Leo P. Denault
Chairman & Chief Executive Officer at Entergy
Thank you, Bill. Good morning, everyone. Today, we are reporting strong second quarter adjusted earnings of $1.78 per share. Robust economic activity and supportive fundamentals drove favorable sales trends in our commercial and industrial sectors and hot weather drove increased residential and commercial sales. We are also seeing growing residential customer counts supported by strengthening wage and employment data. Given the results to date as well as our view of the balance of the year, we are tracking towards the upper half of our 2022 guidance range and remain squarely on pace to achieve our longer-term 6% to 8% growth outlooks.
While we're pleased with the strength of our business, I want to acknowledge that due to global factors impacting natural gas prices, together with high electric usage caused by extreme heat, our customers, like many across the country, are receiving electric bills that are much higher than is typical even for this time of year. This is top of mind as we continue to achieve outcomes that build upon our proven track record of results. We executed on the important customer, regulatory, operational and financial deliverables that continue to improve quality across our business. As we discussed at Analyst Day, the attributes of Entergy's business align well with premium utilities. Given the bill pressures customers are facing, we continue to take strong and meaningful measures to help ease the burden of electric costs.
Many of our past actions and investments are mitigating the impacts of high natural gas prices for our customers today. The investments we made over the last eight years and more efficient generation and renewable resources, have lowered fuel cost by nearly $500 million annually compared to what they would otherwise have been. Going forward, investments in renewables and highly efficient generating resources like the Orange County Advanced Power Station will further reduce customer exposure to natural gas prices. Our ongoing participation in MISO has provided more than $250 million per year of savings for customers, and these savings increased during periods of higher fuel prices. Our top quartile O&M performance and customer-centric investments have delivered meaningful value for customers. We placed extra importance in helping customers who need it the most, with programs like the Power to Care and initiatives to get LIHEAP assistance to customers that qualify.
Otherwise, we help customers manage affordability include products like level building, deferred payment plans, as well as analytics and AMI-driven usage alerts. To further address bill challenges today, we are working with our regulators on additional solutions. We've agreed to defer fuel recovery to mitigate fuel price impacts on customers' monthly bills. We are also waiving late fees for eligible customers and credit card fees for all residential customers. We've committed $10 million in shareholder donations for residential bill payment assistance programs. Additionally, given our strong industrial and commercial sales and hot weather, we are utilizing our flex program to increase spending on initiatives designed to lower customers' costs and improve reliability. As I mentioned, one of the largest drivers of higher customer bills has been the increase in natural gas prices.
Looking ahead, the forward NYMEX curve indicates significant gas price declines over the next 12 to 24 months, and we are seeing fundamentals that support that trajectory. While weather across the nation has driven up natural gas demand this year, causing inventories to be tight, U.S. gas production is tracking roughly three Bcf per day ahead of last year. The U.S. has ample natural gas resources that can be produced in shale plays at prices consistent with the long-term NYMEX curve. Over the last year, we've seen independent producer activity ramp up in Haynesville and Permian Basin shale plays. Haynesville gas rig counts have increased nearly 50%. Increased gas production is also reflected by higher oil rig counts in West Texas, where high levels of associated gas from Permian Basin shale represent significant natural gas supply additions.
The old adage that nothing solves high prices like high prices is certainly true. And while we can't control commodity prices, we see relief for customers in sight. Our recent SERI settlement represents another way we have worked with our regulators to mitigate risk while also helping reduce customers' bills. In late June, we announced a settlement with the MPSC that resolved Entergy Mississippi's 40% economic interest in complaints against SERI. The settlement is a big step forward in resolving risks surrounding system energy and improving our overall regulatory environment. The settlement also comes at an opportune time to provide much needed bill relief to Mississippi customers. Entergy Mississippi would use the cash payment from this settlement to provide immediate bill relief and help offset fuel impacts on customer bills.
The Mississippi Public Service Commission recognized the opportunity to deliver meaningful value to customers today rather than wait for an uncertain outcome potentially years down the road. Looking beyond Mississippi, this settlement sets a marker and represents a catalyst opportunity to drive progress with the other commissions on broader SERI litigation resolution. Beyond SERI, regulatory progress was made at all of our utilities. We have submitted our annual FRP filings in Arkansas, New Orleans and Louisiana. And as planned, Entergy Texas filed a rate case reflecting the significant investments we've made across transmission, distribution and generation resources to better serve our Texas customers. We also demonstrated strong operational quality in the quarter. We have a flexible, diverse and reliable portfolio of generation and grid infrastructure that allowed us to reliably deliver power to customers during extreme weather.
