Entergy Q3 2025 Earnings Call Transcript

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Provided by Quartr
October 29, 2025

Key Takeaways

  • Positive Sentiment: Entergy reported $1.53 adjusted EPS for Q3, narrowed 2025 guidance (raised the bottom by $0.10) and reiterated long‑term adjusted EPS growth above 8% through 2029.
  • Positive Sentiment: Company highlighted a robust commercial pipeline — a 7–12 gigawatt data‑center opportunity set — and has secured >19 gigawatts of capacity, adding 4.5 GW of power‑island equipment to support 2031–2032 commercial operations.
  • Positive Sentiment: Entergy rolled forward a $41 billion capital plan for 2026–2029 with an associated equity need of $4.4 billion (10–15% of capex) and has already contracted ~45% of near‑term equity, settling roughly $1.13 billion of equity forwards year‑to‑date.
  • Positive Sentiment: Regulatory and resilience progress is supporting growth and affordability — examples include the Superpower Mississippi $300M grid hardening (funded by new industrial customers), Louisiana and Arkansas approvals for generation/solar, and major Texas transmission approvals.
  • Negative Sentiment: Risks remain from higher other O&M and rising construction/craft labor costs, an increased share count from equity forward settlements, and a Texas PUCT cost cap (~$2.4B) on certain projects that could constrain recovery or margin upside.
AI Generated. May Contain Errors.
Earnings Conference Call
Entergy Q3 2025
00:00 / 00:00

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Operator

Hello, everyone. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to today's Entergy Corporation third quarter earnings call and teleconference. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. If you'd like to withdraw your question, simply press star one again. Thank you. I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation. Liz?

Liz Hunter
Liz Hunter
VP of Investor Relations at Entergy Corporation

Good morning. Thank you, Greg, and thanks to everyone for joining this morning. We will begin today with comments from Entergy's Chair and CEO, Drew Marsh, and then Kimberly Fontan, our CFO, will review results. In today's call, management will make certain forward-looking statements. Actual results could differ materially from these forward-looking statements due to a number of factors which are set forth in our earnings release, our slide presentation, and our SEC filings. Entergy does not assume any obligation to update these forward-looking statements. Management will also discuss non-GAAP financial information. Reconciliations to the applicable GAAP measures are included in today's press release and slide presentation, both of which can be found on the Investor Relations section of our website. I will turn the call over to Drew.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thank you, Liz, and good morning, everyone. Today we are reporting strong financial results as well as continued progress on business and regulatory matters. Starting with our quarterly financial results, our adjusted earnings per share was $1.53. With our results to date and our biggest quarter behind us, we are narrowing our guidance, raising the bottom by $0.10. We also remain well-positioned to achieve our long-term growth outlooks. Kimberly will review the financial details in a moment. Turning to the business, last quarter, we achieved the first quartile net promoter score for utility residential service for the first time since we began tracking this metric. We're pleased to report that we've maintained our first quartile position. We are keenly focused on meeting the needs of our 3 million customers, and we believe our strategy will carry this momentum forward.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Our focus on the customer starts with keeping our rates as low as possible. To begin, we aim to maintain our average rates well below the national average through the remarkable commitment and creativity of our employees and a culture of continuous improvement. Today's share of wallet is roughly the lowest our customers have seen over the last 20 years. We expect it to stay in that range over the outlook period. Of course, there's more to it than that. We proactively manage the effect of fuel volatility on customers' bills through fuel hedging programs and mechanisms to defer fuel costs during peak prices. For individual customers, we have developed tools to help them manage their bills, such as approved bill discounts for low-income seniors, payment options like average billing and payment timing, energy efficiency services, and customer assistance programs like Power to Care and LIHEAP Advocacy.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

I'm proud to highlight that our digital LIHEAP platform recently received a Silver Best Practices Award from Chartwell for excellence in serving vulnerable customers. This tool streamlines access to energy assistance and provides real-time app updates for customers in need. As we've worked to attract new hyperscale data center customers, we ensure that they pay their fair share of energy infrastructure investments while bringing other significant benefits to our communities, such as jobs, property tax payments, direct municipal infrastructure investment, and workforce development. This is consistent with their stated intent to be good neighbors. For example, at the recent groundbreaking announcement, Google said that they will protect energy affordability for existing customers by covering the full cost of powering the data center in West Memphis. They're also committed to making a significant community impact, including a $25 million fund to accelerate local energy efficiency efforts and workforce development.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

In September, Entergy Mississippi announced a new customer-focused initiative known as Superpower Mississippi. The initiative includes a $300 million investment to harden the grid and improve reliability with the goal of reducing outages for customers by half within five years. We're able to add this investment for grid improvements at no additional cost to Entergy Mississippi customers because of new revenues from Amazon and other large industrial customers' investments in the state. Haley Fisackerly, our CEO at Entergy Mississippi, recently noted that customer rates would be 16% lower than they otherwise would have been due to these large customers. That includes the incremental Superpower Mississippi investment. In customer growth news, in late September, Simper reached its final investment decision for phase two of its Port Arthur LNG project. In addition, a colocation data center, AVAIO, announced an investment in Entergy Mississippi's service area.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

