Entergy: Grand Gulf nuclear plant’s viability threatened by FERC move to advance state, city complaint
The Federal Energy Regulatory Commission’s decision to file a complaint about the prudence of an $875 million capacity expansion at Entergy’s Grand Gulf nuclear power plant a decade ago and its operational performance threatens the plant’s survival, Entergy said in a shelf Friday at the agency.
Entergy subsidiaries, including System Energy Resources Inc. or SERI, which owns 90% of the 1,443 MW Grand Gulf power plant, asked FERC to reconsider their mid-November decision to hold hearings on key elements of a complaint from utility regulators from Arkansas, Louisiana and New Orleans.
“The Commission’s decision not to dismiss [the prudence] Allegation…indicates that SERI could be liable for refunds in excess of SERI’s ability to pay, thereby jeopardizing Grand Gulf’s ability to continue as a going concern,” Entergy said.
The complaint is part of a broader dispute at FERC involving SERI, which is selling capacity and power from the Grand Gulf power plant in Port Gibson, Mississippi, to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans under a “unified power”. Purchase contract”.
In a complaint filed in March 2021, the Arkansas Public Service Commission, the Louisiana Public Service Commission and the Council of the City of New Orleans allege that Grand Gulf’s 178 MW “boost” in 2012 was careless. They also said the plant was carelessly operated from 2016 to 2020 due to the plant’s capacity factor and alleged safety deficiencies.
Regulators asked FERC to order SERI to provide at least $360 million in replacement energy costs and unspecified reimbursements related to the increase.
Last month, FERC said The dispute required hearings and settlement court proceedings. The agency denied a request from regulators to amend the Unit Power sale contract to require reviews of all projects in Grand Gulf, which are expected to cost more than $125 million.
FERC’s decision to uphold the complaint was flawed, according to SERI’s request for a rehearing.
State and city regulators approved the increase, and under FERC precedent, they can’t contest a utility lawsuit years later, SERI said.
“The complainants have not disputed that they were informed of and involved in SERI’s decision to start the increase and were aware of the escalating estimated costs; The complainants have not contested the omission of the simultaneous objection; The complainants did not dispute that they allowed full retail reimbursement of the cost of the surcharge after a reasonable opportunity to investigate; and the complainants have not denied that they hesitated for many years before raising objections to the high-priced project with the Commission,” said SERI.
FERC also erred in failing to identify what changes to the unit electricity sales contract might be considered at the hearing or analyze whether potential changes are consistent with the Nuclear Regulatory Commission’s safety policy, according to SERI.
The agency made a mistake in ordering a hearing by an administrative judge before a federal court can consider whether FERC’s administrative judges are constitutional, SERI said, pointing to May appeal a court decision with the participation of administrative judges of the Securities and Exchange Commission.
SERI also said that a complaint based on “unsubstantiated allegations” should not be heard.
The Mississippi Public Service Commission and Entergy reached approximate in June $300 million agreement Resolution of several issues related to Grand Gulf. These include SERI’s approved return on equity and capital structure, the extension of its sale-leaseback agreement, the treatment of uncertain tax positions, and a broader examination of tariffs under the unit electricity sales contract, according to Entergy.
Mid-2021 Moody’s Investors Service has changed SERI’s outlook from stable to negative as complaints at FERC could undermine SERI’s profitability and cost recovery mechanisms while the Grand Gulf facility underperforms the industry average.