Q1 2025 Entergy Corp Earnings Call
Greg: Good morning, my name is Greg and I will be your conference operator today.
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. If you'd like to ask a question. During this time simply press star.
Greg: 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 After the speakers 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. And if you'd like to withdraw your question, simply press star one again.
Followed by the number one on your telephone keypad once again star one.
And if you'd like to withdraw your question simply press Star one again, thank you.
Liz Hunter: I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation. Liz, you have the floor. Thank you, Greg. And thanks to everyone for joining this morning.
Speaker Change: I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation lives you have the floor.
Liz Hunter: Thank you Craig and thanks to everyone for joining this morning, we will begin today with comments from Entergy Chair and CEO drew Marsh and then Kimberly Fontanne, 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.
Liz Hunter: We will begin today with comments from Entergy's Chair and CEO, Drew Marsh, and then Kimberly Fontan, our CFO, will review results.
Liz Hunter: 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. Entergy does not assume any obligation to update these forward-looking statements.
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.
Liz Hunter: To update these forward looking statements.
Liz Hunter: 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.
Liz Hunter: 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: And now I will turn the call over to Drew. Thank you, Liz. Good morning, everyone. We had a very productive start to the year with progress on activities that support our near and long-term objectives. Important updates to facilitate customer growth include new customer announcements, regulatory outcomes, and new legislation.
Drew Marsh: Thank you Liz and good morning, everyone.
Drew Marsh: We had a very productive start to the year with progress on activities that support our near and long term objectives.
Drew Marsh: Important updates to facilitate customer growth include new customer announcements regulatory outcomes and new legislation.
Drew Marsh: Starting with our financial results for the first quarter. Today, we are reporting adjusted earnings per share of 82 cents. 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.
Drew Marsh: Starting with our financial results for the first quarter today, we are reporting adjusted earnings per share of 82 sets.
Drew Marsh: We're on track for 2025 guidance, we remain well positioned to attain our greater than 8% adjusted earnings per share compound annual growth rate.
Speaker Change: So the outlook period, Kimberly Kimberly will discuss our financial results in more detail.
Drew Marsh: Kimberly will discuss our financial results in more detail. 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 $5.8 billion investment in Hyundai Steel. a manufacturing facility and an engine for economic growth in Ascension Parish, Louisiana. Then, in early April, CF Industries announced that it had reached its final investment decision on its $4 billion investment in a low-carbon blue ammonia facility, which will be located near Hyundai Steel.
Speaker Change: As you've heard US say, we aim to create value for all our stakeholders customers employees communities and owners and customers are listen first because everything starts there.
Speaker Change: The opportunities driving our industrial sales growth continued to be robust.
Speaker Change: There is increasing visibility into our growth, including three announcements from large customers since our last call.
Speaker Change: In March Hyundai Motor Group announced a 5.8 billion dollar investment and Hyundai steel.
Speaker Change: Our manufacturing facility and an engine for economic growth and Ascension parish, Louisiana.
Speaker Change: Then in early April CF industries announced it has reached its final investment decision on its $4 billion investment in a low carbon blue ammonia facility, which will be located near Hyundai steel.
Drew Marsh: This project was first announced in 2022.
Speaker Change: This project was first announced in 2022.
Drew Marsh: and Just Today. would announce that they have reached FID on their $17.5 billion 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. 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 L&G are examples of this trend continuing.
Speaker Change: And just today.
Speaker Change: <unk> announced that they have reached F. I D on their 17, and a half billion dollar LNG facility, bringing jobs and investment to coastal Louisiana.
Speaker Change: These projects are expected to come online in 2028 and into 2029 and were assumed in our outlook last quarter.
Speaker Change: These customers diversify our industrial mix. They also provide important benefits the nearby communities through substantial local investment significant growth and workforce development.
Speaker Change: We've demonstrated a long history of powering industrial growth as businesses establish and expand operations in the Gulf South region.
Speaker Change: Andi steel CF industries, and Woodside LNG are examples of this trend continuing.
Drew Marsh: As more companies consider investment in the U.S., 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. Proven Workforce, and Welcoming Community. Data centers are a more recent addition to our large customer portfolio, and we remain in productive discussions for many potential projects. 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 5 to 10 gigawatt range. We're executing on our capital plan to support that strong customer growth, as well as improve reliability and resilience.
Speaker Change: As more companies consider investment in the U S. 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.
Speaker Change: Data centers are a more recent addition to our large customer portfolio and we remain in productive discussions for many potential projects continue.
Speaker Change: <unk> continued to receive strong interest and optimism from Hyperscale developers about the incredible opportunity before them.
Speaker Change: And our data center pipeline remains in the five to 10 gigawatt range.
Speaker Change: We are executing on our capital plan to support that strong customer growth as well as improved reliability and resilience.
Drew Marsh: We continue to make progress in the Orange County Advanced Power Station. The project is approximately 70% complete with more than 1 million man-hours worked with no safety input. The project remains on schedule and on budget with a projected end service date by summer of next year. 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.
Speaker Change: Continue to make progress in the Orange County advanced power station.
Speaker Change: The project is approximately 70% complete with more than 1 million man hours worked with no safety incidents.
Speaker Change: Project remains on schedule and on budget with a projected in service date by summer of next year.
Speaker Change: Delta Blues advanced power station in Mississippi is in earlier phases of construction is also on schedule and on budget.
Speaker Change: At the same time, we're exploring the potential to increase the capacity of our existing combined cycle natural gas facility by nearly 500 megawatts.
Speaker Change: Yeah.
Speaker Change: For nuclear we completed the spring refueling outage at River Bend on schedule.
Drew Marsh: During the outage, we conducted extensive work on the main generator to support long-term reliable operations. The Waterford 3 refilling outage is now underway. 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 2026. 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 a potential new nuclear facility at Grand Gulf, which expires in April 2027.
Speaker Change: During the outage, we conducted extensive work on the main generator to support long term reliable operations.
Speaker Change: The Waterford three refueling outages now underway.
Speaker Change: Land work includes replacement of low pressure turbine rotors, and will improve efficiency and pave the way to increase the capacity of the plant by an estimated 40 megawatts in the fall of 2026.
Speaker Change: We continue to assess potential capacity upgrades at our other nuclear plants that could total approximately 275 megawatts.
Speaker Change: As we mentioned before we have an NRC early site permit for potential new nuclear facility at Grand Gulf, which expires in April 2027.
Drew Marsh: We intend to renew the permit for another 20 years to maintain a viable option for new nuclear. We are in discussions with customers, potential partners, and other stakeholders regarding that opportunity. 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.
Speaker Change: We intend to renew the permit for another 20 years to maintain a viable option for new nuclear.
Speaker Change: We are in discussions for us with customers potential partners and other stakeholders regarding that opportunity.
Speaker Change: 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.
Drew Marsh: in addition to our efforts in operation. 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. A faster recovery reduces carrying costs and supports Entergy Louisiana's credit, both of which keep costs low for customers.
