Washington, DC--Congressman Eliot Engel praised the New York State Public Service Commission (PSC) decision to deny the Entergy Corp. effort to spinoff Indian Point 2 and 3 and four other nuclear energy generating plants into a separate corporation as “not in the public interest.”

The PSC ruled the proposed corporation would not be financially viable. Rep. Engel, who urged the PSC to deny the application when it was proposed, said, “I am gratified that the PSC agrees that this proposal is not in the public interest.” He also said he believed it would lead to increased electricity rates and potentially put taxpayers on the hook for millions of dollars on cleanup costs.

The proposed spinoff, Enexus Energy Corp., would be $3 billion in debt and its only assets would be their nuclear plants, including the Indian Point 2 and 3, which were built to last 35 years and are now almost 40 years old. Another plant, Vermont Yankee, is being investigated by the Nuclear Regulatory Commission for radioactive leaks and the Vermont State Senate recently voted to close that plant by 2012.

After the PSC held hearings on the proposed spinoff, its Senior Advisory Staff recommended that the proposal be rejected unless debt was mitigated, the company’s long term financial capabilities enhanced, and rate payer benefits provided. Entergy resubmitted plans, but they did not meet the requirements.

Rep. Engel, a senior member of the House Energy and Commerce Committee, said the spinoff appeared to be an effort to shed the legitimate costs of running nuclear power plants while leaving the taxpayers liable when the plants close or problems develop. He said problems were inevitable considering the age of Indian Point.

Entergy had declared bankruptcy in August, 2006, after Hurricane Katrina caused it $475 million in damages.

The proposed spinoff had received approval from the U.S. Federal Energy Regulatory Commission and the Nuclear Regulatory Commission. Entergy wants to spinoff six reactors: FitzPatrick, Indian Point 2 and 3, in New York, Pilgrim in Massachusetts, Palisades in Michigan and Vermont Yankee in Vermont. Indian Point and Vermont Yankee have applications pending for licenses to continue operating.