Entergy 2009 Annual Report Download - page 29

Entergy Corporation and Subsidiaries
Management's Financial Discussion and Analysis
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current environmental regulations must be operational by September 2013. Entergy Arkansas has requested
a variance from that date, however, because the EPA has recently expressed concerns about Arkansas'
Regional Haze State Implementation Plan and questioned the appropriateness of issuing an air permit prior
to its approval of that plan. The White Bluff project is currently suspended, but the latest conceptual cost
estimate indicates Entergy Arkansas' share of the project could cost approximately $465 million. Entergy
continues to review potential environmental spending needs and financing alternatives for any such spending,
and future spending estimates could change based on the results of this continuing analysis.
The Utility's generating capacity remains short of customer demand, and its supply plan initiative will continue to
seek to transform its generation portfolio with new or repowered generation resources. Opportunities resulting from
the supply plan initiative, including new projects or the exploration of alternative financing sources, could result in
increases or decreases in the capital expenditure estimates given above. Estimated capital expenditures are also
subject to periodic review and modification and may vary based on the ongoing effects of business restructuring,
regulatory constraints and requirements, environmental regulations, business opportunities, market volatility,
economic trends, and the ability to access capital.
Acadia Unit 2 Purchase Agreement
In October 2009, Entergy Louisiana announced that it has signed an agreement to acquire Unit 2 of the
Acadia Energy Center, a 580 MW generating unit located near Eunice, La., from Acadia Power Partners, LLC, an
independent power producer. The Acadia Energy Center, which entered commercial service in 2002, consists of two
combined-cycle gas-fired generating units, each nominally rated at 580 MW. Entergy Louisiana proposes to acquire
100 percent of Acadia Unit 2 and a 50 percent ownership interest in the facility’ s common assets for approximately
$300 million. In a separate transaction entered into earlier this year, Cleco Power is acquiring Acadia Unit 1 and the
other 50 percent interest in the facility’ s common assets. Upon closing the transaction, Cleco Power will serve as
operator for the entire facility. Entergy Louisiana has committed to sell one third of the output of Unit 2 to Entergy
Gulf States Louisiana in accordance with terms and conditions detailed under the existing Entergy System
Agreement.
Entergy Louisiana's purchase is contingent upon, among other things, obtaining necessary approvals,
including full cost recovery, from various federal and state regulatory and permitting agencies. Closing is expected
to occur in late 2010 or early 2011. Entergy Louisiana and Acadia Power Partners also have entered into a purchase
power agreement for 100 percent of the output of Acadia Unit 2 that is expected to commence on May 1, 2010 and is
set to expire at the closing of the acquisition transaction. Entergy Louisiana has filed with the LPSC for approval of
the transaction, and no party filed an opposition to the purchase power agreement and it has been forwarded to the
LPSC for its review. The parties have agreed to a procedural schedule for the acquisition that would lead to LPSC
consideration of the matter at its January 2011 meeting and includes a hearing before the ALJ in September 2010.
Waterford 3 Steam Generator Replacement Project
Entergy Louisiana plans to replace the Waterford 3 steam generators, along with the reactor vessel closure
head and control element drive mechanisms, in 2011. Replacement of these components is common to pressurized
water reactors throughout the nuclear industry. The nuclear industry continues to address susceptibility to stress
corrosion cracking of certain materials associated with these components within the reactor coolant system. The
issue is applicable to Waterford 3 and is managed in accordance with standard industry practices and guidelines.
Routine inspections of the steam generators during Waterford 3's Fall 2006 refueling outage identified additional
degradation of certain tube spacer supports in the steam generators that required repair beyond that anticipated prior
to the outage. Corrective measures were successfully implemented to permit continued operation of the steam
generators. While potential future replacement of these components had been contemplated, additional steam
generator tube and component degradation necessitates replacement of the steam generators as soon as reasonably
achievable. The earliest the new steam generators can be manufactured and delivered for installation is 2011. A
mid-cycle outage performed in 2007 supports Entergy Louisiana's 2011 replacement strategy. The reactor vessel
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