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Asset Retirement Obligations
 12 Months Ended
Dec. 31, 2016
Asset Retirement Obligations
ASSET RETIREMENT OBLIGATIONS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Accounting standards require companies to record liabilities for all legal obligations associated with the retirement of long-lived assets that result from the normal operation of the assets.  For Entergy, substantially all of its asset retirement obligations consist of its liability for decommissioning its nuclear power plants.  In addition, an insignificant amount of removal costs associated with non-nuclear power plants is also included in the decommissioning line item on the balance sheets.
 
These liabilities are recorded at their fair values (which are the present values of the estimated future cash outflows) in the period in which they are incurred, with an accompanying addition to the recorded cost of the long-lived asset.  The asset retirement obligation is accreted each year through a charge to expense, to reflect the time value of money for this present value obligation.  The accretion will continue through the completion of the asset retirement activity.  The amounts added to the carrying amounts of the long-lived assets will be depreciated over the useful lives of the assets.  The application of accounting standards related to asset retirement obligations is earnings neutral to the rate-regulated business of the Registrant Subsidiaries.

In accordance with ratemaking treatment and as required by regulatory accounting standards, the depreciation provisions for the Registrant Subsidiaries include a component for removal costs that are not asset retirement obligations under accounting standards.  In accordance with regulatory accounting principles, the Registrant Subsidiaries have recorded regulatory assets (liabilities) in the following amounts to reflect their estimates of the difference between estimated incurred removal costs and estimated removal costs recovered in rates:
 
December 31,
 
2016
 
2015
 
(In Millions)
Entergy Arkansas
$128.5
 
$85.7
Entergy Louisiana
($53.9)
 
($68.3)
Entergy Mississippi
$82.0
 
$77.5
Entergy New Orleans
$40.1
 
$29.4
Entergy Texas
$33.5
 
$25.8
System Energy
$69.7
 
$54.8


The cumulative decommissioning and retirement cost liabilities and expenses recorded in 2016 and 2015 by Entergy were as follows:
 
Liabilities as
of December 31,
2015
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31, 2016 (a)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$872.3

 

$—

 

$53.6

 

$—

 

($1.5
)
 

$924.4

Entergy Louisiana

$1,027.9

 

$—

 

$54.8

 

$—

 

$—

 

$1,082.7

Entergy Mississippi

$8.3

 

$—

 

$0.4

 

$—

 

$—

 

$8.7

Entergy New Orleans

$2.7

 

$—

 

$0.2

 

$—

 

$—

 

$2.9

Entergy Texas

$6.1

 

$—

 

$0.4

 

$—

 

$—

 

$6.5

System Energy

$803.4

 

$—

 

$50.8

 

$—

 

$—

 

$854.2

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$28.0

 

$—

 

$2.2

 

$10.1

 

($2.4
)
 

$37.9

FitzPatrick

$—

 

$696.2

(b)

$18.1

 

$—

 

$—

 

$714.3

Indian Point 1

$197.9

 

$—

 

$17.1

 

($0.3
)
 

($7.1
)
 

$207.6

Indian Point 2

$390.1

 

$—

 

$33.0

 

$230.0

 

$—

 

$653.1

Indian Point 3

$—

 

$466.3

(b)

$12.1

 

$162.7

 

$—

 

$641.1

Palisades

$342.0

 

$—

 

$29.5

 

$128.8

 

$—

 

$500.3

Pilgrim

$551.2

 

$—

 

$48.4

 

$3.2

 

($0.5
)
 

$602.3

Vermont Yankee

$560.0

 

$—

 

$39.3

 

$—

 

($128.8
)
 

$470.5

Other (c)

$0.3

 

$—

 

$—

 

$—

 

$—

 

$0.3


 
Liabilities as
of December 31,
2014
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31,
2015
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$818.4

 

$3.5

(c)

$50.4

 

$—

 

$—

 

$872.3

Entergy Louisiana

$950.3

 

$1.9

(c)

$51.0

 

$24.7

 

$—

 

$1,027.9

Entergy Mississippi

$6.8

 

$1.1

(c)

$0.4

 

$—

 

$—

 

$8.3

Entergy New Orleans

$2.5

 

$—

 

$0.2

 

$—

 

$—

 

$2.7

Entergy Texas

$4.6

 

$1.4

(c)

$0.3

 

($0.2
)
 

$—

 

$6.1

System Energy

$757.9

 

$—

 

$48.0

 

($2.5
)
 

$—

 

$803.4

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$27.8

 

$—

 

$2.2

 

$—

 

($2.0
)
 

$28.0

Indian Point 1

$188.9

 

$—

 

$16.3

 

$—

 

($7.3
)
 

$197.9

Indian Point 2

$359.7

 

$—

 

$30.4

 

$—

 

$—

 

$390.1

Palisades

$352.0

 

$—

 

$25.2

 

($35.2
)
 

$—

 

$342.0

Pilgrim

$383.1

 

$—

 

$33.3

 

$134.8

 

$—

 

$551.2

Vermont Yankee

$606.3

 

$—

 

$46.1

 

$—

 

($92.4
)
 

$560.0

Other (c)

$—

 

$—

 

$0.3

 

$—

 

$—

 

$0.3



(a)
Entergy Wholesale Commodities includes $714.3 million of asset retirement obligation for FitzPatrick which is classified as held for sale within other non-current liabilities on the consolidated balance sheet. See Note 14 to the financial statements for discussion of the agreement to sell the FitzPatrick plant to Exelon.
(b)
See “Entergy Wholesale Commodities” in “Nuclear Plant Decommissioning” below for additional discussion regarding the decommissioning agreements with NYPA and the associated asset retirement obligations.
(c)
See “Coal Combustion Residuals” below for additional discussion regarding the asset retirement obligations related to coal combustion residuals management.

Nuclear Plant Decommissioning

Entergy periodically reviews and updates estimated decommissioning costs.  The actual decommissioning costs may vary from the estimates because of the timing of plant decommissioning, regulatory requirements, changes in technology, and increased costs of labor, materials, and equipment.  As described below, during 2016 and 2015, Entergy updated decommissioning cost estimates for certain nuclear power plants.

Utility

In the fourth quarter 2015, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for Waterford 3 as a result of a revised decommissioning cost study.  The revised estimate resulted in a $24.9 million increase in its decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

In the fourth quarter 2015, System Energy recorded a revision to its estimated decommissioning cost liability for Grand Gulf as a result of a revised decommissioning cost study.  The revised estimate resulted in a $2.5 million reduction in its decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

Entergy Wholesale Commodities

In August 2013 the Board approved a plan to close and decommission Vermont Yankee at the end of 2014. As a result of the settlement agreement entered into by Entergy and the state of Vermont, Entergy reassessed its assumptions regarding the timing of cash flows. Entergy Vermont Yankee provided to the Vermont parties, in 2014, a site assessment study of the costs and tasks of radiological decommissioning, spent nuclear fuel management, and site restoration for Vermont Yankee.  Entergy Vermont Yankee filed its Post-Shutdown Decommissioning Activities Report (PSDAR) for Vermont Yankee with the NRC in December 2014.  As part of the development of the site assessment study and PSDAR, Entergy obtained a revised decommissioning cost study in the third quarter 2014. The revised estimate, along with reassessment of the assumptions regarding the timing of decommissioning cash flows, resulted in a $101.6 million increase in the decommissioning cost liability and a corresponding impairment charge, recorded in September 2014.

Vermont Yankee submitted notification of permanent cessation of operations and permanent removal of fuel from the reactor in January 2015 after final shutdown in December 2014. Vermont Yankee’s future certifications to satisfy the NRC’s financial assurance requirements will now be based on the site specific cost estimate, including the estimated cost of managing spent fuel, rather than the NRC minimum formula for estimating decommissioning costs. Filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required and will specifically address funding for spent fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligation.

Entergy expects that amounts available in Vermont Yankee’s decommissioning trust fund, including expected earnings, together with the credit facilities entered into in January 2015 that are expected to be repaid with recoveries from DOE litigation related to spent fuel storage, will be sufficient to cover Vermont Yankee’s expected costs of decommissioning, spent fuel management costs, and site restoration.  In June 2015 the NRC staff issued an exemption from its regulations to allow Vermont Yankee to use its decommissioning trust fund to pay for approximately $225 million of estimated future spent fuel management costs that will not be paid for using funds from the credit facilities.  In August 2015, Vermont and two Vermont utilities filed a petition in the U.S. Court of Appeals for the D.C. Circuit challenging the NRC’s issuance of that exemption.  In February 2016 the court dismissed the petition as premature because Vermont and the utilities had requested the NRC to reconsider a number of issues related to Vermont Yankee's use of the decommissioning trust fund including its use to pay for spent fuel management expenses pursuant to the exemption granted in June 2015. In October 2016 the NRC denied Vermont's and the utilities' request for a hearing and other relief but directed the NRC staff to conduct an assessment of any environmental impacts associated with the exemption.

In the second quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $77.6 million reduction in the decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset.

In the fourth quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $42.4 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2015.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $129 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant on October 1, 2018, subject to regulatory approval. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Palisades plant.

In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Pilgrim as a result of a revised decommissioning cost study. The revised estimate resulted in a $134 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant no later than June 2019. The asset retirement cost asset was included in the Pilgrim carrying value that was written down to fair value in the third quarter 2015. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Pilgrim plant.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities.  NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations.  NYPA had the right to require the Entergy subsidiaries to assume each of the decommissioning liabilities provided that it assigned the corresponding decommissioning trust, up to a specified level, to the Entergy subsidiaries.  Under the original agreements, if the decommissioning liabilities were retained by NYPA, the Entergy subsidiaries would perform the decommissioning of the plants at a price equal to the lesser of a pre-specified level or the amount in the decommissioning trust funds. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies. The asset was increased by monthly accretion based on the applicable discount rate necessary to ultimately provide for the estimated future value of the decommissioning contract.  The monthly accretion was recorded as interest income.
In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to the contract asset for the FitzPatrick plant. Due to a change in expectation regarding the timing of decommissioning cash flows, the result was a write down of the contract asset from $335 million to $131 million, for a charge of $204 million.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. As a result of the agreement with NYPA, in the third quarter 2016 Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and asset retirement obligations for the decommissioning liabilities. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  The decommissioning trust funds for the Indian Point 3 and FitzPatrick plants were transferred to Entergy by NYPA in January 2017.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liabilities for Indian Point 1, Indian Point 2, and Indian Point 3 as a result of revised decommissioning cost studies. The revised estimates resulted in a $392 million increase in the decommissioning cost liabilities, along with a corresponding increase in the related asset retirement cost assets. The increase in the estimated decommissioning cost liabilities resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the Indian Point 2 plant no later than April 2020 and the Indian Point 3 plant no later than April 2021. The asset retirement cost assets were included in the carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of Indian Point Energy Center.

As the Entergy Wholesale Commodities nuclear plants individually transition to decommissioning, the Entergy Wholesale Commodities plant owners will submit filings with the NRC for planned shutdown activities. These filings with the NRC will determine whether any other financial assurance may be required. The plants’ owners are required to provide the NRC with a biennial report (annually for units that have shut down or will shut down within five years), based on values as of December 31, addressing the owners’ ability to meet the NRC minimum funding levels. Depending on the value of the trust funds, the Entergy Wholesale Commodities plant owners may be required to take steps, such as providing financial guarantees through letters of credit or parent company guarantees or making additional contributions to the trusts, which could be significant, to ensure that the trusts are adequately funded and that NRC minimum funding requirements are met.

Entergy maintains decommissioning trust funds that are committed to meeting its obligations for the costs of decommissioning the nuclear power plants.  The fair values of the decommissioning trust funds and the related asset retirement obligation regulatory assets (liabilities) of Entergy as of December 31, 2016 and 2015 are as follows:

 
2016
 
2015
 
Decommissioning Trust Fair Values
 
Regulatory Asset (Liability)
 
Decommissioning
Trust Fair Values
 
Regulatory
Asset (Liability)
 
(In Millions)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
ANO 1 and ANO 2

$834.7

 
$316.3
 

$771.3

 

$280.3

River Bend

$712.8

 
($28.4)
 

$651.7

 

($26.8
)
Waterford 3

$427.9

 
$172.8
 

$390.6

 

$158.5

Grand Gulf

$780.5

 
$142.5
 

$701.5

 

$108.6

Entergy Wholesale Commodities

$2,968.0

 
$—
 

$2,834.9

 

$—



As a result of the agreement with NYPA discussed above, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables of $1.5 billion for the beneficial interests in the decommissioning trust funds for Indian Point 3 and FitzPatrick. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values are based on the trust statements received from NYPA and are valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value hierarchy. The receivables for the beneficial interests in the decommissioning trust funds are recorded in other deferred debits on the consolidated balance sheet.

