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Entergy Agrees to Post-Shutdown Sale of Indian Point Nuke Plant to Holtec International
Thursday 18 April 2019

18 April 2019 - US-based utility operator Entergy Corp. (NYSE: ETR) has agreed to sell the subsidiaries that own New York, US-based nuclear plant Indian Point Units 1, 2, and 3, to a Holtec International subsidiary for decommissioning, the company said.

The sale, which will be effective after Unit 3 has been shut down and permanently defueled, includes the transfer of the licenses, spent fuel, decommissioning liabilities, and Nuclear Decommissioning Trusts for the three units.

With this agreement to sell Indian Point, Entergy has now announced the sale of its entire remaining merchant nuclear fleet for decommissioning.

Following regulatory approvals and transaction close, Holtec plans to initiate decommissioning at Indian Point decades sooner than if Entergy continued to own the units.

A more defined timetable will be developed in connection with Holtec's preparation of its Post-Shutdown Decommissioning Activities Report (PSDAR) and Site-Specific Decommissioning Cost Estimate.

Holtec will submit those reports to the US Nuclear Regulatory Commission, likely in 4Q19.

The transaction closing is targeted for 3Q21.

The transaction is subject to closing conditions, including approval from the NRC. The companies also plan to seek an order from the New York State Public Service Commission disclaiming jurisdiction, or alternatively, approving the transaction.

Closing is also conditioned on obtaining from the NYS Department of Environmental Conservation an agreement confirming Holtec's decommissioning plans as being consistent with applicable standards.

Entergy remains committed to operation of Indian Point Unit 2 and Unit 3 until their permanent shutdowns in 2020 and 2021, respectively.

With the acquisition of the Indian Point Energy Center, Holtec's fleet is expected to grow to six reactors at four nuclear facilities and an independent spent fuel storage installation, located in Michigan, New York, New Jersey, and Massachusetts.

Oyster Creek and Pilgrim (Mass.) License Transfer Application requests are pending at the NRC, with anticipated closings in 2019, subject to NRC approval.

Holtec and its affiliates specialising in demolition and decommissioning will deploy operating processes and methods that enable them to expedite site clean-up and minimize occupational dose to workers.

Holtec will transfer all of the used nuclear fuel to its dry fuel storage cask systems to be stored at the on-site reinforced concrete pads, which will remain under guard, monitored during shutdown and decommissioning, and subject to the NRC's oversight, until the US Department of Energy removes it in accordance with its legal obligations, or until Holtec's proposed Consolidated Interim Storage facility in New Mexico, named Hi-Stor CIS, is ready to begin accepting used fuel from across the country.

Holtec and Comprehensive Decommissioning International, a US-based joint venture company formed in 2018 between Holtec and SNC-Lavalin, have agreed to enter into a Decommissioning General Contractor Agreement for CDI to perform the decommissioning of the Indian Point site. CDI's decommissioning plan is backed by decades of experience managing complex projects in both commercial and government nuclear sectors around the world.

Ownership of the plants and management of the decommissioning trust funds at Indian Point will remain solely with Holtec, post-transaction.

As consideration for its transfer to Holtec of its interest in Indian Point Energy Center, Entergy will receive nominal cash consideration.

The transaction is expected to result in a non-cash loss based on the difference between Entergy's adjusted net investment in the subsidiaries at closing and the sale price net of any agreed adjustments.

As of Dec. 31, 2018, Entergy's adjusted net investment in the companies was USD 265m.

The terms of the transaction include limitations on withdrawals from the NDTs to fund decommissioning activities and controls on how Entergy manages the investment of NDT assets between signing and closing; however, the agreement does not require a minimum level of funding in the NDTs as a condition to closing.

Entergy affirmed its expectation for Entergy Wholesale Commodities to provide positive net cash to parent from 2019 to 2022.

Indian Point Energy Center, in Buchanan, N.Y., is home to two operating nuclear power plants, Unit 2 and Unit 3, which generate approximately 2,000mw of electricity for homes, business and public facilities in New York City and Westchester County.

Indian Point Unit 2 and Unit 3 are scheduled to shut down by April 30, 2020 and April 30, 2021, as part of an agreement with New York State. Indian Point Unit 1 was shut down in 1974.

Entergy is an integrated energy company engaged primarily in electric power production and retail distribution operations.

Entergy owns and operates power plants with approximately 30,000mw of electric generating capacity, including nearly 9,000mw of nuclear power. Entergy delivers electricity to 2.9m utility customers in Arkansas, Louisiana, Mississippi and Texas.

Entergy has annual revenues of USD 11bn and nearly 13,700 employees.

Holtec International is a privately held energy technology company with operation centers in Florida, New Jersey, Ohioand Pennsylvania in the US, and globally in Brazil, Dubai, India, South Africa, Spain, UK and Ukraine. Holtec's principal business concentration is in the nuclear power industry.

Holtec has played a role since the 1980s in expanding nuclear plants' wet spent fuel storage capacity at over 110 reactor units in the US and abroad.

Dry storage and transport of nuclear fuel is another area in which Holtec is recognised as the foremost innovator and industry leader with a dominant market share and an active market presence at over 115 reactor units around the globe.

Among the company's pioneering endeavors is the world's first below-ground Consolidated Interim Storage Facility being developed in New Mexico and a 160-Megawatt walk away safe small modular reactor, SMR-160.

Comprehensive Decommissioning International, LLC is a jointly owned company of Holtec International and SNC-Lavalin.

Headquartered in Camden, New Jersey, CDI is a general decommissioning contractor that provides comprehensive project solutions for retiring nuclear power plants.
Details
Date Published: 18/04/2019
Target: Indian Point Units 1, 2, and 3
Country: USA
Sector: Utilities
Type: Divestment
Financing: Cash
Status: Agreed
Vendor: Entergy Corp
Buyer: Holtec International subsidiary
Comment:
Terms of the deal were not disclosed

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