at www.entergy.com/investor_relations(link is external).In this news release, and from time to time, Entergy Corporation makes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.Forward-looking statements involve a number of risks and uncertainties. There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including (a) those factors discussed in (i) Entergy’s Form 10-K for the year ended December 31, 2008, (ii) Entergy’s Form 10-Q for the quarters ended March 31, June 30 and September 30, 2009, and (iii) Entergy’s other reports and filings made under the Securities Exchange Act of 1934, (b) the uncertainties associated with efforts to remediate the effects of Hurricanes Gustav and Ike and the January 2009 Arkansas ice storm and recovery of costs associated with restoration, and (c) the following transactional factors (in addition to others described elsewhere in this news release and in subsequent securities filings): (i) risks inherent in the contemplated spin-off, joint venture and related transactions (including the level of debt to be incurred by Enexus Energy Corporation and the terms and costs related thereto), (ii) legislative and regulatory actions, and (iii) conditions of the capital markets during the periods covered by the forward-looking statements. Entergy cannot provide any assurances that the spin-off or any of the proposed transactions related thereto will be completed, nor can it give assurances as to the terms on which such transactions will be consummated. The transaction is subject to certain conditions precedent, including regulatory approvals and the final approval by the Board of Directors of Entergy.View Complete Earnings Release [PDF]Privacy Policy | Legal Information©1998-2009 Entergy Corporation, All Rights Reserved.Source: Entergy. 2.3.2010last_img read more