While these were included in our probability-weighted sales forecast, these developments continue to build confidence in our long-term outlook. As a reminder, we probability weight potential industrial customers in our plans except for very large businesses like hyperscale data centers, which we don't add to our plans until there is a signed electric service agreement. Because of our vertical integration, natural Gulf Coast advantages, thoughtful regulation, a long history of successfully working with large industrial projects, and now MISO's expedited connection mechanisms, we continue to see strong demand from businesses looking to locate in our service areas. This includes data centers, but also customers from traditional industrial segments. Our data center pipeline has continued to grow and now is sitting from 7-12 GW. This is based on active conversations with customers for whom we reasonably could expect to sign agreements within the next year or two.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

With line of sight on incremental opportunities, we've added 4.5 GW to our agreement for the purchase of power island equipment, including steam turbines, combustion turbines, and heat recovery steam generators. This addition represents six units that will be delivered in time to support commercial operations in 2031 to 2032. In total, we now have secured more than 19 GW of capacity, 11 GW of which is accounted for due to growth or other supply needs. That leaves 8 GW for additional growth. We secured other critical equipment, including transformers and breakers, and we secured 90% of materials required for our planned transmission projects through 2030. We also have agreements with EPCs for the generation projects through mid-2029, and we have line of sight for additional projects. We're also well-positioned for solar projects.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

For our owned projects, we've secured approximately 75% of our critical equipment, including generator step-up transformers, high-voltage breakers, and solar modules. We also have clear line of sight for the remaining 25% through our existing supplier relationships. In July, FERC approved MISO's expedited resource addition study, or ERAS, process. We have since submitted nine interconnection requests for 12 plants into the new process. Eight of these plants in our ERAS submission are in our plan, and four are available for incremental growth. ERAS has worked well to support speed to market for customers trying to come online as quickly as possible, as well as help us respond to the national security priority for rapid energy deployment to win the AI race. We expect to start receiving our first project approvals by the end of this year.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

With standardized designs for our generation projects and our transmission lines and our history of successful execution on large projects, we remain confident in our ability to manage our operations and execute on our capital plan. We're also well-positioned to serve potential new customers above our current plan. For the customer base that continues to grow, perhaps it is no surprise that our system, as well as Entergy Arkansas and Entergy Texas, hit new peak loads in July. Our system performed well during these high load periods. Responding to that customer growth, Entergy Texas remains on track for the completion of the Orange County Advanced Power Station next spring. The plant's decommissioning—I shouldn't—not decommissioning. The plant's commissioning is underway, and first fire is expected in December. Our other large generation and transmission projects are also on track. Last week, Entergy Mississippi broke ground on the Vicksburg Advanced Power Station.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

We'll also support customer growth, including the large customer that Entergy Mississippi signed this past February. Entergy Louisiana recently announced selections from its base load generation RFP to support customer growth. That includes two combined cycle resources that will be self-built. For accelerated resilience, we expect to file phase two plans in Louisiana and New Orleans within the next several months. This timing allows us to maintain operational momentum with our resilience investments. To date, our operating companies have invested about $580 million in approved resilience work. We've completed 32 line hardening projects, upgrading more than 13,000 structures. We have hardened 10 existing substations to mitigate the impacts of both hurricane-force winds and storm surge. In addition, Entergy Texas was recently awarded $200 million in grant funding by the PUCT from the Texas Energy Fund for Resilience Projects with no cost to customers.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

The grant will allow for the hardening of more than 8,000 distribution poles covering 338 mi, as well as hardening 16 transmission lines. We appreciate the proactive support from our state regulators and legislative bodies to improve the storm readiness of our system for the benefit of all customers. With the customer growth opportunity before us and excitement throughout our service areas, we continue to work with our stakeholders, including regulators, elected leaders, community leaders, and local vendors to meet customers' needs and to improve their outcomes. In August, the Louisiana Public Service Commission approved the settlement for generation and transmission resources needed to serve Meta. Meta's generational investment will bring significant benefits, including jobs, workforce development, and state and local tax income.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

As the LPSC staff highlighted at the business and executive meeting, contracted minimum bills ensure that Meta is paying the incremental cost to serve them during the contract term without imposing costs on other customers. These features provide benefits to support keeping rates as low as possible for Louisiana customers. Last week, the Louisiana Public Service Commission also approved the 200-MW Bogalusa West solar project, which was the first project approved through Louisiana's accelerated solar approval process. In Arkansas, the Public Service Commission approved the Generating Arkansas Jobs Act rider. This rider, enabled by the legislation this past spring, allows recovery for new economic development-related and other customer-critical generation and transmission investments outside of the formula rate plan's 4% cap. Additionally, it includes recovery of carrying costs on CWIP during construction, thus lowering costs for customers.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Under the new rider, Entergy Arkansas filed in early August for the Jefferson Power Station approval. Also, under the new rider, Entergy Arkansas filed for approval in September for Cypress Solar, a solar and battery storage facility to support economic development via Google's recently announced data center. Moving to Texas, in September, the Public Utility Commission approved the Legend Combined Cycle Power Station and Lone Star, a simple cycle peaking unit. They will provide efficient, reliable power to support the rapid growth in our Southeast Texas service area. While the commission approved the generation, it also implemented a cost cap in our filed cost estimates totaling $2.4 billion, including transmission, carrying costs, and contingency. As I noted earlier, we have already contracted with the EPC and secured the long lead time equipment, which comprised a significant portion of the construction costs.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

