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First Auctioned Nuke Changes Hands

First Auctioned Nuke Changes Hands

Entergy Nuclear grew its nuclear fleet with the first U.S. competitive bid purchase of a nuclear plant. Entergy bought Pilgrim Station, a 670-megawatt reactor in Plymouth, MA, from Boston Edison for $81 million. The deal closed less than eight months after the companies agreed to transfer ownership.

"Pilgrim is the first of many plants we plan to acquire," said Don Hintz, president of Entergy Corp. "We intend to be a major player in the new market with a large portfolio of well-run, competitive nuclear units. This sale is a good first step toward achieving that goal."

"The sale of Pilgrim to a company that owns and operates a larger fleet of nuclear generating units helps ensure that safe, reliable, and economical electricity will continue to be provided to the northeast," said Tom May, Boston Edison CEO.

The competitive bid process is considered to be a model for the nuclear industry. Entergy will pay Boston Edison $81 million for Pilgrim Station, the nuclear fuel, and the plant's 1,600-acre site on Cape Cod Bay. In addition, credits of up to $31 million potentially available on future nuclear insurance premiums would be transferred from Entergy to Boston Edison. The sale includes power purchase agreements through 2004. Boston Edison will fully fund the plant's decommissioning trust with $471 million. Entergy expects to realize a $0.05/share earnings contribution to 1999 earnings from Pilgrim's operation.

"This marks the first completed sale in the history of the industry," said Jerry Yelverton, CEO of Entergy's nuclear companies.

Entergy Nuclear is a non-regulated subsidiary of Entergy Corp., a New Orleans-based global energy company that distributes energy to 2.5 million customers.

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