The paragraph is an introduction and overview of Entergy's Third Quarter 2024 Earnings Conference Call. The call is led by Liz Hunter, Vice President of Investor Relations, who introduces Chair and CEO Drew Marsh and CFO Kimberly Fontan. They outline the agenda, mentioning the inclusion of forward-looking statements and non-GAAP financial information, with relevant materials available on their website. Drew Marsh highlights the company's strong financial performance and progress on its growth strategy, reporting a robust quarterly adjusted EPS of $2.99 and announcing an increase in the bottom of their earnings guidance range by $0.10.

The company is increasing its long-term outlook due to new capital investments aimed at supporting rising industrial sales and the growing demand for clean energy products. It anticipates a compound annual growth rate of 11% to 12% in industrial sales through 2028, largely due to a new customer in Louisiana. With a heightened focus on clean energy, customers are showing interest in renewable and nuclear green tariffs. The company plans to raise its capital plan by $7 billion through 2028, primarily to expand transmission and generation capacity, including renewable projects. Specific advancements include adding nearly 800 megawatts of solar projects in Arkansas and more than 2,600 megawatts of additional projects in progress. More information will be disclosed at the EEI conference.

The paragraph highlights Entergy Louisiana's plans for customer-driven renewable projects, emphasizing new large-scale, hydrogen-ready dual fuel generation projects in Louisiana and Mississippi that incorporate future carbon capture and storage (CCS) capabilities. With a standardized design approach, Entergy has a successful track record of executing major projects, crucial for anticipated growth. The importance of preparing for CCS is underscored by regulatory requirements under the Clean Air Act. Additionally, Entergy is engaging with customers interested in low-carbon solutions and received a grant for a FEED study at Lake Charles Power Station to evaluate CCS feasibility with partner Crescent Midstream, aiming to enhance future CCS projects.

The paragraph emphasizes the importance of carbon capture and storage (CCS) and nuclear energy in meeting future federal emissions requirements and achieving decarbonization goals. It highlights existing nuclear capabilities and plans for potential expansion, including power upgrades and new site evaluations. The company is considering small modular reactor (SMR) technology and participating in industry and state working groups for nuclear development, particularly in Texas, Louisiana, and Mississippi. Solar, storage, CCS, nuclear, and potentially wind are seen as essential for reliable, affordable, and sustainable energy delivery. The company is engaging with stakeholders to address concerns and is committed to carefully evaluating the risks and economic impacts before making substantial investments.

Entergy Louisiana has submitted a request to the Louisiana Public Service Commission for approval of transmission and generation investments to support a new customer in the state, with a decision expected by September next year. Details of the filing can be viewed on Entergy’s Investor Relations website, with a summary available before its official publication in November. A separate filing for renewable projects is also planned. The project is expected to greatly benefit Louisiana, especially economically disadvantaged regions, by creating jobs, increasing tax revenue, and improving quality of life, while also diversifying the state's economy. The revenue from the customer will help cover the investment costs, allowing Entergy to maintain competitive rates. This initiative is based on a stakeholder engagement model discussed at Analyst Day.

The paragraph highlights the company's integrated utility services, offering generation, transmission, and retail solutions while maintaining strong relationships with stakeholders, which helps expedite project timelines. The company is experiencing growth due to trends like onshoring clean energy and electrification, expecting further sales and investments. Additionally, it emphasizes their effective storm preparedness, as demonstrated by a swift power restoration following two hurricanes in their service area, attributed to resilience investments, planning, execution, and communication.

The paragraph highlights the efforts of the company and its employees in restoring power swiftly and safely to customers, as well as providing mutual assistance to neighboring utilities during hurricanes. The company is advancing a comprehensive grid strengthening initiative with significant investments, including Entergy Louisiana’s $1.9 billion resilience plan and a $107 million project in Lake Charles. Additionally, the New Orleans City Council approved $100 million for resilience projects. The New Orleans East project has been selected for a DOE grant. A settlement was also reached on the first phase of the Entergy Texas resilience plan.

The paragraph discusses significant investments and grants aimed at enhancing infrastructure resilience for Entergy's operating companies. A $335 million investment plan includes $200 million contingent on a Texas Energy Fund grant, and federal grants have been secured for resilience projects in Louisiana and Texas, totaling $68 million and $54 million, respectively. Several completed projects, such as New Orleans' Avenue C project and elevated substations in Texas, demonstrate improved resilience against extreme weather events, like Hurricane Ida. These efforts reflect Entergy's customer-first approach and its benefits for regulatory outcomes and stakeholder interests.