The Texas Commission also recently approved two large transmission projects that serve growth and improve reliability and resilience of the system. CTEX, the Southeast Texas Area Reliability Project, a $1.4 billion 500 kV line, and the Legend DeSandling 230 kV line, which will serve industrial customers in Port Arthur, including phase two of the Sempra LNG project. Separately, Entergy Texas filed for an increase in its DCRF rider. We expect a decision from the PUCT by the end of the year. These are exciting times in Entergy and exciting times for our industry. We are delivering unprecedented growth for our region and economic development that benefits the customers and communities we serve. At the same time, we're answering the call to support our national security through our rapid response to the energy needs of companies working to win the global AI race.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

All that while keeping rates as low as possible for our customers. The EEI Financial Conference is in a couple of weeks, and we'll share additional cover regarding the strong foundations underpinning our differentiated growth story. Notably, our long-term customer sales growth outlook is robust, including continued support from both traditional industrial and data center customers. We are well-positioned to support speed to market through our supply chain positioning, design choices, stakeholder engagement, and strong balance sheet. We are successfully executing on critical issues that our existing customers care about, including keeping rates as low as possible and deploying resilience and reliability investments. We look forward to continuing this conversation with you at the EEI Financial Conference in a couple of weeks. I'll now turn the call over to Kimberly, who will review our financial results for the quarter.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

Thank you, Drew. Good morning, everyone. We had another great quarter. I'll now walk through our financial results as well as our guidance and outlooks, and I'll provide a look ahead to EEI. Starting with earnings, our adjusted EPS for the quarter was $1.53, as shown on slide four. Primary drivers were strong sales growth and the effects of investments made for our customers, partially offset by higher other O&M and other operating expenses, and an increase in our share count from settling equity forward. Earnings contribution from sales growth was positive, even with weather being milder this quarter compared to last year. Weather-adjusted sales for the quarter were once again very strong, increasing approximately 4.5%. Industrial sales were the largest contributor with more than 7% growth, primarily from new and expansion customers that continue to ramp up their operations.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

Slide five summarizes our credit ratings and affirms that our credit metric outlooks remain better than rating agency thresholds. In the quarter, S&P issued credit reports on each of our operating companies and Entergy Corporation. Moody's also issued reports on Entergy Mississippi and Entergy New Orleans. Both agencies affirmed all ratings and outlooks. Last quarter, we discussed the nuclear production tax credits earned in 2024. Since then, we have completed transactions to monetize these, which netted more than $535 million after transaction cost. We continue to work with our regulators on how and over what time period we will provide these benefits to customers. We expect this to happen over an extended period of time. As a reminder, because the value of nuclear PTCs is highly dependent on average revenue per MW hour, we do not include cash benefits in our cash flow or credit metric outlooks beyond 2025.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

We'll talk more about our credit at EEI, but I'll give you a quick preview. Our credit metric outlooks are strong, with episode of debt above our thresholds throughout the outlook period, achieving our 15% target during the period. Our financial health is bolstered by all the work we've done, including the structure of our new large customer ESAs to protect existing customers and our credit, improvement in our pension-funded status, constructive regulatory mechanisms, and conservative planning assumptions. All of these have strengthened our balance sheet and created benefits for our customers. We continue to see strong underlying fundamentals and flexibility to meet our objectives. We are rolling forward our outlooks to 2029, shifting our four-year capital and equity plans forward, as you can see on slide six. Our updated capital plan for 2026 through 2029 is $41 billion.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

The equity associated with that plan is $4.4 billion, within the 10%-15% range of the total capital plan. Our capital and equity plans include alternative financing assumptions, which shift the capital outlay for some projects beyond our 2029 outlook. This better aligns the cash outflow with when assets are placed in service. We have been proactive in addressing our equity needs, selling forward contracts through our ATM, as well as the block transaction we executed in March. We have taken significant price risk off the table and have ample time to raise capital, including through our ATM program. For our 2026 through 2029 equity need, about 45% is already contracted, which takes us well into 2027. Through the third quarter, we have settled approximately $800 million of equity forwards. In October, after quarter end, we settled an additional approximately $330 million, or about 5.7 million shares.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

We are using these funds to continue to invest for the benefit of our customers. Our adjusted EPS guidance and outlook are shown on slide seven. As Drew mentioned, with solid results through the third quarter, we are narrowing our 2025 guidance range, raising the bottom by $0.10. Higher than planned revenue from weather, as well as other planning updates, have enabled us to manage the business and flex spending in areas that benefit our customers. Our flex program helps us ensure that we deliver predictable adjusted EPS growth year in and year out while meeting our customer needs. Looking beyond 2025, we continue to see very strong growth driven by our customer-centric capital plan. Our adjusted EPS through 2028 remains unchanged, and as we add 2029 to our outlook period, our long-term compound annual growth remains strong at greater than 8%.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

Drew and I, along with our operating company leaders, will be in Florida in less than two weeks, where we will talk about our strong customer growth story, as well as our plans to invest in reliability and resilience to better serve our customers. We have a solid base plan consistent with our strategic objectives. As Drew discussed, we have a strong customer pipeline, including 7-12 GW of data center opportunities, and we have secured critical equipment to bring additional customers online. Today, we have provided our adjusted earnings per share outlook and a high-level view of our preliminary capital and equity plans through 2029. At EEI, we will provide more details on these outlooks. We are excited about the opportunities before us and look forward to talking with you at EEI. The Entergy team is available for questions.

Operator

Thanks, Kimberly. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Once again, star one. In the interest of time, we ask that you please limit your questions to one primary and one follow-up question. Thank you in advance. We'll pause just a moment to compile the Q&A roster. All right, looks like our first question today comes from the line of Shar Pereza with Wells Fargo. Shar, please go ahead.

