Aug 27 (Reuters) - Entergy Corp announced on Tuesday that it will shut the Vermont Yankee nuclear power plant, citing low power prices and high costs, after years of battling with state politicians and environmentalists to keep the plant operating.
The 620-megawatt power station will be decommissioned in the fourth quarter of next year, the company said.
"This was an agonizing decision and an extremely tough call for us," said Leo Denault, Entergy's chief executive officer.
The plant is the latest casualty of low power prices and utilities preferring cheap natural gas to generate electricity.
Nuclear and coal power plants have faced increased competition from cheap natural gas, due to a surge in production from the nation's bountiful shale reserves.
Entergy said it will take an after-tax impairment charge of about $181 million in the third quarter due to the shut down.
It also expects charges of $55 million to $60 million related to future severance and employee retention costs through the end of next year.
Entergy said the decision to shut down the plant is expected to benefit its operational earnings within two years. Its cash flow is expected to increase about $150 million to $200 million through 2017.
The plant, which Entergy bought in 2002, has been the focus of political controversy over its operations. The most recent fight followed Entergy's disclosure in January 2010 of a leak of radioactive tritium at the plant.
Still, the U.S. Nuclear Regulatory Commission granted the plant a 20-year operating license in 2011 that would have kept it running until March 2032.
The station, which is the only nuclear plant in the state of Vermont, will remain under the oversight of the NRC throughout the decommissioning process.
Shares of the New Orleans, Lousiana-based power company were down less than one percent at $62.72 on the New York Stock Exchange.
See FACTBOX U.S. nuclear power reactors that have been shut