During the past quarter, the Louisiana Public Service Commission approved several key initiatives for Entergy Louisiana, including a three-year extension of the formula rate plan, resolving claims, and transactions involving energy assets. New Orleans and Louisiana have adapted new rate plans. The company attributes its successes to customer-centric strategies and reports strong performance in operational, regulatory, and financial areas. The bottom range of the 2024 EPS guidance is raised due to a customer-driven capital plan. Key personnel changes are also announced, with Bill Abler and Liz Hunter transitioning to new roles within the company. The focus remains on delivering value to stakeholders.

The paragraph announces the retirement of Rod West, the Utility Group President at Entergy, after 25 years with the company. His retirement is described as bittersweet, acknowledging his contributions to customer growth and stakeholder engagement. The speaker anticipates seeing him again despite his retirement. Following this, Kimberly Fontan reports on the financial results, noting a strong quarter and an increase in the lower end of the guidance range. Adjusted EPS for the quarter was $2.99, slightly lower than last year due to weather impacts, but earnings increased when excluding these effects. Retail sales grew by 5%, with significant growth in industrial sales. O&M costs were as expected, benefiting from increased flexible spending in 2023.

The company reports a healthy operating cash flow of nearly $1.6 billion, a $157 million increase from last year, driven by the timing of fuel, purchase power payments, and pension contributions. Credit metrics meet or exceed expectations, with S&P upgrading SERI's credit rating and Entergy New Orleans receiving a stable outlook due to regulatory orders and litigation progress. The estimated cost for Hurricane Francine is $220 million to $240 million, primarily in Louisiana, and cost recovery discussions with regulators have begun without the expectation of securitization. The company's 2024-2028 capital plan has increased by $7 billion to support industrial sales and renewable energy interests, to be financed through operational cash flow, debt, and equity, with $2.4 billion in DOE loan applications to lower customer costs. A previous equity plan was fulfilled in 10 months using forward contracts under the ATM.

The paragraph discusses financial expectations and plans, including the settlement of contracts and cash proceeds anticipated in 2025 and 2026, and a remaining equity need of $3 billion between 2026 and 2028. Most of these needs are expected to be met in 2027 and 2028 using an efficient tool, the ATM. The company has adjusted its 2024 EPS guidance upwards and plans to adjust spending for customer benefits and risk reduction due to quarter changes. With a new capital plan, the company has increased its adjusted EPS outlook for 2026 to 2028, projecting a $0.35 to $0.85 annual increase. A 6% dividend growth is expected to be sustained, balancing business growth and capital return. Additionally, a 2-for-1 stock split has been approved, with trading to commence on a split-adjusted basis on December 13, and future reports will reflect this on a post-split basis.

Entergy's management is preparing for an upcoming update at EEI, focusing on their capital plans and future growth drivers. During a Q&A session, Shar Pourreza from Guggenheim Partners asked about Entergy's projected EPS growth of 8% to 9% by 2026 and the factors driving this change, particularly a major customer deal in Northern Louisiana and new generation agreements. Kimberly Fontan from Entergy noted that the growth is due to additional capital and customer growth, with certain customer commitments solidified through signed Energy Service Agreements (ESAs). Shar also inquired if the investment is fully covered under the rate agreement or if it requires reliance on the FRP, a point that Kimberly addressed in her explanation.

In the discussion, Kimberly Fontan and Andrew Marsh addressed questions about the financial recovery of investments and the impact of transferring a portion of the System Energy Resources, Inc. (SERI) asset from Louisiana to Mississippi. Fontan noted that investments are expected to be fully recoverable under existing rate mechanisms. The integration of a new customer should help spread costs and benefit other customers. Regarding capacity, Fontan and Marsh indicated that Louisiana's needs can be managed without additional resources beyond the current plan, even with the SERI capacity transfer to Mississippi. The transfer involves about 200 megawatts, which can be accommodated within Entergy Louisiana's portfolio.