Speaker Change: In addition to our efforts in operations.
Speaker Change: We are working with our regulators and other stakeholders unimportant dockets that address infrastructure needs to support growth liability and resilience.
Speaker Change: 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 rate subject to a future Prudence review.
This means our recovery started less than two months from filing and six months after the storm.
A faster recovery reduces carrying costs and supports entergy Louisiana's credit both of which keep costs low for customers.
Drew Marsh: The LPSC also approved the half-billion-dollar West Bank 230KV transmission project that will support customer growth and economic development. 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's gas LDC sale from the East Baton Rouge Parish Council. retarding to close the sale of both Entergy Louisiana and Entergy New Orleans gas businesses in July. Entergy Louisiana's filing to support its hyperscale data center customer continues to move forward. Parties have filed testimony and the hearing is scheduled for mid-July. We remain on track for an LPSC decision in October.
The L. P. A C also approve the half billion dollar West Bank 230 kv transmission project that will support customer growth and economic development.
Speaker Change: In addition.
Speaker Change: We have a major 500 kv transmission project in Louisiana that is pending Commission review.
Speaker Change: Separately, we received the final approval needed for Entergy, Louisiana gas LDC sale from the East Baton Rouge Parish Council.
Speaker Change: We are targeting to close the sale of both Entergy, Louisiana and Entergy, New Orleans gas businesses in July.
Speaker Change: Entergy Louisiana's filings to support its Hyperscale data center customer continues to move forward.
Speaker Change: These are filed testimony and the hearing is scheduled for mid July.
Speaker Change: On track for an L. P. S C decision in October.
Drew Marsh: for Entergy Louisiana's 3 gigawatt solar RFP. The first round of procurement is complete, and we're moving forward two proposals for owned assets, a total 400 megawatts. Proposals in the second quarter were received in mid-April, and we are targeting selections later this quarter. In Texas, the PUCT approved placing $137 million of transmission investment into rates. have also requested a Certificate of Convenience and Necessity for a large transmission project in Texas known as CTEX, S-E-T-E-X. The hearing is scheduled for May, and we are targeting a commission decision by the end of August. EntergyTexas request for generation CCN.
Speaker Change: For Entergy, Louisiana, three Gigawatts solar RFP. The first round of procurement is complete and we're moving forward to proposals for owned assets a total 400 megawatts.
Speaker Change: Proposals in the second quarter were received in April.
Speaker Change: And we are targeting selections later this quarter.
Speaker Change: In Texas, the PUC approved placing $137 million of transmission investment into rates.
Speaker Change: We have also requested a certificate of convenience and necessity for a large transmission project in Texas.
Speaker Change: C tax S E T X.
Speaker Change: The hearing is scheduled for May and we are targeting a commission decision by the end of August.
Speaker Change: Entergy, Texas request for generation CCN.
Drew Marsh: are continuing as expected. Hearings for Legend and Lone Star Dispatchable Generation Projects, as well as Renewable Resources are complete. 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. Entergy Mississippi received approval to build a combined cycle gas plant in Ridgeland County. This facility will serve the growing demand in our Mississippi service area. and Entergy Mississippi also filed its annual formula rate plan with no rate change requested.
Speaker Change: Continuing as expected.
Earrings for legend, and Lone Star to dispatch will generation projects as well as renewable resources are complete.
Speaker Change: Briefings have begun and no parties a dispute the need for new generation to meet growing demand.
Speaker Change: We are targeting decisions in the third quarter.
Speaker Change: In Arkansas, the a PSC issued a certificate of environmental compatibility and public need for late Catherine unit five.
Speaker Change: This plant is important to support Arkansas customer demand.
Speaker Change: Entergy, Mississippi received approval to build a combined cycle gas plant in Richland County.
Speaker Change: This facility will serve the growing demand in our Mississippi service area.
Speaker Change: And Entergy, Mississippi also filed its annual Formula rate plan with no rate change requested.
Drew Marsh: We expect the commission to take this up over the next few months.
Speaker Change: The commission to take this up over the next few months.
Drew Marsh: Turning to legislative matters, Arkansas recently completed its session. Setting the stage for future growth in the state. Act 373, 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 and process. During construction, thus lowering costs for customers.
Speaker Change: Turning to legislative matters, Arkansas recently completed its session.
Speaker Change: Setting the stage for future growth in the state.
Speaker Change: At $3 73 signed into law by the Governor supports economic development and growth and will benefit our customers and communities.
Speaker Change: Typically the legislation allows recovery for new generation capacity and certain transmission investments outside of the formula rate plans, 4% cap.
Speaker Change: It also streamlines and simplifies the process for certification of public need to allow for faster response to economic development, while maintaining regulatory oversight.
Speaker Change: Additionally, the new law allows utilities to recover carrying costs on construction work in process.
Speaker Change: During construction, thus lowering costs for customers.
Drew Marsh: Texas is also in a legislative session. One of the bills of interest for us will accelerate the regulatory review and approval for storm securitization to 150 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.
Speaker Change: Texas is also in a legislative session one of the bills of interest for us will accelerate the regulatory review and approval for storm securitization to 150 days.
Significantly faster than previous reviews.
More timely reviews benefit customers through lower carrying costs and improved credit.
Speaker Change: The Texas Legislative session continues through June 2nd.
Drew Marsh: Turning to tariffs, we know tariffs are certainly a topic that we know you're interested in. is 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 impact our management. The current tariff would primarily impact capital expenditures, and we estimate that the impact to be approximately 1% of our $37 billion four-year capital plan. The vast majority of the dollar impact is in the back end of our forecast period, which provides time to continue to reduce those effects through additional supply sources.
Speaker Change: Turning to tariffs, we know tariffs are certainly a topic.
Speaker Change: We know you're interested in.
Speaker Change: It's top of mind for us as well and we were actively engaged in monitoring as the landscape evolves.
Speaker Change: There are several considerations in the bottom line is that we believe tariffs impacts are manageable.
Speaker Change: The current tariffs would primarily impact capital expenditures and we estimate that the impact to be approximately 1% of our 37 billion four year capital plan.
Speaker Change: The vast majority of the dollar impact is in the back end of our forecast period provides time to continue to reduce those effects through additional supply sources.
Drew Marsh: To mitigate potential impacts, we are working with our suppliers to develop alternative supply sourcing strategies. 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 discipline capital prioritization and review processes to drive customer value. To date, we've identified greater than $1 billion of capital that was redeployed into other projects to benefit customers. for making every effort to reduce the effects of tariffs for our customers, for working hard to make ends meet, and competing in a global market.
Speaker Change: To mitigate potential impacts we are working with our suppliers to develop alternative supply sourcing strategies. In addition, our ongoing cost management efforts as well as contingencies in our spending plans will help us manage our costs for.
Speaker Change: For example at Analyst Day last summer, we talked about our disciplined capital prioritization and review processes, So drive customer value.
