Entergy looks to complete spinoff of nuclear business by end of year

By Angela McDaniels

Tacoma, Wash., July 14 - Entergy Corp. filed a motion with the New York Public Service Commission on Monday that it hopes will allow it to complete the proposed spinoff of its non-utility nuclear business by the end of the year, according to a company news release.

Entergy announced its plans to separate the non-utility nuclear business from its rate-regulated utility business through a tax-free spinoff in November 2007. The business to be spun off will be named Enexus Energy Corp.

The motion filed Monday requests procedures and a schedule to allow the report of the Presiding Administrative Law Judges to be issued in time for the New York Public Service Commission to issue a final order no later than Entergy's regularly scheduled meeting in November.

In May 2008, the commission began a review of the proposed spinoff's potential to harm captive New York utility ratepayers.

Entergy said that during the review, the commission raised concerns about the relative credit ratings of Entergy and Enexus for long-term unsecured bonds and the possibility that Enexus' lower rating might adversely affect its ability to ensure the reliable operation of the New York nuclear plants.

The company is proposing that it file an amended proposal that it believes resolves these concerns. The amended proposal would decrease the amount of long-term bonds at Enexus to $3.5 billion from $4.5 billion and increase its initial unrestricted cash balance to $750 million from $250 million.

In addition, instead of distributing all of the Enexus shares to Entergy shareholders in a tax-free reorganization, 80% would be distributed to Entergy shareholders and the remainder would be retained in trust by Entergy for up to one year. The retained shares would then be exchanged for Entergy shares.

Based on current power prices, Entergy estimates that Enexus would have about $1.88 billion of available liquidity at the spinoff date after satisfying credit support obligations and the authority to issue approximately $825 million of additional secured debt.

Entergy generates electric power and is based in New Orleans.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.