Entergy 2007 Annual Report Download - page 19

ur non-utility nuclear business oers tremendous potential
for value realization. e safe, secure, emission-free nature
of nuclear power makes it a particularly attractive generation
source in a carbon-constrained world.
Over the past nine years, Entergy acquired ve nuclear sites and
used its operational and risk management expertise to transform
this underperforming portfolio into valuable, emission-free power-
generating assets that are safe and secure. While the operating results
of these assets have contributed substantially to protability, the full
value of the investment has not and is unlikely to be recognized or
realized embedded in a “utility” corporation, which has dierent needs.
We expect the non-utility nuclear spin-o to fully unlock this upside
by creating the only pure-play, emission-free nuclear generating
company in the United States as the states, the nation and the world
move inexorably toward a less carbon intensive future. With four of
these sites located in the capacity-constrained Northeast, the new
company will have opportunity to capture and create even more value
in the region with the highest average regional power prices in the
United States both today and expected into the future.
Since Entergy acquired its rst non-utility nuclear asset in 1999,
the industry-leading performance of our nuclear team has delivered
tremendous value to our customers and shareholders. ere were
several highlights to note in 2007.
A Premier Nuclear Fleet
In April, we closed the purchase of the 798-megawatt Palisades
Nuclear Plant near South Haven, Mich., from Consumers Energy.
As part of the purchase, Entergy will sell 100 percent of the plant’s
output back to Consumers Energy for 15 years at a price that retains
the benets of low-cost nuclear generation for Consumers Energy’s
1.8 million customers.
With the addition of the Palisades Nuclear Plant, our nuclear eet –
both utility and non-utility – now includes 11 units located in the
Northeast, Midwest and South. We also manage the operations of
the Cooper Nuclear Station in Nebraska under a service agreement.
We are strong believers in the value of nuclear power and continue
to pursue opportunities to expand our eet. We are moving forward
systematically to preserve the option to build new nuclear units.
In 2007, we received one of the rst Early Site Permits in the country
for a possible new nuclear unit at the Grand Gulf Nuclear Station.
e Early Site Permit resolves many of the safety and environmental
issues associated with new nuclear development and can be incorporated
with the Construction and Operating License applications. Entergy and
NuStart, a consortium of 12 industry leaders including Entergy, submitted
a combined Construction and Operating License application for Grand
Gulf in February 2008. Entergy is currently preparing a second application
for our River Bend Station which it anticipates ling sometime this year.
While we have not yet made a decision to build a nuclear unit,
the Louisiana Public Service Commission approved new nuclear
nancing rules in 2007 that provide the structure and certainty at the
state level that we would need to decide to proceed with new nuclear
development at River Bend Station. e rules include a detailed
review of plant costs, a preliminary “up or down” decision on the
project and annual prudence reviews of all costs incurred. e rules
would also smooth the rate eect on customers by having some cost
recovery before the plant is completed, but only aer a determination
that construction of a new plant is in the public interest. Legislation is
being considered in Mississippi enabling new baseload generation.
In 2007, we also made progress on license renewals for our
Northeast eet. e Nuclear Regulatory Commission issued its nal
environmental impact statements for Vermont Yankee Nuclear Power
Station, Pilgrim Nuclear Station and most recently in January for the
James A. FitzPatrick Nuclear Power Plant, nding no environmental
impacts that would preclude the license renewal at these sites. All
three sites are on track to receive renewed licenses during 2008. Also
in 2007, the NRC accepted the license renewal application for Indian
Point Energy Center. Extensive press coverage has raised the level
of rhetoric as well as a number of questions regarding the license
renewal process for Indian Point. We believe the NRC license renewal
process is well established and provides for the hearing of legitimate
issues and concerns raised by the public and interested parties.
We are also engaged in substantial public outreach and education
programs to enable license renewal for this vital source of emission-
free power.
2007 Nuclear Operating Performance
First and foremost, we continued to put safety and security rst in the
operation of our nuclear eet, as we do in all our operations. All
other activities are pursued only when we are condent that we are
performing at the highest possible level from a safety perspective.
In our nuclear eet, six of our sites have earned Star Status from
the Occupational Safety and Health Administration under their
Voluntary Protection Program. at is the highest possible safety
rating for an industrial work site.
Unique Generating Assets and Operating Expertise
Entergy Nuclear
O
Entergy Corporation and Subsidiaries 2007
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