Constantine Lednev
Constantine Lednev
Analyst at Wells Fargo

Hi, good morning, Drew, Kimberly. It's actually Constantine here for Shar.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Good morning.

Constantine Lednev
Constantine Lednev
Analyst at Wells Fargo

Congrats on a great quarter. Maybe starting off on the updated CapEx plan and kind of the 4.5 GW of the power island equipment, is that directly associated with some of the more visible load in the current pipeline? Do you anticipate any incremental CapEx needs that would require regulatory approval before making it into the 2029 plan? Just how should we be thinking about the upside here?

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

Yeah, good morning, Constantine. It's Kimberly. The $41 billion includes the capital that's needed to support the load that is in the forecast. The 4.5 incremental GW that Drew referenced would support additional customers that could come online. He referenced 7-12 GW in the data center. That's up from 5 to 10 in the last quarter. We've added, as you noted, additional plant power island equipment in order to support that. To the extent that those customers in that pipeline reach agreement, we would expect that you would need supplemental capital to support that, and that's what we've planned ahead for here.

Constantine Lednev
Constantine Lednev
Analyst at Wells Fargo

Okay, perfect. Maybe shifting to the longer-term outlook, with the large load growth solidifying and under contract, we're locking in the CapEx plans and the associated equipment. Do you see any opportunity to potentially guide on a longer-term EPS growth outlook beyond 2030, just as you gain that visibility?

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

As you know, we added 2029 here. Certainly good visibility through that period. If we're able to land additional customers, that will provide you that visibility there. Going beyond that, I think we'll just, you know, this good visibility here, including individual outlooks by year. We do think we have long-term opportunity over beyond this period.

Constantine Lednev
Constantine Lednev
Analyst at Wells Fargo

Okay, perfect. Just a quick follow-up on kind of the generation needs, kind of more broadly, do you see customers agnostic to the resource mix, or is there still a push for some renewable components, as we've kind of seen with hyperscale data centers demanding for nuclear, SMRs, and other technologies?

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

We talk to our customers about all kinds of supplies. Certainly, we've lined up here. Drew referenced both gas resources as well as renewable resources. We do have a pipeline of opportunity around renewables, based on customer needs, but we also continue to look for ways to meet their needs to ensure that we are speed to market as well as meeting clean needs. We think it's an all-of-the-above approach over time.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yeah, and Constantine, I'll just add that we are building this gas generation, but we have expectations that we will also do carbon capture at some point. We are working on that actively. We have RFPs out for some of our assets in Mississippi and in Texas to test that. We still have feed studies going on at our Lake Charles Power Station in Louisiana, and we're exploring various options to figure that out. We're supported by our data center customers that are wanting to achieve those same objectives. We think we're well-positioned to figure that out over time, but we don't have anything specific to announce today.

Constantine Lednev
Constantine Lednev
Analyst at Wells Fargo

Excellent. Seems like a wonderful backdrop. I appreciate the questions today.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thanks, Constantine.

Operator

Yes, thank you. Our next question today comes from the line of Jeremy Tonet with JPMorgan. Jeremy, please go ahead.

Jeremy Tonet
Jeremy Tonet
Managing Director and Research Analyst at JPMorgan

Hi, good morning.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Good morning.

Jeremy Tonet
Jeremy Tonet
Managing Director and Research Analyst at JPMorgan

I just wanted to dive in maybe a little bit more on the forward outlook as well. I think some of the commentaries might have highlighted the capital shifting out closer to plant COD, and maybe that kind of spills over into past the plan period. Just wondering if you could talk a bit, I guess, on the momentum across the plan and where, you know, how that looks after the plan, given I think you've said in the past how this accelerates into the end of the decade.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

Good morning, Jeremy. It's Kimberly. I guess just to clarify, $41 billion through 2029. I referenced some plan that closes outside the period. Some of that is alternate finance. You don't see the spend in this period, and all the spend would go out when that closes. That was that reference there. Certainly, with the additional equipment that we've secured in the pipeline that we see, we would expect investment to continue well beyond this period.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yeah, we do have turbine slots that are delivering for, you know, commercial operations in 2029 and 2030 that still have not been announced as overall projects. There are still opportunities that could add additional capital in the out part of our current outlook period.

Jeremy Tonet
Jeremy Tonet
Managing Director and Research Analyst at JPMorgan

Got it. That's helpful. Thank you for that. Maybe just pivoting to Arkansas here, if you could comment a little bit more, I guess, on the ramp for Google there, the project there. Just wondering any more color you might be able to provide, as well as local stakeholder views in, I guess, commission priorities, how that all kind of fits together at this point.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

Yes, that project is obviously in early stages. It was filed in September, but the customer is continuing to move forward with the ramp as we would expect. As you know, there are minimum bills associated with all of these large customers that help support during the construction period. I don't see anything different on that ramp than where we have been, similar to all of our other customers.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yeah, people are excited in Arkansas for that project. At Google's groundbreaking last month, the governor was there, and numerous local leaders, including the mayor of West Memphis. There's also the 600-MW solar facility and the 350-MW battery that are going to be part of supporting Google. That investment is traveling through the Arkansas Commission's docket as well. We expect to work through that process with the various stakeholders. At this point, there's a lot of support in Arkansas for the economic development that this opportunity brings.

