PSEG Nuclear, a Public Service Enterprise Group (PEG) company, has appealed to the U.S. Nuclear Regulatory Commission (NRC) for renewing the operating licenses of its New Jersey-based Salem and Hope Creek facilities by another 20 years. The NRC is likely to take around 22-30 months to review the applications.
For merchant nuclear reactors, the NRC originally issues operating licenses for 40 years under the Atomic Energy Act, which is the average period taken by electric utilities to amortize their capital spending. PSEG Nuclear’s Salem station has two units with a combined generating capacity of 2345 megawatts (MW). The original operating licenses of Salem’s Unit 1 and 2 are valid till 2016 and 2020, respectively. The Hope Creek facility has a single unit generating 1211 MW and its original operating license terminates in 2026.
PSEG Nuclear is the second largest nuclear facility in the United States, producing adequate electricity to serve nearly 3 million houses daily. The Salem and Hope Creek stations play a vital role in meeting New Jersey’s electricity demands. New Jersey procures more than 50% percent of the state’s energy needs from nuclear power.
PEG closed at $31.26 on Wednesday, trading at 9.82X trailing 12-month EPS. We presently have Neutral recommendation for the company.
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