Entergy Q1 2025 Earnings Report

Entergy EPS Results

• Actual EPS: $0.82
• Consensus EPS: $0.60
• Beat/Miss: Beat by +$0.22
• One Year Ago EPS: $0.54

Entergy Revenue Results

• Actual Revenue: $3.02 billion
• Expected Revenue: $3.13 billion
• Beat/Miss: Missed by -$112.66 million
• YoY Revenue Growth: N/A

Entergy Announcement Details

• Quarter: Q1 2025
• Date: 4/29/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, April 29, 2025
• Conference Call Time: 11:00AM ET

Entergy (NYSE:ETR), together with its subsidiaries, engages in the production and retail distribution of electricity in the United States. It generates, transmits, distributes, and sells electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, including the City of New Orleans; and distributes natural gas. It generates electricity through gas, nuclear, coal, hydro, and solar power sources. The company sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company's power plants have approximately 24,000 megawatts of electric generating capacity. It delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1913 and is headquartered in New Orleans, Louisiana.

Entergy Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Good morning. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to the Entergy Corporation First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

[Operator]

Thank you. I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation. Liz, you have the floor.

[Elizabeth Hunter, VP - IR at Entergy]

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 an effort to accommodate everyone who has questions, we request that each person ask no more than two questions. 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.

[Elizabeth Hunter, VP - IR at Entergy]

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. And now I will turn the call over to Drew.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Thank you, Liz, and good morning, everyone. We had a very productive start to the year with progress on activities to support our near and long term objectives. Important updates to facilitate customer growth include new customer announcements, regulatory outcomes, and new legislation. Starting with our financial results for the first quarter, today, we are reporting adjusted earnings per share of $0.82 We're on track for 2025 guidance, and we remain well positioned to attain our greater than 8% adjusted earnings per share compound annual growth rate for the outlook period. Kimberly will discuss our financial results in more detail.

[Drew Marsh, Chair of the Board & CEO at Entergy]

As you've heard us say, we aim to create value for all our stakeholders, customers, employees, communities, and owners. And customers are listed first because everything starts there. The opportunities driving our industrial sales growth continue to be robust. There is increasing visibility into our growth, including three announcements from large customers since our last call. In March, Hyundai Motor Group announced a $5,800,000,000 investment in Hyundai Steel, a manufacturing facility with and an engine for economic growth in Ascension Parish, Louisiana.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Then in early April, CF Industries announced that it reached its final investment decision on its $4,000,000,000 investment in a low carbon blue ammonia facility, which we located near Hyundai Steel. This project was first announced in 2022. And just today, Woodside announced that they have reached FID on their $17,500,000,000 LNG facility, bringing jobs and investment to Coastal Louisiana. These projects are expected to come online in 2028 and into 2029 and were assumed in our outlooks last quarter. These customers diversify our industrial mix.

[Drew Marsh, Chair of the Board & CEO at Entergy]

They also provide important benefits to the nearby communities through substantial local investment, significant growth, and workforce development. We've demonstrated a long history of powering industrial growth as businesses establish and expand operations in the Gulf South region. Hyundai Steel, CF Industries, and Woodside LNG are examples of this trend continuing. As more companies consider investment in The US, the Gulf South remains a very attractive option with low power costs, robust energy and transportation infrastructure, access to diverse energy sources, a business friendly environment, a proven workforce, and welcoming communities. Data centers are a more recent addition to our large customer portfolio, and we remain in productive discussions for many potential projects.

[Drew Marsh, Chair of the Board & CEO at Entergy]

We continue to receive strong interest and optimism from hyperscale developers about the incredible opportunity before them, and our data center pipeline remains in the five to 10 gigawatt range. We are executing on our capital plan to support that strong customer growth as well as improved reliability and resilience. We continue to make progress in the Orange County Advanced Power Station. The project is approximately 70% complete with more than 1,000,000 man hours worked with no safety incidents. The project remains on schedule and on budget with a projected in service date by summer of next year.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Delta Blue's advanced power station in Mississippi is in earlier phases of construction and is also on schedule and on budget. At the same time, we're exploring the potential to increase the capacity of our existing combined cycle natural gas facilities by nearly 500 megawatts. For nuclear, we completed the spring refueling outage at River Bend on schedule. During the outage, we conducted extensive work on the main generator to support long term reliable operations. The Waterford Three refueling outage is now underway.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Planned work includes replacement of low pressure turbine rotors that will improve efficiency and pave the way to increase the capacity of the plant by an estimated 40 megawatts in the fall of twenty twenty six. We continue to assess potential capacity upgrades at our other nuclear plants that could total approximately 275 megawatts. As we mentioned before, we have an NRC early site permit for potential new nuclear facility at Grand Gulf, which expires in April 2027. We intend to renew the permit for another twenty years to maintain a viable option for new nuclear. We are in discussions for with customers, potential partners, and other stakeholders regarding that opportunity.

[Drew Marsh, Chair of the Board & CEO at Entergy]

As you can see, our operations and project management development teams are doing a great job keeping us on track to support our customers' needs. In addition to our efforts in operations, we are working with our regulators and other stakeholders on important dockets that address infrastructure needs to support growth, reliability, and resilience. Efficient review processes are critical to stay on track to meet our customers' expectations. Entergy Louisiana received approval from its public service commission to place the capital investment from Hurricane Francine into rates subject to a future prudence review. This means our recovery started less than two months from filing and six months after the storm.

