8-KOther Events

ENTERGY CORP /DE/ 8-K Report, Corporate Update (May 20, 2013)

Filed May 20, 2013For Securities:ETR

Summary

Entergy Corporation (ETR) filed an 8-K report on May 20, 2013, detailing a significant incident at its Arkansas Nuclear One (ANO) facility. On March 31, 2013, a contractor-owned crane collapsed during scheduled maintenance at ANO 1, leading to a fatality, injuries to other workers, damage to the turbine building serving both ANO units, and an unplanned shutdown of ANO 2. The company estimates the total cost for assessment, debris removal, and property/equipment replacement to be between $130 million and $215 million, which may fluctuate as assessments continue. While ANO 2 has since been restarted and returned to full power, ANO 1 remains offline with restoration efforts expected to conclude by the end of 2013. Entergy anticipates incurring replacement power costs for both units. The company is actively pursuing recovery of damages, including through its insurance with Nuclear Electric Insurance Limited (NEIL), though a dispute has arisen regarding NEIL's application of a $50 million sublimit for the incident. Investors should monitor the resolution of this insurance claim and the final costs associated with the ANO incident.

Key Highlights

  • 1On March 31, 2013, a contractor crane collapsed at the Arkansas Nuclear One (ANO) facility during a refueling outage for ANO 1.
  • 2The incident resulted in one fatality and several injuries to contract workers.
  • 3The ANO 2 unit was forced to shut down, and the turbine building, common to both ANO units, sustained damage.
  • 4Estimated costs for damage assessment, debris removal, and replacement of property and equipment range from $130 million to $215 million.
  • 5ANO 2 was restarted and reached full power by April 30, 2013.
  • 6ANO 1 restoration is ongoing, with an expected completion before the end of 2013.
  • 7Entergy is in a dispute with its insurer, NEIL, over the application of a $50 million sublimit for the incident's property damage coverage.

Frequently Asked Questions

The incident occurred when a contractor-owned and operated heavy-lifting apparatus collapsed while moving the generator stator out of the turbine building during a scheduled refueling outage at ANO 1.

Entergy estimates the total cost for assessment, debris removal, and replacing damaged property and equipment to be between $130 million and $215 million. The company also expects to incur incremental replacement power costs for both ANO 1 and ANO 2.

ANO 2 was shut down as a result of the incident but has since been restarted and returned to full power. ANO 1 is still undergoing restoration efforts, which are expected to be completed before the end of 2013.

Yes, Entergy Arkansas is assessing its options for recovering damages, including through its insurance with Nuclear Electric Insurance Limited (NEIL). However, there is a disagreement with NEIL regarding the applicability of a $50 million course of construction sublimit to the loss.