Drew Marsh
Chairman of the Board and Chief Executive Officer at Entergy
Thank you, Bill, and good morning, everyone. Today, we are reporting second-quarter adjusted earnings per share of $1.84. Our progress through the first half of the year keeps us firmly on track to achieve 2023 results in line with our guidance. And we remain well-positioned to achieve our long-term 6% to 8% growth outlooks. Creating sustainable value for our customers, employees, communities, and owners is at the center of everything we do. I'll start today with our work to meet our customers' demands.
We're investing in resiliency and reliability and working to expand our clean energy footprint. This work helps our current customers meet their goals while also attracting new customers to Entergy service area. To that end, our power delivery team continues to upgrade legacy assets to new, more robust wind and flooding standards through new construction projects, storm restoration, and asset renewal. For example, in the second quarter, our new deployments included roughly 600 transmission structures, approximately 8,000 distribution poles, more than 200 miles of new distribution conductor, and seven new substations. In addition, these improvements will support more than 120 megawatts of growth.
Safe and effective nuclear operations are also important for our stakeholders. Our nuclear units continue to provide clean, reliable baseload power to our customers. And two of our plants, River Bend and ANO Unit 2, recently completed successful refueling outages, which included major projects to support long-term operational excellence. Overall, our nuclear plants are running very well. Outside of refueling outages, our fleet achieved a 99% capability factor in the first half of 2023. While our customers demand more reliability in clean energy from us, our unique and sizable long-term industrial sales growth opportunity continues to improve.
Growing businesses support our communities, provide employment opportunities, and help with affordability. The inherent advantages of our geographic footprint remain solidly intact. We continue to see evidence of these advantages through recent project announcements in our service area. For example, ExxonMobil announced a transformative CCUS project that will capture, transport, and store up to 800,000 metric tons of CO2 per year from a new core iron plant in Convent, Louisiana. The project is expected to start up in 2026. Paired with the recently-announced acquisition of Denbury, ExxonMobil's actions clearly highlight the opportunities around CCUS in our region. Also, Shell Catalysts & Technologies announced its final investment decision on its $120 million expansion project in Port Allen, Louisiana. The facility is already the largest refining catalyst plant in the world and the expansion will create even more manufacturing capacity. These are just a couple of projects that have the potential to increase and extend our long-term growth rate.
We're currently updating our annual industrial sales forecast and we are accounting for recent trends. As many of you have noted, there has been some weakness in national industrial output indicators, like the ISM Manufacturing Index. Despite this, we are seeing strength in our Gulf region. In the quarter, our total industrial sales declined, which had been expected due to higher cogeneration sales last year. Adjusting for cogen, our industrial sales were up about 1%. For some highlights, sales to small industrial customers, which are typically more exposed to broader U.S. economic factors, grew nearly 90 gigawatt hours over last year. Sales to large, new, and expanding industrial customers grew nearly 100 gigawatt hours over last year. As we look forward, a few large industrial projects have adjusted their in-service dates from 2024 to 2025, which could lower our 2024 industrial growth expectation, but not to a degree that affects our outlooks. Overall, our pipeline for project continues to grow, supported by favorable commodity spreads and the IRA legislation.
Early indications show demand in 2025 and beyond shaping up even stronger than our last forecast. As we typically do, we'll provide an update to our industrial growth expectations at EEI. To support this growth and to help our customers meet their sustainability needs, we are expanding our clean energy portfolio. Through 2026, we plan to add nearly 6,000 megawatts of renewable capacity. 2,400 of those megawatts are currently in construction, permitting regulatory review or negotiations. Approximately 30% of the 2,400 megawatts will be owned by Entergy. Last quarter, I mentioned that we are continuing to work on our self-build capabilities. Our recent self-build submissions have been extremely competitive in the RFP process. However, we have been limited by a smaller development pipeline. I'm pleased to report that we are making progress on that front, and going forward, I would expect Entergy to achieve at least 50% ownership through our competitive RFPs.