[Drew Marsh, Chair of the Board & CEO at Entergy]

A faster recovery reduces carrying costs and supports Entergy Louisiana's credit, both of which keep costs low for customers. The LPSC also approved the half billion dollar Westbank 2 hundred and 30 kV transmission project that will support customer growth and economic development. In addition, we have a major 500 kV transmission project in Louisiana that is pending commission review. Separately, we received the final approval needed for Entergy Louisiana gas LDC sale from the East Baton Rouge Parish Council. Retargeting to close the sale of both Entergy Louisiana and Entergy New Orleans gas businesses in July.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Entergy Louisiana's filing to support its hyperscale data center customer continues to move forward. Parties have filed testimony, the hearing is scheduled for mid July. We remain on track for an LPSC decision in October. For Entergy Louisiana's three gigawatt solar RFP, the first round of procurement is complete, and we're moving forward two proposals for owned assets that total 400 megawatts. Proposals in the second quarter were received in mid April, and we are targeting selections later this quarter.

[Drew Marsh, Chair of the Board & CEO at Entergy]

In Texas, the PUCT approved placing $137,000,000 of transmission investment into rates. We've also requested a certificate of convenience and necessity for a large transmission project in Texas known as Seetex, s e t e x. The hearing is scheduled for May, and we are targeting a commission decision by the August. Entergy Texas' request for generation CCNs are continuing as expected. Hearings for Legend and Lone Star dispatchable generation projects as well as renewable resources are complete.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Briefings have begun, and no parties have disputed the need for new generation to meet growing demand. We are targeting decisions in the third quarter. In Arkansas, the APSC issued a certificate of environmental compatibility and public need for Lake Catherine Unit 5. This plan is important to support Arkansas' customer demand. Entry Mississippi received approval to build a combined cycle gas plant in Richland County.

[Drew Marsh, Chair of the Board & CEO at Entergy]

This facility will serve the growing demand in our Mississippi service area. And Entergy Mississippi also filed its annual form of rate plan with no rate change requested. We expect the commission to take this up over the next few months. Turning to legislative matters. Arkansas recently completed its session, setting the stage for future growth in the state.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Act three seventy three, signed into law by the governor, supports economic development and growth and will benefit our customers and communities. Specifically, the legislation allows recovery for new generation capacity and certain transmission investments outside of the formula rate plan's 4% cap. It also streamlines and simplifies the process for certification of public need to allow for faster response to economic development while maintaining regulatory oversight. Additionally, the new law allows utilities to recover carrying costs on construction work in process during construction, thus lowering costs for customers. Texas is also in a legislative session.

[Drew Marsh, Chair of the Board & CEO at Entergy]

One of the bills of interest for us will accelerate the regulatory review and approval for storm securitization to one hundred and fifty days, significantly faster than previous reviews. More timely reviews benefit customers through lower carrying costs and improved credit. The Texas legislative session continues through June 2. Turning to tariffs. We know tariffs are certainly a topic that we know you're interested in.

[Drew Marsh, Chair of the Board & CEO at Entergy]

It's top of mind for us as well, and we are actively engaged in monitoring as the landscape evolves. There are several considerations, and the bottom line is that we believe tariffs impacts are manageable. The current tariffs would primarily impact capital expenditures, and we estimate that the impact to be approximately 1% of our $37,000,000,000 4 year capital plan. The vast majority of the dollar impact is in the back end of our forecast period, It provides time to continue to reduce those effects through additional supply sources. To mitigate potential impacts, we are working with our suppliers to develop alternative supply sourcing strategies.

[Drew Marsh, Chair of the Board & CEO at Entergy]

In addition, our ongoing cost management efforts as well as contingencies in our spending plans will help us manage our costs. For example, at Analyst Day last summer, we talked about our disciplined capital prioritization and review processes to drive customer value. To date, we've identified greater than $1,000,000,000 of capital that was redeployed into other projects to benefit customers. We're making every effort to reduce the effects of tariffs for our customers, working hard to make ends meet, and competing in a global marketplace. To that point, we're also actively monitoring what this means for our customers' businesses.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Our large industrial customers are highly competitive in domestic and global markets. Commodity spreads continue to be supportive in part due to the structural advantage of low cost natural gas. I'd like to highlight a few specific examples. LNG exports are likely to increase due to the natural gas advantage, which would help bridge the trade deficit, and I just mentioned the Woodside announcement as a case in point. Ammonia has a strong competitive position due to low natural gas prices in The US, and companies are moving forward investment in clean energy technologies as the CF Industries example illustrates.

[Drew Marsh, Chair of the Board & CEO at Entergy]

The petrochemical sector also enjoys structural advantages from low cost natural gas liquid feedstock and potential decreases in global production would likely come from the European Union. Beyond the price advantages of natural gas, companies seeking domestically produced materials to manage tariffs could cause sectors such as steel that are not currently running at full capacity to ramp up production. Overall, commodity fundamentals still favor U. S. Manufacturing.

[Drew Marsh, Chair of the Board & CEO at Entergy]

As a result, our service area remains well positioned to capture new onshoring and industrial development with the Gulf Coast advantages that we talked about for some time and that I managed that I mentioned earlier. These foundational elements can facilitate even further expansion of the broad industrial manufacturing base and supporting services in our region. As I said, we believe tariff impacts are manageable. And with everything we know today, we remain confident in the guidance and outlook initiated on last quarter's call. Before I wrap up, tomorrow, our COO, Pete Norgeo, is retiring.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Over his ten plus years at Entergy, Pete transformed our power generation team, closed out our exit from the merchant power business. In the last couple of years as COO, he re centered us on public safety while preparing us to manage the large capital investments responding to customer demands. Pete is also a good friend. We will miss him, and we wish him well in the next chapter. Moving into the COO role is Kimberly Cook Nelson, who's been driving our steadily improving nuclear operations over the last few years.