The paragraph is a discussion involving various individuals about Entergy Louisiana's growth prospects and leadership changes. Shar Pourreza congratulates Rod West for his leadership at Entergy, highlighting his contributions, particularly in stakeholder engagement, and anticipates his future impact at another utility. Andrew Marsh addresses a question from Nicholas Campanella regarding the sustainability of an 8% to 9% growth rate post-2025. He mentions that long-term growth drivers include onshoring, clean energy, and electrification technology, as discussed at Analyst Day.

The paragraph discusses the expected growth in clean energy and electrification, particularly as industries work towards decarbonization plans into the next decade. It highlights ongoing discussions with large industrial customers looking into electrification, signifying a shift in traditional industries towards cleaner energy solutions. The paragraph notes the strategic advantages of being located near the Gulf Coast. Additionally, an inquiry is made about the focus on advanced nuclear energy, asking if it involves a regulated cohort and possibly a large-scale, multi-state initiative like AP1000.

In the paragraph, Andrew Marsh discusses the ongoing interest and belief in nuclear energy as crucial for achieving future carbon reduction goals. Despite its past unpopularity, he highlights the excitement and ongoing discussions around nuclear energy with various stakeholders, including vendors, communities, and leaders. He mentions the policy benefits of nuclear energy, such as clean energy production, job creation, tax contributions, community involvement, and the stability it provides to the power grid. Marsh acknowledges the challenges of overcoming initial hurdles to achieve these policy objectives and ultimately reach net-zero emissions. The dialogue then transitions to Nicholas Campanella thanking Marsh, leading to the next question from Julien Dumoulin-Smith of Jefferies.

The paragraph discusses the considerations and challenges associated with developing nuclear power projects, particularly in relation to their scale and financial implications. The speaker, Andrew Marsh, emphasizes the complexity and risks of a nuclear project, especially for smaller operating companies like Entergy Mississippi, due to their relatively smaller asset bases. He indicates that the ownership structure of such projects is under discussion but leans towards ownership to manage long-term contracts and balance sheet impacts, while noting that the company is experienced in handling such challenges. The conversation touches on resource mix, including solar and storage hybrid resources, and the broader discussions around nuclear projects.

The paragraph consists of a conversation during a discussion involving large industrial resources and the potential expansion into data centers. Andrew Marsh expresses optimism about continued growth in attracting transformational customers, citing multiple gigawatts of opportunities and current customer conversations as evidence. He acknowledges that these projects can take years but expects eventual success. Julien Dumoulin-Smith acknowledges the points and yields the floor. Ross Fowler from Bank of America congratulates Rod and Bill and inquires about regulatory support for nuclear energy, referencing a recent summit in Mississippi. He questions whether other states in their service territory share similar support for nuclear energy.

In the conversation, Andrew Marsh discusses the interest in new nuclear developments across various jurisdictions, highlighting formal exploration processes in Texas, Mississippi, and Louisiana with multiple stakeholders, emphasizing stakeholder engagement. Ross Fowler inquires about an industrial project in Northern Louisiana, specifically concerning a 1.5-gigawatt solar installment, questioning its association with a data center and specific sites. Rod West refrains from giving details about the customer, mentioning confidentiality until the customer decides to disclose. Steve Fleishman asks for clarification on a guidance change regarding CapEx and sales, questioning if it's solely related to one customer, but no specific answer is provided in this excerpt.

In the discussion, Andrew Marsh and Steve Fleishman talk about investments and capital expenditures related to solar and transmission projects. While a significant portion of sales comes from one main customer, the capital investments extend beyond just this customer, involving other significant projects. They also touch upon the costs of new gas plants in Texas, noting that while each site may differ in specifics such as location, financing, and transmission needs, they generally follow a standardized design. Regulatory fees vary by state, with different conditions in places like Mississippi and Texas. Regarding the balance sheet, Kimberly Fontan mentions that the incremental equity required to support additional capital expenditures is modest, attributed to improved cash flows, with previous figures amounting to around $1.7 billion projected for 2027 and 2028.

In this paragraph, the discussion revolves around the financial metrics and strategies related to renewable and nuclear energy investments. Kimberly Fontan explains that their metrics are comfortably above 14% and they are working towards 15%, without yet including nuclear Production Tax Credits (PTCs). She notes that these PTCs, when included, would be credit-positive and that Louisiana has agreed to amortize these credits over time. While they have factored in the corporate minimum tax in their forecast, the PTCs are expected to provide additional financial uplift. Steve Fleishman inquires about the risks associated with developing new nuclear projects. Andrew Marsh acknowledges the large scale and project risk of nuclear projects and notes that they must consider the company's size in relation to investment size, but he cannot provide specific details as discussions are ongoing.