Speaker Change: To date, we've identified greater than $1 billion of capital that was redeployed into other projects to benefit customers.
Speaker Change: We're making every effort to reduce the effects of tariffs for our customers. We're working hard to make ends meet and competing in a global marketplace.
Drew Marsh: that point. We're also actively monitoring what this means for our customers. 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 raise 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 U.S. and companies are moving forward in investment in clean energy technologies, as the CF Industries example illustrates.
Speaker Change: To that point, we're also actively monitoring what this means for our customers businesses.
Speaker Change: Our large industrial customers are highly competitive and domestic and global markets.
Speaker Change: <unk> spreads continue to be supported in part due to the structural advantage of low cost natural gas.
Speaker Change: I'd like to highlight a few specific examples.
Speaker Change: LNG exports are likely to increase due to the natural gas advantage.
Speaker Change: Which would help bridge the trade deficit and I just mentioned the Woodside announcement as a case in point.
Speaker Change: Ammonia is a strong competitive position due to low natural gas prices in the U S and companies are moving forward investment in clean energy technologies cause of CF Industries example, illustrates.
Drew Marsh: 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 cost sectors such as steel that are not currently running at full capacity to ramp up production. Overall, commodity fundamentals still favor U.S. manufacturing. As a result, our service area remains well positioned to capture new on-shoring and industrial development with the Gulf Coast advantages that we've talked about for some time and that I mentioned earlier. These foundational elements can facilitate even further expansion of the broad industrial manufacturing base and supporting services in our region.
Speaker Change: The petrochemical sector also enjoy structural advantages from low cost natural gas liquid feedstocks and potential decreases in global production would likely come from the European Union.
Speaker Change: Beyond the price advantages of natural gas companies seeking domestically produced materials to managed tariffs could cost sectors such as steel that are not currently running at full capacity to ramp up production.
Speaker Change: Overall commodity fundamentals still favor U S manufacturing.
Speaker Change: As a result, our service area remains well positioned to capture new onshoring and industrial development with the Gulf Coast advantages that we've talked about for some time and then I manage that I mentioned earlier.
Speaker Change: These foundational elements can facilitate even further expansion of the broad industrial manufacturing base and supporting services in our region.
Drew Marsh: 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.
Speaker Change: Third we believe tariff impacts are manageable I mean, everything we know today, we remain confident in the guidance and outlooks initiated on last quarter's call.
Drew Marsh: Before I wrap up, tomorrow, our COO, Pete Norgio, is retiring. Over his 10-plus years at Entergy, Pete transformed our power generation team, closed out our exit from the merchant power business, and 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 demand.
Speaker Change: Before I wrap up tomorrow.
Speaker Change: Oh, Oh, Oh, Pete <unk> is retiring.
Speaker Change: Over his 10 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 CFO. He re centered us on public safety, while preparing us to manage the large capital investments responding to customer demands.
Drew Marsh: Pete is also a good friend. We will miss him and we wish him well in the next chapter.
Speaker Change: Pete is also a good friend, we will miss him and we wish him well in the next chapter.
Drew Marsh: Moving into the COO role is Kimberly Cook-Nelson, who has been driving our steadily improving nuclear operations over the last few years.
Speaker Change: Moving into the CFO role is Kimberly Cook Nelson, who has been driving our Sally improving nuclear operations over the last few years.
Drew Marsh: A leader in the nuclear industry should bring the wealth of leadership experience, operational discipline and project management skills to the COO role.
Speaker Change: A leader in the nuclear industry. She brings a wealth of leadership experience operational discipline and project management skills to the CEO role.
Drew Marsh: Wish us service well for the growth investment road ahead.
Speaker Change: Which is serviced well for the growth investment road ahead.
Drew Marsh: And finally, John Dinelli 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.
Speaker Change: Finally, John Donnelly is taking over as Chief nuclear officer.
Speaker Change: As a longtime entergy employee Havent started here when we purchased Indian point.
Speaker Change: Is held many leadership roles within the nuclear organization and recently served as our nuclear COO, helping lead the cultural change is needed to continue our relentless pursuit of improvement in nuclear operations.
Drew Marsh: While we are sad to see Pete go, we are excited about the new opportunities that will come from the leadership of Kimberly and John. And finally...
Speaker Change: While we are sad to see P. Go we're excited about the new opportunities that will come from the leadership of Kimberly and John.
Speaker Change: And finally.
Drew Marsh: We're starting 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. And of course, we know her from her 20 years of service on our Board of Directors.
Speaker Change: We're saddened to learn of the passing of Alexis Herman over the weekend.
Speaker Change: From her beginnings in Alabama, along the Gulf Coast she.
Speaker Change: 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 20 years of service on our board of directors.
Drew Marsh: 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. 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.
Speaker Change: Beyond her outstanding Wisdom, and insight she was a friend and a mentor and an inspiration to all of us and we will miss her dearly.
Speaker Change: Although we are sad Alexis would be proud of our great start to the year.
Speaker Change: We are on the path to meet our stakeholders expectations in 2025 with solid progress across key customer operational legislative and regulatory fronts.
Speaker Change: We are executing on our plan to realize the opportunity in front of us and we're confident we can be successful.
Speaker Change: As we continue to put our customers first we will deliver premium value to each of our key stakeholders.
Kimberly Fontan: I'll now turn the call over to Kimberly. Thank you, Drew. Good morning, everyone. Today I will review our financial results, as well as our guidance and outlooks. I'll also talk about tax credits and their potential financial impact. 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. The quarters 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&M than first quarter last year.
Kimberly: I'll now turn the call over to Kimberly.
Kimberly: Thank you drew good morning, everyone.
Kimberly: 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.
Kimberly: Starting with earnings our adjusted earnings per share for the quarter was 82 cents. This result keeps us firmly on track for our adjusted EPS guidance for the year.
Kimberly: The quarter's adjusted EPS drivers are shown on slide four.
Kimberly: Key highlights include higher retail sales volume, including the effects of weather.
Kimberly: Next from regulatory actions, including recovery of investments to benefit customers.
Kimberly: And lower other O&M in first quarter last year.
Kimberly Fontan: These favorable effects were partially offset by higher interest expense and depreciation as a result of investment. 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. Slide 5 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.
Kimberly: These favorable effects were partially offset by higher interest expense and depreciation as a result of investments.
Kimberly: First quarter weather adjusted retail sales growth was strong at five 2%. The industrial sales increase was the biggest driver and nine 3% reflecting increases in usage from customer additions over the course of 'twenty 'twenty four as well as continued ramp of new and expansion customers.
Kimberly: Slide five provides our credit ratings and affirms that our credit metric outlook remain better than agency thresholds are.
Kimberly: Our ongoing focus on credit has created flexibility to manage volatility and headwinds.
Kimberly: Availability and transferability of renewable tax credits continued to be a topic of interest.
Kimberly Fontan: 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. We are evaluating our position with respect to these credits and will finalize our position prior to our 2024 corporate tax filing. 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 million and $350 million, respectively, on more than $5 billion of renewable investments through 2028.
