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Entergy Plans to Shut Down Pilgrim Nuclear Plant by June 2019

Cites poor market conditions, lower revenue and higher operating costs



Updated Oct. 13, 2015 6:05 p.m. ET


Entergy Corp. said Tuesday it will close its aging Pilgrim nuclear power plant in Massachusetts by mid-2019, citing low power prices, regulatory challenges and public policies that it says disadvantage nuclear plants.

Many of the same issues that have been weighing on Pilgrim also are dogging other nuclear power plants, and that could prompt more reactor shutdowns, particularly in states with deregulated electricity markets.

Three dozen reactors, or nearly a third of the U.S. nuclear power fleet, are at risk of early closure because of unfavorable economics, according to the Institute for Energy and the Environment at the Vermont Law School.

In the next two weeks Entergy will decide the fate of its FitzPatrick nuclear plant in New York, according to Bill Mohl, the company’s head of wholesale commodities. Like Pilgrim, FitzPatrick’s profitability is challenged because it competes directly with power plants that burn natural gas to make less expensive electricity.

The decision to shut down Pilgrim was agonizing, Mr. Mohl said, and an “extremely close call.” But, ultimately, the plant simply couldn’t compete. Pilgrim, which started operating in 1972 in Plymouth, is making $40 million a year less today than it did a year ago because of lower wholesale power prices in New England, he said.

Forces that could boost the nuclear power sector won’t come fast enough for Pilgrim. For example, the U.S. intends to limit carbon-dioxide emissions from power plants by 2030, but Mr. Mohl said some state and federal policies that favor clean energy specifically exclude existing nuclear plants, even though they emit no carbon. 

“In all cases, Pilgrim ends up on the losing end,” he said.

But the Pilgrim and FitzPatrick plants also use older reactor technology similar to the kind that suffered catastrophic damage at Fukushima Daiichi in Japan four years ago when an earthquake struck that plant north of Tokyo. As a result, they face higher costs stemming from mandatory safety improvements implemented by U.S. regulators after the 2011 disaster.

The aging Pilgrim nuclear power station, pictured in 2011. PHOTO: STEVEN SENNE/ASSOCIATED PRESS

Pilgrim also has faced heightened scrutiny from the U.S. Nuclear Regulatory Commission since 2013 after inspections uncovered poor practices and the reactor experienced several unplanned shutdowns. Last month, federal regulators downgraded Pilgrim’s safety rating to a level that requires special remedial action and oversight.

Pilgrim is now one of just two nuclear plants in the U.S. in the next-to-lowest category, denoting multiple, repetitive safety problems. The other is Entergy’s Arkansas Nuclear One plant in Russellville, Ark.

Nuclear critics, including U.S. Sen. Edward Markey (D-Mass.), welcomed the Pilgrim announcement because they regard the New England plant as one of the most worrisome in the U.S.

Entergy could end up closing Pilgrim even earlier. The plant is due for uranium refueling in 2017, but the company could decide not to refuel the plant. 

The timing of the teardown will depend, in part, on its ultimate cost. Entergy has nearly $900 million in a decommissioning fund, but that may not be enough to cover all the removal costs. Tearing down the Vermont Yankee nuclear power plant, which is similar in size to Pilgrim, is expected to cost at least $1.25 billion.

Regardless of when the plant stops making electricity, it will be a visible mark on the landscape in Massachusetts for decades. It takes five to 10 years for uranium fuel to cool enough to be moved from pools into dry storage, and owners have up to 60 years to tear down a plant and clean up the site.

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