FOR IMMEDIATE RELEASE CONTACT: JOHN FAIRBANKS
FEBRUARY 12, 2010 223.8421 x 4097
jfairbanks@vpirg.org
ENTERGY AGAIN CHEERED BY WALL STREET
Management ranked at the top; JP Morgan upgrades stock
MONTPELIER—Entergy, the Louisiana-based energy giant that owns the Vermont Yankee nuclear power plant, is once again winning applause from Wall Street.
The finance industry magazine Institutional Investor lists Entergy as the top electric utility in the country and one of the top nine companies in the nation. The magazine’s ranking was based on a survey of more than 1,350 securities analysts representing more than 500 securities firms and financial institutions.
Institutional Investor named Entergy’s management to its “2010 All-America Executive Team,” making it one of the most honored companies in America. CEO Wayne Leonard was named as the top CEO in the power industry. Leonard has ranked as one of the top CEOs in the nation for seven consecutive years in the magazine’s survey. He is the only CEO included among the top four electric utility CEOs in the rankings every year since they began in 2004.
Entergy CFO Leo Denault was named the best CFO in the electric utility sector for the second straight year.
The magazine is not alone in its enthusiasm. This week, J.P. Morgan upgraded Entergy’s stock.
“Industry insiders love Entergy,” said VPIRG Executive Director Paul Burns. “They can’t seem to get enough of the kind of short-term, take-the-money-and-run business model that looks great on the Dow Jones, but that’s what gave us the Enron scandal and, more recently, triggered the largest economic collapse since the Depression.”
On a February 2nd conference call with investors, Entergy CFO Denault told his audience that fourth-quarter cash flow was up $300 million, in part due to “lower working capital requirements.”
Since Entergy bought Yankee in 2002, the aging plant, located in Vernon, Vermont, has suffered a series of mishaps, including a fire, the collapse of a cooling tower, and most recently a tritium leak that has created an underground pool of radioactive water the size of a football field, and at least 30 feet deep. Some of that tritium, which is carcinogenic, has reached the nearby Connecticut River.
“We’ve seen fires, radiation leaks, and collapsing cooling towers, and now we know Entergy boosted its bottom line by skimping on maintenance at Yankee,” Burns said. “We’re the ones wondering when the tritium is going to reach our drinking water. We’re the ones being handed a long-term deal for less power at higher costs. We’re the ones who may be on the hook for a large chunk of a billion-dollar cleanup.”
Burns noted that Entergy’s “working capital requirements” also do not, apparently, include the decommissioning fund that is supposed to pay for cleaning up the plant. That fund is currently under $500 million, and the estimated cleanup costs are $1 billion.
At the same time, Entergy is planning to spin off the declining asset that is Yankee and four other aged nuclear plants into a shell corporation, Enexus. Entergy plans to walk to the bank with $3.5 billion and leave Enexus with about $4.5 billion in debt. This raises serious questions about Enexus’ ability to pay for decommissioning and clean up.
“We need to bid these people goodbye, and when 2012 rolls around, we need to retire Vermont Yankee,” Burns said.
