Entergy 2011 Annual Report Download - page 91

Entergy Corporation and Subsidiaries 2011
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
PR OP ER T Y IN SU R AN C E
Entergy’s nuclear owner/licensee subsidiaries are members of
Nuclear Electric Insurance Limited (NEIL), a mutual insurance
company that provides property damage coverage, including
decontamination and premature decommissioning expense, to the
members’ nuclear generating plants. Effective April 1, 2011, Entergy
was insured against such losses per the following structures:
Utility Plants (ANO 1 and 2, Grand Gulf, River Bend, and
Waterford 3)
n Primary Layer (per plant) - $500 million per occurrence
n Excess Layer (per plant) - $750 million per occurrence
n Blanket Layer (shared among the Utility plants) - $350 million
per occurrence
n Total limit - $1.6 billion per occurrence
n Deductibles:
n $2.5 million per occurrence - Turbine/generator damage
n $2.5 million per occurrence - Other than turbine/
generator damage
n $10 million per occurrence plus 10% of amount
above $10 million - Damage from a windstorm, flood,
earthquake, or volcanic eruption
Note: ANO 1 and 2 share in the primary and excess layers with common
policies because the policies are issued on a per site basis.
Entergy Wholesale Commodities Plants (Indian Point, FitzPatrick,
Pilgrim, Vermont Yankee, Palisades, and Big Rock Point)
n Primary Layer (per plant) - $500 million per occurrence
n Excess Layer - $615 million per occurrence
n Total limit - $1.115 billion per occurrence
n Deductibles;
n $2.5 million per occurrence - Turbine/generator damage
n $2.5 million per occurrence - Other than turbine/generator
damage
n $10 million per occurrence plus 10% of amount
above $10 million - Damage from a windstorm, flood,
earthquake, or volcanic eruption
Note: The Indian Point Units share in the primary and excess
layers with common policies because the policies are issued on a
per site basis. Big Rock Point has its own primary policy with no
excess coverage.
In addition, Waterford 3, Grand Gulf, and the Entergy Wholesale
Commodities plants are also covered under NEIL’s Accidental Outage
Coverage program. This coverage provides certain fixed indemnities
in the event of an unplanned outage that results from a covered NEIL
property damage loss, subject to a deductible period. The following
summarizes this coverage effective April 1, 2011:
Waterford 3
n $2.95 million weekly indemnity
n $413 million maximum indemnity
n Deductible: 26 week deductible period
Grand Gulf
n $400,000 weekly indemnity (total for four policies)
n $56 million maximum indemnity (total for four policies)
n Deductible: 26 week deductible period
Indian Point 2, Indian Point 3, and Palisades
n $4.5 million weekly indemnity
n $490 million maximum indemnity
n Deductible: 12 week deductible period
FitzPatrick and Pilgrim
n $4.0 million weekly indemnity
n $490 million maximum indemnity
n Deductible: 12 week deductible period
Vermont Yankee
n $3.5 million weekly indemnity
n $435 million maximum indemnity
n Deductible: 12 week deductible period
Under the property damage and accidental outage insurance
programs, all NEIL insured plants could be subject to assessments
should losses exceed the accumulated funds available from NEIL.
Effective April 1, 2011, the maximum amounts of such possible
assessments per occurrence were as follows (in millions):
Utility:
Entergy Arkansas $20.1
Entergy Gulf States Louisiana $16.3
Entergy Louisiana $19.3
Entergy Mississippi $0.07
Entergy New Orleans $0.07
Entergy Texas N/A
System Energy $16.3
Entergy Wholesale Commodities $ –
Potential assessments for the Entergy Wholesale Commodities
plants are covered by insurance obtained through NEIL’s reinsurers.
Entergy maintains property insurance for its nuclear units in
excess of the NRC’s minimum requirement of $1.06 billion per site
for nuclear power plant licensees. NRC regulations provide that
the proceeds of this insurance must be used, first, to render the
reactor safe and stable, and second, to complete decontamination
operations. Only after proceeds are dedicated for such use and
regulatory approval is secured would any remaining proceeds be
made available for the benefit of plant owners or their creditors.
In the event that one or more acts of terrorism causes property
damage under one or more or all nuclear insurance policies issued
by NEIL (including, but not limited to, those described above)
within 12 months from the date the first property damage occurs,
the maximum recovery under all such nuclear insurance policies
shall be an aggregate of $3.24 billion plus the additional amounts
recovered for such losses from reinsurance, indemnity, and any other
sources applicable to such losses. The Terrorism Risk Insurance
Reauthorization Act of 2007 created a government program that
provides for up to $100 billion in coverage in excess of existing
coverage for a terrorist event.
Conventional Property Insurance
Entergy’s conventional property insurance program provides
coverage of up to $400 million on an Entergy system-wide basis for all
operational perils (direct physical loss or damage due to machinery
breakdown, electrical failure, fire, lightning, hail, or explosion) on an
“each and every loss” basis; up to $400 million in coverage for certain
natural perils (direct physical loss or damage due to earthquake,
tsunami, flood, ice storm, and tornado) on an annual aggregate
basis; and up to $125 million for certain other natural perils (direct
physical loss or damage due to a named windstorm or storm surge)
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