Entergy Announces Closure of Pilgrim Nuclear Plant in Massachusetts

Researched by Industrial Info Resources (Sugar Land, Texas)--The Pilgrim Nuclear Power Plant in Plymouth, Massachusetts, has been added to the list of pending U.S. nuclear power plant closures. On Tuesday, October 13, Entergy Corporation (NYSE:ETR) (New Orleans, Louisiana) announced that the continued operation of the plant simply did not make economic sense. The company plans to close the plant no later than June 1, 2019.

The plant began operating in 1972 and is the latest in a string of coal-fired and nuclear power plant closures that are becoming more frequent, in part due to an influx of cheap and abundant natural gas in the U.S., making it the fuel of choice for many power plant operators.

In a press release regarding the closure, Entergy said: "Low current and forecast wholesale energy prices--brought about by record low natural gas prices, driven by shale gas production--significantly impacted Pilgrim's revenues. The current and projected market price for delivered natural gas in New England has dropped substantially because of the influx of shale gas and policy-related issues, which in turn has driven down power prices." Entergy said the changes in policy had resulted in an annual revenue loss of more than $40 million for Pilgrim.

The company also took a swipe at "unfavorable state energy proposals that subsidize renewable energy resources at the expense of Pilgrim and other plants."

As natural gas continues to change the U.S. energy landscape by providing relatively inexpensive plant construction and lower operating and fuel costs, operators of coal-fired and nuclear power plants face tough decisions. Within the nuclear sector, the plants most at risk of closure are smaller, one- or two-reactor plants like Pilgrim, which had a single, 680-megawatt (MW) reactor.

Other recent single-reactor nuclear plant closures include Dominion Resources Incorporated's (NYSE:D) (Richmond, Virginia) 556-MW Kewaunee Nuclear Power Station in Wisconsin, which was taken offline in May 2013, and Entergy's 620-MW Vermont Yankee Nuclear Power Plant in Vernon, Vermont, which was closed in December 2014. Both plants were closed for similar economic reasons.

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