Entergy Plans Nuclear Plant Spin-off

Entergy Corp, the second-largest U.S. nuclear power generator, said Monday it would spin off five nuclear plants into a new company in a bid to capitalize on the greenhouse-gas-friendly technology.

The new company, which would 50 percent owned by Entergy, would have nearly 5,000 megawatts of generating capacity, located largely in the Northeast, which has some of the highest power prices in the country.

After the spin-off, Entergy would consist of five electric utility subsidiaries and a 50 percent stake in the new unit.

The U.S. nuclear industry is seeing a resurgence in interest, driven largely by expectations that the federal government will create new rules limiting carbon dioxide emissions that are blamed for global warming.

At an industry conference in Orlando, Florida, a director at Fitch Ratings said the new company spun off by Entergy would have debt totaling $4.5 billion. That debt would be "not commensurate with investment grade," said the Fitch director, Justin Bowersock.

The plants included in the new company would be the Pilgrim station in Plymouth, Massachusetts; the Fitzpatrick and Indian Point plants in Oswego and Buchanan, New York; the Palisade plant in Covert, Michigan; and the Vermont Yankee plant in Vernon, Vermont.

Also on Monday, Entergy said its third-quarter earnings rose 19 percent, helped by higher wholesale power prices and recent rate increases. Net income was $461.2 million, or $2.30 per share, up from $388.9 million, or $1.83 per share, a year earlier.

The earnings-per-share gain of nearly 26 percent lagged the 27 percent the company forecast on October 17.

Entergy shares rose nearly 2 percent in pre-market trade to $121.00.