By Tom Kleckner
With its merchant nuclear power plants all but part of history, Entergy reported second-quarter earnings Wednesday that almost doubled investor expectations.
The New Orleans-based company said second-quarter profits were $409.9 million ($2.27/share), compared with $567.3 million ($3.11/share) a year ago. A Zacks Investment Research survey of Wall Street analysts had forecasted earnings of $1.20/share.
Entergy took a $152.3 million loss related to its plans to sell or close its five Entergy Wholesale Commodities nuclear plants. (See Entergy, Consumers Announce Closure of Palisades Nuke and Entergy to Shut Down Indian Point by 2021.)
At the same time, the company has received final regulatory approval to build a pair of nearly identical 990-MW combined cycle gas-fired plants in Louisiana and Texas. The Lake Charles Power Station in Westlake, La., is expected to go online in 2020, while the Montgomery County Power Station near Houston should begin operations in 2021.
“These projects will contribute to our portfolio transformation efforts to replace older, less efficient plants with new generation,” Entergy CEO Leo Denault told analysts during a Wednesday earnings call, pointing to state-of-the art emission controls that capture and use waste heat to boost generation. “They are an important part of our strategy to meet our voluntary commitment to develop an electric system that is well-positioned to operate in a carbon-constrained economy.”
Denault said the two plants are expected to provide Entergy’s Louisiana and Texas customers at least $3 billion in combined net benefits and lower production costs. The plants are also expected to provide thousands of jobs during construction and generate more than $2 billion in economic activity for their local communities, he said.
Entergy has also amended its application for the proposed New Orleans Power Station, which has encountered opposition from the City Council. Denault said the company has renewed its request for the original 226-MW combustion turbine but also proposed a 128-MW unit as an alternative.