The paragraph is part of a discussion involving multiple stakeholders about managing risks associated with new investments, particularly focusing on a customer-led approach. Andrew Marsh emphasizes the need for in-depth conversations with stakeholders, including communities, states, and customers, to manage and share risks for these projects. During a Q&A, Jeremy Tonet from JPMorgan asks about the tariff framework for new customers, questioning its applicability for future cases. Kimberly Fontan responds, highlighting the importance of ensuring new customers support their fair share under their framework.

The paragraph discusses efforts in Mississippi where the governor and legislature have worked to support the customer base by ensuring contributions extend beyond immediate additions, creating a replicable framework for engaging stakeholders. Jeremy Tonet asks about the timeline and challenges related to nuclear plant uprates. Andrew Marsh explains that the duration depends on the plant and project, noting easier and ongoing upgrades in some locations, while others are more complex and costly, requiring more customer support. Most upgrades are in Arkansas and Louisiana, with no opportunities at Grand Gulf, which had a major upgrade about 15 years ago. The conversation concludes with an appreciation for Rob's contribution.

In the conversation, Bill Appicelli asks Andrew Marsh if the capital expenditures (CapEx) from a new large customer are reflected in the current update, to which Marsh confirms they are. Bill then inquires about the impact on customer bills relative to previous expectations shared at an Analyst Day. Kimberly Fontan explains that the bill trajectory has decreased to about 3.5% from the earlier 4% due to sales growth spreading fixed costs over more sales. This growth benefits all customers. Bill also asks about the potential for nuclear clean tariffs and its impact on rate design. Andrew Marsh clarifies this mainly involves existing nuclear energy, particularly related to upgrades, and that advanced stages would present different risks. Sophie Karp from KeyBanc Capital Markets is the next to ask a question, appreciating the update.

In the paragraph, Sophie Karp asks Kimberly Fontan and Rod West for more details about the financial impact of a large new customer on EPS and capital investments. Kimberly Fontan states that the impact hasn't been specifically broken out but involves a blend of sales and investments in generation and transmission, including renewable resources, for this and other customers. Sophie then inquires if existing tariffs are sufficient for the new customer arrangement. Rod West responds by explaining that existing tariffs are typically used, but the company can negotiate special contracts to cover unique cost elements if necessary. Details are being withheld until the customer publicly announces their project.

The paragraph involves a discussion about the transfer of Louisiana's share to Mississippi, requiring approval from both Mississippi and the Federal Energy Regulatory Commission (FERC), with the expectation of approval by the end of the year. It also addresses nuclear development, where Andrew Marsh discusses the willingness to participate in nuclear projects, emphasizing the importance of risk allocation. He notes that entering as a first-of-its-kind project involves more risk than later iterations, suggesting comfort with participation if risks are appropriately mitigated with partners and stakeholders. The dialogue concludes with gratitude expressed by Sophie Karp and a transition to a question from Michael Lonegan from Evercore.

The paragraph discusses a financial outlook where Kimberly Fontan explains that despite favorable weather and operational flexibility, there is no significant change in the 2025 earnings per share (EPS) guidance due to conservative planning principles and a goal of steady results. The company aims for a 6% to 8% growth rate, consistent with previous years. Michael Lonegan asks about dividend growth and the long-term payout ratio target. Fontan mentions an implicit adjustment but no specific target, with a focus on maintaining a 6% dividend growth to deliver value to shareholders. The conversation concludes with an announcement about the quarterly report submission to the SEC.

The paragraph explains that events occurring before the 10-Q filing date, which provide additional evidence of conditions existing at the balance sheet date, will be reflected in the financial statements following Generally Accepted Accounting Principles. It also mentions that Entergy maintains a webpage on its Investor Relations site called Regulatory and Other Information, which offers updates on regulatory proceedings and strategic milestones. However, it advises not to rely solely on this page for all company information. The paragraph ends by concluding a call.

This summary was generated with AI and may contain some inaccuracies.