Coal Combustion Residuals

In June 2010 the EPA issued a proposed rule on coal combustion residuals (CCRs) that contained two primary regulatory options: (1) regulating CCRs destined for disposal in landfills or received (including stored) in surface impoundments as so-called “special wastes” under the hazardous waste program of RCRA Subtitle C; or (2) regulating CCRs destined for disposal in landfills or surface impoundments as non-hazardous wastes under Subtitle D of RCRA.  Under both options, CCRs that are beneficially reused in certain processes would remain excluded from hazardous waste regulation. In April 2015 the EPA published the final CCR rule with the material being regulated under the second scenario presented above - as non-hazardous wastes regulated under RCRA Subtitle D. The final regulations create new compliance requirements including modified storage, new notification and reporting practices, product disposal considerations, and CCR unit closure criteria.  Entergy believes that on-site disposal options will be available at its facilities, to the extent needed for CCR that cannot be transferred for beneficial reuse. In December 2016, the Water Infrastructure Improvements for the Nation Act was signed into law, which authorizes states to regulate coal ash rather than leaving primary enforcement to citizen suit actions. States may submit to the EPA proposals for permit programs. Entergy is monitoring state agency actions and will participate in the regulatory development process.
Entergy Arkansas [Member]  
Asset Retirement Obligations
ASSET RETIREMENT OBLIGATIONS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Accounting standards require companies to record liabilities for all legal obligations associated with the retirement of long-lived assets that result from the normal operation of the assets.  For Entergy, substantially all of its asset retirement obligations consist of its liability for decommissioning its nuclear power plants.  In addition, an insignificant amount of removal costs associated with non-nuclear power plants is also included in the decommissioning line item on the balance sheets.
 
These liabilities are recorded at their fair values (which are the present values of the estimated future cash outflows) in the period in which they are incurred, with an accompanying addition to the recorded cost of the long-lived asset.  The asset retirement obligation is accreted each year through a charge to expense, to reflect the time value of money for this present value obligation.  The accretion will continue through the completion of the asset retirement activity.  The amounts added to the carrying amounts of the long-lived assets will be depreciated over the useful lives of the assets.  The application of accounting standards related to asset retirement obligations is earnings neutral to the rate-regulated business of the Registrant Subsidiaries.

In accordance with ratemaking treatment and as required by regulatory accounting standards, the depreciation provisions for the Registrant Subsidiaries include a component for removal costs that are not asset retirement obligations under accounting standards.  In accordance with regulatory accounting principles, the Registrant Subsidiaries have recorded regulatory assets (liabilities) in the following amounts to reflect their estimates of the difference between estimated incurred removal costs and estimated removal costs recovered in rates:
 
December 31,
 
2016
 
2015
 
(In Millions)
Entergy Arkansas
$128.5
 
$85.7
Entergy Louisiana
($53.9)
 
($68.3)
Entergy Mississippi
$82.0
 
$77.5
Entergy New Orleans
$40.1
 
$29.4
Entergy Texas
$33.5
 
$25.8
System Energy
$69.7
 
$54.8


The cumulative decommissioning and retirement cost liabilities and expenses recorded in 2016 and 2015 by Entergy were as follows:
 
Liabilities as
of December 31,
2015
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31, 2016 (a)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$872.3

 

$—

 

$53.6

 

$—

 

($1.5
)
 

$924.4

Entergy Louisiana

$1,027.9

 

$—

 

$54.8

 

$—

 

$—

 

$1,082.7

Entergy Mississippi

$8.3

 

$—

 

$0.4

 

$—

 

$—

 

$8.7

Entergy New Orleans

$2.7

 

$—

 

$0.2

 

$—

 

$—

 

$2.9

Entergy Texas

$6.1

 

$—

 

$0.4

 

$—

 

$—

 

$6.5

System Energy

$803.4

 

$—

 

$50.8

 

$—

 

$—

 

$854.2

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$28.0

 

$—

 

$2.2

 

$10.1

 

($2.4
)
 

$37.9

FitzPatrick

$—

 

$696.2

(b)

$18.1

 

$—

 

$—

 

$714.3

Indian Point 1

$197.9

 

$—

 

$17.1

 

($0.3
)
 

($7.1
)
 

$207.6

Indian Point 2

$390.1

 

$—

 

$33.0

 

$230.0

 

$—

 

$653.1

Indian Point 3

$—

 

$466.3

(b)

$12.1

 

$162.7

 

$—

 

$641.1

Palisades

$342.0

 

$—

 

$29.5

 

$128.8

 

$—

 

$500.3

Pilgrim

$551.2

 

$—

 

$48.4

 

$3.2

 

($0.5
)
 

$602.3

Vermont Yankee

$560.0

 

$—

 

$39.3

 

$—

 

($128.8
)
 

$470.5

Other (c)

$0.3

 

$—

 

$—

 

$—

 

$—

 

$0.3


 
Liabilities as
of December 31,
2014
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31,
2015
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$818.4

 

$3.5

(c)

$50.4

 

$—

 

$—

 

$872.3

Entergy Louisiana

$950.3

 

$1.9

(c)

$51.0

 

$24.7

 

$—

 

$1,027.9

Entergy Mississippi

$6.8

 

$1.1

(c)

$0.4

 

$—

 

$—

 

$8.3

Entergy New Orleans

$2.5

 

$—

 

$0.2

 

$—

 

$—

 

$2.7

Entergy Texas

$4.6

 

$1.4

(c)

$0.3

 

($0.2
)
 

$—

 

$6.1

System Energy

$757.9

 

$—

 

$48.0

 

($2.5
)
 

$—

 

$803.4

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$27.8

 

$—

 

$2.2

 

$—

 

($2.0
)
 

$28.0

Indian Point 1

$188.9

 

$—

 

$16.3

 

$—

 

($7.3
)
 

$197.9

Indian Point 2

$359.7

 

$—

 

$30.4

 

$—

 

$—

 

$390.1

Palisades

$352.0

 

$—

 

$25.2

 

($35.2
)
 

$—

 

$342.0

Pilgrim

$383.1

 

$—

 

$33.3

 

$134.8

 

$—

 

$551.2

Vermont Yankee

$606.3

 

$—

 

$46.1

 

$—

 

($92.4
)
 

$560.0

Other (c)

$—

 

$—

 

$0.3

 

$—

 

$—

 

$0.3



(a)
Entergy Wholesale Commodities includes $714.3 million of asset retirement obligation for FitzPatrick which is classified as held for sale within other non-current liabilities on the consolidated balance sheet. See Note 14 to the financial statements for discussion of the agreement to sell the FitzPatrick plant to Exelon.
(b)
See “Entergy Wholesale Commodities” in “Nuclear Plant Decommissioning” below for additional discussion regarding the decommissioning agreements with NYPA and the associated asset retirement obligations.
(c)
See “Coal Combustion Residuals” below for additional discussion regarding the asset retirement obligations related to coal combustion residuals management.

Nuclear Plant Decommissioning

Entergy periodically reviews and updates estimated decommissioning costs.  The actual decommissioning costs may vary from the estimates because of the timing of plant decommissioning, regulatory requirements, changes in technology, and increased costs of labor, materials, and equipment.  As described below, during 2016 and 2015, Entergy updated decommissioning cost estimates for certain nuclear power plants.

Utility

In the fourth quarter 2015, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for Waterford 3 as a result of a revised decommissioning cost study.  The revised estimate resulted in a $24.9 million increase in its decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

In the fourth quarter 2015, System Energy recorded a revision to its estimated decommissioning cost liability for Grand Gulf as a result of a revised decommissioning cost study.  The revised estimate resulted in a $2.5 million reduction in its decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

Entergy Wholesale Commodities

In August 2013 the Board approved a plan to close and decommission Vermont Yankee at the end of 2014. As a result of the settlement agreement entered into by Entergy and the state of Vermont, Entergy reassessed its assumptions regarding the timing of cash flows. Entergy Vermont Yankee provided to the Vermont parties, in 2014, a site assessment study of the costs and tasks of radiological decommissioning, spent nuclear fuel management, and site restoration for Vermont Yankee.  Entergy Vermont Yankee filed its Post-Shutdown Decommissioning Activities Report (PSDAR) for Vermont Yankee with the NRC in December 2014.  As part of the development of the site assessment study and PSDAR, Entergy obtained a revised decommissioning cost study in the third quarter 2014. The revised estimate, along with reassessment of the assumptions regarding the timing of decommissioning cash flows, resulted in a $101.6 million increase in the decommissioning cost liability and a corresponding impairment charge, recorded in September 2014.

Vermont Yankee submitted notification of permanent cessation of operations and permanent removal of fuel from the reactor in January 2015 after final shutdown in December 2014. Vermont Yankee’s future certifications to satisfy the NRC’s financial assurance requirements will now be based on the site specific cost estimate, including the estimated cost of managing spent fuel, rather than the NRC minimum formula for estimating decommissioning costs. Filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required and will specifically address funding for spent fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligation.

Entergy expects that amounts available in Vermont Yankee’s decommissioning trust fund, including expected earnings, together with the credit facilities entered into in January 2015 that are expected to be repaid with recoveries from DOE litigation related to spent fuel storage, will be sufficient to cover Vermont Yankee’s expected costs of decommissioning, spent fuel management costs, and site restoration.  In June 2015 the NRC staff issued an exemption from its regulations to allow Vermont Yankee to use its decommissioning trust fund to pay for approximately $225 million of estimated future spent fuel management costs that will not be paid for using funds from the credit facilities.  In August 2015, Vermont and two Vermont utilities filed a petition in the U.S. Court of Appeals for the D.C. Circuit challenging the NRC’s issuance of that exemption.  In February 2016 the court dismissed the petition as premature because Vermont and the utilities had requested the NRC to reconsider a number of issues related to Vermont Yankee's use of the decommissioning trust fund including its use to pay for spent fuel management expenses pursuant to the exemption granted in June 2015. In October 2016 the NRC denied Vermont's and the utilities' request for a hearing and other relief but directed the NRC staff to conduct an assessment of any environmental impacts associated with the exemption.

In the second quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $77.6 million reduction in the decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset.

In the fourth quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $42.4 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2015.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $129 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant on October 1, 2018, subject to regulatory approval. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Palisades plant.

In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Pilgrim as a result of a revised decommissioning cost study. The revised estimate resulted in a $134 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant no later than June 2019. The asset retirement cost asset was included in the Pilgrim carrying value that was written down to fair value in the third quarter 2015. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Pilgrim plant.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities.  NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations.  NYPA had the right to require the Entergy subsidiaries to assume each of the decommissioning liabilities provided that it assigned the corresponding decommissioning trust, up to a specified level, to the Entergy subsidiaries.  Under the original agreements, if the decommissioning liabilities were retained by NYPA, the Entergy subsidiaries would perform the decommissioning of the plants at a price equal to the lesser of a pre-specified level or the amount in the decommissioning trust funds. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies. The asset was increased by monthly accretion based on the applicable discount rate necessary to ultimately provide for the estimated future value of the decommissioning contract.  The monthly accretion was recorded as interest income.
In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to the contract asset for the FitzPatrick plant. Due to a change in expectation regarding the timing of decommissioning cash flows, the result was a write down of the contract asset from $335 million to $131 million, for a charge of $204 million.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. As a result of the agreement with NYPA, in the third quarter 2016 Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and asset retirement obligations for the decommissioning liabilities. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  The decommissioning trust funds for the Indian Point 3 and FitzPatrick plants were transferred to Entergy by NYPA in January 2017.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liabilities for Indian Point 1, Indian Point 2, and Indian Point 3 as a result of revised decommissioning cost studies. The revised estimates resulted in a $392 million increase in the decommissioning cost liabilities, along with a corresponding increase in the related asset retirement cost assets. The increase in the estimated decommissioning cost liabilities resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the Indian Point 2 plant no later than April 2020 and the Indian Point 3 plant no later than April 2021. The asset retirement cost assets were included in the carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of Indian Point Energy Center.