[Drew Marsh, Chair of the Board & CEO at Entergy]

A leader in the nuclear industry, she brings a wealth of leadership experience, operational discipline, and project management skills to the COO role, which has served us well for the growth investment road ahead. Finally, John Donnelli is taking over as chief nuclear officer. He's a long time Entergy employee, having started here when we purchased Indian Point. He has held many leadership roles within the nuclear organization, and recently, he has served as our nuclear COO, helping lead the cultural changes needed to continue our relentless pursuit of improvement in nuclear operations. While we are sad to see Pete go, we're excited about the new opportunities that will come from the leadership of Kimberly and John.

[Drew Marsh, Chair of the Board & CEO at Entergy]

And finally, we're saddened to learn of the passing of Alexis Herman over the weekend. From her beginnings in Alabama along the Gulf Coast, she attended Xavier University right here in New Orleans, and then went on to become secretary of labor among many other accomplishments. Of course, we know her from her twenty years of service on our board of directors. Beyond her outstanding wisdom and insight, she was a friend, a mentor, and an inspiration to all of us, and we will miss her dearly. Although we are sad, Alexis would be proud of our great start to the year.

[Drew Marsh, Chair of the Board & CEO at Entergy]

We are on the path to meet our stakeholders' expectations in 2025 with solid progress across key customer operational, legislative, and regulatory fronts. We are executing on our plan to realize the opportunity in front of us, and we're confident we can be successful. To continue to put our customers first, we will deliver premium value to each of our key stakeholders. I'll now turn the call over to Kimberly.

[Kimberly Fontan, Executive VP & CFO at Entergy]

Thank you, Drew. Good morning, everyone. Today, I will review our financial results as well as our guidance and outlook. I'll also talk about tax credits and their potential financial impacts. Starting with earnings, our adjusted earnings per share for the quarter was $0.82 This result keeps us firmly on track for our adjusted EPS guidance for the year.

[Kimberly Fontan, Executive VP & CFO at Entergy]

The quarter's adjusted EPS drivers are shown on Slide four. Key highlights include higher retail sales volume, including the effects of weather effects from regulatory actions, including recovery of investments to benefit customers and lower other O and M than first quarter last year. These favorable effects were partially offset by higher interest expense and depreciation as a result of investments. First quarter weather adjusted retail sales growth was strong at 5.2%. The industrial sales increase was the biggest driver at 9.3%, reflecting increases in usage from customer additions over the course of 2024 as well as continued ramp of new and expansion customers.

[Kimberly Fontan, Executive VP & CFO at Entergy]

Slide five provides our credit ratings and affirms that our credit metric outlooks remain better than agency thresholds. Our ongoing focus on credit has created flexibility to manage volatility and headwinds. Availability and transferability of renewable tax credits continue to be a topic of interest. Nuclear production tax credits or PTCs became effective in 2024. The treasury department has not issued guidance on how to determine gross receipts for purposes of calculating the amount of nuclear PTCs generated.

[Kimberly Fontan, Executive VP & CFO at Entergy]

We are evaluating our position with respect to these credits and will finalize our position prior to our 2024 corporate tax filings. As a reminder, cash benefits from nuclear PTCs are not included in our outlooks, so any nuclear PTCs that are realized would be positive to our plan. Our 2027 and 2028 outlooks include tax credits of approximately $170,000,000 and $350,000,000 respectively, on more than $5,000,000,000 of renewable investments through 2028. If the transferability rules change, we would expect to monetize the credits using tax equity. We continue to safe harbor as many projects as possible in the event that the credits phase out sooner than the current rules provide.

[Kimberly Fontan, Executive VP & CFO at Entergy]

However, even if we were to lose all the renewable tax credits assumed in our guidance, our credit metrics would still exceed rating agencies' thresholds. Turning to slide six, our equity needs are unchanged since our last update. During the quarter, we executed an approximately $1,500,000,000 block equity forward, including the green shield. Prior to the equity block, we contracted roughly $230,000,000 using ATM forwards. With these transactions, we have successfully secured our equity needs into 2027, and we've contracted approximately two thirds of our needs through 2028, ensuring access to capital needed to execute on our capital plan.

[Kimberly Fontan, Executive VP & CFO at Entergy]

No forwards were settled during the quarter. As shown on slide seven, we are affirming our adjusted EPS guidance and outlooks. For 2025, we're firmly on track. Weather and other updates in the first quarter create flexibility to manage the business in response to potential volatility and other headwinds. Looking ahead to the second quarter, we expect other O and M to be roughly a nickel higher than last year, primarily due to planned power generation spending, including the timing of outages and timing of vegetation management expenses.

[Kimberly Fontan, Executive VP & CFO at Entergy]

We have confidence in our plan and our ability to deliver on our guidance and outlook. We've had a strong start to the year and have a solid plan to support our growing customer base. We are excited about the opportunities before us and remain well positioned to execute and deliver successful outcomes. And now the Intrigy team is available for questions.

[Operator]

Thank you. And as Liz mentioned earlier, in the interest of time, we ask that you please limit yourself to two questions. Thanks. It looks like our first question today comes from the line of Shar Pourreza with Guggenheim Partners. Shar, your line is open.

[Constantine Lednev, Vice President - Equity Research at Guggenheim Partners]

Good morning, team. Congrats on a great quarter. It's actually Constantine here for Sharpe.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Hey. Good morning.