Moving to regulatory items. We continue to make meaningful progress on important regulatory matters, which support the credit required to meet customers' growing needs and drive improved customer outcomes. Beginning with Mississippi, the Public Service Commission approved Entergy Mississippi's formula rate plan settlement providing for recovery of substantially all costs. Meanwhile, Entergy Louisiana, Entergy New Orleans, and Entergy Arkansas, each filed their annual formula formula rate plans. New rates for Louisiana and New Orleans are expected to be effective in September, and Arkansas are expected to be effective at the first of next year. As we've discussed, Entergy Louisiana plans to file a base rate case this month, including our request for a new three-year formula rate plan. We like the clarity and certainty than an FRP provides, which helps us make investments to benefit our customers. However, in recent years, Entergy Louisiana's earned returns have materially lagged its allowed returns. We are making significant investments to support customer growth and demand for greater resilience and cleaner energy in Louisiana. This investment is critical for the state as well as our local communities. It's important to have an opportunity for fair and timely recovery, which allows us to maintain Entergy Louisiana's credit and cost-effectively source capital to meet customers' expectations.
Turning to Texas. Entergy Texas has an unopposed settlement before the commission. And we expect a decision at tomorrow's open meeting. Interim rates were implemented in June, and once the commission makes this decision, any change in revenue and depreciation expense will be retroactive to December of last year. In addition, the Texas legislative session ramped up at the end of May, and the governor signed a new build into law that are important to Texas customers and communities as well as to Entergy. I'll highlight a few. The Texas Resiliency Act allows utilities to submit a storm resiliency plan to improve customer outcomes. We expect the commission to complete their initial rulemaking in 180 days. We set the deadline to establish a regulatory framework in mid-December. Entergy Texas will then file its resilience plan shortly after the rulemaking is complete. And the commission will have 180 days to review and act on the filing. Based on this, Entergy Texas currently expects to have clarity on its resilience plan the middle of next year.
The distribution cost recovery factor legislation allows for to annual filings which provide more timely recovery of the significant distribution investments that we plan to make in Texas to support customer growth and reliability. And the expedited transmission CCM will reduce the time for commission approval by half to approximately six months. This will enable Entergy Texas to complete projects to support customer growth and resilience sooner and with lower risk.
Turning to federal matters. In May, we received an initial decision on a unit power sales agreement complaint against SERI. The ALJ rule against the complainant on several issues, but recommended approximately $250 million in refunds, which is mostly interest, primarily associated with accumulated deferred tax issues going as far back as 1996. We disagree with the ALJ's conclusions on ADIT and we continue to believe that SERI's positions on the law and the facts are correct and that its actions were prudent and taken for the benefit of customers. SERI filed its briefs on exception in July, and the next step is a ruling from FERC. There's not a statutory deadline for FERC to issue an order. More broadly on SERI, I would note that we are still awaiting FERC's response to our compliance filing related to the December 23 order on the sale leaseback and uncertain tax position case. While there is not a procedural deadline, we expect to see this clarification soon and we expect FERC to affirm that no additional refunds are due. FERC's response will provide clarity and will be an important step towards resolving the broader set of SERI litigation.
Our communities are one of our key stakeholders, and actively supporting them is an important part of our strategy. The Civic 50, an initiative a Points of Light, named Entergy a top-50 most community-minded company, and this year's leader for the utility sector. Another example of our community commitment is our Beat the Heat campaign. In May, we launched a series of measures to help low-income and senior customers save on their utility bills during hot summer months. $4 million in contributions will support thousands of vulnerable customers through bill payment assistance, weatherization events, fan distribution, and energy efficiency kits. I'm also proud that Forbes magazine has named Entergy as one of America's Best Employers for Diversity. They recognize our commitment to fostering a diverse and inclusive workplace where our employees feel valued and respected. Such confirmation is critical as we compete for talent from all corners of our community to best serve the diverse interest of our 3 million customers. Together, our employees are doing a great job of living our vision statement of We Power Life by meeting today's challenges and ensuring that we will create value for our stakeholders well into the future.
As you can see, we continue to make progress on our strategy to deliver all our key stakeholders. We are laser-focused on meeting our customers' demands through operational excellence, resilience, and clean energy investments. Meanwhile, we continue to maintain our financial discipline and work closely with our stakeholders to ensure we have the financial strength to drive economic development in our communities. Successfully executing across these dimensions will keep us on track to deliver steady predictable earnings and dividend growth, and move us toward our goal to be the premier utility.
I'll now turn the call over to Kimberly who will review our financial results for the quarter.