As the Entergy Wholesale Commodities nuclear plants individually transition to decommissioning, the Entergy Wholesale Commodities plant owners will submit filings with the NRC for planned shutdown activities. These filings with the NRC will determine whether any other financial assurance may be required. The plants’ owners are required to provide the NRC with a biennial report (annually for units that have shut down or will shut down within five years), based on values as of December 31, addressing the owners’ ability to meet the NRC minimum funding levels. Depending on the value of the trust funds, the Entergy Wholesale Commodities plant owners may be required to take steps, such as providing financial guarantees through letters of credit or parent company guarantees or making additional contributions to the trusts, which could be significant, to ensure that the trusts are adequately funded and that NRC minimum funding requirements are met.

Entergy maintains decommissioning trust funds that are committed to meeting its obligations for the costs of decommissioning the nuclear power plants.  The fair values of the decommissioning trust funds and the related asset retirement obligation regulatory assets (liabilities) of Entergy as of December 31, 2016 and 2015 are as follows:

 
2016
 
2015
 
Decommissioning Trust Fair Values
 
Regulatory Asset (Liability)
 
Decommissioning
Trust Fair Values
 
Regulatory
Asset (Liability)
 
(In Millions)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
ANO 1 and ANO 2

$834.7

 
$316.3
 

$771.3

 

$280.3

River Bend

$712.8

 
($28.4)
 

$651.7

 

($26.8
)
Waterford 3

$427.9

 
$172.8
 

$390.6

 

$158.5

Grand Gulf

$780.5

 
$142.5
 

$701.5

 

$108.6

Entergy Wholesale Commodities

$2,968.0

 
$—
 

$2,834.9

 

$—



As a result of the agreement with NYPA discussed above, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables of $1.5 billion for the beneficial interests in the decommissioning trust funds for Indian Point 3 and FitzPatrick. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values are based on the trust statements received from NYPA and are valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value hierarchy. The receivables for the beneficial interests in the decommissioning trust funds are recorded in other deferred debits on the consolidated balance sheet.

Coal Combustion Residuals

In June 2010 the EPA issued a proposed rule on coal combustion residuals (CCRs) that contained two primary regulatory options: (1) regulating CCRs destined for disposal in landfills or received (including stored) in surface impoundments as so-called “special wastes” under the hazardous waste program of RCRA Subtitle C; or (2) regulating CCRs destined for disposal in landfills or surface impoundments as non-hazardous wastes under Subtitle D of RCRA.  Under both options, CCRs that are beneficially reused in certain processes would remain excluded from hazardous waste regulation. In April 2015 the EPA published the final CCR rule with the material being regulated under the second scenario presented above - as non-hazardous wastes regulated under RCRA Subtitle D. The final regulations create new compliance requirements including modified storage, new notification and reporting practices, product disposal considerations, and CCR unit closure criteria.  Entergy believes that on-site disposal options will be available at its facilities, to the extent needed for CCR that cannot be transferred for beneficial reuse. In December 2016, the Water Infrastructure Improvements for the Nation Act was signed into law, which authorizes states to regulate coal ash rather than leaving primary enforcement to citizen suit actions. States may submit to the EPA proposals for permit programs. Entergy is monitoring state agency actions and will participate in the regulatory development process.
Entergy Louisiana [Member]  
Asset Retirement Obligations
ASSET RETIREMENT OBLIGATIONS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Accounting standards require companies to record liabilities for all legal obligations associated with the retirement of long-lived assets that result from the normal operation of the assets.  For Entergy, substantially all of its asset retirement obligations consist of its liability for decommissioning its nuclear power plants.  In addition, an insignificant amount of removal costs associated with non-nuclear power plants is also included in the decommissioning line item on the balance sheets.
 
These liabilities are recorded at their fair values (which are the present values of the estimated future cash outflows) in the period in which they are incurred, with an accompanying addition to the recorded cost of the long-lived asset.  The asset retirement obligation is accreted each year through a charge to expense, to reflect the time value of money for this present value obligation.  The accretion will continue through the completion of the asset retirement activity.  The amounts added to the carrying amounts of the long-lived assets will be depreciated over the useful lives of the assets.  The application of accounting standards related to asset retirement obligations is earnings neutral to the rate-regulated business of the Registrant Subsidiaries.

In accordance with ratemaking treatment and as required by regulatory accounting standards, the depreciation provisions for the Registrant Subsidiaries include a component for removal costs that are not asset retirement obligations under accounting standards.  In accordance with regulatory accounting principles, the Registrant Subsidiaries have recorded regulatory assets (liabilities) in the following amounts to reflect their estimates of the difference between estimated incurred removal costs and estimated removal costs recovered in rates:
 
December 31,
 
2016
 
2015
 
(In Millions)
Entergy Arkansas
$128.5
 
$85.7
Entergy Louisiana
($53.9)
 
($68.3)
Entergy Mississippi
$82.0
 
$77.5
Entergy New Orleans
$40.1
 
$29.4
Entergy Texas
$33.5
 
$25.8
System Energy
$69.7
 
$54.8


The cumulative decommissioning and retirement cost liabilities and expenses recorded in 2016 and 2015 by Entergy were as follows:
 
Liabilities as
of December 31,
2015
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31, 2016 (a)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$872.3

 

$—

 

$53.6

 

$—

 

($1.5
)
 

$924.4

Entergy Louisiana

$1,027.9

 

$—

 

$54.8

 

$—

 

$—

 

$1,082.7

Entergy Mississippi

$8.3

 

$—

 

$0.4

 

$—

 

$—

 

$8.7

Entergy New Orleans

$2.7

 

$—

 

$0.2

 

$—

 

$—

 

$2.9

Entergy Texas

$6.1

 

$—

 

$0.4

 

$—

 

$—

 

$6.5

System Energy

$803.4

 

$—

 

$50.8

 

$—

 

$—

 

$854.2

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$28.0

 

$—

 

$2.2

 

$10.1

 

($2.4
)
 

$37.9

FitzPatrick

$—

 

$696.2

(b)

$18.1

 

$—

 

$—

 

$714.3

Indian Point 1

$197.9

 

$—

 

$17.1

 

($0.3
)
 

($7.1
)
 

$207.6

Indian Point 2

$390.1

 

$—

 

$33.0

 

$230.0

 

$—

 

$653.1

Indian Point 3

$—

 

$466.3

(b)

$12.1

 

$162.7

 

$—

 

$641.1

Palisades

$342.0

 

$—

 

$29.5

 

$128.8

 

$—

 

$500.3

Pilgrim

$551.2

 

$—

 

$48.4

 

$3.2

 

($0.5
)
 

$602.3

Vermont Yankee

$560.0

 

$—

 

$39.3

 

$—

 

($128.8
)
 

$470.5

Other (c)

$0.3

 

$—

 

$—

 

$—

 

$—

 

$0.3


 
Liabilities as
of December 31,
2014
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31,
2015
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$818.4

 

$3.5

(c)

$50.4

 

$—

 

$—

 

$872.3

Entergy Louisiana

$950.3

 

$1.9

(c)

$51.0

 

$24.7

 

$—

 

$1,027.9

Entergy Mississippi

$6.8

 

$1.1

(c)

$0.4

 

$—

 

$—

 

$8.3

Entergy New Orleans

$2.5

 

$—

 

$0.2

 

$—

 

$—

 

$2.7

Entergy Texas

$4.6

 

$1.4

(c)

$0.3

 

($0.2
)
 

$—

 

$6.1

System Energy

$757.9

 

$—

 

$48.0

 

($2.5
)
 

$—

 

$803.4

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$27.8

 

$—

 

$2.2

 

$—

 

($2.0
)
 

$28.0

Indian Point 1

$188.9

 

$—

 

$16.3

 

$—

 

($7.3
)
 

$197.9

Indian Point 2

$359.7

 

$—

 

$30.4

 

$—

 

$—

 

$390.1

Palisades

$352.0

 

$—

 

$25.2

 

($35.2
)
 

$—

 

$342.0

Pilgrim

$383.1

 

$—

 

$33.3

 

$134.8

 

$—

 

$551.2

Vermont Yankee

$606.3

 

$—

 

$46.1

 

$—

 

($92.4
)
 

$560.0

Other (c)

$—

 

$—

 

$0.3

 

$—

 

$—

 

$0.3



(a)
Entergy Wholesale Commodities includes $714.3 million of asset retirement obligation for FitzPatrick which is classified as held for sale within other non-current liabilities on the consolidated balance sheet. See Note 14 to the financial statements for discussion of the agreement to sell the FitzPatrick plant to Exelon.
(b)
See “Entergy Wholesale Commodities” in “Nuclear Plant Decommissioning” below for additional discussion regarding the decommissioning agreements with NYPA and the associated asset retirement obligations.
(c)
See “Coal Combustion Residuals” below for additional discussion regarding the asset retirement obligations related to coal combustion residuals management.

Nuclear Plant Decommissioning

Entergy periodically reviews and updates estimated decommissioning costs.  The actual decommissioning costs may vary from the estimates because of the timing of plant decommissioning, regulatory requirements, changes in technology, and increased costs of labor, materials, and equipment.  As described below, during 2016 and 2015, Entergy updated decommissioning cost estimates for certain nuclear power plants.

Utility

In the fourth quarter 2015, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for Waterford 3 as a result of a revised decommissioning cost study.  The revised estimate resulted in a $24.9 million increase in its decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

In the fourth quarter 2015, System Energy recorded a revision to its estimated decommissioning cost liability for Grand Gulf as a result of a revised decommissioning cost study.  The revised estimate resulted in a $2.5 million reduction in its decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

Entergy Wholesale Commodities

In August 2013 the Board approved a plan to close and decommission Vermont Yankee at the end of 2014. As a result of the settlement agreement entered into by Entergy and the state of Vermont, Entergy reassessed its assumptions regarding the timing of cash flows. Entergy Vermont Yankee provided to the Vermont parties, in 2014, a site assessment study of the costs and tasks of radiological decommissioning, spent nuclear fuel management, and site restoration for Vermont Yankee.  Entergy Vermont Yankee filed its Post-Shutdown Decommissioning Activities Report (PSDAR) for Vermont Yankee with the NRC in December 2014.  As part of the development of the site assessment study and PSDAR, Entergy obtained a revised decommissioning cost study in the third quarter 2014. The revised estimate, along with reassessment of the assumptions regarding the timing of decommissioning cash flows, resulted in a $101.6 million increase in the decommissioning cost liability and a corresponding impairment charge, recorded in September 2014.

Vermont Yankee submitted notification of permanent cessation of operations and permanent removal of fuel from the reactor in January 2015 after final shutdown in December 2014. Vermont Yankee’s future certifications to satisfy the NRC’s financial assurance requirements will now be based on the site specific cost estimate, including the estimated cost of managing spent fuel, rather than the NRC minimum formula for estimating decommissioning costs. Filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required and will specifically address funding for spent fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligation.

Entergy expects that amounts available in Vermont Yankee’s decommissioning trust fund, including expected earnings, together with the credit facilities entered into in January 2015 that are expected to be repaid with recoveries from DOE litigation related to spent fuel storage, will be sufficient to cover Vermont Yankee’s expected costs of decommissioning, spent fuel management costs, and site restoration.  In June 2015 the NRC staff issued an exemption from its regulations to allow Vermont Yankee to use its decommissioning trust fund to pay for approximately $225 million of estimated future spent fuel management costs that will not be paid for using funds from the credit facilities.  In August 2015, Vermont and two Vermont utilities filed a petition in the U.S. Court of Appeals for the D.C. Circuit challenging the NRC’s issuance of that exemption.  In February 2016 the court dismissed the petition as premature because Vermont and the utilities had requested the NRC to reconsider a number of issues related to Vermont Yankee's use of the decommissioning trust fund including its use to pay for spent fuel management expenses pursuant to the exemption granted in June 2015. In October 2016 the NRC denied Vermont's and the utilities' request for a hearing and other relief but directed the NRC staff to conduct an assessment of any environmental impacts associated with the exemption.

In the second quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $77.6 million reduction in the decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset.

In the fourth quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $42.4 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2015.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $129 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant on October 1, 2018, subject to regulatory approval. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Palisades plant.