[Constantine Lednev, Vice President - Equity Research at Guggenheim Partners]

Just as we're thinking about the Arkansas generation bill, do you feel the state is now fully competitive on the data center front in terms of providing turnkey interconnection? Have there been any inbound thus far, or do you need any further rate design improvement?

[Drew Marsh, Chair of the Board & CEO at Entergy]

No. I think I Sean, it's Drew. Sorry. Constantine, this is Drew. The, we feel that they are fully competitive at this point, and, you know, we are talking to potential customers of the state of Arkansas.

[Drew Marsh, Chair of the Board & CEO at Entergy]

We have a lot of of interest there, and so we are we are working down that path right now.

[Constantine Lednev, Vice President - Equity Research at Guggenheim Partners]

Excellent. And then maybe in terms of the financing updates, just last quarter, the guidance was for 75% of the equity to be after 2026, and looks like that might be accelerating slightly. Does that imply an acceleration of credit metric improvement or any other moving pieces you wanna highlight?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yeah. There hasn't been a substantial change in the timing of the equity needed. We we contracted forward into '27, but, and our credit metrics through '28 continue to build towards and up to 15%. So we see strong flexibility in credit, but I wouldn't assume a whole lot of shift in, in the equity needs and and the timing of the equity, in that period.

[Constantine Lednev, Vice President - Equity Research at Guggenheim Partners]

And any any anything that drove such a big forward volume in January relative to last quarter, or is that just an optimization?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yeah. Really was taking risk off the table. We had an opportunity to execute on that forward and, you know, given volatility and the the equity that we needed that we believed we could continue to satisfy with the ATM. But we had an opportunity to close some of that out. And so we took advantage of that and and set ourselves up to be able to manage volatility over the next couple of years.

[Constantine Lednev, Vice President - Equity Research at Guggenheim Partners]

Excellent. Appreciate that. Thanks for taking the questions. I'll jump back in queue.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Thank you.

[Operator]

Thanks, Constantine. And our next question comes from the line of Jeremy Tonet with JPMorgan. Jeremy, your line is open.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Hi, good morning.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Good morning, Jeremy.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Just want to look at the sales a little bit here. I think that your residential customer count might have been up just under 1% quarter over quarter. And your weather normalized sales, if I'm seeing this right, for residential went up about four and a half percent. I was wondering if you could talk a bit more about drivers there.

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yeah. Good morning, Jeremy. It's Kimberly. You know, I wouldn't look too much at the specifics on the quarter over quarter. You're gonna see some volatility in the counts.

[Kimberly Fontan, Executive VP & CFO at Entergy]

What we expect are residential sales to be about 1% for the full year, and our sales overall to be about five and a half percent. So still strong sales over the year, but you're gonna see some volatility in a in a given quarter on a on a quarter over quarter basis.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Got it. That's helpful. Thanks. And just moving to industrial sales, and as you said, it'll be, volatile any given quarter, but it seems like there's a degree of macro uncertainty out there that might be weighing on industrial activity a bit. Just wondering if you could provide any thoughts from from your viewpoint on your service territory.

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yeah. When we think about our industrial customers, you know, we have had more than 5% growth for over fifteen years, and that's included a number of periods where there were various economic factors happening in those periods. And I think the three industrial customers that Drew referenced in his comments coming in just this quarter or over the last couple months underscores the opportunity that we have for our traditional customers, and then we continue to have, significant opportunity in the data center space. So, you know, our customers are making thirty year decisions. There's our short term volatility that they may have to manage through, but we see those decisions coming through, And we continue to see a lot of opportunity, through our pipeline as we go forward.

[Drew Marsh, Chair of the Board & CEO at Entergy]

And I'll just point to the rule of thumb that we have in our materials for industrial sales is, you know, 1% change in a given year is only about a penny of impact. So, it's a pretty well derisked because of the high level of demand charges, that we have, in the industrial customer space.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Got it. That's helpful. And just one last one if I could. Just as far as the the winning these new packages here and increasing the pipeline of big activity, I wonder if you could provide more color what it looks like, I guess, on conversations with data center or other large industrial users, you know, how you see that, I guess, coming together in this environment. Has anything changed?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yeah. Jeremy, the Drew referenced that we had five to 10 gigawatts in our data center discussions. Those are still strong and ongoing discussions. Our pipeline in our other customers hasn't really changed from the last time that we gave that that level of detail. We continue to have strong conversations.

[Kimberly Fontan, Executive VP & CFO at Entergy]

You know, our our pipeline is in our forecast. It's on a weighted probability bay basis, and Drew referenced that these customers were in our forecast. But, certainly, they are hitting at a faster and higher success rate that enables us to continue to serve them. But if that rate continues, we'll have to look at incremental capital to support continued growth.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Yeah. That's a that's a good point. I mean, the and outside of data centers, you know, we probably weight everything. And the three announcements that we gave you were in our forecast, but they were probability weighted. And so now the the sales expectation for them are much higher than what we originally anticipating and taking up the space that the other probability weighted customers, you know, might have been taking up.

[Drew Marsh, Chair of the Board & CEO at Entergy]

So there could be additional capital needed should those customers come in, and and we do expect some of them to come.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Got it. That's helpful. I'll leave it there. Thanks.

[Operator]

Thanks, Jeremy. And our next question comes from the line of David Arcaro with Morgan Stanley. David, please go ahead.

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

Hey. Thanks so much. Good morning.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Good morning.