Jeremy Tonet
Jeremy Tonet
Managing Director and Research Analyst at JPMorgan

Got it. Thank you for that. Maybe just taking a step back overall, I guess, commercial discussions here with hyperscalers. At this point, I guess, how would you describe the tone or pace of discussions here? Is there more or less urgency to sign up incremental load at this point, given the success that you've had so far?

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

I would point to the raise from 5-10 GW to 7-12 GW around our increased customer conversations. Those conversations cover all the things that we've talked about before: speed to market, getting to claim, and also how the stakeholders and bringing the stakeholders along. As Drew said, in Arkansas, very excited about that transaction in Arkansas. We think the conversations continue to be strong and continue to support our incremental increase in that pipeline.

Jeremy Tonet
Jeremy Tonet
Managing Director and Research Analyst at JPMorgan

Got it. One last quick one, if I could, on the transmission side, just given some of the load shut events due to storm activity earlier in the year, wondering how you think about the opportunity to deploy more transmission, enhance flexibility, you know, such as increasing connectivity into Mississippi. Just wondering how you see the opportunity set at this point.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yeah, we do still see a robust transmission opportunity, but it'll be customer-driven and based on, you know, how the grid needs to adapt to continued growth in our service territory. Right now, we have a very robust, you know, over 400 mi of 500 kV line. We have a lot of 230 kV transmission that we are also building. We're getting ready to file in Louisiana the Babel to Weber line. I think I talked about that last quarter, which is part of that 500 kV system. We have approvals pending in Texas and in Louisiana on transmission right now. There is the possibility for significantly more. We have quite a bit coming through the MTEP process that's seeking MISO approval by the end of this year, and then, you know, depending on the growth, there could be additional investment opportunities out there.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

We're expecting continued significant transmission investment going forward.

Jeremy Tonet
Jeremy Tonet
Managing Director and Research Analyst at JPMorgan

Got it. Very helpful. I'll leave it there. Thanks.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thank you.

Operator

Thanks, Jeremy.

Operator

Our next question comes from the line of David Arcaro with Morgan Stanley. David, please go ahead.

David Arcaro
David Arcaro
Executive Director of Equity Research at Morgan Stanley

Hey, thanks so much. Good morning.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Good morning.

David Arcaro
David Arcaro
Executive Director of Equity Research at Morgan Stanley

I was wondering, you might have said before, but I may have missed it. What's the timeframe for the 4.5 GW of the power equipment that you secured? I guess I was wondering, is this a stepping stone? Are you still actively working to secure additional power equipment in a similar way?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

The timing for the extra six units would support commercial operations in 2031 and 2032. That's about, you know, we're using our standard design of 750 MW. That comes out to a little over 4 GW. That's the plan. I can't remember the last part of your question, David. Remind me.

David Arcaro
David Arcaro
Executive Director of Equity Research at Morgan Stanley

I'm curious if this is a stepping stone. Are you still actively in discussions and working to increase your access to gas turbine supply beyond that 4.5?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Right now, it matches what we see as our customer needs. If there continues to be growth, then we may continue to go into the market and seek additional turbine access. I think that's where I would put it right now. It's meeting our expectations of potential growth that we see in the near term. We're also looking at a number of other things. We continue to monitor new nuclear and look into that, and talk to our customers about that. We are also, as you saw with the Google transaction, there's the potential for solar and battery. We're also looking at a number of upgrades on our system to provide incremental supply. There are several things that are out there that could still drive incremental generation capacity even beyond just gas turbines.

David Arcaro
David Arcaro
Executive Director of Equity Research at Morgan Stanley

Got it. Great. Yeah, thanks for that. I was curious just to get your latest thoughts on the potential to expand nuclear capacity in your service territory and any reaction or impacts to your thinking from the recent Westinghouse and U.S. government announcement that we've seen.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yes, we thank you for that question. We're actually excited to see that there's some investments going in. You know, what the industry really needs is to get to the end of a kind, to manage the construction risk. We're excited to see someone moving forward. We certainly applaud the work that Brookfield and Westinghouse and Cameco are doing with the feds to figure this out. Obviously, there's still a lot of details that need to come out about that. We're anxious to get into that conversation with them at some point about what exactly they're doing and how they're shaping all that up. We're excited to see that it's moving forward and has an opportunity to really move the industry forward.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

With all that being said, we still have a lot of interest in our service territory from our stakeholders to bring new nuclear into Texas, Louisiana, Mississippi, and Arkansas. Each state has some sort of commission or task force or something like that looking at how do we bring new nuclear in, and we're a member of all of them. We continue to actively look at it. As we've said in the past, we haven't figured it out yet. There is a lot of interest from our stakeholders, and we continue to explore it.

David Arcaro
David Arcaro
Executive Director of Equity Research at Morgan Stanley

Okay, great. That's helpful. Thanks so much.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thank you.

Operator

Thanks, David. Our next question comes from the line of Angie Storozynski with Seaport. Angie, please go ahead.

Angie Storozynski
Angie Storozynski
Senior Equity Research Analyst at Seaport

Thank you. I was just wondering, you know, we've all read about the Manhattan-sized data center in your Louisiana service territory from META. How much of that is currently covered by ESAs and then reflected in your pipeline?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Right now, the only thing that we have in our outlooks is the signed ESA that we previously announced, basically about a year ago almost now. That project has been publicly said by META to be 2 GW of compute, and anything beyond that is not currently reflected in our outlooks. We wouldn't comment on any specifics of the size or timing of any project, just like for that potential opportunity, even though, you know, we know that they've been posting about it. You know, we wouldn't comment on it consistent with our ongoing policy for not commenting on specific customer opportunities.