In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Pilgrim as a result of a revised decommissioning cost study. The revised estimate resulted in a $134 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant no later than June 2019. The asset retirement cost asset was included in the Pilgrim carrying value that was written down to fair value in the third quarter 2015. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Pilgrim plant.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities.  NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations.  NYPA had the right to require the Entergy subsidiaries to assume each of the decommissioning liabilities provided that it assigned the corresponding decommissioning trust, up to a specified level, to the Entergy subsidiaries.  Under the original agreements, if the decommissioning liabilities were retained by NYPA, the Entergy subsidiaries would perform the decommissioning of the plants at a price equal to the lesser of a pre-specified level or the amount in the decommissioning trust funds. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies. The asset was increased by monthly accretion based on the applicable discount rate necessary to ultimately provide for the estimated future value of the decommissioning contract.  The monthly accretion was recorded as interest income.
In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to the contract asset for the FitzPatrick plant. Due to a change in expectation regarding the timing of decommissioning cash flows, the result was a write down of the contract asset from $335 million to $131 million, for a charge of $204 million.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. As a result of the agreement with NYPA, in the third quarter 2016 Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and asset retirement obligations for the decommissioning liabilities. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  The decommissioning trust funds for the Indian Point 3 and FitzPatrick plants were transferred to Entergy by NYPA in January 2017.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liabilities for Indian Point 1, Indian Point 2, and Indian Point 3 as a result of revised decommissioning cost studies. The revised estimates resulted in a $392 million increase in the decommissioning cost liabilities, along with a corresponding increase in the related asset retirement cost assets. The increase in the estimated decommissioning cost liabilities resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the Indian Point 2 plant no later than April 2020 and the Indian Point 3 plant no later than April 2021. The asset retirement cost assets were included in the carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of Indian Point Energy Center.

As the Entergy Wholesale Commodities nuclear plants individually transition to decommissioning, the Entergy Wholesale Commodities plant owners will submit filings with the NRC for planned shutdown activities. These filings with the NRC will determine whether any other financial assurance may be required. The plants’ owners are required to provide the NRC with a biennial report (annually for units that have shut down or will shut down within five years), based on values as of December 31, addressing the owners’ ability to meet the NRC minimum funding levels. Depending on the value of the trust funds, the Entergy Wholesale Commodities plant owners may be required to take steps, such as providing financial guarantees through letters of credit or parent company guarantees or making additional contributions to the trusts, which could be significant, to ensure that the trusts are adequately funded and that NRC minimum funding requirements are met.

Entergy maintains decommissioning trust funds that are committed to meeting its obligations for the costs of decommissioning the nuclear power plants.  The fair values of the decommissioning trust funds and the related asset retirement obligation regulatory assets (liabilities) of Entergy as of December 31, 2016 and 2015 are as follows:

 
2016
 
2015
 
Decommissioning Trust Fair Values
 
Regulatory Asset (Liability)
 
Decommissioning
Trust Fair Values
 
Regulatory
Asset (Liability)
 
(In Millions)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
ANO 1 and ANO 2

$834.7

 
$316.3
 

$771.3

 

$280.3

River Bend

$712.8

 
($28.4)
 

$651.7

 

($26.8
)
Waterford 3

$427.9

 
$172.8
 

$390.6

 

$158.5

Grand Gulf

$780.5

 
$142.5
 

$701.5

 

$108.6

Entergy Wholesale Commodities

$2,968.0

 
$—
 

$2,834.9

 

$—



As a result of the agreement with NYPA discussed above, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables of $1.5 billion for the beneficial interests in the decommissioning trust funds for Indian Point 3 and FitzPatrick. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values are based on the trust statements received from NYPA and are valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value hierarchy. The receivables for the beneficial interests in the decommissioning trust funds are recorded in other deferred debits on the consolidated balance sheet.

Coal Combustion Residuals

In June 2010 the EPA issued a proposed rule on coal combustion residuals (CCRs) that contained two primary regulatory options: (1) regulating CCRs destined for disposal in landfills or received (including stored) in surface impoundments as so-called “special wastes” under the hazardous waste program of RCRA Subtitle C; or (2) regulating CCRs destined for disposal in landfills or surface impoundments as non-hazardous wastes under Subtitle D of RCRA.  Under both options, CCRs that are beneficially reused in certain processes would remain excluded from hazardous waste regulation. In April 2015 the EPA published the final CCR rule with the material being regulated under the second scenario presented above - as non-hazardous wastes regulated under RCRA Subtitle D. The final regulations create new compliance requirements including modified storage, new notification and reporting practices, product disposal considerations, and CCR unit closure criteria.  Entergy believes that on-site disposal options will be available at its facilities, to the extent needed for CCR that cannot be transferred for beneficial reuse. In December 2016, the Water Infrastructure Improvements for the Nation Act was signed into law, which authorizes states to regulate coal ash rather than leaving primary enforcement to citizen suit actions. States may submit to the EPA proposals for permit programs. Entergy is monitoring state agency actions and will participate in the regulatory development process.
Entergy Mississippi [Member]  
Asset Retirement Obligations
ASSET RETIREMENT OBLIGATIONS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Accounting standards require companies to record liabilities for all legal obligations associated with the retirement of long-lived assets that result from the normal operation of the assets.  For Entergy, substantially all of its asset retirement obligations consist of its liability for decommissioning its nuclear power plants.  In addition, an insignificant amount of removal costs associated with non-nuclear power plants is also included in the decommissioning line item on the balance sheets.
 
These liabilities are recorded at their fair values (which are the present values of the estimated future cash outflows) in the period in which they are incurred, with an accompanying addition to the recorded cost of the long-lived asset.  The asset retirement obligation is accreted each year through a charge to expense, to reflect the time value of money for this present value obligation.  The accretion will continue through the completion of the asset retirement activity.  The amounts added to the carrying amounts of the long-lived assets will be depreciated over the useful lives of the assets.  The application of accounting standards related to asset retirement obligations is earnings neutral to the rate-regulated business of the Registrant Subsidiaries.

In accordance with ratemaking treatment and as required by regulatory accounting standards, the depreciation provisions for the Registrant Subsidiaries include a component for removal costs that are not asset retirement obligations under accounting standards.  In accordance with regulatory accounting principles, the Registrant Subsidiaries have recorded regulatory assets (liabilities) in the following amounts to reflect their estimates of the difference between estimated incurred removal costs and estimated removal costs recovered in rates:
 
December 31,
 
2016
 
2015
 
(In Millions)
Entergy Arkansas
$128.5
 
$85.7
Entergy Louisiana
($53.9)
 
($68.3)
Entergy Mississippi
$82.0
 
$77.5
Entergy New Orleans
$40.1
 
$29.4
Entergy Texas
$33.5
 
$25.8
System Energy
$69.7
 
$54.8


The cumulative decommissioning and retirement cost liabilities and expenses recorded in 2016 and 2015 by Entergy were as follows:
 
Liabilities as
of December 31,
2015
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31, 2016 (a)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$872.3

 

$—

 

$53.6

 

$—

 

($1.5
)
 

$924.4

Entergy Louisiana

$1,027.9

 

$—

 

$54.8

 

$—

 

$—

 

$1,082.7

Entergy Mississippi

$8.3

 

$—

 

$0.4

 

$—

 

$—

 

$8.7

Entergy New Orleans

$2.7

 

$—

 

$0.2

 

$—

 

$—

 

$2.9

Entergy Texas

$6.1

 

$—

 

$0.4

 

$—

 

$—

 

$6.5

System Energy

$803.4

 

$—

 

$50.8

 

$—

 

$—

 

$854.2

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$28.0

 

$—

 

$2.2

 

$10.1

 

($2.4
)
 

$37.9

FitzPatrick

$—

 

$696.2

(b)

$18.1

 

$—

 

$—

 

$714.3

Indian Point 1

$197.9

 

$—

 

$17.1

 

($0.3
)
 

($7.1
)
 

$207.6

Indian Point 2

$390.1

 

$—

 

$33.0

 

$230.0

 

$—

 

$653.1

Indian Point 3

$—

 

$466.3

(b)

$12.1

 

$162.7

 

$—

 

$641.1

Palisades

$342.0

 

$—

 

$29.5

 

$128.8

 

$—

 

$500.3

Pilgrim

$551.2

 

$—

 

$48.4

 

$3.2

 

($0.5
)
 

$602.3

Vermont Yankee

$560.0

 

$—

 

$39.3

 

$—

 

($128.8
)
 

$470.5

Other (c)

$0.3

 

$—

 

$—

 

$—

 

$—

 

$0.3


 
Liabilities as
of December 31,
2014
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31,
2015
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$818.4

 

$3.5

(c)

$50.4

 

$—

 

$—

 

$872.3

Entergy Louisiana

$950.3

 

$1.9

(c)

$51.0

 

$24.7

 

$—

 

$1,027.9

Entergy Mississippi

$6.8

 

$1.1

(c)

$0.4

 

$—

 

$—

 

$8.3

Entergy New Orleans

$2.5

 

$—

 

$0.2

 

$—

 

$—

 

$2.7

Entergy Texas

$4.6

 

$1.4

(c)

$0.3

 

($0.2
)
 

$—

 

$6.1

System Energy

$757.9

 

$—

 

$48.0

 

($2.5
)
 

$—

 

$803.4

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$27.8

 

$—

 

$2.2

 

$—

 

($2.0
)
 

$28.0

Indian Point 1

$188.9

 

$—

 

$16.3

 

$—

 

($7.3
)
 

$197.9

Indian Point 2

$359.7

 

$—

 

$30.4

 

$—

 

$—

 

$390.1

Palisades

$352.0

 

$—

 

$25.2

 

($35.2
)
 

$—

 

$342.0

Pilgrim

$383.1

 

$—

 

$33.3

 

$134.8

 

$—

 

$551.2

Vermont Yankee

$606.3

 

$—

 

$46.1

 

$—

 

($92.4
)
 

$560.0

Other (c)

$—

 

$—

 

$0.3

 

$—

 

$—

 

$0.3



(a)
Entergy Wholesale Commodities includes $714.3 million of asset retirement obligation for FitzPatrick which is classified as held for sale within other non-current liabilities on the consolidated balance sheet. See Note 14 to the financial statements for discussion of the agreement to sell the FitzPatrick plant to Exelon.
(b)
See “Entergy Wholesale Commodities” in “Nuclear Plant Decommissioning” below for additional discussion regarding the decommissioning agreements with NYPA and the associated asset retirement obligations.
(c)
See “Coal Combustion Residuals” below for additional discussion regarding the asset retirement obligations related to coal combustion residuals management.

Nuclear Plant Decommissioning

Entergy periodically reviews and updates estimated decommissioning costs.  The actual decommissioning costs may vary from the estimates because of the timing of plant decommissioning, regulatory requirements, changes in technology, and increased costs of labor, materials, and equipment.  As described below, during 2016 and 2015, Entergy updated decommissioning cost estimates for certain nuclear power plants.

Utility

In the fourth quarter 2015, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for Waterford 3 as a result of a revised decommissioning cost study.  The revised estimate resulted in a $24.9 million increase in its decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

In the fourth quarter 2015, System Energy recorded a revision to its estimated decommissioning cost liability for Grand Gulf as a result of a revised decommissioning cost study.  The revised estimate resulted in a $2.5 million reduction in its decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

Entergy Wholesale Commodities

In August 2013 the Board approved a plan to close and decommission Vermont Yankee at the end of 2014. As a result of the settlement agreement entered into by Entergy and the state of Vermont, Entergy reassessed its assumptions regarding the timing of cash flows. Entergy Vermont Yankee provided to the Vermont parties, in 2014, a site assessment study of the costs and tasks of radiological decommissioning, spent nuclear fuel management, and site restoration for Vermont Yankee.  Entergy Vermont Yankee filed its Post-Shutdown Decommissioning Activities Report (PSDAR) for Vermont Yankee with the NRC in December 2014.  As part of the development of the site assessment study and PSDAR, Entergy obtained a revised decommissioning cost study in the third quarter 2014. The revised estimate, along with reassessment of the assumptions regarding the timing of decommissioning cash flows, resulted in a $101.6 million increase in the decommissioning cost liability and a corresponding impairment charge, recorded in September 2014.