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

I was wondering if you could maybe just give a maybe an update or a profile of your system. You know, as you're looking at some of these large load customers in the pipeline, how quickly can you offer them, you know, service to connect in? You know, time to power has been a focus among that cohort. So curious just what the latest is in terms of how quickly you can accommodate new, large load customers.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Yeah. This is Drew, and then I'll see if, Kimberly wants to add anything. But the the we do have, positions and queues in order to, you know, provide generation to, potential customers. You know, as you all know, those queues are full, but, you know, our positions, we believe, would allow us to continue to offer up opportunities for customers. At this point, it's near the back end of our our period, because there's just, you know, a lot to do, to make room for all this.

[Drew Marsh, Chair of the Board & CEO at Entergy]

And and as you know, the the the three that we customers that we were talking about today are all in the 2028 moving in you know, ramping into 2029 kind of time frame. So that's kind of where we are in terms of potential opportunity. And so it doesn't really matter which kind of customers we're talking about. That's where that's where that opportunity will be sitting.

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

Got it. Yeah. That makes sense. Appreciate that color. Maybe just a a quick clarification on the tariff exposure.

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

Would you consider I guess, do you think of the tariff exposure as being earnings exposure? You know, is this, kind of already approved projects that now need to, that are gonna be more expensive or, this is out in the future, you know, will get, worked through regulatory processes over time? I know you're trying to offset it, but, how do you consider kind of earnings exposure, if any, from that?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yeah, David. Most of that exposure, as you noted, is in '27 and '28, and most of it is also tied to new generation specific components to help, build those facilities. So we think that gives us time to find additional suppliers and mitigate that. So we don't see that being a real earnings effect. And and Drew mentioned some of the things we're doing to mitigate that, but we think that that is manageable within the forecast period.

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

Okay. Got it. Understood. I appreciate it. Thanks so much.

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

Thank you.

[Operator]

Thanks, David. And our next question comes from the line of Nick Campanella with Barclays. Nick, your line is open.

[Nicholas Campanella, Director at Barclays]

Hey, good morning. Thanks for all the updates.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Hey, good morning, Nick.

[Nicholas Campanella, Director at Barclays]

Morning. Hey. I just wanted

[Nicholas Campanella, Director at Barclays]

to ask on '25. It just seems like you're off to a good start. You know, are you trending higher in the fiscal twenty five plan, just given the the weather tailwinds or other headwinds to kinda consider, for for later this year?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yeah. We did have a good start to the to the year, but we as with any year, we use that to manage through the course of the business. Uncertainty, we obviously have the summer coming. It could be we could have a super hot summer or we could have a mild summer, and so we need to see how that plays out. But we'll use that flexibility to help us manage, but we're comfortable that we'll deliver our outlooks at the end of the year.

[Nicholas Campanella, Director at Barclays]

Okay. Great. Thanks. And then just on this new customer generation transmission filing, I know that we're kind of approaching hearings here as as kind of a a midterm data point. Just is there any potential or effort by the parties to wanna settle issues in the proceeding, or do you kinda see that going straight through, into the October order?

[Nicholas Campanella, Director at Barclays]

Thanks.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Yeah. This is true. You know, there is always the potential to settle, and so we will we will look at that. If those and those opportunities arrive, certainly, we'd always prefer to settle rather than go to hearing if we if we could. But, yeah, we have a good schedule, and and there's a lot of support for this investment in the state and among the stakeholders.

[Drew Marsh, Chair of the Board & CEO at Entergy]

So we are, you know, we are confident that we will manage through the process and and get the the outcome that will benefit, customers and communities.

[Nicholas Campanella, Director at Barclays]

Thanks a lot.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Thank you.

[Operator]

Thanks, Nick. And our next question comes from the line of Paul Fremont with Ladenburg. Paul, your line is open.

[Paul Fremont, Managing Director at Ladenburg Thalmann]

Hey, thank you very much and congratulations on a strong quarter. I guess my first question is, can you

[Paul Fremont, Managing Director at Ladenburg Thalmann]

give us a sense of the

[Paul Fremont, Managing Director at Ladenburg Thalmann]

load that's associated with the three customers?

[Drew Marsh, Chair of the Board & CEO at Entergy]

Good morning, Paul. Unfortunately, I can't. We don't have authorization to talk about specific customer load, so we I wouldn't mention that to you. I would say, you know, these are large industrial facilities, and they would be on par with, you know, with things that you might see, in else elsewhere. But, I can't give you specifics, unfortunately.

[Paul Fremont, Managing Director at Ladenburg Thalmann]

And then the that your transmission filing in Texas, is that a three sixty five, five hundred, or three forty five k v line that you're proposing? And and, I guess, how many how many miles should we think of of additional transmission?

[Drew Marsh, Chair of the Board & CEO at Entergy]

Yeah. That's a it's 500 k v, and it is a 30 to a 60 miles. It's there's a slide in the materials, on that that you can you can look at you can look at. And it actually will sort of terminate, ideally, with the line that we are requesting for approval in Louisiana. So you'll get in addition to customer support, I think you'll get a a good resilience benefit out of that as well to to help us with storms.

[Paul Fremont, Managing Director at Ladenburg Thalmann]

And sort of last question there, what would be the completion if you were to, be awarded the project? What what would be the completion date?

[Drew Marsh, Chair of the Board & CEO at Entergy]

We think it would be just outside of our our outlook period, in 2029.

[Paul Fremont, Managing Director at Ladenburg Thalmann]

Great. Thank you so much.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Thank you.