Angie Storozynski
Angie Storozynski
Senior Equity Research Analyst at Seaport

Is it because the ESA hasn't been signed? Is it because it's beyond the planning horizon when this investment would need to happen?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

It is not necessarily because the ESA hasn't been signed. We wouldn't comment generally about ongoing negotiations with anybody. As it relates to putting large data center projects into our capital plan, we would need a signed ESA to do that. That's been our policy. Because these projects are so large, they have such an impact, it doesn't really fit with our probability weighting methodology that we've had forever. We still use that methodology with our more traditional industrial projects like steel mills and LNG terminals and petrochem facilities and the like. For these really large data centers, it's either all in or all out. We haven't included anything in our outlooks to support any large data centers at this time.

Angie Storozynski
Angie Storozynski
Senior Equity Research Analyst at Seaport

Awesome. That's all I had. Thank you.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thank you, Angie.

Operator

Thank you, Angie. Our next question comes from the line of Sophie Karp with KeyBanc Capital Markets. Sophie, please go ahead.

Sophie Karp
Sophie Karp
Managing Director and Equity Research Analyst at KeyBanc Capital Markets

Hi, good morning. Thank you for taking my question.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thank you, Sophie.

Sophie Karp
Sophie Karp
Managing Director and Equity Research Analyst at KeyBanc Capital Markets

A couple of questions for me. Hi, yeah. On the regulatory front, given all of the demand from large customers and all these trends that we know about, do you envision that you will need something more beyond your regular formula rate plan proceedings to accommodate that growth and recovery, of course?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

I didn't catch all of that. Sophie, you're breaking up a little bit. Do we need something beyond what exactly were you talking about?

Sophie Karp
Sophie Karp
Managing Director and Equity Research Analyst at KeyBanc Capital Markets

Do you think that you will need a regulatory proceeding that goes beyond your regular formula rate plans, reviews to accommodate all the growth that you have on the system?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yeah, it depends on the jurisdiction. Thank you for that clarifying. It depends on the jurisdiction. In Mississippi, you know, they have the law that allows for very large economic development projects to move forward with the presumption of, effectively the presumption of the certificate of convenience and necessity. Of course, we'd still ultimately have to go back through regulatory approval for formula rate plans and the like in Mississippi. It's not like the commission's not involved, but you'd be able to kind of move forward there. In Louisiana and in Arkansas, you know, Arkansas just passed the Generating Arkansas Jobs Act, which allows for an expedited process, and we're actually using those processes right now. We'd still continue to go through the process in Arkansas, and we'd expect the same in Louisiana.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

I think we'd be using the same processes that we have today, both in Louisiana, Arkansas, and I guess in Mississippi, although Mississippi is very different for those large economic development projects that we've used in the past. They would all be somewhat expedited, given what we've seen and the interest from the various stakeholders in each jurisdiction.

Sophie Karp
Sophie Karp
Managing Director and Equity Research Analyst at KeyBanc Capital Markets

Got it. Thank you. My other question was, the 12-GW pipeline, could you help us and break it down by the stage it's in, like how much of that is in an ESA stage versus the slightly earlier, maybe in the process?

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

Hi, Sophie. It's Kimberly. I would not think of that as signed ESAs. That is opportunity in the pipeline. It's in various stages, but not all the way to the end. As Drew mentioned earlier, we don't include in our forecasts until we get to certainty around a signed ESA. That would not be in that 7-12 GW that we gave.

Sophie Karp
Sophie Karp
Managing Director and Equity Research Analyst at KeyBanc Capital Markets

Got it. This is all incremental to ESAs that you have in your plan.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

That's right.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

I would just add that our actual pipeline goes well beyond that. I think these are ones that we feel like we would reasonably see come to fruition in the next year or two.

Sophie Karp
Sophie Karp
Managing Director and Equity Research Analyst at KeyBanc Capital Markets

Got it. Thank you. I appreciate the answers.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thank you.

Operator

Thanks, Sophie. Our next question comes from the line of Paul Zimbardo with Jefferies. Paul, please go ahead.

Paul Zimbardo
Paul Zimbardo
Managing Director and Research Analyst at Jefferies

Hi, good morning. Thank you.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Good morning, Paul.

Paul Zimbardo
Paul Zimbardo
Managing Director and Research Analyst at Jefferies

I had a clarifying question following up on David's a little bit. Could you explain the comment on the 8 GW for additional growth from the power commitments above the plan? I recall it was 7 GW from the second quarter call, and I know you said you added 4.5 GW. Does that mean you execute against some of that incremental opportunity? I was just a little confused on that piece if you could clarify.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

Sure, Paul. I would think about in the second quarter call, we said 15 GW. 8 was in the forecast through 2028. 7 was for growth. We now have 19.5 GW compared to that 15, and 8 is for growth. That delta is what I was referencing earlier. It's either in the forecast or it's in the forecast, but the capital closes outside the period. You're not necessarily seeing that. That's how you get to that 8 GW of incremental growth.