Kimberly: Nuclear production tax credits are P. T six became effective in 2024.
Kimberly: Measuring department has not issued guidance on how to determine gross receipts for purposes of calculating the amount of nuclear P. T seems generated.
Kimberly: We are evaluating our position with respect to these credits and we'll finalize our position prior to our 2020 for corporate tax filings.
Kimberly: As a reminder, cash benefits from nuclear P. T. CS are not included in our outlook. So any nuclear P. T. Six that are realized would be positive to our plan.
Kimberly: Our twenties 27 in 2028 outlooks include tax credits of approximately $170 million and $315 million, respectively, and more than $5 billion of renewable investments through 2028.
Kimberly Fontan: 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. 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.
Kimberly: If the transferability rules change, we would expect to monetize the credits using tax equity.
Kimberly: We continue to safe Harbor as many projects as possible in the event that the credit stays out sooner than the current rules provide.
Kimberly: However, even if we were to lose all the renewable tax credits assumed in our guidance our credit metrics would still exceed rating agency thresholds.
Kimberly Fontan: Turning to slide 6, our equity needs are unchanged since our last update. During the quarter, we executed an approximately $1.5 billion block equity forward, including the Green Shield. Prior to the equity block, we contracted roughly $230 million using ATM forward. 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. No forwards were settled during the quarter. As shown on slide 7, we are affirming our adjusted EPS guidance and outlook. For 2025, we're firmly on track.
Kimberly: Turning to slide six our equity needs are unchanged since our last update during the quarter. We executed an approximately 1.5 billion dollar block equity forward, including the Green shoe.
Kimberly: Prior to the equity block, we contracted roughly $230 million using ATM forwards.
Kimberly: With these transactions, we have successfully secured our equity needs into 2027, and we have contracted approximately two thirds of our needs through 2028, ensuring access to capital needed to execute on our capital plan.
Kimberly: No forward were settled during the quarter.
Kimberly: As shown on slide seven we are affirming our adjusted EPS guidance and outlook for 2025, we're firmly on track.
Kimberly Fontan: 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&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. 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.
Kimberly: Weather and other updates in the first quarter create flexibility to manage the business in response to potential volatility and other headwinds.
Kimberly: Looking ahead to the second quarter, we expect other O&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: 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.
Kimberly Fontan: And now the Entergy team is available for questions. Thank you. And 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.
Speaker Change: Now the entergy team is available for questions.
Kimberly: Yes.
Speaker Change: Thank you and 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, the star one and as Liz mentioned earlier in the interest of time, we ask that you. Please limit yourself to two questions and we will pause just a moment to compile the Q&A roster.
Kimberly Fontan: And as Liz mentioned earlier, in the interest of time, we ask that you please limit yourself to two questions. Thanks, and we will pause just a moment to compile the Q&A roster.
Shahriar Pourreza: And it looks like our first question today comes from the line of Shahriar Pourreza with Guggenheim Partners. Shahriar, your line is open. Hi, good morning team. Congrats on a great quarter. It's actually a constant theme here for sure.
Speaker Change: And it looks like our first question today comes from the line of sharp Guereza with Guggenheim Partners Sharpen Your line is open.
Constantine: Hi, good morning team congrats on a great quarter, it's actually Constantine here for sure.
Speaker Change: Right.
Drew Marsh: 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 inbounds thus far, or do you need any further rate design improvements? I'm sure this is true. Sorry, Constantine, this is true. We feel that they are fully competitive at this point. And, you know, we are talking to potential customers in the state of Arkansas. We have a lot of interest there. And so we are we are working down that path right now.
Speaker Change: Just as we're thinking about the Arkansas generation Bill do you feel the state is now fully competitive on the datacenter front in terms of providing turnkey interconnection and have there been any inbounds, thus far or do you need any further rate design improvement.
Speaker Change: Yeah.
Speaker Change: Charles drew or sorry, costing and this is true 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, and we have a lot of interest there.
Speaker Change: And so we are we're working down that path right now.
Unknown Executive: Excellent.
Kimberly Fontan: 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 it looks like that might be accelerating slightly. Does that imply an acceleration of credit metric improvement or any other moving pieces you want to highlight? Yeah, there hasn't been a substantial change in the timing of the equity needed we we contracted forward into 27. But in our credit metrics through 28 continue to build towards an 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 the timing of equity in that period.
Speaker Change: Excellent.
Speaker Change: 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 it looks like that might be accelerating slightly does that imply an acceleration of credit metric improvement or any other moving pieces you want to highlight.
Speaker Change: Yeah, there hasn't been a substantial change in the timing of the equity needed. We we contracted forward into 'twenty seven.
Speaker Change: And our credit metrics 328 continue to build towards an up to 15%. So we see strong flexibility in credit, but I wouldnt see them a whole lot of shift in our in the equity needs and the timing of the equity in that period.
Kimberly Fontan: And anything that drove such a big forward volume in 1Q relative to the last quarter or is that just kind of optimization? Yeah, it really was taking risk off the table. We had an opportunity to execute on that forward and, you know, given volatility and 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 set ourselves up to be able to manage volatility over the next couple of years.
Speaker Change: And any any.
Speaker Change: Anything that drove such a big forward volume in <unk> relative to last quarter or is that just kind of optimization.
Speaker Change: Yeah really was taken risk off the table, we had an opportunity to execute on that forward and you know given.
Speaker Change: Volatility in the equity that we needed that we believed we could continue to satisfy with the a T M. But we had an opportunity to close some of that out until we took advantage of that and and set ourselves up to be able to manage volatility over the next couple of years.
Unknown Executive: Excellent. Appreciate that. Thanks for taking the questions. I'll jump back in queue. Thanks, Konstantin.
Speaker Change: Excellent I appreciate that thanks for taking the questions I'll jump back in queue.
Speaker Change: Thank you.
Constantine: Thanks Constantine.
Kimberly Fontan: And our next question comes from the line of Jeremy Tonet with J.P. Morgan. Jeremy, your line is open. Hi, good morning. Good morning, Jerry. Um, 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 just wonder if you could talk a bit more about drivers there. Yeah, good morning, Jeremy, it's Kimberly.
Speaker Change: And our next question comes from the line of Jeremy Tonet with J P. Morgan Jeremy Your line is open.
Constantine: Hi, good morning.
Speaker Change: Good morning, Jeremy.
Speaker Change: Just wanted to get the sales a little bit here I think that your residential customer count might've been up just under 1% quarter over quarter and your weather normalized sales if I'm seeing this rate for residential went up about four 5% I was wondering if you could talk a bit more about the drivers there.
Kimberly: Yeah, Good morning, Jeremie, it's Kimberly.
Kimberly Fontan: You know, I wouldn't look too much at the specifics on the quarter of a quarter, you're going to see some volatility in the counts. What we expect our 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 going to see some volatility in a in a given quarter on a on a quarter of a quarter basis. Got it. That's helpful. Thanks.
