Entergy to Sell Vermont Yankee Nuke Plant to Dismantling Firm Northstar.
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10 November 2016 - US-based energy company Entergy Corp. (NYSE: ETR) has agreed to sell Entergy Nuclear Vermont Yankee and transfer its US Nuclear Regulatory Commission licenses to subsidiaries of US-based dismantling and remediation company NorthStar Group Services, Inc. to accelerate decommissioning and site restoration by decades, the company said on Thursday.
The move is meant to shorten the time to decommission the plant and restore the site. Entergy had planned to decommission the plant by 2075. However, NorthStar plans to do the job by 2030.
The sale of Entergy Nuclear Vermont Yankee is subject to closing conditions, including approval by the NRC and the Vermont Public Service Board.
Entergy and NorthStar will ask the Public Service Board to approve proposed site restoration standards that are generally consistent with those of other regional decommissioning projects.
The companies anticipate that the transaction will close by the end of 2018.
NorthStar, based in New York, is a dismantling and remediation company and is partnering through a subsidiary with industry leaders AREVA, Waste Control Specialists and Burns and McDonnell to perform specialised services drawing on each company's core competencies.
The NorthStar team members have collectively worked on more than 300 nuclear and non-nuclear power plant projects over the past 15 years.
Under the agreement with Entergy, NorthStar has committed to initiate decontamination and dismantlement by 2021 and to complete decommissioning and restoration of the Vermont Yankee site (with the exception of the ISFSI), by 2030.
Thereafter, NorthStar will continue to operate and maintain the ISFSI until the US Department of Energy fulfills its statutory and contractual obligations to remove all of the spent nuclear fuel from Vermont Yankee.
NorthStar will then decommission the ISFSI, terminate the NRC license and complete site restoration.
Holtec International, the manufacturer of the dry storage systems used at Vermont Yankee, submitted license amendment requests to the NRC earlier this year, which if approved, will support complete transfer of all of Vermont Yankee's spent nuclear fuel to dry storage by the end of 2018.
As consideration for its interest in ENVY, Entergy will receive nominal cash consideration and a promissory note payable to Entergy in an amount equal to the amount owed at the time of closing under a credit facility to finance Vermont Yankee's dry fuel storage costs, which facility will be either assumed or refinanced by an Entergy subsidiary at or before the closing.
The transfer of ENVY to NorthStar will include the transfer of ENVY's nuclear decommissioning trust and its obligations for spent fuel management and decommissioning.
As a result, the nuclear decommissioning trust and associated asset retirement obligation will be removed from Entergy's balance sheet at closing.
The transaction is expected to result in a loss at closing, the amount of which cannot be determined at this time, based on the difference between Entergy's book basis in ENVY at the time of closing and the sale price plus any agreed adjustments.
Subject to satisfaction or waiver of the conditions to closing, the transaction is expected to be completed in late 2018.
On an ongoing basis, the sale is expected to be mildly accretive to operational results once the transaction is completed, primarily due to the elimination of future decommissioning accretion expenses.
At full power, Vermont Yankee supplied nearly one-third of all electricity consumed in Vermont.
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|Publication:||M2 EquityBites (EQB)|
|Date:||Nov 10, 2016|
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