Vermont Yankee submitted notification of permanent cessation of operations and permanent removal of fuel from the reactor in January 2015 after final shutdown in December 2014. Vermont Yankee’s future certifications to satisfy the NRC’s financial assurance requirements will now be based on the site specific cost estimate, including the estimated cost of managing spent fuel, rather than the NRC minimum formula for estimating decommissioning costs. Filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required and will specifically address funding for spent fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligation.

Entergy expects that amounts available in Vermont Yankee’s decommissioning trust fund, including expected earnings, together with the credit facilities entered into in January 2015 that are expected to be repaid with recoveries from DOE litigation related to spent fuel storage, will be sufficient to cover Vermont Yankee’s expected costs of decommissioning, spent fuel management costs, and site restoration.  In June 2015 the NRC staff issued an exemption from its regulations to allow Vermont Yankee to use its decommissioning trust fund to pay for approximately $225 million of estimated future spent fuel management costs that will not be paid for using funds from the credit facilities.  In August 2015, Vermont and two Vermont utilities filed a petition in the U.S. Court of Appeals for the D.C. Circuit challenging the NRC’s issuance of that exemption.  In February 2016 the court dismissed the petition as premature because Vermont and the utilities had requested the NRC to reconsider a number of issues related to Vermont Yankee's use of the decommissioning trust fund including its use to pay for spent fuel management expenses pursuant to the exemption granted in June 2015. In October 2016 the NRC denied Vermont's and the utilities' request for a hearing and other relief but directed the NRC staff to conduct an assessment of any environmental impacts associated with the exemption.

In the second quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $77.6 million reduction in the decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset.

In the fourth quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $42.4 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2015.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $129 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant on October 1, 2018, subject to regulatory approval. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Palisades plant.

In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Pilgrim as a result of a revised decommissioning cost study. The revised estimate resulted in a $134 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant no later than June 2019. The asset retirement cost asset was included in the Pilgrim carrying value that was written down to fair value in the third quarter 2015. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Pilgrim plant.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities.  NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations.  NYPA had the right to require the Entergy subsidiaries to assume each of the decommissioning liabilities provided that it assigned the corresponding decommissioning trust, up to a specified level, to the Entergy subsidiaries.  Under the original agreements, if the decommissioning liabilities were retained by NYPA, the Entergy subsidiaries would perform the decommissioning of the plants at a price equal to the lesser of a pre-specified level or the amount in the decommissioning trust funds. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies. The asset was increased by monthly accretion based on the applicable discount rate necessary to ultimately provide for the estimated future value of the decommissioning contract.  The monthly accretion was recorded as interest income.
In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to the contract asset for the FitzPatrick plant. Due to a change in expectation regarding the timing of decommissioning cash flows, the result was a write down of the contract asset from $335 million to $131 million, for a charge of $204 million.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. As a result of the agreement with NYPA, in the third quarter 2016 Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and asset retirement obligations for the decommissioning liabilities. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  The decommissioning trust funds for the Indian Point 3 and FitzPatrick plants were transferred to Entergy by NYPA in January 2017.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liabilities for Indian Point 1, Indian Point 2, and Indian Point 3 as a result of revised decommissioning cost studies. The revised estimates resulted in a $392 million increase in the decommissioning cost liabilities, along with a corresponding increase in the related asset retirement cost assets. The increase in the estimated decommissioning cost liabilities resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the Indian Point 2 plant no later than April 2020 and the Indian Point 3 plant no later than April 2021. The asset retirement cost assets were included in the carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of Indian Point Energy Center.

As the Entergy Wholesale Commodities nuclear plants individually transition to decommissioning, the Entergy Wholesale Commodities plant owners will submit filings with the NRC for planned shutdown activities. These filings with the NRC will determine whether any other financial assurance may be required. The plants’ owners are required to provide the NRC with a biennial report (annually for units that have shut down or will shut down within five years), based on values as of December 31, addressing the owners’ ability to meet the NRC minimum funding levels. Depending on the value of the trust funds, the Entergy Wholesale Commodities plant owners may be required to take steps, such as providing financial guarantees through letters of credit or parent company guarantees or making additional contributions to the trusts, which could be significant, to ensure that the trusts are adequately funded and that NRC minimum funding requirements are met.

Entergy maintains decommissioning trust funds that are committed to meeting its obligations for the costs of decommissioning the nuclear power plants.  The fair values of the decommissioning trust funds and the related asset retirement obligation regulatory assets (liabilities) of Entergy as of December 31, 2016 and 2015 are as follows:

 
2016
 
2015
 
Decommissioning Trust Fair Values
 
Regulatory Asset (Liability)
 
Decommissioning
Trust Fair Values
 
Regulatory
Asset (Liability)
 
(In Millions)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
ANO 1 and ANO 2

$834.7

 
$316.3
 

$771.3

 

$280.3

River Bend

$712.8

 
($28.4)
 

$651.7

 

($26.8
)
Waterford 3

$427.9

 
$172.8
 

$390.6

 

$158.5

Grand Gulf

$780.5

 
$142.5
 

$701.5

 

$108.6

Entergy Wholesale Commodities

$2,968.0

 
$—
 

$2,834.9

 

$—



As a result of the agreement with NYPA discussed above, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables of $1.5 billion for the beneficial interests in the decommissioning trust funds for Indian Point 3 and FitzPatrick. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values are based on the trust statements received from NYPA and are valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value hierarchy. The receivables for the beneficial interests in the decommissioning trust funds are recorded in other deferred debits on the consolidated balance sheet.

Coal Combustion Residuals

In June 2010 the EPA issued a proposed rule on coal combustion residuals (CCRs) that contained two primary regulatory options: (1) regulating CCRs destined for disposal in landfills or received (including stored) in surface impoundments as so-called “special wastes” under the hazardous waste program of RCRA Subtitle C; or (2) regulating CCRs destined for disposal in landfills or surface impoundments as non-hazardous wastes under Subtitle D of RCRA.  Under both options, CCRs that are beneficially reused in certain processes would remain excluded from hazardous waste regulation. In April 2015 the EPA published the final CCR rule with the material being regulated under the second scenario presented above - as non-hazardous wastes regulated under RCRA Subtitle D. The final regulations create new compliance requirements including modified storage, new notification and reporting practices, product disposal considerations, and CCR unit closure criteria.  Entergy believes that on-site disposal options will be available at its facilities, to the extent needed for CCR that cannot be transferred for beneficial reuse. In December 2016, the Water Infrastructure Improvements for the Nation Act was signed into law, which authorizes states to regulate coal ash rather than leaving primary enforcement to citizen suit actions. States may submit to the EPA proposals for permit programs. Entergy is monitoring state agency actions and will participate in the regulatory development process.
Entergy New Orleans [Member]  
Asset Retirement Obligations
ASSET RETIREMENT OBLIGATIONS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Accounting standards require companies to record liabilities for all legal obligations associated with the retirement of long-lived assets that result from the normal operation of the assets.  For Entergy, substantially all of its asset retirement obligations consist of its liability for decommissioning its nuclear power plants.  In addition, an insignificant amount of removal costs associated with non-nuclear power plants is also included in the decommissioning line item on the balance sheets.
 
These liabilities are recorded at their fair values (which are the present values of the estimated future cash outflows) in the period in which they are incurred, with an accompanying addition to the recorded cost of the long-lived asset.  The asset retirement obligation is accreted each year through a charge to expense, to reflect the time value of money for this present value obligation.  The accretion will continue through the completion of the asset retirement activity.  The amounts added to the carrying amounts of the long-lived assets will be depreciated over the useful lives of the assets.  The application of accounting standards related to asset retirement obligations is earnings neutral to the rate-regulated business of the Registrant Subsidiaries.

In accordance with ratemaking treatment and as required by regulatory accounting standards, the depreciation provisions for the Registrant Subsidiaries include a component for removal costs that are not asset retirement obligations under accounting standards.  In accordance with regulatory accounting principles, the Registrant Subsidiaries have recorded regulatory assets (liabilities) in the following amounts to reflect their estimates of the difference between estimated incurred removal costs and estimated removal costs recovered in rates:
 
December 31,
 
2016
 
2015
 
(In Millions)
Entergy Arkansas
$128.5
 
$85.7
Entergy Louisiana
($53.9)
 
($68.3)
Entergy Mississippi
$82.0
 
$77.5
Entergy New Orleans
$40.1
 
$29.4
Entergy Texas
$33.5
 
$25.8
System Energy
$69.7
 
$54.8


The cumulative decommissioning and retirement cost liabilities and expenses recorded in 2016 and 2015 by Entergy were as follows:
 
Liabilities as
of December 31,
2015
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31, 2016 (a)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$872.3

 

$—

 

$53.6

 

$—

 

($1.5
)
 

$924.4

Entergy Louisiana

$1,027.9

 

$—

 

$54.8

 

$—

 

$—

 

$1,082.7

Entergy Mississippi

$8.3

 

$—

 

$0.4

 

$—

 

$—

 

$8.7

Entergy New Orleans

$2.7

 

$—

 

$0.2

 

$—

 

$—

 

$2.9

Entergy Texas

$6.1

 

$—

 

$0.4

 

$—

 

$—

 

$6.5

System Energy

$803.4

 

$—

 

$50.8

 

$—

 

$—

 

$854.2

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$28.0

 

$—

 

$2.2

 

$10.1

 

($2.4
)
 

$37.9

FitzPatrick

$—

 

$696.2

(b)

$18.1

 

$—

 

$—

 

$714.3

Indian Point 1

$197.9

 

$—

 

$17.1

 

($0.3
)
 

($7.1
)
 

$207.6

Indian Point 2

$390.1

 

$—

 

$33.0

 

$230.0

 

$—

 

$653.1

Indian Point 3

$—

 

$466.3

(b)

$12.1

 

$162.7

 

$—

 

$641.1

Palisades

$342.0

 

$—

 

$29.5

 

$128.8

 

$—

 

$500.3

Pilgrim

$551.2

 

$—

 

$48.4

 

$3.2

 

($0.5
)
 

$602.3

Vermont Yankee

$560.0

 

$—

 

$39.3

 

$—

 

($128.8
)
 

$470.5

Other (c)

$0.3

 

$—

 

$—

 

$—

 

$—

 

$0.3


 
Liabilities as
of December 31,
2014
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31,
2015
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$818.4

 

$3.5

(c)

$50.4

 

$—

 

$—

 

$872.3

Entergy Louisiana

$950.3

 

$1.9

(c)

$51.0

 

$24.7

 

$—

 

$1,027.9

Entergy Mississippi

$6.8

 

$1.1

(c)

$0.4

 

$—

 

$—

 

$8.3

Entergy New Orleans

$2.5

 

$—

 

$0.2

 

$—

 

$—

 

$2.7

Entergy Texas

$4.6

 

$1.4

(c)

$0.3

 

($0.2
)
 

$—

 

$6.1

System Energy

$757.9

 

$—

 

$48.0

 

($2.5
)
 

$—

 

$803.4

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$27.8

 

$—

 

$2.2

 

$—

 

($2.0
)
 

$28.0

Indian Point 1

$188.9

 

$—

 

$16.3

 

$—

 

($7.3
)
 

$197.9

Indian Point 2

$359.7

 

$—

 

$30.4

 

$—

 

$—

 

$390.1

Palisades

$352.0

 

$—

 

$25.2

 

($35.2
)
 

$—

 

$342.0

Pilgrim

$383.1

 

$—

 

$33.3

 

$134.8

 

$—

 

$551.2

Vermont Yankee

$606.3

 

$—

 

$46.1

 

$—

 

($92.4
)
 

$560.0

Other (c)

$—

 

$—

 

$0.3

 

$—

 

$—

 

$0.3



(a)
Entergy Wholesale Commodities includes $714.3 million of asset retirement obligation for FitzPatrick which is classified as held for sale within other non-current liabilities on the consolidated balance sheet. See Note 14 to the financial statements for discussion of the agreement to sell the FitzPatrick plant to Exelon.
(b)
See “Entergy Wholesale Commodities” in “Nuclear Plant Decommissioning” below for additional discussion regarding the decommissioning agreements with NYPA and the associated asset retirement obligations.
(c)
See “Coal Combustion Residuals” below for additional discussion regarding the asset retirement obligations related to coal combustion residuals management.

