Entergy Corp. is considering a move to shut down coal-fired power plants, the company’s CEO announced Wednesday.
In a conference call with analysts, John McDonough said the utility’s financial position and outlook are deteriorating due to the decline in coal prices, which he said will lead to significant losses for the company.
McDonough also warned the utility could lose as much as $1 billion from the closure of coal plants, which the company has long said would benefit the U.A.E.
The utility is seeking a $30 billion bailout from the U to avoid defaulting on a $100 billion bond issue it is due next month.
The company said the bankruptcy plan is not binding, but McDonow said it would be a “significant event” if Entergy loses its financial support.
McDonald said the company would be “further reviewing our options for a bankruptcy and if and when such a resolution is feasible, we will seek additional guidance from the appropriate authorities.”
The company also reported an operating loss of $9.2 billion for the first quarter, which fell short of expectations and below the industry average of $10.6 billion.
McDONOW, who took over as CEO in November, has been under pressure to cut costs amid soaring electricity costs.
The company has said it plans to cut spending to $1.5 billion by the end of the year.
McDowell said he expected the company to need a $2 billion bailout by the first half of next year, but that would be based on its outlook for coal prices and the utility expected a rate hike from the state of Indiana by March.
The electric utility has said the exit of coal will result in an increase in power prices.
McDougough also said Entergy is looking for an additional $10 billion in state incentives to offset its losses.
Entergy has received $17.4 billion in federal stimulus money and has received another $6 billion from other government agencies.
McDeWahe’s comments came as Entergy was preparing to file for Chapter 11 bankruptcy protection and exit bankruptcy protection.
It has faced multiple lawsuits over the past decade.
McDonnell said the utilities bankruptcy would be completed by the middle of next month, and Entergy would be able to close its remaining coal plants in March 2019.