Entergy 2003 Annual Report Download - page 17

Nuclear –
Talented Cast, Outstanding Production
s the nation’s second-largest nuclear generator with 10 units totaling nearly
9,000 MW, Entergy has broad, deep expertise. We’re applying that expertise to
increase production and reduce costs at our own plants, and to provide management
and decommissioning services to other nuclear owners.
Building a Nuclear Services Business
Entergy Nuclear opened up a new avenue of growth when the Nebraska Public Power District
selected Entergy over other nuclear operating companies to provide management services to the
Cooper Nuclear Station. Entergy began managing the 800 MW plant in October 2003.
Providing management services to nuclear owners represents another way – in addition to
acquisitions – that we can grow revenues and earnings from the nuclear business. The Cooper
contract will provide Entergy $10-20 million in annual earnings in a business that requires no
capital investment, while providing NPPD’s customers the benefits of more efficient operations
and lower costs.
Our management contract at Cooper is a model we believe that other nuclear owners will find
attractive. We have ample expertise within Entergy to supply management services to more
plants. In the future, we hope to secure additional plant management contracts that not only
provide a source of income but also include a right of first refusal should the plant be sold.
Setting the Stage for Further Growth
Entergy is taking steps to maintain growth in our nuclear business by increasing capacity,
reducing costs, securing cash flows, and extending the lives of our plants.
In 2003, Entergy completed uprates that added 46 MW of nuclear capacity to our Northeast
fleet, and we plan 110 MW of additional uprates in 2004. As a general rule of thumb, we can
increase earnings by about 1 percent for every 50 MW of nuclear uprates.
Entergy Nuclear has a productivity
improvement target to reduce annual
operation and maintenance expenses by
$135 million by 2006 compared to 2002
baseline amounts. We took a big step when we
completed the Voluntary Severance Program
in December 2003. Almost 375 nuclear
employees in the Northeast participated,
producing annual savings of nearly $26
million after tax from reduced staffing. We
carefully identified and timed staff reductions
to ensure the continued safety, security, and
reliability of our nuclear plants.
We continue to reduce the time that nuclear
plants are off line for refueling by performing
more maintenance work while plants are
operating, and by better planning and
preparation in advance of outages. In October
2003, ANO Unit 2 completed the shortest and
ENTERGY CORPORATION AND SUBSIDIARIES 2003
A
2003 Goals
(in 2002 Annual Report)
Continue to improve productivity
at Northeast plants, reducing
average fleet operating costs.
Sell or hedge at least 75 percent of
2005 output and 50 percent of
2006 output from our Northeast
plants by year-end 2003.
Increase output at Pilgrim and
Indian Point 2 through power
uprates scheduled for 2003, on
time and on budget.
Performance Review
Club Nuclear
Virtuoso performance in every way from hitting the high notes on
productivity to building the power through successful uprates – and
closing the deal on forward sales.
2003 Performance
Achieved average production costs of
$20/MWh, 31 percent below $29/MWh
prior to Entergy ownership.
Reached agreements to sell forward
54 percent of 2005 output and 45
percent of 2006 output.
Completed 14 MW uprates at IP 2
and IP 3 and 18 MW uprate at
Pilgrim in 2003. Additional 44 MW
uprate scheduled for IP 2 in 2004.
Rating:
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