Are they pulling a Vermont Yankee...except including impaired fossel plant. I won't approve it for the Nukes.
Is Susquehanna and other power plant PPL's dogs... right. they keep the regulated plants.PPL to Spin Off Susquehanna Nuclear Plant and Other Generation Assets
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Wed, Jun 11 2014 9:26 AM
Entergy Nuclear Spinoff Taps Rising Plant ValuesPPL Corp. has announced that it plans to spin off its reactors at Susquehanna and other merchant power plants in a deal with Riverstone Holdings.
The new publicly traded company, called Talen Energy Corp., will operate 15,320 megawatts of nuclear and fossil generating capacity. PPL will retain its regulated plants while divesting itself of the Pennsylvania reactors and other assets in a deal that distributes 65 percent of new Talen shares to PPL stockholders.
The spinoff is subject to regulatory approval, including that of the Nuclear Regulatory Commission. Susquehanna uses two General Electric Type 4 boiling water reactors licensed in the early 1980s to generate about 2,600 megawatts. In a release Monday, PPL said it expects layoffs after the deal closes, although it hasn't determined which plants or positions will be affected.
See, the future dogs of Entergy?Updated Nov. 6, 2007 11:59 p.m. ETEntergy Crp plans to spin off about half of its nuclear-power plants and create the nation's first stand-alone, publicly traded nuclear-energy company, underscoring how the once-shunned nuclear sector is getting a lift from increasing anxiety about other methods of making electricity.
Less than a decade ago, Entergy was picking up distressed nuclear assets on the cheap. In one case, it bought a plant for little more than the value of fuel on hand. Now Entergy, a New Orleans company with utilities in four Southeastern states, estimates it will be able to take assets for which it paid about $2 billion and put them in a new company with a market value approaching $20 billion, according to Chief Executive Officer Wayne Leonard.
The move puts pressure on other big nuclear operators to consider similar action. CEO John Rowe of Chicago's Exelon Corp., the biggest owner of nuclear capacity in the U.S., said: "It's something we constantly look at." The company reaped most of its third-quarter profit from its nuclear fleet, not its regulated utilities.
U.S. policy makers are giving nuclear power new respect out of concern about emissions blamed for global warming from existing coal-fired plants, and they are increasingly pessimistic about prospects for new ones. Existing nuclear plants have more value as the estimated cost of building new units rises.
There are other factors. Entergy, Exelon and other consolidators have increased the productivity of nuclear plants, and they are able to collect rising prices in deregulated markets as supply margins shrink, including new "capacity" payments in organized Northeast markets.
During the next five years, sales contracts on the output of the five plants that Entergy intends to spin off are expiring. It is negotiating new prices that are as much as triple the old ones.
The new company will be based in Jackson, Miss., and will have about 5,000 megawatts of nuclear capacity, including the Pilgrim plant in Plymouth, Mass.; the FitzPatrick plant at Oswego, N.Y.; the Indian Point plant at Buchanan, N.Y.; Vermont Yankee in Vernon, Vt.; and the recently acquired Palisades plant in Covert, Mich. As an unregulated, standalone company, the new company could carry a higher debt ratio.
None of the plants is owned by a regulated utility. Entergy's remaining nuclear units, all in the Southeast, are part of utilities currently and will remain so.
Mr. Leonard said he doesn't expect the new company to build nuclear plants, as Entergy is considering doing through its regulated utilities. "If they were going to do a merchant plant, I'd sell my stock in the company," he said, referring to the new company. He said the board decided to spin off the units as a "payday for shareholders" that would capture values they aren't accorded as part of a largely regulated company.
He said the five units currently have earnings, before certain reductions, of about $800 million a year but that they will soon rise to about $1.4 billion as power sales terms are renegotiated. He said a reasonable estimate of earnings in the near future is $2 billion. At 10 times earnings, that would value the company at $20 billion.
Entergy shares rose $5.46, or 4.6%, to $124.15 as of 4 p.m. in New York Stock Exchange composite trading
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