Kimberly: I wouldn't look too much into specifics on the quarter over quarter, you're going to see some volatility in the accounts and we expect our residential sales to be about 1% for the full year I mean, our sales overall to be about 5.5%. So still strong sales over the year, but you're going to see some volatility in a given quarter on a on a quarter over quarter.
Kimberly: Basis.
Speaker Change: Got it that's helpful. Thanks, and just moving to industrial sales and as you said it will be volatile in 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: And just moving to industrial sales, and as you said, it'd 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 your viewpoint on your service. You know, when we think about our industrial customers, you know, we have had more than 5% growth for over 15 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.
Kimberly: Yeah, when we think about our industrial customers we have.
Speaker Change: <unk> had more than 5% growth for over 15 years and that's included a number of periods, where there were various economic factors happening in those periods and I think that's three industrial customers that drew referenced in his comments coming in just this quarter or over the last couple of months underscores the opportunity that we have for our traditional.
Speaker Change: Customers and then we continue to have a significant opportunity in the datacenter space. So you know our customers are making 30 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.
Kimberly Fontan: So, you know, our customers are making 30-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. 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 pretty well de-risked because of the high level of demand charges that we have in the industrial customer space. got it that's helpful.
Speaker Change: And I'll just point to the rule of thumb that we have in our materials for industrial sales as you know 1% change in a given year, it's only about a penny.
Speaker Change: Impact so.
Speaker Change: It's a pretty well derisked because of the high level of demand charges that we have are in the industrial customer space.
Speaker Change: Got it that's helpful and just one last one if I could just as far as are we.
Kimberly Fontan: And just one last one, if I could just as far as 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 as anything. Yeah, Jeremy, Drew referenced that we had 5 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 level of detail.
Speaker Change: Winning these new packages here and increasing the pipeline of big activity I Wonder if you could provide more color of what it looks like I guess on conversations with data center or other large industrial users.
Speaker Change: How you see that I guess coming together in this environment has anything changed.
Speaker Change: Yeah, Jeremy the drew referenced that we had five to 10 gigawatts in our datacenter and discussions as are still strong and ongoing discussions or pipeline in our other customers Hasnt really changed from the last time that we gave that that level of detail. We continue to have strong conversations.
Kimberly Fontan: We continue to have strong conversations. You know, our pipeline is in our forecast, it's on a weighted probability 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. Yeah, that's a good point. I mean, outside of data centers, you know, we probability weight everything, and the three announcements that we gave you were in our forecast, but they were probability weighted.
Speaker Change: Our pipeline is in our forecast is 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.
Speaker Change: To continue to serve them, but at that rate continues we'll have to look at incremental capital to support continued growth.
Speaker Change: Yeah, that's a that's a good point I mean the.
Speaker Change: And outside of the data centers, we probability weight everything in the three announcements that we gave you were in our forecast, but they were probability weighted and so now the sales expectation for them are much higher than what we were originally anticipating and taking up the space that the other probability weighted our customers might have been.
Unknown Executive: And so now the sales expectation for them are much higher than what we were originally anticipating, and taking up the space that the other probability weighted customers, you know, might have been taking up. So there could be additional capital needed should those customers come in, and we do expect some of them Got it. That's helpful. I'll leave it there. Thanks. Thanks, Jeremy.
Speaker Change: Taking up so there could be additional capital needed should those customers come in and we do expect some of them to come.
Speaker Change: Got it that's helpful I'll leave it there thanks.
Speaker Change: Thanks, Jeremy.
Drew Marsh: And our next question comes from the line of David Arcaro with Morgan Stanley. David, please go ahead. Hey, thanks so much. Good morning. 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?
Speaker Change: And our next question comes from the line of David Arcaro with Morgan Stanley David. Please go ahead.
David Arcaro: Oh, hey, thanks, so much good morning.
Speaker Change: Good morning.
Speaker Change: Wondering if you could maybe just give us maybe an update or a profile of your system you know as youre looking at some of these large load customers in the pipeline. How quickly can you offer them you know service to connecting them.
Drew Marsh: Uh, 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 Yeah, this is Drew. And then I'll see if Kimberly wants to add anything. But 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 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 period. there's just, you know, a lot to do to make room for all this.
Speaker Change: You know.
Speaker Change: 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.
Speaker Change: Yeah, that's true and then I'll see if Kimberly wants to add anything but the.
Speaker Change: <unk>.
Speaker Change: We do have positions in Qs in order to create you know provide generation to our potential customers.
Speaker Change: As you all know those skus are full.
Speaker Change: But 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.
Speaker Change: Because.
There's just.
Speaker Change: A lot to do to make room for all this in and as you know that the three that we customers that we were talking about today are all in the 2028, moving and ramping into 2029 kind of time frame. So that's kind of where we are in terms of potential opportunity.
Drew Marsh: And as you know, that the three that we customers that we were talking about today, are all in the 2028, moving, you know, ramping into 2029, kind of timeframe. 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. Got it. Yeah, that makes sense. Appreciate that color.
Speaker Change: 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.
Speaker Change: Got it yeah that makes sense I appreciate that color.
Kimberly Fontan: Maybe just a quick clarification on the tariff exposure. 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 going to be more expensive or this is out in the future? You know, we'll get work through regulatory processes over time. I know you're trying to offset it, but how do you consider kind of earnings exposure, if any? 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.
Speaker Change: Maybe just a quick clarification on the terrorists exposure would you consider I guess do you think of the tariff exposure is being earnings exposure. You know is this kind of already approved projects that now need to that are going to be more expensive or this.
Speaker Change: This is out in the future you know we.
Speaker Change: We will get worked through regulatory processes overtime, I know, you're trying to offset it but how do you consider kind of earnings exposure if any from that.
Speaker Change: Yeah, David most of that exposure as you noted is in 27 28 and most of it is also tied to new generation specific component to it.
Kimberly Fontan: 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.
Speaker Change: Build those facilities. So we think that gives us time to find additional suppliers and mitigate that and so we don't see that being a real earnings effect and Andrew mentioned some of the things we're doing to mitigate that but we think that that is manageable within the forecast period.
Unknown Executive: Okay, got it. Understood. I appreciate it. Thanks so much. Thanks, David.
Speaker Change: Okay got it understood I appreciate it thanks, so much.
Speaker Change: Thank you.
Nick Campanella: And our next question comes from the line of Nick Campanella with Barclays. Nick, your line is open. Hey, good morning. Thanks for all the updates. Good morning, Nick. Morning.
Speaker Change: Thanks, David.
Speaker Change: And our next question comes from the line of Nick Campanella with Barclays. Your line is open.
Nick Campanella: Hey, good morning, Thanks for all the updates.
Speaker Change: Nick.
