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NUCLEAR H 2 PRODUCTION – A UTILITY PERSPECTIVE
Introduction
To put our perspective as a nuclear owner/operator in context, some background on Entergy and our
nuclear interests is appropriate.
Who is Entergy?
Entergy is the fourth largest utility company in the United States with approximately 30 000 MW of
generating capacity. We own eleven (11) commercial nuclear units and are currently the nation’s
second largest nuclear operator. Prior to 1999, Entergy owned and operated five (5) nuclear plants in a
regulated service territory that spanned Louisiana, Texas, Mississippi and Arkansas. Entergy’s
experience in commercial nuclear operations was viewed by the corporation’s senior executives as a
core competency and in 1999, the company embarked on a nuclear growth strategy that subsequently
resulted in the purchase of six (6) additional units in the Northeast and Midwest areas of the
United States (See Figure 1).
Figure 1: Entergy’s nuclear fleet
Palisades
Vermont Yankee
Fitzpatrick
Pilgrim
Indian Point (2)
ANO (2)
Grand Gulf
River Bend
Waterford 3
The five nuclear facilities in Louisiana, Texas, Mississippi and Arkansas are operated under a cost
of service agreements with state government agencies. Under these agreements, Entergy’s investment
cost recovery and a modest return on the investment are assured through the rate base. In contrast to
the five nuclear plants in Entergy’s service territory, the six additional nuclear units that were
purchased in the Northeast and the Midwest operate in and provide electricity to the merchant
market place. Electric power pricing is established by the open market and through bilateral power
purchase agreements established between Entergy and the load serving entities or end-users. In these
merchant operations there are no rate base or cost of service agreements and therefore, no certainty
or assurance of cost recovery and return on investment. The nuclear owner/operator wears all the risk
in these merchant operations and achieves investment recovery and a return on the investment solely
through revenues derived from nuclear operations and the consequent sale of electricity. Success in
the merchant marketplace is therefore a direct result of operational performance.
Entergy’s nuclear growth strategy
Because Entergy’s performance in merchant nuclear operations has been successful, our company is
evaluating options and preparing for future growth in this area. As has been publicised, Entergy is
transferring its merchant nuclear assets in the Northeast and the Midwest into a separate company
called Enexus Energy. A separate third entity, Equagen, whose ownership will be shared by Entergy
and Enexus Energy is also being formed to operate all of the facilities – both regulated and merchant
(see Figure 2). Facility operations conducted by this single operating company will retain the economies
of scale available to large fleet operations while the segregation of merchant facilities and regulated
290 NUCLEAR PRODUCTION OF HYDROGEN – © OECD/NEA 2010