Antinuclear

Nuclear company creates a “spinoff” to avoid paying its debts

The New York Public Commission staff has concluded that Entergy’s proposed spinoff is not in the public interest, and that the new company will be too debt-burdened and financially unstable.

Nuclear “SpinCo”, t r u t h o u t , 18 March 2010 by: World Business Academy, Rinaldo Brutoco  and Madeleine Austin The nuclear industry, like Wall Street, knows how to make money with other people’s money: move liabilities off balance sheet, use lots of borrowed money and leverage, don’t worry about loading too much debt onto the company as long as insiders can walk away with plenty of money and look to the fool taxpayer to cover the losses.

Such was the script that private equity used to get rich by flipping companies like Simmons Mattress while driving them into the ground and laying off thousands of workers. It’s also the script that Entergy Corp. is using today to spin off aging, leaking nuclear power plants.

Anyone who wants to know how to flip a nuclear plant might want to take a page from Entergy’s playbook. Entergy owns and operates a fleet of nuclear power plants that sell electricity on the wholesale market at prices set by supply and demand. It also does business through subsidiaries that operate as regulated utilities, which sell electricity to households at retail rates set by regulators.

It turns out that Entergy, the second biggest nuclear player in the US, is not too sure that nuclear power can compete in the free market. It plans to spin off five of its wholesale nuclear power plants – all leaking radioactivity – into a new shell company front-loaded with billions in debt. The new company was originally named SpinCo, but it now has a nice new name, Enexus.

Entergy’s grand plan is in trouble. Vermont and New York have reared up in revolt, and Mississippi is getting into the action, too………..

The spinoff would help insulate Entergy for liability for spills and leaks. In addition to tritium, Indian Point is leaking radioactive strontium 90, a dangerous carcinogen, from a partially decommissioned reactor. Both leaks are moving through the groundwater into the Hudson River.

Other plants leaking radioactive tritium that Entergy wants to spinoff into the new company include the Fitzpatrick plant in western New York, the Pilgrim plant in Massachusetts and the Pallisades plant in Michigan. Citizens had better be prepared to fend for themselves…………..

About a quarter of all US nuclear power plants are leaking radioactive tritium, but the pro-industry Nuclear Regulatory Commission (NRC) refuses to require Entergy and other nuclear plant owners to monitor their groundwater………….

The New York Public Commission staff has concluded that Entergy’s proposed spinoff is not in the public interest, and that the new company will be too debt-burdened and financially unstable.

t r u t h o u t | Nuclear “SpinCo”

March 19, 2010 - Posted by Christina Macpherson | 1 | antinuclear, nuclear, nuclear costs