[Operator]

Thanks, Paul. And our next question comes from the line of Steve Fleishman with Wolfe Research. Steve, your line is open.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

Yes. Hi, good morning.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Good morning, Steve.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

Yes. Just I guess just on the sales guide for '25, you took took it down a little bit. Just any I know it's still really good, but just any explanation for that?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yeah. Good morning, Steve. It really is just as we get line of sight on the over the course of the year, we know the industrials will come in. Their ramps may vary. They come in large load comes in a little bit of variety over the course of the year.

[Kimberly Fontan, Executive VP & CFO at Entergy]

So still at five and a half percent, we still see strong sales, but just a little bit of clarity on how that's going to come in.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

Okay. And then the last quarter, think you had the second Mississippi customer that you kind of announced but hadn't been named. Is there any more clarity on that, customer?

[Drew Marsh, Chair of the Board & CEO at Entergy]

Yeah. So, yeah, we, we are still all on, you know, moving forward with that customer. They have not announced, themselves, and so we are, you know, working to their schedule, but there's nothing new from our end. We are moving forward on everything we need to do to serve that customer.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

Okay. Then on the, regulatory on the Texas plants that you're the next round of plants that you're looking to build, I think staff came out against it more because they thought you should have had RFP. Just could you talk to your views on being able to kind of resolve that constructively?

[Drew Marsh, Chair of the Board & CEO at Entergy]

Sure. Yeah. We as as I mentioned in my remarks, there is, no disagreement with, the need for incremental generation in Texas. Everybody recognizes that. And then I think everybody also appreciates that we really need to move quickly, in order to support the low growth, in Texas as well.

[Drew Marsh, Chair of the Board & CEO at Entergy]

That's fully in the record and and well supported, the the rationale for why we needed to move quickly. We've already got the Orange County plant. We'd actually did a full RFP for that one, and there were no other competing bids for this project. In lieu of a longer time required for a full RFP, we did bid out all of the you know, some of the major components for the plant. So there is RFP in there, just not for the whole thing.

[Drew Marsh, Chair of the Board & CEO at Entergy]

That's all reflected in the record, and we understand what the staff was saying, but we do believe there's support for us to continue to move forward, and get to the finish line. Of course, we gotta we have to finish out the process, with the commission, and and the commission needs to agree with that. But, we believe that there's evidence in the record that'll support moving forward quickly.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

Okay, great. That makes sense. Thanks.

[Drew Marsh, Chair of the Board & CEO at Entergy]

All right. Thanks, Steve.

[Operator]

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

[Sophie Karp, Managing Director & Equity Research Analyst at KeyBanc Capital Markets]

Hi. Good morning. Thank you for taking my questions.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Good morning, Hi.

[Sophie Karp, Managing Director & Equity Research Analyst at KeyBanc Capital Markets]

So a couple of questions on the, I guess, the generation portfolio, how you think about that. I was curious to hear your thoughts on what would make what kind of market signal would make you take a closer look at nuclear and maybe bring those opportunities forward. And also, you know, some of your peers are discussing how building gas plants takes some really long time. Right? And how what are you seeing, and how fast can you basically build a gas plant right now?

[Drew Marsh, Chair of the Board & CEO at Entergy]

Yeah. So with regards to nuclear, you know, we are working on opportunities right now, as I mentioned. So we have the early site permit in Mississippi, that is an opportunity for us. We're talking with stakeholders, including customers and vendors, on that. You know, I don't know that there are any other market signals that we could see.

[Drew Marsh, Chair of the Board & CEO at Entergy]

You know, the key issue for us is, our ability to manage the construction risk. And and, of course, we need a customer to wanna pay for that. So there's a lot of political support, in Mississippi, Louisiana, Arkansas, and in Texas. Some of the states have laws, you know, in their legislative sessions right now that they are considering, to to try and facilitate nuclear investment. We view that as all very, very positive, but we need to be able to solve that commercial question upfront in order to to move forward with nuclear, on a more rapid, pace.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Regarding combined cycles and the path, there, you know, we have the key for that is where are you in the queue. And so we have few positions that would, allow us to build plants in '28 and '29. You saw that the the examples today and and the the customers that that are coming in are coming in in that time frame that matches up with our ability to continue to build. So that's that's the time frame that we are looking at right now, is that time frame in toward bringing on combined side. But I think that's if if you have queue positions, I think that's consistent with most.

[Drew Marsh, Chair of the Board & CEO at Entergy]

I think there may be a few people that have, sort of uncommitted queue positions maybe in 2027, but that's about as early as I think you can get, today that that we've seen, that could come into our service area. And then, you know, if you're not in the queue, you know, and you're trying to get into the queue today, it's probably more like twenty thirty, 20 30 one, so it's a little further out.

[Sophie Karp, Managing Director & Equity Research Analyst at KeyBanc Capital Markets]

Thank you. It's just a very helpful color. And then my other question is on the legislature that you mentioned in Arkansas and in Texas, I believe, that improves recovery mechanisms for, you know, plant under construction and storm recovery. How should we think about potential financial impacts of those? Obviously, this is a positive, but how much would that be, I guess, accretive on a normal year to you guys?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Good morning, Sophie. It's Kimberly. From the Arkansas legislation, it does allow us to, build, earlier because you get, recovery earlier through you get AFUDC through or you get cash CWIP rather than AFUDC. We haven't quantified that effect. We'll look at what specific investments we'll use that mechanism for and how that will benefit customers.