Nuclear Plant Decommissioning

Entergy periodically reviews and updates estimated decommissioning costs.  The actual decommissioning costs may vary from the estimates because of the timing of plant decommissioning, regulatory requirements, changes in technology, and increased costs of labor, materials, and equipment.  As described below, during 2016 and 2015, Entergy updated decommissioning cost estimates for certain nuclear power plants.

Utility

In the fourth quarter 2015, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for Waterford 3 as a result of a revised decommissioning cost study.  The revised estimate resulted in a $24.9 million increase in its decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

In the fourth quarter 2015, System Energy recorded a revision to its estimated decommissioning cost liability for Grand Gulf as a result of a revised decommissioning cost study.  The revised estimate resulted in a $2.5 million reduction in its decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

Entergy Wholesale Commodities

In August 2013 the Board approved a plan to close and decommission Vermont Yankee at the end of 2014. As a result of the settlement agreement entered into by Entergy and the state of Vermont, Entergy reassessed its assumptions regarding the timing of cash flows. Entergy Vermont Yankee provided to the Vermont parties, in 2014, a site assessment study of the costs and tasks of radiological decommissioning, spent nuclear fuel management, and site restoration for Vermont Yankee.  Entergy Vermont Yankee filed its Post-Shutdown Decommissioning Activities Report (PSDAR) for Vermont Yankee with the NRC in December 2014.  As part of the development of the site assessment study and PSDAR, Entergy obtained a revised decommissioning cost study in the third quarter 2014. The revised estimate, along with reassessment of the assumptions regarding the timing of decommissioning cash flows, resulted in a $101.6 million increase in the decommissioning cost liability and a corresponding impairment charge, recorded in September 2014.

Vermont Yankee submitted notification of permanent cessation of operations and permanent removal of fuel from the reactor in January 2015 after final shutdown in December 2014. Vermont Yankee’s future certifications to satisfy the NRC’s financial assurance requirements will now be based on the site specific cost estimate, including the estimated cost of managing spent fuel, rather than the NRC minimum formula for estimating decommissioning costs. Filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required and will specifically address funding for spent fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligation.

Entergy expects that amounts available in Vermont Yankee’s decommissioning trust fund, including expected earnings, together with the credit facilities entered into in January 2015 that are expected to be repaid with recoveries from DOE litigation related to spent fuel storage, will be sufficient to cover Vermont Yankee’s expected costs of decommissioning, spent fuel management costs, and site restoration.  In June 2015 the NRC staff issued an exemption from its regulations to allow Vermont Yankee to use its decommissioning trust fund to pay for approximately $225 million of estimated future spent fuel management costs that will not be paid for using funds from the credit facilities.  In August 2015, Vermont and two Vermont utilities filed a petition in the U.S. Court of Appeals for the D.C. Circuit challenging the NRC’s issuance of that exemption.  In February 2016 the court dismissed the petition as premature because Vermont and the utilities had requested the NRC to reconsider a number of issues related to Vermont Yankee's use of the decommissioning trust fund including its use to pay for spent fuel management expenses pursuant to the exemption granted in June 2015. In October 2016 the NRC denied Vermont's and the utilities' request for a hearing and other relief but directed the NRC staff to conduct an assessment of any environmental impacts associated with the exemption.

In the second quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $77.6 million reduction in the decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset.

In the fourth quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $42.4 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2015.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $129 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant on October 1, 2018, subject to regulatory approval. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Palisades plant.

In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Pilgrim as a result of a revised decommissioning cost study. The revised estimate resulted in a $134 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant no later than June 2019. The asset retirement cost asset was included in the Pilgrim carrying value that was written down to fair value in the third quarter 2015. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Pilgrim plant.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities.  NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations.  NYPA had the right to require the Entergy subsidiaries to assume each of the decommissioning liabilities provided that it assigned the corresponding decommissioning trust, up to a specified level, to the Entergy subsidiaries.  Under the original agreements, if the decommissioning liabilities were retained by NYPA, the Entergy subsidiaries would perform the decommissioning of the plants at a price equal to the lesser of a pre-specified level or the amount in the decommissioning trust funds. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies. The asset was increased by monthly accretion based on the applicable discount rate necessary to ultimately provide for the estimated future value of the decommissioning contract.  The monthly accretion was recorded as interest income.
In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to the contract asset for the FitzPatrick plant. Due to a change in expectation regarding the timing of decommissioning cash flows, the result was a write down of the contract asset from $335 million to $131 million, for a charge of $204 million.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. As a result of the agreement with NYPA, in the third quarter 2016 Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and asset retirement obligations for the decommissioning liabilities. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  The decommissioning trust funds for the Indian Point 3 and FitzPatrick plants were transferred to Entergy by NYPA in January 2017.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liabilities for Indian Point 1, Indian Point 2, and Indian Point 3 as a result of revised decommissioning cost studies. The revised estimates resulted in a $392 million increase in the decommissioning cost liabilities, along with a corresponding increase in the related asset retirement cost assets. The increase in the estimated decommissioning cost liabilities resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the Indian Point 2 plant no later than April 2020 and the Indian Point 3 plant no later than April 2021. The asset retirement cost assets were included in the carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of Indian Point Energy Center.

As the Entergy Wholesale Commodities nuclear plants individually transition to decommissioning, the Entergy Wholesale Commodities plant owners will submit filings with the NRC for planned shutdown activities. These filings with the NRC will determine whether any other financial assurance may be required. The plants’ owners are required to provide the NRC with a biennial report (annually for units that have shut down or will shut down within five years), based on values as of December 31, addressing the owners’ ability to meet the NRC minimum funding levels. Depending on the value of the trust funds, the Entergy Wholesale Commodities plant owners may be required to take steps, such as providing financial guarantees through letters of credit or parent company guarantees or making additional contributions to the trusts, which could be significant, to ensure that the trusts are adequately funded and that NRC minimum funding requirements are met.

Entergy maintains decommissioning trust funds that are committed to meeting its obligations for the costs of decommissioning the nuclear power plants.  The fair values of the decommissioning trust funds and the related asset retirement obligation regulatory assets (liabilities) of Entergy as of December 31, 2016 and 2015 are as follows:

 
2016
 
2015
 
Decommissioning Trust Fair Values
 
Regulatory Asset (Liability)
 
Decommissioning
Trust Fair Values
 
Regulatory
Asset (Liability)
 
(In Millions)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
ANO 1 and ANO 2

$834.7

 
$316.3
 

$771.3

 

$280.3

River Bend

$712.8

 
($28.4)
 

$651.7

 

($26.8
)
Waterford 3

$427.9

 
$172.8
 

$390.6

 

$158.5

Grand Gulf

$780.5

 
$142.5
 

$701.5

 

$108.6

Entergy Wholesale Commodities

$2,968.0

 
$—
 

$2,834.9

 

$—



As a result of the agreement with NYPA discussed above, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables of $1.5 billion for the beneficial interests in the decommissioning trust funds for Indian Point 3 and FitzPatrick. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values are based on the trust statements received from NYPA and are valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value hierarchy. The receivables for the beneficial interests in the decommissioning trust funds are recorded in other deferred debits on the consolidated balance sheet.

Coal Combustion Residuals

In June 2010 the EPA issued a proposed rule on coal combustion residuals (CCRs) that contained two primary regulatory options: (1) regulating CCRs destined for disposal in landfills or received (including stored) in surface impoundments as so-called “special wastes” under the hazardous waste program of RCRA Subtitle C; or (2) regulating CCRs destined for disposal in landfills or surface impoundments as non-hazardous wastes under Subtitle D of RCRA.  Under both options, CCRs that are beneficially reused in certain processes would remain excluded from hazardous waste regulation. In April 2015 the EPA published the final CCR rule with the material being regulated under the second scenario presented above - as non-hazardous wastes regulated under RCRA Subtitle D. The final regulations create new compliance requirements including modified storage, new notification and reporting practices, product disposal considerations, and CCR unit closure criteria.  Entergy believes that on-site disposal options will be available at its facilities, to the extent needed for CCR that cannot be transferred for beneficial reuse. In December 2016, the Water Infrastructure Improvements for the Nation Act was signed into law, which authorizes states to regulate coal ash rather than leaving primary enforcement to citizen suit actions. States may submit to the EPA proposals for permit programs. Entergy is monitoring state agency actions and will participate in the regulatory development process.
Entergy Texas [Member]  
Asset Retirement Obligations
ASSET RETIREMENT OBLIGATIONS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Accounting standards require companies to record liabilities for all legal obligations associated with the retirement of long-lived assets that result from the normal operation of the assets.  For Entergy, substantially all of its asset retirement obligations consist of its liability for decommissioning its nuclear power plants.  In addition, an insignificant amount of removal costs associated with non-nuclear power plants is also included in the decommissioning line item on the balance sheets.
 
These liabilities are recorded at their fair values (which are the present values of the estimated future cash outflows) in the period in which they are incurred, with an accompanying addition to the recorded cost of the long-lived asset.  The asset retirement obligation is accreted each year through a charge to expense, to reflect the time value of money for this present value obligation.  The accretion will continue through the completion of the asset retirement activity.  The amounts added to the carrying amounts of the long-lived assets will be depreciated over the useful lives of the assets.  The application of accounting standards related to asset retirement obligations is earnings neutral to the rate-regulated business of the Registrant Subsidiaries.

In accordance with ratemaking treatment and as required by regulatory accounting standards, the depreciation provisions for the Registrant Subsidiaries include a component for removal costs that are not asset retirement obligations under accounting standards.  In accordance with regulatory accounting principles, the Registrant Subsidiaries have recorded regulatory assets (liabilities) in the following amounts to reflect their estimates of the difference between estimated incurred removal costs and estimated removal costs recovered in rates:
 
December 31,
 
2016
 
2015
 
(In Millions)
Entergy Arkansas
$128.5
 
$85.7
Entergy Louisiana
($53.9)
 
($68.3)
Entergy Mississippi
$82.0
 
$77.5
Entergy New Orleans
$40.1
 
$29.4
Entergy Texas
$33.5
 
$25.8
System Energy
$69.7
 
$54.8


The cumulative decommissioning and retirement cost liabilities and expenses recorded in 2016 and 2015 by Entergy were as follows:
 
Liabilities as
of December 31,
2015
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31, 2016 (a)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$872.3

 

$—

 

$53.6

 

$—

 

($1.5
)
 

$924.4

Entergy Louisiana

$1,027.9

 

$—

 

$54.8

 

$—

 

$—

 

$1,082.7

Entergy Mississippi

$8.3

 

$—

 

$0.4

 

$—

 

$—

 

$8.7

Entergy New Orleans

$2.7

 

$—

 

$0.2

 

$—

 

$—

 

$2.9

Entergy Texas

$6.1

 

$—

 

$0.4

 

$—

 

$—

 

$6.5

System Energy

$803.4

 

$—

 

$50.8

 

$—

 

$—

 

$854.2

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$28.0

 

$—

 

$2.2

 

$10.1

 

($2.4
)
 

$37.9

FitzPatrick

$—

 

$696.2

(b)

$18.1

 

$—

 

$—

 

$714.3

Indian Point 1

$197.9

 

$—

 

$17.1

 

($0.3
)
 

($7.1
)
 

$207.6

Indian Point 2

$390.1

 

$—

 

$33.0

 

$230.0

 

$—

 

$653.1

Indian Point 3

$—

 

$466.3

(b)

$12.1

 

$162.7

 

$—

 

$641.1

Palisades

$342.0

 

$—

 

$29.5

 

$128.8

 

$—

 

$500.3

Pilgrim

$551.2

 

$—

 

$48.4

 

$3.2

 

($0.5
)
 

$602.3

Vermont Yankee

$560.0

 

$—

 

$39.3

 

$—

 

($128.8
)
 

$470.5

Other (c)

$0.3

 

$—

 

$—

 

$—

 

$—

 

$0.3


 
Liabilities as
of December 31,
2014
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31,
2015
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$818.4

 

$3.5

(c)

$50.4

 

$—

 

$—

 

$872.3

Entergy Louisiana

$950.3

 

$1.9

(c)

$51.0

 

$24.7

 

$—

 

$1,027.9

Entergy Mississippi

$6.8

 

$1.1

(c)

$0.4

 

$—

 

$—

 

$8.3

Entergy New Orleans

$2.5

 

$—

 

$0.2

 

$—

 

$—

 

$2.7

Entergy Texas

$4.6

 

$1.4

(c)

$0.3

 

($0.2
)
 

$—

 

$6.1

System Energy

$757.9

 

$—

 

$48.0

 

($2.5
)
 

$—

 

$803.4

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$27.8

 

$—

 

$2.2

 

$—

 

($2.0
)
 

$28.0

Indian Point 1

$188.9

 

$—

 

$16.3

 

$—

 

($7.3
)
 

$197.9

Indian Point 2

$359.7

 

$—

 

$30.4

 

$—

 

$—

 

$390.1

Palisades

$352.0

 

$—

 

$25.2

 

($35.2
)
 

$—

 

$342.0

Pilgrim

$383.1

 

$—

 

$33.3

 

$134.8

 

$—

 

$551.2

Vermont Yankee

$606.3

 

$—

 

$46.1

 

$—

 

($92.4
)
 

$560.0

Other (c)

$—

 

$—

 

$0.3

 

$—

 

$—

 

$0.3



(a)
Entergy Wholesale Commodities includes $714.3 million of asset retirement obligation for FitzPatrick which is classified as held for sale within other non-current liabilities on the consolidated balance sheet. See Note 14 to the financial statements for discussion of the agreement to sell the FitzPatrick plant to Exelon.
(b)
See “Entergy Wholesale Commodities” in “Nuclear Plant Decommissioning” below for additional discussion regarding the decommissioning agreements with NYPA and the associated asset retirement obligations.
(c)
See “Coal Combustion Residuals” below for additional discussion regarding the asset retirement obligations related to coal combustion residuals management.

