New York Rejects Entergy’s Spinoff of Nuclear Plants (xpost)

[bananas]

From LBN yesterday:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4321451

New York Rejects Entergy’s Spinoff of Nuclear Plants (Update1)

Source: Business Week (Bloomberg)

Entergy Corp.’s plan to raise at least $3 billion by spinning off six nuclear reactors into a separate company was rejected by the New York Public Service Commission.

The commission voted unanimously today at a regular meeting in New York City, after its staff and state Attorney General Andrew Cuomo argued the transaction would hurt the public by creating a “debt-laden” company with fewer financial resources to meet obligations to dismantle the plants.
...
Enexus “would not be a financially viable entity in the long term” because of the debt loads proposed by Entergy, John Stewart, the regulator’s director of utility rates and service, said at the meeting.
...
Entergy’s debt is rated BBB, the second-lowest investment grade, by Standard & Poor’s and Baa3, the lowest investment grade, by Moody’s Investors Service.
...

Read more: http://www.businessweek.com/news/2010-03-26/new-york-rejects-entergy-s-spinoff-of-nuclear-plants-update3-.html

dixiegrrrrl has it right:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4321451&mesg_id=4321728

dixiegrrrrl
Response to Original message

3. Cuomo is very smart.

Companies can and do form subsidiaries, load them with debt while the income stream is sent to the parent company, then declare bankruptcy for the debt laden subsidiary. Investors, pensioners, lose all their money.
A widely used tactic in Argentina, which contributed to the collapse of that country a few years back.
A hated tactic during the Energy crisis in Ca. a few years back.
And recently used by GMC, to the shock of the investors of the "old" company who lost everything.

[madokie]

1. This is a perfect example

of what I've been saying for years now. The nuclear power industry is not to be trusted in any way, shape or form, they lie, thats what they do.

only fools advocate the use of more nuclear energy as it is neither cheap, clean nor carbon neutral. Yes I said that...

[LiberalFighter]

2. Should be illegal to create subsidiaries with the intent to dissolve later

and avoid their financial obligations.

They made the decisions as a whole for each part of the business and they should pay for their mistakes.