UPDATE: NY Ruling On Entergy Nuclear Spin-Off Possible In Jan
August 24 2009 - 1:23PM
Dow Jones News
New York regulators will decide in January or later on Entergy
Corp.'s (ETR) plans to spin off five of its nuclear power plants,
falling short of the company's schedule.
Two state administrative law judges in a ruling released late
Friday wrote that a request by Entergy for a November decision is
not feasible. A decision in January is possible, but could be
delayed, the judges wrote.
The New Orleans-based power company has been looking to create
the nation's first stand-alone nuclear power company for more than
a year and a half. The deal was stymied by the global credit freeze
as Entergy needs to access billions of dollars in new debt to
create the company, to be called Enexus Energy Corp. A return of
activity in the market for below-investment-grade debt has Entergy
again focusing on regulatory approvals needed for the spin-off,
recently filing an amended financing plan with New York
regulators.
In Friday's ruling, Administrative Law Judges Gerald Lynch and
David Prestemon also commented on the amended plan, writing that
the filing does not "effectively show" the spin-off is as capable
of meeting financial obligations as Entergy. Further discovery is
required on environmental issues as well.
The schedule detailed in the judges' ruling conflicts with
Entergy's timeline. The company requested a November decision from
the New York Public Service Commission so that the spin-off could
be completed by the end of the year. Entergy needs approval from
regulators in New York where two of the plants involved in the
spin-off - Indian Point and James Fitzpatrick - are located.
The ruling stated Entergy suggested a less-preferable schedule
of a mid-December ruling with the transaction closing at the end of
January. Entergy in a statement said it continues to move forward
on the spin-off as quickly as possible. Enexus would allow Entergy
to separate its merchant nuclear power plant business that relies
on market-based prices from its utility businesses that rely on
regulated rates.
In New York, the law judges will eventually make a
recommendation to the commission on the spin-off, with the
commission having final authority. Objections to the judges'
recommendation could further delay a commission decision.
Entergy shares recently traded down 41 cents to $81.37.
-By Mark Peters, Dow Jones Newswires; 212-416-2457;
mark.peters@dowjones.com