Paul Zimbardo
Paul Zimbardo
Managing Director and Research Analyst at Jefferies

Okay. Very clear. That's what I thought. Thank you. I know you talked a lot about the renewable side today, and obviously, Google is doing solar and storage. Are there any, and we focus a lot on the turbines, of course, are there any commitments in MW, GW on the renewable side, solar and storage that we should be thinking about also as kind of upside opportunities to the plan to serve hyperscalers?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yeah, I think we would expect that there would be additional renewables associated with large hyperscale deployment in some way. We've certainly seen that with each of our announcements thus far. You know, AWS had, I think, 600 MW of solar associated with Google similarly, and then Meta also had 1,500 MW of solar. I would expect that there would be some solar out there, commitments as well.

Paul Zimbardo
Paul Zimbardo
Managing Director and Research Analyst at Jefferies

Okay, great. We should think of that as kind of upside to the gas GW that you talk about.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yeah, potentially. I mean, there's also a lot of solar projects out there. There's also still the potential for PPAs. We would want to try to compete to land some of those projects ourselves for our own capital deployment.

Paul Zimbardo
Paul Zimbardo
Managing Director and Research Analyst at Jefferies

Yeah, excellent. Thank you very much.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thanks, Paul.

Operator

Thank you, Paul. Our next question comes from the line of Anthony Crowdell with Mizuho. Anthony, please go ahead.

Anthony Crowdell
Anthony Crowdell
Managing Director at Mizuho

Hey, good morning, team. Thanks for taking my question. I think one just may be a follow-up. On the 4.5 GW, I guess, of the additional power equipment, is that incremental to what's on slide 14 of, I guess, you have 7 CCGTs listed? That is incremental to that?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yes, it would be. I'm looking. Okay, we've got slide 14 pulled up here in the room. Yes, it would be incremental to the ones that are there. There are other ones that are part of our overall 19 GW that aren't on that page before you get to the 4.5 that we added. Yes, the 4.5 would be incremental to what's on that page.

Anthony Crowdell
Anthony Crowdell
Managing Director at Mizuho

Great. Just on, I think you touched on when you prepared remarks on EPC availability, it doesn't seem like there's any issue getting craft labor contracts to build all the generation. Just provide any color, whereas we've seen other large projects that maybe have struggled in the size of all of these projects. It's kind of tremendous, but yet no issues on labor. I just want to know if you give any color on that.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

There are real challenges with labor. I don't think that, it's certainly not easy to get, you know, the labor lined up. There is a real need for skilled craft, of all types, and that hasn't changed. The result has been that there are increasing costs associated with these combined cycle projects. We've been hearing about that trend. It is very real. Our projects aren't immune to that. We're working through it with the EPCs.

Anthony Crowdell
Anthony Crowdell
Managing Director at Mizuho

Great. Congrats on a great update, and thanks for taking my questions.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thanks, Anthony.

Anthony Crowdell
Anthony Crowdell
Managing Director at Mizuho

Thank you.

Operator

Our next question comes from the line of Andrew Weisel with Scotiabank. Andrew, please go ahead.

Andrew Weisel
Andrew Weisel
Director and Senior Equity Analyst at Scotiabank

Hey, thanks. Good morning, everybody. If I can first piggyback on Angie's question about the massive data center buildouts, I don't need or expect you to comment specifically on META's Hyperion project, but how are you thinking about the potential for some of these data centers to build onsite power generation themselves? Have you been talking to them about their interest in self-generating versus buying power from your utilities? I know your CapEx and earnings outlooks are based on real signed contracts, but how are you thinking about that going forward?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

In order to manage transmission costs, we are actually building generation in many cases very close to where the customer is located. Maybe it's not onsite or behind the meter, but it's very close. You can see that with the META project and stuff like that. I think there's, in some ways, a distinction without a difference from a physical grid perspective. Secondly, I would say that these customers, while they certainly have the wherewithal to do their own generation, they'd prefer to put their capital into something else. You even see that with, I would say, META's recent financing of their facility where they're leasing it back in North Louisiana. They have a lot of capital needs. If they could avoid putting capital into generating stations, I think they would probably prefer to do that.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

While it is possible that they could go behind the meter, I think competitively we are well-positioned to support their growth by putting our own plants nearby, getting essentially the same benefits, and supporting the capital that's not making the capital deployment somewhere else to support them on our books rather than having them have to carry it on their own balance sheet.

Andrew Weisel
Andrew Weisel
Director and Senior Equity Analyst at Scotiabank

Okay, thank you. In Arkansas, I believe you're planning to file a rate case early next year. You talked about the hyperscalers helping with customer affordability and paying their fair share. Can you maybe preview the filing a little bit in terms of customer bill impacts and what roles Google might play in that case?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yeah, I can't give you an update today. The team's still working on the case, so I don't want to get out in front of them. You know, I think in Arkansas, as we look out over time, you see similar types of things that you've seen in the other jurisdictions where the benefits associated with the large new customer help out the existing customers. We would expect to lay that out as part of the rate case going forward, and frankly, within the ongoing conversation that we're having right now with the existing processes over the formula, the special rate contract that we filed for in Arkansas for Google.

Andrew Weisel
Andrew Weisel
Director and Senior Equity Analyst at Scotiabank

Okay, thank you very much.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thank you.

Operator

Thanks, Andrew. Our next question comes from the line of Alex Kania with BTIG. Alex, please go ahead.