Nuclear Plant Decommissioning

Entergy periodically reviews and updates estimated decommissioning costs.  The actual decommissioning costs may vary from the estimates because of the timing of plant decommissioning, regulatory requirements, changes in technology, and increased costs of labor, materials, and equipment.  As described below, during 2016 and 2015, Entergy updated decommissioning cost estimates for certain nuclear power plants.

Utility

In the fourth quarter 2015, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for Waterford 3 as a result of a revised decommissioning cost study.  The revised estimate resulted in a $24.9 million increase in its decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

In the fourth quarter 2015, System Energy recorded a revision to its estimated decommissioning cost liability for Grand Gulf as a result of a revised decommissioning cost study.  The revised estimate resulted in a $2.5 million reduction in its decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

Entergy Wholesale Commodities

In August 2013 the Board approved a plan to close and decommission Vermont Yankee at the end of 2014. As a result of the settlement agreement entered into by Entergy and the state of Vermont, Entergy reassessed its assumptions regarding the timing of cash flows. Entergy Vermont Yankee provided to the Vermont parties, in 2014, a site assessment study of the costs and tasks of radiological decommissioning, spent nuclear fuel management, and site restoration for Vermont Yankee.  Entergy Vermont Yankee filed its Post-Shutdown Decommissioning Activities Report (PSDAR) for Vermont Yankee with the NRC in December 2014.  As part of the development of the site assessment study and PSDAR, Entergy obtained a revised decommissioning cost study in the third quarter 2014. The revised estimate, along with reassessment of the assumptions regarding the timing of decommissioning cash flows, resulted in a $101.6 million increase in the decommissioning cost liability and a corresponding impairment charge, recorded in September 2014.

Vermont Yankee submitted notification of permanent cessation of operations and permanent removal of fuel from the reactor in January 2015 after final shutdown in December 2014. Vermont Yankee’s future certifications to satisfy the NRC’s financial assurance requirements will now be based on the site specific cost estimate, including the estimated cost of managing spent fuel, rather than the NRC minimum formula for estimating decommissioning costs. Filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required and will specifically address funding for spent fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligation.

Entergy expects that amounts available in Vermont Yankee’s decommissioning trust fund, including expected earnings, together with the credit facilities entered into in January 2015 that are expected to be repaid with recoveries from DOE litigation related to spent fuel storage, will be sufficient to cover Vermont Yankee’s expected costs of decommissioning, spent fuel management costs, and site restoration.  In June 2015 the NRC staff issued an exemption from its regulations to allow Vermont Yankee to use its decommissioning trust fund to pay for approximately $225 million of estimated future spent fuel management costs that will not be paid for using funds from the credit facilities.  In August 2015, Vermont and two Vermont utilities filed a petition in the U.S. Court of Appeals for the D.C. Circuit challenging the NRC’s issuance of that exemption.  In February 2016 the court dismissed the petition as premature because Vermont and the utilities had requested the NRC to reconsider a number of issues related to Vermont Yankee's use of the decommissioning trust fund including its use to pay for spent fuel management expenses pursuant to the exemption granted in June 2015. In October 2016 the NRC denied Vermont's and the utilities' request for a hearing and other relief but directed the NRC staff to conduct an assessment of any environmental impacts associated with the exemption.

In the second quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $77.6 million reduction in the decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset.

In the fourth quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $42.4 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2015.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $129 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant on October 1, 2018, subject to regulatory approval. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Palisades plant.

In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Pilgrim as a result of a revised decommissioning cost study. The revised estimate resulted in a $134 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant no later than June 2019. The asset retirement cost asset was included in the Pilgrim carrying value that was written down to fair value in the third quarter 2015. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Pilgrim plant.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities.  NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations.  NYPA had the right to require the Entergy subsidiaries to assume each of the decommissioning liabilities provided that it assigned the corresponding decommissioning trust, up to a specified level, to the Entergy subsidiaries.  Under the original agreements, if the decommissioning liabilities were retained by NYPA, the Entergy subsidiaries would perform the decommissioning of the plants at a price equal to the lesser of a pre-specified level or the amount in the decommissioning trust funds. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies. The asset was increased by monthly accretion based on the applicable discount rate necessary to ultimately provide for the estimated future value of the decommissioning contract.  The monthly accretion was recorded as interest income.
In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to the contract asset for the FitzPatrick plant. Due to a change in expectation regarding the timing of decommissioning cash flows, the result was a write down of the contract asset from $335 million to $131 million, for a charge of $204 million.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. As a result of the agreement with NYPA, in the third quarter 2016 Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and asset retirement obligations for the decommissioning liabilities. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  The decommissioning trust funds for the Indian Point 3 and FitzPatrick plants were transferred to Entergy by NYPA in January 2017.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liabilities for Indian Point 1, Indian Point 2, and Indian Point 3 as a result of revised decommissioning cost studies. The revised estimates resulted in a $392 million increase in the decommissioning cost liabilities, along with a corresponding increase in the related asset retirement cost assets. The increase in the estimated decommissioning cost liabilities resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the Indian Point 2 plant no later than April 2020 and the Indian Point 3 plant no later than April 2021. The asset retirement cost assets were included in the carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of Indian Point Energy Center.

As the Entergy Wholesale Commodities nuclear plants individually transition to decommissioning, the Entergy Wholesale Commodities plant owners will submit filings with the NRC for planned shutdown activities. These filings with the NRC will determine whether any other financial assurance may be required. The plants’ owners are required to provide the NRC with a biennial report (annually for units that have shut down or will shut down within five years), based on values as of December 31, addressing the owners’ ability to meet the NRC minimum funding levels. Depending on the value of the trust funds, the Entergy Wholesale Commodities plant owners may be required to take steps, such as providing financial guarantees through letters of credit or parent company guarantees or making additional contributions to the trusts, which could be significant, to ensure that the trusts are adequately funded and that NRC minimum funding requirements are met.

Entergy maintains decommissioning trust funds that are committed to meeting its obligations for the costs of decommissioning the nuclear power plants.  The fair values of the decommissioning trust funds and the related asset retirement obligation regulatory assets (liabilities) of Entergy as of December 31, 2016 and 2015 are as follows:

 
2016
 
2015
 
Decommissioning Trust Fair Values
 
Regulatory Asset (Liability)
 
Decommissioning
Trust Fair Values
 
Regulatory
Asset (Liability)
 
(In Millions)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
ANO 1 and ANO 2

$834.7

 
$316.3
 

$771.3

 

$280.3

River Bend

$712.8

 
($28.4)
 

$651.7

 

($26.8
)
Waterford 3

$427.9

 
$172.8
 

$390.6

 

$158.5

Grand Gulf

$780.5

 
$142.5
 

$701.5

 

$108.6

Entergy Wholesale Commodities

$2,968.0

 
$—
 

$2,834.9

 

$—



As a result of the agreement with NYPA discussed above, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables of $1.5 billion for the beneficial interests in the decommissioning trust funds for Indian Point 3 and FitzPatrick. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values are based on the trust statements received from NYPA and are valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value hierarchy. The receivables for the beneficial interests in the decommissioning trust funds are recorded in other deferred debits on the consolidated balance sheet.

Coal Combustion Residuals

In June 2010 the EPA issued a proposed rule on coal combustion residuals (CCRs) that contained two primary regulatory options: (1) regulating CCRs destined for disposal in landfills or received (including stored) in surface impoundments as so-called “special wastes” under the hazardous waste program of RCRA Subtitle C; or (2) regulating CCRs destined for disposal in landfills or surface impoundments as non-hazardous wastes under Subtitle D of RCRA.  Under both options, CCRs that are beneficially reused in certain processes would remain excluded from hazardous waste regulation. In April 2015 the EPA published the final CCR rule with the material being regulated under the second scenario presented above - as non-hazardous wastes regulated under RCRA Subtitle D. The final regulations create new compliance requirements including modified storage, new notification and reporting practices, product disposal considerations, and CCR unit closure criteria.  Entergy believes that on-site disposal options will be available at its facilities, to the extent needed for CCR that cannot be transferred for beneficial reuse. In December 2016, the Water Infrastructure Improvements for the Nation Act was signed into law, which authorizes states to regulate coal ash rather than leaving primary enforcement to citizen suit actions. States may submit to the EPA proposals for permit programs. Entergy is monitoring state agency actions and will participate in the regulatory development process.
System Energy [Member]  
Asset Retirement Obligations
ASSET RETIREMENT OBLIGATIONS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Accounting standards require companies to record liabilities for all legal obligations associated with the retirement of long-lived assets that result from the normal operation of the assets.  For Entergy, substantially all of its asset retirement obligations consist of its liability for decommissioning its nuclear power plants.  In addition, an insignificant amount of removal costs associated with non-nuclear power plants is also included in the decommissioning line item on the balance sheets.
 
These liabilities are recorded at their fair values (which are the present values of the estimated future cash outflows) in the period in which they are incurred, with an accompanying addition to the recorded cost of the long-lived asset.  The asset retirement obligation is accreted each year through a charge to expense, to reflect the time value of money for this present value obligation.  The accretion will continue through the completion of the asset retirement activity.  The amounts added to the carrying amounts of the long-lived assets will be depreciated over the useful lives of the assets.  The application of accounting standards related to asset retirement obligations is earnings neutral to the rate-regulated business of the Registrant Subsidiaries.