Unknown Executive: Hey, I just wanted to ask on 25, it just seems like you're off to a good start, you know, are you trending higher in the fiscal 25 plan, just given the weather tailwinds or other headwinds to kind of consider for later this year? Yeah, we did have a good start to the to the year. But as with any year, we use that to manage through the course of the business. Uncertainty, we obviously have the summer coming, we 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.
Speaker Change: Good morning, Hey, I just wanted to ask on 25, it just seems like you're off to a good start trending higher in the fiscal 'twenty five plan, just given the weather tailwind or other headwinds to kind of consider.
Speaker Change: For later this year.
Speaker Change: Yeah, we did have a good start to the to the year, but as with any year, we use that to manage through the course of the business uncertainty. We obviously have the summer come in could be.
Speaker Change: We could have a super hot summer, we could have a mild summer and said we need to see how that plays out, but we will use that flexibility to help us manage that we're comfortable that we'll deliver our outlets at the end of the year.
Drew Marsh: 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.
Unknown Executive: Okay, great. Thanks.
Speaker Change: Okay, great. Thanks, and then just.
Drew Marsh: And then just on this new customer generation and transmission filing, I know that we're kind of approaching hearings here as kind of a midterm data point. Is there any potential or effort by the parties to want to settle issues in the proceeding, or do you kind of see that going straight through into the October order? Thanks. Yeah, this is true. You know, there is always the potential to settle. And so we will, we will look at that. If those if those opportunities arrive, certainly, we'd always prefer to settle rather than go to hearing if we if we could.
Speaker Change: Just on this new customer generation transmission filing I.
Speaker Change: I know that we're kind of approaching hearings here.
I was kind of a midterm data point, just is there any potential or effort by the parties to want a subtle issues in the preceding or do you kind of see that going straight through into.
Speaker Change: And to the October order thanks.
Drew Marsh: Yeah. This is drew yeah. 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 I could.
Speaker Change: But.
Drew Marsh: But, you know, we have a good schedule. And there's a lot of support for this investment in the state, and among the stakeholders. So we are, you know, we're confident that we will manage through the process and get the outcome that will benefit customers, members of communities.
Speaker Change: Yeah, we have a good schedule and and Theres a lot of support for this investment and the state and among the stakeholders. So we are yeah. We're confident that we will manage through the process and get the outcome that will benefit our customers and communities.
Unknown Executive: Thanks a lot. Thank you.
Speaker Change: Thanks, a lot.
Speaker Change: Thank you.
Speaker Change: Thanks, Nick.
Paul Fremont: And our next question comes from the line of Paul Fremont with Lautenberg. Paul, your line is open. Hey, thank you very much and congratulations on a strong quarter.
Speaker Change: And our next question comes from the line of Paul Fremont with Ladenburg Paul Your line is open.
Paul Fremont: Hey, Thank you very much and congratulations on a strong quarter I guess my first question is can you give us a sense of the load this associated with the three customers.
Unknown Executive: I guess my first question is, can you give us a sense of the load that's associated with the three customers? Good morning, Paul. Unfortunately, I can't. We don't have authorization to talk about specific customer load, so I wouldn't mention that to you.
Paul Fremont: 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 things that you might see.
Drew Marsh: I would say these are large industrial facilities, and they would be on par with things that you might see elsewhere, but I can't give you specifics, unfortunately. And then the that your transmission filing in Texas, is that 365, 500 or 345 kv line that you're proposing? And and I guess how many, how many miles should we think of additional Yeah, that's a 500 kV. And it is 130 to 160 miles. 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.
Paul Fremont: Elsewhere.
Paul Fremont: But I can't give you specifics unfortunately.
Paul Fremont: And then the debt.
Paul Fremont: Transmission filing in Texas is that 365, 500 or 345 kv line that you are proposing and I guess, how many how many miles should we think of of additional transmission.
Paul Fremont: Yeah, that's a it's 500 kv and it is a 130 to 160 miles. It's there's a slide in the materials on that that you can you can look you can look at and it actually will terminate.
Paul Fremont: Ideally with the line that we are requesting for approval in Louisiana, So you'll get.
Drew Marsh: So you'll get, in addition to customer support, I think you'll get a good resilience benefit out of that as well to help us with storm. And sort of last question there, what would be the completion if you were to be awarded the project? What would be the completion date? We think it would be just outside of our outlook period in 2029. Thank you so much. Thank you. Thanks, Paul.
Paul Fremont: In addition to our customer support I think youll get a good resilience benefit out of that as well to help us with storms.
Paul Fremont: And sort of last question there.
Paul Fremont: What would be the completion, if you were to be awarded the project.
Paul Fremont: It would be the completion date.
Paul Fremont: We think it would be just outside of our our outlook period in 2029.
Paul Fremont: Great. Thank you so much.
Paul Fremont: Thank you.
Paul Fremont: Thanks, Paul.
Steve Fleishman: And our next question comes from the line of Steve Fleishman with Wolf Research. Steve, your line is open. Yeah, hi, good morning.
Speaker Change: And our next question comes from the line of Steve Fleishman with Wolfe Research Steve Your line is open.
Paul Fremont: Yeah.
Speaker Change: Yes, hi, good morning.
Steve Fleishman: Yeah, just just, I guess just on the sales guide for 25, you took it down a little bit, just any, I know, it's still really good, but just any explanation for that. 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. 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.
Paul Fremont: Yeah, just just.
Paul Fremont: I guess just.
Paul Fremont: On the sales guide for 'twenty, if you just took.
Paul Fremont: Took it down a little bit just any.
Paul Fremont: I know, it's still really good but just any explanation for that.
Speaker Change: Yeah. Good morning, Steve It really is just as we get line of sight on that over the course of the year. We know the industrials will come in that ramps may vary they come in large live comes in a little bit of variety over the course of the year. So still at five 5%, we still see strong sales, but just a little bit of clarity on how that's going to come in.
Drew Marsh: Okay, and then the last quarter, I think you had this second Mississippi customer that you kind of announced, but hadn't been named. Is there any More clarity on that, customer. Yeah, so yeah, we, we are still all on, you know, moving forward that customer, they have not announced themselves. And so we're, you know, working to their schedule. But there's nothing new from our end, we're moving forward on everything we need to do to serve that customer.
Speaker Change: Okay, and then the last quarter I think you had the second Mississippi customer that.
Speaker Change: You kind of announced but haven't been named is there any.
Speaker Change: More clarity on that customer.
Speaker Change: Yeah. So yeah. We are we are still all on you know moving forward with that customer they have not announced themselves and so we are working to their schedule, but there's nothing new from our end we are moving forward on everything we needed to do to serve that customer.
Drew Marsh: Okay.
Speaker Change: Okay.
Drew Marsh: Then on the regulatory on the Texas Plans that you're the next round of plans that you're looking to build. I think staff came out. against it more because they thought you should have had a RFP. Just could you talk to... Your views on being able to kind of resolve that constructively. Sure. 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.
Speaker Change: Then on the regulatory on the Texas.
Speaker Change: Plants that you are.
Speaker Change: Sure.