Alex Kania
Alex Kania
Managing Director and Utilities and Power Analyst at BTIG

Hey, good morning. Just maybe trying to tie around this 4.5 GW of incremental. I was just wondering if you could maybe tie that with the comments made a little bit earlier on the ARAS queue as well. Or is that 4.5 GW? Does that tie to those extra incremental, I feel like, four projects in the queue? Maybe more broadly, if the ARAS process right now is working as intended and seemingly should be able to kind of help for the forward needs.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Yeah, the 4.5 GW, those extra six turbines are not yet represented in the ARAS queue. Those are the things that are in the ARAS queue would be much more near-term than those. Those projects are, as I said earlier, searching for COD in the 2031, 2032 timeframe, and the projects that we have in the ARAS queue would be coming in much earlier than that. Hopefully that answers your question.

Alex Kania
Alex Kania
Managing Director and Utilities and Power Analyst at BTIG

Got it. In some ways then, those extra turbines in the queue would represent incremental nearer-term demand if the opportunity arises?

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

That's correct.

Alex Kania
Alex Kania
Managing Director and Utilities and Power Analyst at BTIG

Okay, great. Thanks very much.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

You're welcome.

Operator

All right, thanks, Alex. Our next question comes from the line of Steve D'Ambrisi with RBC Capital Markets. Steve, please go ahead.

Steve D'Ambrisi
Steve D'Ambrisi
Analyst at RBC Capital Markets

Hi, Drew and Kimberly, thanks very much for taking my question. Good morning.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Good morning.

Steve D'Ambrisi
Steve D'Ambrisi
Analyst at RBC Capital Markets

Just, kind of again on some of this discussion around the dispatchable generation. Can you talk a little bit more about the alternative financing agreements that you guys are using? Can I extrapolate what that is, the sizing of that? If you've gone from 8 GW that I think was committed in Q2 to now the implied 11 GW in Q3, does that 3 GW increase, is that basically what's being alternatively financed and falls outside of the plan? Can you give a flavor of the timing around that and the magnitude? It seems like that would be a $6 billion-$7.5 billion spend that could come in 2030 or 2031, which would look like it would drive an outsized amount of growth.

Kimberly Fontan
Kimberly Fontan
CFO at Entergy Corporation

Steve, it's Kimberly. I wouldn't think of it as a direct correlation between that alternate financing and the 3 GW solar project you referenced. First, we added an extra year. You roll forward to 2029, and you can see the run rate of that is consistent with where we've been in each of the prior years before that. That's your biggest piece. There is some alternate financing. We talked about that actually in our legend filing in Texas as a way to help with the overall cost, but also time that's closing with when that asset goes into service and throws off cash. We haven't sized that. We'll have a little more visibility into that in EEI, but I think your numbers are a bit outsized relative to what you have here, and I would think more about the 2029 addition.

Steve D'Ambrisi
Steve D'Ambrisi
Analyst at RBC Capital Markets

Okay. All right. That's helpful. Thank you very much.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Add to that, sorry, Steve, just to add to that, all of these projects that we are bringing on that we've contracted for for these turbines, we expect to achieve commercial operations by 2032. They're all coming pretty fast, and you could see a number of them on that page 14 that we were referencing earlier. There's a whole bunch more in the next few years just beyond that, if everything comes together on the schedule that we've laid out with the turbine orders. There is quite a bit of capital just over the horizon from 2029 to support that kind of potential buildout.

Steve D'Ambrisi
Steve D'Ambrisi
Analyst at RBC Capital Markets

Okay. That's helpful. Thanks very much, appreciate it.

Drew Marsh
Drew Marsh
Chair and CEO at Entergy Corporation

Thank you.

Operator

Thanks, Steve. It looks like there are no further questions. At this time, I will now turn the call back over to Liz Hunter for closing comments. Liz.

Liz Hunter
Liz Hunter
VP of Investor Relations at Entergy Corporation

Thank you, Greg, and thanks to everyone for participating this morning. Our quarterly report on Form 10-Q is due to the SEC on November 10, 2023, and provides more details and disclosures about our financial statement. Events that occur prior to the date of our 10-Q filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected in our financial statements in accordance with generally accepted accounting principles. Also, as a reminder, we maintain a webpage as part of Entergy's investor relations website called Regulatory and Other Information, which provides key updates of regulatory proceedings and important mitones on our strategic execution. While some of this information may be considered material information, you should not rely exclusively on this page for all relevant company information. This concludes our call. Thank you very much.

Operator

Thanks, everyone. Again, this concludes today's conference call. You may now disconnect.

Executives
    • Kimberly Fontan
      Kimberly Fontan
      CFO
    • Drew Marsh
      Drew Marsh
      Chair and CEO
    • Liz Hunter
      Liz Hunter
      VP of Investor Relations
Analysts
    • Angie Storozynski
      Senior Equity Research Analyst at Seaport
    • Steve D'Ambrisi
      Analyst at RBC Capital Markets
    • David Arcaro
      Executive Director of Equity Research at Morgan Stanley
    • Alex Kania
      Managing Director and Utilities and Power Analyst at BTIG
    • Jeremy Tonet
      Managing Director and Research Analyst at JPMorgan
    • Andrew Weisel
      Director and Senior Equity Analyst at Scotiabank
    • Constantine Lednev
      Analyst at Wells Fargo
    • Paul Zimbardo
      Managing Director and Research Analyst at Jefferies
    • Anthony Crowdell
      Managing Director at Mizuho
    • Sophie Karp
      Managing Director and Equity Research Analyst at KeyBanc Capital Markets
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