In accordance with ratemaking treatment and as required by regulatory accounting standards, the depreciation provisions for the Registrant Subsidiaries include a component for removal costs that are not asset retirement obligations under accounting standards.  In accordance with regulatory accounting principles, the Registrant Subsidiaries have recorded regulatory assets (liabilities) in the following amounts to reflect their estimates of the difference between estimated incurred removal costs and estimated removal costs recovered in rates:
 
December 31,
 
2016
 
2015
 
(In Millions)
Entergy Arkansas
$128.5
 
$85.7
Entergy Louisiana
($53.9)
 
($68.3)
Entergy Mississippi
$82.0
 
$77.5
Entergy New Orleans
$40.1
 
$29.4
Entergy Texas
$33.5
 
$25.8
System Energy
$69.7
 
$54.8


The cumulative decommissioning and retirement cost liabilities and expenses recorded in 2016 and 2015 by Entergy were as follows:
 
Liabilities as
of December 31,
2015
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31, 2016 (a)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$872.3

 

$—

 

$53.6

 

$—

 

($1.5
)
 

$924.4

Entergy Louisiana

$1,027.9

 

$—

 

$54.8

 

$—

 

$—

 

$1,082.7

Entergy Mississippi

$8.3

 

$—

 

$0.4

 

$—

 

$—

 

$8.7

Entergy New Orleans

$2.7

 

$—

 

$0.2

 

$—

 

$—

 

$2.9

Entergy Texas

$6.1

 

$—

 

$0.4

 

$—

 

$—

 

$6.5

System Energy

$803.4

 

$—

 

$50.8

 

$—

 

$—

 

$854.2

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$28.0

 

$—

 

$2.2

 

$10.1

 

($2.4
)
 

$37.9

FitzPatrick

$—

 

$696.2

(b)

$18.1

 

$—

 

$—

 

$714.3

Indian Point 1

$197.9

 

$—

 

$17.1

 

($0.3
)
 

($7.1
)
 

$207.6

Indian Point 2

$390.1

 

$—

 

$33.0

 

$230.0

 

$—

 

$653.1

Indian Point 3

$—

 

$466.3

(b)

$12.1

 

$162.7

 

$—

 

$641.1

Palisades

$342.0

 

$—

 

$29.5

 

$128.8

 

$—

 

$500.3

Pilgrim

$551.2

 

$—

 

$48.4

 

$3.2

 

($0.5
)
 

$602.3

Vermont Yankee

$560.0

 

$—

 

$39.3

 

$—

 

($128.8
)
 

$470.5

Other (c)

$0.3

 

$—

 

$—

 

$—

 

$—

 

$0.3


 
Liabilities as
of December 31,
2014
 
Liabilities Incurred
 
 
 
Accretion
 
Change in
Cash Flow
Estimate
 
 
 
Spending
 
Liabilities as of December 31,
2015
 
(In Millions)
Utility:
 
 
 
 
 
 
 
 
 
 
 
Entergy Arkansas

$818.4

 

$3.5

(c)

$50.4

 

$—

 

$—

 

$872.3

Entergy Louisiana

$950.3

 

$1.9

(c)

$51.0

 

$24.7

 

$—

 

$1,027.9

Entergy Mississippi

$6.8

 

$1.1

(c)

$0.4

 

$—

 

$—

 

$8.3

Entergy New Orleans

$2.5

 

$—

 

$0.2

 

$—

 

$—

 

$2.7

Entergy Texas

$4.6

 

$1.4

(c)

$0.3

 

($0.2
)
 

$—

 

$6.1

System Energy

$757.9

 

$—

 

$48.0

 

($2.5
)
 

$—

 

$803.4

Entergy Wholesale Commodities:


 


 


 


 


 


Big Rock Point

$27.8

 

$—

 

$2.2

 

$—

 

($2.0
)
 

$28.0

Indian Point 1

$188.9

 

$—

 

$16.3

 

$—

 

($7.3
)
 

$197.9

Indian Point 2

$359.7

 

$—

 

$30.4

 

$—

 

$—

 

$390.1

Palisades

$352.0

 

$—

 

$25.2

 

($35.2
)
 

$—

 

$342.0

Pilgrim

$383.1

 

$—

 

$33.3

 

$134.8

 

$—

 

$551.2

Vermont Yankee

$606.3

 

$—

 

$46.1

 

$—

 

($92.4
)
 

$560.0

Other (c)

$—

 

$—

 

$0.3

 

$—

 

$—

 

$0.3



(a)
Entergy Wholesale Commodities includes $714.3 million of asset retirement obligation for FitzPatrick which is classified as held for sale within other non-current liabilities on the consolidated balance sheet. See Note 14 to the financial statements for discussion of the agreement to sell the FitzPatrick plant to Exelon.
(b)
See “Entergy Wholesale Commodities” in “Nuclear Plant Decommissioning” below for additional discussion regarding the decommissioning agreements with NYPA and the associated asset retirement obligations.
(c)
See “Coal Combustion Residuals” below for additional discussion regarding the asset retirement obligations related to coal combustion residuals management.

Nuclear Plant Decommissioning

Entergy periodically reviews and updates estimated decommissioning costs.  The actual decommissioning costs may vary from the estimates because of the timing of plant decommissioning, regulatory requirements, changes in technology, and increased costs of labor, materials, and equipment.  As described below, during 2016 and 2015, Entergy updated decommissioning cost estimates for certain nuclear power plants.

Utility

In the fourth quarter 2015, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for Waterford 3 as a result of a revised decommissioning cost study.  The revised estimate resulted in a $24.9 million increase in its decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

In the fourth quarter 2015, System Energy recorded a revision to its estimated decommissioning cost liability for Grand Gulf as a result of a revised decommissioning cost study.  The revised estimate resulted in a $2.5 million reduction in its decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset that will be depreciated over the remaining life of the unit.

Entergy Wholesale Commodities

In August 2013 the Board approved a plan to close and decommission Vermont Yankee at the end of 2014. As a result of the settlement agreement entered into by Entergy and the state of Vermont, Entergy reassessed its assumptions regarding the timing of cash flows. Entergy Vermont Yankee provided to the Vermont parties, in 2014, a site assessment study of the costs and tasks of radiological decommissioning, spent nuclear fuel management, and site restoration for Vermont Yankee.  Entergy Vermont Yankee filed its Post-Shutdown Decommissioning Activities Report (PSDAR) for Vermont Yankee with the NRC in December 2014.  As part of the development of the site assessment study and PSDAR, Entergy obtained a revised decommissioning cost study in the third quarter 2014. The revised estimate, along with reassessment of the assumptions regarding the timing of decommissioning cash flows, resulted in a $101.6 million increase in the decommissioning cost liability and a corresponding impairment charge, recorded in September 2014.

Vermont Yankee submitted notification of permanent cessation of operations and permanent removal of fuel from the reactor in January 2015 after final shutdown in December 2014. Vermont Yankee’s future certifications to satisfy the NRC’s financial assurance requirements will now be based on the site specific cost estimate, including the estimated cost of managing spent fuel, rather than the NRC minimum formula for estimating decommissioning costs. Filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required and will specifically address funding for spent fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligation.

Entergy expects that amounts available in Vermont Yankee’s decommissioning trust fund, including expected earnings, together with the credit facilities entered into in January 2015 that are expected to be repaid with recoveries from DOE litigation related to spent fuel storage, will be sufficient to cover Vermont Yankee’s expected costs of decommissioning, spent fuel management costs, and site restoration.  In June 2015 the NRC staff issued an exemption from its regulations to allow Vermont Yankee to use its decommissioning trust fund to pay for approximately $225 million of estimated future spent fuel management costs that will not be paid for using funds from the credit facilities.  In August 2015, Vermont and two Vermont utilities filed a petition in the U.S. Court of Appeals for the D.C. Circuit challenging the NRC’s issuance of that exemption.  In February 2016 the court dismissed the petition as premature because Vermont and the utilities had requested the NRC to reconsider a number of issues related to Vermont Yankee's use of the decommissioning trust fund including its use to pay for spent fuel management expenses pursuant to the exemption granted in June 2015. In October 2016 the NRC denied Vermont's and the utilities' request for a hearing and other relief but directed the NRC staff to conduct an assessment of any environmental impacts associated with the exemption.

In the second quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $77.6 million reduction in the decommissioning cost liability, along with a corresponding reduction in the related asset retirement cost asset.

In the fourth quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $42.4 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2015.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Palisades as a result of a revised decommissioning cost study. The revised estimate resulted in a $129 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant on October 1, 2018, subject to regulatory approval. The asset retirement cost asset was included in the Palisades carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Palisades plant.

In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability for Pilgrim as a result of a revised decommissioning cost study. The revised estimate resulted in a $134 million increase in the decommissioning cost liability, along with a corresponding increase in the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the plant no later than June 2019. The asset retirement cost asset was included in the Pilgrim carrying value that was written down to fair value in the third quarter 2015. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of the Pilgrim plant.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities.  NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations.  NYPA had the right to require the Entergy subsidiaries to assume each of the decommissioning liabilities provided that it assigned the corresponding decommissioning trust, up to a specified level, to the Entergy subsidiaries.  Under the original agreements, if the decommissioning liabilities were retained by NYPA, the Entergy subsidiaries would perform the decommissioning of the plants at a price equal to the lesser of a pre-specified level or the amount in the decommissioning trust funds. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies. The asset was increased by monthly accretion based on the applicable discount rate necessary to ultimately provide for the estimated future value of the decommissioning contract.  The monthly accretion was recorded as interest income.
In the third quarter 2015, Entergy Wholesale Commodities recorded a revision to the contract asset for the FitzPatrick plant. Due to a change in expectation regarding the timing of decommissioning cash flows, the result was a write down of the contract asset from $335 million to $131 million, for a charge of $204 million.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. As a result of the agreement with NYPA, in the third quarter 2016 Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and asset retirement obligations for the decommissioning liabilities. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  The decommissioning trust funds for the Indian Point 3 and FitzPatrick plants were transferred to Entergy by NYPA in January 2017.

In the fourth quarter 2016, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liabilities for Indian Point 1, Indian Point 2, and Indian Point 3 as a result of revised decommissioning cost studies. The revised estimates resulted in a $392 million increase in the decommissioning cost liabilities, along with a corresponding increase in the related asset retirement cost assets. The increase in the estimated decommissioning cost liabilities resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations of the Indian Point 2 plant no later than April 2020 and the Indian Point 3 plant no later than April 2021. The asset retirement cost assets were included in the carrying value that was written down to fair value in the fourth quarter 2016. See Note 14 to the financial statements for discussion of the impairment of the value and planned shutdown of Indian Point Energy Center.

As the Entergy Wholesale Commodities nuclear plants individually transition to decommissioning, the Entergy Wholesale Commodities plant owners will submit filings with the NRC for planned shutdown activities. These filings with the NRC will determine whether any other financial assurance may be required. The plants’ owners are required to provide the NRC with a biennial report (annually for units that have shut down or will shut down within five years), based on values as of December 31, addressing the owners’ ability to meet the NRC minimum funding levels. Depending on the value of the trust funds, the Entergy Wholesale Commodities plant owners may be required to take steps, such as providing financial guarantees through letters of credit or parent company guarantees or making additional contributions to the trusts, which could be significant, to ensure that the trusts are adequately funded and that NRC minimum funding requirements are met.

Entergy maintains decommissioning trust funds that are committed to meeting its obligations for the costs of decommissioning the nuclear power plants.  The fair values of the decommissioning trust funds and the related asset retirement obligation regulatory assets (liabilities) of Entergy as of December 31, 2016 and 2015 are as follows:

 
2016
 
2015
 
Decommissioning Trust Fair Values
 
Regulatory Asset (Liability)
 
Decommissioning
Trust Fair Values
 
Regulatory
Asset (Liability)
 
(In Millions)
 
(In Millions)
Utility:
 
 
 
 
 
 
 
ANO 1 and ANO 2

$834.7

 
$316.3
 

$771.3

 

$280.3

River Bend

$712.8

 
($28.4)
 

$651.7

 

($26.8
)
Waterford 3

$427.9

 
$172.8
 

$390.6

 

$158.5

Grand Gulf

$780.5

 
$142.5
 

$701.5

 

$108.6

Entergy Wholesale Commodities

$2,968.0

 
$—
 

$2,834.9

 

$—



As a result of the agreement with NYPA discussed above, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables of $1.5 billion for the beneficial interests in the decommissioning trust funds for Indian Point 3 and FitzPatrick. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values are based on the trust statements received from NYPA and are valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value hierarchy. The receivables for the beneficial interests in the decommissioning trust funds are recorded in other deferred debits on the consolidated balance sheet.

Coal Combustion Residuals

In June 2010 the EPA issued a proposed rule on coal combustion residuals (CCRs) that contained two primary regulatory options: (1) regulating CCRs destined for disposal in landfills or received (including stored) in surface impoundments as so-called “special wastes” under the hazardous waste program of RCRA Subtitle C; or (2) regulating CCRs destined for disposal in landfills or surface impoundments as non-hazardous wastes under Subtitle D of RCRA.  Under both options, CCRs that are beneficially reused in certain processes would remain excluded from hazardous waste regulation. In April 2015 the EPA published the final CCR rule with the material being regulated under the second scenario presented above - as non-hazardous wastes regulated under RCRA Subtitle D. The final regulations create new compliance requirements including modified storage, new notification and reporting practices, product disposal considerations, and CCR unit closure criteria.  Entergy believes that on-site disposal options will be available at its facilities, to the extent needed for CCR that cannot be transferred for beneficial reuse. In December 2016, the Water Infrastructure Improvements for the Nation Act was signed into law, which authorizes states to regulate coal ash rather than leaving primary enforcement to citizen suit actions. States may submit to the EPA proposals for permit programs. Entergy is monitoring state agency actions and will participate in the regulatory development process.