[Kimberly Fontan, Executive VP & CFO at Entergy]

So that will be coming in in future quarters, but certainly sets us up to move faster and actually provides lower cost to customers because of the CWIP recovery early in the construction period. In Texas, I think the the mechanisms are are more around ensuring risk. There's wild there's wildfire legislation. There's other legislation there, but I don't know that you'll see a lot of changes in the financials from depending on what goes through the legislation session there. From a securitization perspective, it is timing of the ability to recover the cost, which does lower cost to customers because of the carrying cost on that time to get those dollars back.

[Sophie Karp, Managing Director & Equity Research Analyst at KeyBanc Capital Markets]

Thank you so much.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Thank you.

[Operator]

Thanks, Sophie. And our next question comes from the line of Ryan Levine with Citi. Ryan, please go ahead.

[Ryan Levine, Analyst at Citigroup]

Good morning. Two related questions, particularly to Louisiana. How does the Woodside FID decision impact the availability of power time to market for new potential data center customers in your service territory? And then related, given the macro uncertainty, any color you can share around GDP sensitivity to your load or customer activity in your plan and how that could impact the large load customer conversations?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Right. I'll address the first part

[Kimberly Fontan, Executive VP & CFO at Entergy]

of your question regarding the data center and how the large customers affect that. We've talked before that the our large traditional customers are in a probability weighted pipeline in our forecast. The large data centers are we consider them binary. So we we look at what does it take to make sure that we can supply those, and then also we add that as needed when we add that large customer. That's what you saw the last couple of quarters.

[Kimberly Fontan, Executive VP & CFO at Entergy]

So they're not, mutually exclusive, but they're also not as dependent on each other. We look at that supply for the probability weighted, then you look at the supply for the specific large customers. So we think that we can continue to serve data centers over time. Obviously, Drew talked about the the timing on construction, but we think we still have a lot of opportunity there.

[Drew Marsh, Chair of the Board & CEO at Entergy]

And then just to make make sure I understand your your second part of your question, Ryan, you're you're asking about macro drivers and whether those would affect, how would those affect, like, Woodside in particular?

[Ryan Levine, Analyst at Citigroup]

Those how those would impact some data center conversations to the extent that the economy were to slow and that may reduce your load and, you expand your reserve margins.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Yeah. So, I mean, I would I would think that's I don't think data centers are really any different than, you know, our traditional industrial customers in that regard. They are looking at long term, investments, and so they're looking past any near term macro effects that you might see from tariffs or recession or anything like that that that could come about. So, you know, the that's at least that's what's happening in the conversations that we're having. You know, they are they're looking well out into the future, and, you know, they're not looking at just these investments, but, you know, lots of investments.

[Drew Marsh, Chair of the Board & CEO at Entergy]

And and so that's think the that would be the driver for them, not near term macro, but long term, expectations.

[Ryan Levine, Analyst at Citigroup]

But in terms of your core business outside of those customers, how GDP sensitive is your load?

[Drew Marsh, Chair of the Board & CEO at Entergy]

I mean, it isn't it is not recession proof, if that's what you're asking. But, you know, we have some of the most competitive, industrials in the world given all the investment that happened over the last fifteen years in our service territory. So, you know, in any sort of macro change, they would be the last to turn off and the first to turn on. And that's, you know, looking at the commodity spreads from The US to global markets. Right now.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Those continue to be favorable, particularly for the Gulf Coast. So we, you know, might see some temporary downturn, but, you know, anybody that's operating today would probably continue to operate very soon if they had to turn down at all. As I mentioned earlier, our sensitivity from an earnings perspective is is really low, you know, 1¢ for any 1% change in our industrial sales. That shows you how low the sensitivity is and and the the significance of the demand charges that we have. And and so I would think that our our industrial customers will be very robust through any sort of downturn.

[Drew Marsh, Chair of the Board & CEO at Entergy]

And from an investment perspective, you know, as I said, the data centers and the large know, the large industrials traditional large industrials, they're looking at many decades of investment, not not the current macro environment.

[Ryan Levine, Analyst at Citigroup]

Thank you.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Thank you.

[Operator]

Thanks, Ryan. And our next question comes from the line of Anthony Crowdell with Mizuho. Anthony, your line is open.

[Anthony Crowdell, Managing Director at Mizuho Financial Group]

Hey, thank you. Good morning. Just a couple of quick questions on transferability. Appreciate you gave us some numbers, but what's the impact to your FFO to debt metric if transferability were to sunset?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yes. It's Kimberly. The numbers that I gave you, as I noted, we didn't give a percent on FFO, but we would be well above our or we would be above our threshold, I should say. We also would look to maintain some of that through other mechanisms like I talked about, safe harboring potentially or also, tax equity partnership. So that is sort of a bookend case, but we would expect to be able to manage that as well.

[Kimberly Fontan, Executive VP & CFO at Entergy]

But regardless, we still expect to be above our thresholds.

[Anthony Crowdell, Managing Director at Mizuho Financial Group]

Great. And and maybe it's a more of a rating agency question. But if one of the options were tax equity, do you know if they the treatment of that is similar to transferability or that's not included in the FFO calculation?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yes. We've done a few of those already over the last few years and they are treated in the normal course. So I wouldn't expect that to be any different.

[Anthony Crowdell, Managing Director at Mizuho Financial Group]

Great. Thanks for taking my questions. Congrats on a good quarter.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Thanks.

[Operator]

Thanks, Anthony.

[Operator]

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

[Andrew Weisel, Director at Scotiabank]

Hi, thanks. Good morning, everyone. If I could first just elaborate on the slight reduction to the load growth forecast. First, just to clarify, you're saying it's about the pace of new customers ramping, not about usage from existing customers. Is that right?

[Kimberly Fontan, Executive VP & CFO at Entergy]

Yes. I think that's a fair assumption.