Speaker Change: The next round of plants. If you look at the build I think staff came out.
Speaker Change: Against it more because you.
Speaker Change: You should have had.
Speaker Change: RFP just could you talk to.
Speaker Change: Your views on being able to kind of resolve that constructively.
Speaker Change: Sure Yeah, we as I mentioned in my remarks, there is no disagreement.
Speaker Change: Disagreement with.
Speaker Change: The.
Speaker Change: Need for incremental generation in Texas, everybody recognizes that.
Speaker Change: And then I think everybody also appreciates that we really need to move quickly and there just to support the load growth in Texas as well.
Drew Marsh: That's fully in the record and well-supported, the rationale for why we needed to move quickly. We've already got the Orange County plant. We actually did a full RFP for that one, and there were no other competing bids for this project in lieu of the longer time required for a full RFP. We did bid out some of the major components for the plant, so there is RFP in there, just not for the whole thing. 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.
Speaker Change: That's fully in the record and well supported the rationale for why we needed to move quickly and we've already got the Orange County plant, we'd actually did a full RFP for that one.
Speaker Change: And there were no other competing bids for.
Speaker Change: For this project in lieu of a longer time required for a full RFP, we did that out all of it some of the major components for the plant. So there is RFP in there I'm just not for the whole thing and that's all reflected in the record and we understand what the staff was saying, but we do believe their support for us to continue to move forward.
Speaker Change: And get to the finish line of course, we got to we have to finish out the process with the commission and the commission needs to agree with that but.
Drew Marsh: Of course, we have to finish out the process with the Commission, and the Commission needs to agree with that, but we believe that there's evidence in the record that will support moving forward quickly.
Speaker Change: We believe that there is evidence in the record that will support moving forward quickly.
Drew Marsh: Okay, great. That makes sense.
Speaker Change: Okay, great that makes sense.
Unknown Executive: Thanks. All right. Thank you. Thank you, Steve.
Speaker Change: Thanks.
Speaker Change: Alright. Thanks.
Speaker Change: Steve.
Sophie Karp: And our next question comes from the line of Sophie Karp with KeyBank Capital Markets. Sophie, please go ahead. Hi, good morning. Thank you for taking my question. Right, so a couple of questions on the, I guess, the generation portfolio, how you think about that.
Speaker Change: And our next question comes from the line of Sophie Karp with Keybanc capital markets. Sophie. Please go ahead.
Speaker Change: Yeah.
Sophie Karp: Hi, good morning, and thank you for taking my questions.
Sophie Karp: Right.
Sophie Karp: Couple of questions on it.
Sophie Karp: Degeneration, let's call it how you think about that.
Sophie Karp: 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 a really long time, right? And how, what are you seeing and how fast can you basically build a gas plant right now? Yeah, so with regards to nuclear, 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, and we're talking with stakeholders, including customers and vendors on that.
Sophie Karp: Was curious to hear your thoughts on.
Sophie Karp: What would make what kind of market signals would make you.
Sophie Karp: Take a closer look at nuclear and maybe Brendan those opportunities forward.
Sophie Karp: Also you know some of your peers that discussing how building gas plants and it takes them.
Sophie Karp: A long time right.
Sophie Karp: How what are you seeing and how fast can you basically build a gas plant right now.
Sophie Karp: Yeah. So.
Sophie Karp: With regard to nuclear.
Sophie Karp: Our working on opportunities right now as I mentioned, so we have the early site permit in Mississippi that as an opportunity for us and we're talking with stakeholders, including customers and vendors on that.
Drew Marsh: I don't know that there are any other market signals that we could see. The key issue for us is our ability to manage the construction risk. And, of course, we need a customer to want to pay for that. So there is a lot of political support in Mississippi, Louisiana, Arkansas, and in Texas. Some of the states have laws in their legislative sessions right now that they are considering 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 up front in order to move forward with nuclear on a more rapid.
Sophie Karp: You know I don't know that there are any other market signals that we could see you know the key issue for us is our ability to manage the construction risk and and of course, we need a customer to want to pay for that so there's a lot of political support in mis.
Sophie Karp: Sippy, Louisiana, Arkansas and in Texas.
Sophie Karp: Some of the states have laws and their legislative sessions right now that they are considering a two.
Sophie Karp: To try and facilitate nuclear investments, we view that as all very very positive.
Sophie Karp: But we need to be able to solve that commercial question.
Sophie Karp: Upfront in order to move forward with nuclear on a more rapid.
Drew Marsh: page.
Sophie Karp: Pace.
Drew Marsh: Regarding combined cycles and the paths there, you know, we have the key for that is where are you in the queue? And so we have a few positions that would allow us to build plants in 28 and 29. You saw that the examples today and the The customers that that are coming in are coming 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 and toward bringing on combined. So I think that If you have Q positions, I think that's consistent with most.
Sophie Karp: Regarding combined cycles and the path.
Sophie Karp: There we have the key for that is where are you in the queue and so we have a few positions that would allow us to build plants in 28 and 29 you saw that the examples today and in the.
Sophie Karp: Uh huh.
Sophie Karp: Customers that are coming in are coming in in that timeframe that matches up with our ability to continue to build them. So that's that's the time frame that we're looking at right now is that time frame and towards bringing on can buy side, but I think that's it.
Sophie Karp: If you have queue positions I think that's consistent with most I think there may be a few people that have.
Drew Marsh: I think there may be a few people that have sort of uncommitted Q positions, maybe in 2027, but that's about as early as I think you can get today 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 2030, 2031. So it's a little further out. Thank you. It's a very helpful color.
Sophie Karp: Sort of uncommitted queue positions, maybe in 2020 seven but that's about as early as I think you can get a.
Sophie Karp: A day that we've seen they could come into our service area and then yeah, if you're not in the queue.
Sophie Karp: And you're trying to get into the Q today is probably more like 2030 2031, so it's a little further out.
Sophie Karp: Thank you very helpful color and then my other question is on the legislature that you mentioned in Arkansas, and Texas I believe.
Kimberly Fontan: And then my other question is on the legislature that you mentioned in Arkansas and in Texas, I believe, that improves the 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?
Sophie Karp: Prove it covers mechanisms for them.
Sophie Karp: Yeah.
Sophie Karp: And under construction in storm recovery.
Sophie Karp: How should we think about potential financial impacts of those that will be said this is a positive.
Sophie Karp: How much would that be I guess accretive.
Sophie Karp: About a year or two days.
Kimberly Fontan: 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. So that will be coming 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 mechanisms are more around ensuring risk.
Kimberly: Good morning, Sophie if Kimberly from the Arkansas legislation. They it does allow us to build.
Kimberly: Build a earlier because you get a recovery earlier three you get a P. D C. Three or you get cash see web rather than a L. E. D. C. We haven't quantified that effect will look at what.
Kimberly: Specific investments will use that mechanism for and how that will benefit customers. So that will be coming in in future quarters, but certainly sets us up to move faster and actually provides labor cost to customers because of the sea web recovery early in the construction period.
