Energy Nuclear Spinoff hits Problems with NYS

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Entergy nuclear spinoff hits roadblock at NY PSC

 

 

 

 

Thu Feb 11, 2010 3:36pm EST

 

 

 

 

 

 

 

 

 

 

 

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* _UPDATE 2-Entergy profit to rise, top Wall Street view_

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Entergy Corporation

ETR.N

$77.55

+0.88+1.15%

12:00am GMT+0200

 

 

 

 

 

 

 

 

 

 

 

* NY PSC staff says deal not in public interest

_STOCKS_ (http://www.reuters.com/finance/stocks) | _BONDS_

(http://www.reuters.com/finance/bonds)

* PSC says considering other options

* Spinoff already has federal approvals

NEW YORK, Feb 11 (Reuters) - New York's utility regulator said on Thursday

its staff found Entergy Corp's (_ETR.N_

(http://www.reuters.com/finance/stocks/overview?symbol=ETR.N) ) plan to spin

off six nuclear power plants,

including three in New York, to a new company, Enexus Energy Corp, was not in

the public interest.

The New York State Public Service Commission said in a release it was

considering other options, including changes to the transaction to improve the

financial stability of the three New York reactors and provide benefits to

ratepayers.

Officials at Entergy did not immediately comment.

Entergy wants to transfer the James A. FitzPatrick nuclear station in

Oswego County and the Indian Point nuclear station in Westchester County to

Enexus.

Entergy shareholders would eventually receive all of Enexus's capital

stock and receive cash and reductions in outstanding debt worth about $3.5

billion. Upon completion of the transaction, the shares of Entergy and Enexus

would trade independently.

The PSC staff said the proposed transaction was problematic because the

amount of debt leverage to finance Enexus was excessive.

The PSC did not say when it would reconsider the Enexus spinoff but noted

it would look at staff recommendations and hear from interested parties

before bringing the matter back " for final deliberations at the earliest

possible Commission session. "

Entergy announced the spinoff in November 2007. In January 2008, Entergy

sought a ruling that the New York PSC need not review the proposed spinoff.

But in May 2008, the PSC said it would review the spinoff because of its

potential to harm captive New York utility ratepayers.

After review by administrative law judges and months of negotiations,

Entergy in July 2009 requested the PSC take action no later than November so

the proposed spinoff could be completed by the end of 2009.

In addition to New York approval, transfer of the nuclear units requires

authorization from the U.S. Federal Energy Regulatory Commission (FERC), the

Nuclear Regulatory Commission (NRC) and the Vermont Public Service Board.

FERC and the NRC gave their initial approvals on June 12, 2008, and July

28, 2008, respectively. Hearings in the Vermont case were completed in

August 2008. Final action has not been taken by the Vermont Public Service

Board.

Entergy wants to spinoff six reactors: FitzPatrick, Indian Point 2 and 3,

Pilgrim in Massachusetts, Palisades in Michigan and Vermont Yankee in

Vermont. (Reporting by _Scott DiSavino_

(http://blogs.reuters.com/search/journalist.php?edition=us & n=scott.disavino & ) ;

Editing by_David Gregorio_

(http://blogs.reuters.com/search/journalist.php?edition=us & n=david.gregorio & ) )

 

Susan Hito-Shapiro

(845) 371-2100