Who better than to explain the LES puzzle than Jim Ferland? As president of Louisiana Energy Services, Ferland came onboard nearly three years ago. At the time, the LES project was still in Tennessee, but rapidly losing traction. Ferland admits the situation had gotten so bad in Tennessee that his management team had to look elsewhere.
First, we wanted to clarify exactly who owns LES. Conflicting news reports, found in the news items after LES was awarded the first NRC license for a nuclear facility in nearly thirty years, confused us. Ferland straightened us out on this point, too. “LES is incorporated in Delaware. It’s a limited partnership. I’ll give you a quick rundown on the ownership. It is confusing.” Six month ago, Westinghouse Electric owned 24.5 percent of LES. British Nuclear Fuels, which owns a one-third stake in Urenco, owned Westinghouse. On March 3rd of this year, Urenco bought Westinghouse’s minority interest in LES.
Wait, it gets more confusing. “Back in the original LES, which was back in Louisiana in the early 1990s, the utilities did have an equity share at that time,” Ferland explained. “When the Urenco picked the project back up, to restart it in 2002, the utilities tagged along. The utilities, though, did not have an equity ownership share.” According to Ferland, Urenco bought out the three U.S. utilities – Entergy, Exelon and Duke – in exchange for some cash and more cash payments going forward. “All that is happening now is the utilities earn the rest of their money back as LES meets certain milestones going forward,” said Ferland. “One of those milestones was (achieved) the day LES received the NRC license. As of 2002, these three utilities had no management say and no equity participation. They simply had some rights to some future cash flows, depending upon whether or not LES was successful. Essentially, we’re paying the utilities back for the investment they made in the early 1990s.”
The upshot is simple. Louisiana Energy Services is a wholly owned subsidiary of Urenco Ltd. But then again, get ready for a tad more confusion on the ownership issue.