[Andrew Weisel, Director at Scotiabank]

Okay. Great. And then I recognize the EPS impact is modest, but can you detail you originally guided to 11% to 12% industrial growth in 2025. What's your new forecast for the industrial class?

[Kimberly Fontan, Executive VP & CFO at Entergy]

I don't think it's substantially changed. I think you'd still be close to that range. Really, this is about, like I said, timing, ramping, but not a significant change in where we are.

[Andrew Weisel, Director at Scotiabank]

Okay. Very good. And then one more if I may. I appreciate the easy to read list of the significant investment proposals on slide 15, and it does add up to a lot of potential spending, mostly in Louisiana and Texas and across generation and transmission. My question is how much of that is already included in the CapEx plan?

[Andrew Weisel, Director at Scotiabank]

And is there sort of a risk adjustment for some or all of these projects? And would there be upside or down to the plan pending regulatory approval.

[Kimberly Fontan, Executive VP & CFO at Entergy]

37,000,000,000 through 2028. What you're seeing on 15, that list of investments, those are all, I would assume those are in the financial plan. Anything that's not in the financial plan, we'd have to we'd have to look at whatever that is in the future depending on additional customers, and that sort of thing.

[Andrew Weisel, Director at Scotiabank]

Okay. Appreciate you clarifying. Thank you.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Absolutely.

[Operator]

Thanks, Andrew. And our last question today comes from the line of Travis Miller with Morningstar. Travis, your line is open.

[Travis Miller, Analyst at Morningstar]

Thank you. Good morning.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Good morning.

[Travis Miller, Analyst at Morningstar]

High level question here. With all the large load conversation and the potential need for new generation transmission, etcetera, have you changed any of your strategic conversations when you're thinking about contracting with these customers, I. E, going from maybe shorter term types of contracts to longer term off take types of contracts or fixed price type types of contracts. Just wondering if could there's been any change there in your strategy.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Not actually. Not really. You know, one of the advantages that we have is we've been serving large industrial customers for a while, and we were able to take advantage of those structures and frameworks that we had been contracting with previously. That included credit provisions, fixed demand charges, you know, what we call minimum bill, I guess, sometimes, minimum bill charges and and other features, termination features, and and things like that, and adapt them for, the the current environment, with the in particularly with the data centers. But I don't I don't think our strategy changed all that much.

[Drew Marsh, Chair of the Board & CEO at Entergy]

We've but we have had to be disciplined, with the way that we approach, this so that so that we can make sure that we keep, all of our existing customers, in a good spot while we get these new customers up and running.

[Travis Miller, Analyst at Morningstar]

Sure. Okay. That makes sense. And then a specific one on the Louisiana new customer filing. Is there a precedent either in Louisiana or other states you serve or other states you've researched for a decision like this?

[Travis Miller, Analyst at Morningstar]

Is there any kind of precedent ruling you've seen?

[Drew Marsh, Chair of the Board & CEO at Entergy]

I'm sorry. I missed the first part. A precedent ruling on transmission investment in Louisiana?

[Travis Miller, Analyst at Morningstar]

No. The the new customer investment.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Oh, the new customer. Yes. Okay. Well, I mean, I think the the components themselves, nothing is new, that's in there. And so it's it's standard generation and transmits investments that have been requested before.

[Drew Marsh, Chair of the Board & CEO at Entergy]

You know, there is a specific customer, that we are, you know, aiming to serve, in this docket. But outside of that, you know and I think that actually helps because it it helps illustrate, you know, how we will manage the overall impact to existing customer bills. And so I think that probably helps the conversation, But the investments themselves are nothing new, for the commission to consider.

[Travis Miller, Analyst at Morningstar]

Okay. I was thinking more of that kind of fixed price type long term contract approval.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Yeah. Well, again, that's we've we've had those kinds of contract before. They exist, in our our, you know, existing tariffs, that we have. In fact, in Louisiana, we have an existing high factor, load serving tariff, and that allows us to serve a lot of these large industrial customers. We're able to use that same exact tariff for, for, the the new customer.

[Travis Miller, Analyst at Morningstar]

Okay. Perfect. No. That's great. I appreciate it.

[Drew Marsh, Chair of the Board & CEO at Entergy]

Absolutely.

[Operator]

Alright. Thank you, Travis. And that does conclude our Q and A session today. Thank you so much, everyone. I will now turn the call back to Liz Hunter for closing comments.

[Operator]

Liz?

[Elizabeth Hunter, VP - IR at Entergy]

Thank you, Greg, and thanks to everyone for participating this morning. Our quarterly report on Form 10 Q is due to the SEC on May 12 and provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10 Q filing to 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 milestones 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.

[Elizabeth Hunter, VP - IR at Entergy]

And this concludes our call. Thank you very much.

Participants

Executives

• Elizabeth Hunter, VP - IR
• Drew Marsh, Chair of the Board & CEO
• Kimberly Fontan, Executive VP & CFO

Analysts

• Constantine Lednev, Vice President - Equity Research at Guggenheim Partners
• Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan
• David Arcaro, Executive Director, Equity Research at Morgan Stanley
• Nicholas Campanella, Director at Barclays
• Paul Fremont, Managing Director at Ladenburg Thalmann
• Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC
• Sophie Karp, Managing Director & Equity Research Analyst at KeyBanc Capital Markets
• Ryan Levine, Analyst at Citigroup
• Anthony Crowdell, Managing Director at Mizuho Financial Group
• Andrew Weisel, Director at Scotiabank
• Travis Miller, Analyst at Morningstar