In fact, all of the states we serve recorded triple-digit temperatures during the month of June and Entergy system set a new peak load in MISO. Consistent with the accelerated resilience plan we laid out in Analyst Day, Entergy New Orleans made its initial resilience and hardening filing. The filing included $1.5 billion of hardening projects over the next 10 years, including options for several microgrids spaced in neighborhoods throughout the city. All projects proposed create customer benefits. We will work with the City Council and other stakeholders to identify the optimal set of projects for Entergy New Orleans and we'll make a formal filing later this year to seek approval for these projects. We are working towards similar resilience filings in Entergy Louisiana in the fourth quarter and at Entergy Texas next year.
These filings and stakeholder engagement are important steps toward our 10-year accelerated resilience plan. Our plan will reduce risk for our customers and for Entergy, both in terms of reduced outages and lower storm costs, and further improve our operational and balance sheet quality. Another important accomplishment is the sale of Palisades to Holtec. This represents the last major milestone in our multiyear plan to exit the merchant nuclear power business. Turning to growth. Overall economic activity in our region was vibrant during the second quarter. Our commercial customers continue to show strong recovery from the pandemic. We've seen positive economic indicators for our residential customers. For example, the Louisiana wages increased more than 6% in 2021, which exceeded the national average. Further, Louisiana's unemployment rate hit a 50-year low, 3.8% this past June. Economic development and expansion across our region is robust.
And as we've discussed, Entergy is a major facilitator of this growth. Across our system, residential customer accounts continue to grow and show energy efficiency gains. Both of these trends drive improved affordability. We had significant industrial growth this past quarter, which drives economic gains for the regions we serve and the load growth helps keep bills low for all customers. As we discussed at Analyst Day, Entergy has a robust and unique growth story stemming from our industrial customers with an expected 6% compound annual growth rate over the next five years. Commodity spreads and geopolitical conditions combined with the inherent Gulf Coast stability and competitive advantages, are driving new customers to locate in our region and our existing customers to expand their businesses. Over the next five years, we have line of sight to the growth we outlined with a robust pipeline of projects.
As we sit today, there are 100 identified projects in the pipeline. Roughly half of these projects have already made final investment decisions comprising almost 10.5 terawatt hours of annual load potential by 2026. Further highlighting our growth opportunity. Sempra Infrastructure entered into an MOU with Entergy Texas for its Port Arthur LNG plant. Phase one of this facility includes two LNG trains with gas turbine compression, representing 270 megawatts of new load. Phase two would add two additional trains with plans for electric compression that would represent approximately 600 megawatts of new load. The Port Arthur project demonstrates the strong basis for the industrial load growth we expect over the next decade. As outlined in the MOU, Entergy Texas is developing options to accelerate the deployment of new renewable generation and to increase power supply resiliency.
If Sempra's Port Arthur energy were to be supplied with 100% solar, it would represent more than 2,500 megawatts of new solar generating resources. Projects like Sempra Port Arthur highlight industrial expansion with customers striving to grow in a carbon-neutral manner. For our broader industrial customer base to achieve their decarbonization goals, it goes well beyond mitigating emissions from business growth. They must decarbonize their existing operations. As we've previously discussed, Entergy's industrial customers have significant carbon emissions, representing 15% of the nation's industrial emissions and the majority of our customers have aggressive decarbonization goals. For utility investors interested in driving decarbonization, Entergy represents a unique rate of change investment opportunity.
Over the last quarter, we continued to make decarbonization progress for Entergy and our customers. Construction of Entergy Mississippi Sunflower Solar Station was completed. This 100-megawatt facility represents the first step towards Entergy Mississippi's 1,000-megawatt EDGE program, which will support economic development in the state. In May, the Arkansas Public Service Commission approved our Green Promise tariff that offers 100 megawatts of capacity from Entergy Arkansas Searcy and Chicot Solar resources for allocation to customers who signed letters of intent. We've seen robust customer demand for green products and this program is already fully subscribed.
We intend to grow this tariff to accommodate the demand. Entergy Texas continued to move the Orange County Advanced Power Station through the regulatory review and approval process. When it comes online, OCAPS will have the lowest heat rate of any combined-cycle plant in our fleet and will immediately provide fuel savings, reliability and environmental benefits for our customers. This hydrogen-capable facility will provide further benefits over time through fuel diversity and long-duration clean energy storage. At our Analyst Day, we laid out a clear plan and path to support our customers' significant growth potential over the next decade.
This plan calls for greater investment in clean resources and accelerated resilience to meet our customers' demands while we maintain our focus on affordability and drive continued quality gains across all aspects of our business consistent with our premier utility objective. Entergy has an excellent near-term growth opportunity. When considering the broader electrification and decarbonization potential, our long-term growth opportunity is even better. We are excited about our future and proud of the progress we are making towards achieving it.
I will now turn the call over to Drew to review our first quarter results as well as our financial strength and outlooks.