Kimberly: Texas I think that the mechanisms are are more around ensuring risks. There's a lot. There's a 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 the securitization perspective, it is timing of the ability to recover the costs, which does lower.
Kimberly Fontan: 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 section 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 costs on that time to get those dollars back.
Kimberly: Cost to customers because of the carrying cost on that time to get those dollars back.
Unknown Executive: Thank you so much. Thank you. Thanks, Sophie.
Speaker Change: Thank you so much.
Kimberly: Thank you.
Kimberly: Thanks Sophie.
Ryan Levine: And our next question comes from the line of Ryan Levine with Steve Ryan. Please go ahead. Good morning.
Speaker Change: And our next question comes from the line of Ryan Levine with Citi. Brian. Please go ahead.
Ryan Levine: Hi, good morning.
Drew Marsh: 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 conversation. Right, I'll address the first part of your question regarding the data center and how the large customers affect that. We've talked before that our large traditional customers are in a probability-weighted pipeline in our forecast.
Speaker Change: Two related questions.
Particularly to Louisiana, how does the Woodside decision impact the availability of power at a 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 loss.
Speaker Change: Low customer conversations.
Speaker Change: Right I'll address the first part of your question regarding the data center and how the large customers in fact that we've talked before that the our large traditional customers are in our probability weighted pipeline in our forecast for large data centers are we consider them binary.
Drew Marsh: The large data centers are, we consider them binary, so 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. 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, and 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 timing on construction, but we think we still have a lot of opportunity there.
Speaker Change: We look at what does it take to make sure that we can supply those and then offset we add that as needed when we add that large customer that's what she saw the last couple of quarters. So they're not.
Speaker Change: Mutually exclusive but they're also not as dependent on each other and we look at that supply for that probability weighted then you look at the supply for the specific large customers that we think that we can continue to serve data centers over time, obviously, you talked about the timing on construction, but we think we still have a lot of opportunity there.
Drew Marsh: And then just to make sure I understand your second part of your question, Ryan, you're asking about macro drivers and whether those would affect, how would those affect like Woodside in particular? 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 to your reserve market. Yeah, so I mean, 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 could come about.
Speaker Change: And then just to.
Make sure I understand your your second part of your question, Ryan, you're you're asking about macro drivers and whether those would effect how would those effects like Woodside in particular.
Speaker Change: 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.
Speaker Change: You expand to your reserve margins.
Speaker Change: Yeah. So I mean, I would I would think that's I don't think data centers are really any different than our traditional.
Speaker Change: Traditional industrial customers in that regard they are looking at long term.
Speaker Change: Investments.
Speaker Change: And so theyre looking past any near term macro effects that you might see from <unk>.
Speaker Change: Tariffs are a recession or anything like that that that could come about so.
Drew Marsh: So, you know, that's at least that's what's happening in the conversations that we're having, you know, 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. And so that's, I think that would be the driver for them, not near term macro, but long term expectations.
Speaker Change: Yeah.
Speaker Change: At least that's what's happening in the conversations that we're having there they're looking well out into the future and theyre not looking at just these investments but lots of investments.
Speaker Change: And so that's I think the that would be the driver for them not near term macro but long term expectations.
Speaker Change: Expectations.
Drew Marsh: But in terms of your core business outside of those customers, how GDP sensitive is your load? I mean, it is not recession-proof, if that's what you're asking, but we have some of the most competitive industrials in the world, given all the investment that's happened over the last 15 years in our service territory, so in any sort of macro change, they would be the last to turn off and the first to turn on. And that's looking at the commodity spreads from the U.S. to global markets right now. Those continue to be favorable, particularly for the Gulf Coast.
Speaker Change: But in terms of your core business outside of those customers how GDP sensitive is your what.
Speaker Change: I mean it isn't.
Speaker Change: It is not recession proof, if that's what you're asking but we have some of the most competitive.
Speaker Change: Industrials in the world given all the investments that's happened over the last 15 years in our service territory. So yes.
Speaker Change: And any sort of macro change that would be the last to turn off in the first to turn on and.
Speaker Change: And that's looking at the commodity spreads from the U S to global markets are right now those continue to be a favorable particularly.
Speaker Change: Particularly for the Gulf Coast So.
Drew Marsh: So, we might see some temporary downturn, but 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 really low, 1 cent for any 1 percent change in our industrial sales. That shows you how low the sensitivity is and the significance of the demand charges that we have. And so, I would think that our industrial customers will be very robust through any sort of downturn. From an investment perspective, as I said, the data centers and the large industrials, traditional large industrials, They're looking at many decades of investment, not the current macro environment.
Speaker Change: So we.
You might see some temporary downturn, but you know anybody that's operating today would probably continue to operate a very soon if they had to turn down at all as I mentioned earlier, our sensitivity from an earnings perspective is really low one cent for any 1% change in our.
Speaker Change: Our industrial sales.
Speaker Change: That shows you how low the sensitivity is in and the significance of the demand charges that we have and and so I would think that a R.
Speaker Change: Our industrial customers will be very robust through any sort of downturn in from an investment perspective, you know.
Speaker Change: As I said, the data centers and they're large.
Speaker Change: The large industrials traditional large industrials.
Speaker Change: They're looking at many.
Speaker Change: Decades of investment not a not the current macro environment.
Unknown Executive: Thank you. And just a reminder, folks, if you'd like to ask a question, again, it is star one on your touchtone phone. Once again, star one.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Thanks Ryan.
Speaker Change: Just a reminder, folks if you'd like to ask a question again it is star one on your Touchtone phone.
Speaker Change: Once again star one.
Anthony Crowdell: And our next question comes from the line of Anthony Crowdell with Mizzou. Anthony, your line is open. Hey, thank you. Good morning.
Speaker Change: And our next question comes from the line of Anthony crowd L. With Mizuho Anthony Your line is open.
Speaker Change: Hey, Thank you. Good morning, just a couple of quick questions on transfer ability I. Appreciate you gave us some numbers, but what's the impact to your assets.
Kimberly Fontan: Just a couple quick questions on transferability. I appreciate you gave us some numbers, but what's the impact to your FFO to debt metric if transferability were to sunset?
Speaker Change: That metric, if transferability, where does sunset.
Kimberly Fontan: Yeah, 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 partnerships. So that is sort of a bookend case, but we would expect to be able to manage that as well. But regardless, we still expect to be above our threshold.
Speaker Change: Yeah.
Speaker Change: It's Kimberly the numbers that I gave you as I noted we didn't give a percent on S. F O, but we would be well above our or we would be above our thresholds I should say, we also would look to maintain some of that through other mechanisms like I talked about safe harboring potentially or also.
Speaker Change: Tax equity partnership so that is sort of a bookend case, but we would expect to be able to manage that as well, but regardless, we still expect to be above our thresholds.
Kimberly Fontan: And maybe it's a more of a rating agency question, but if one of the options were tax equity, do you know if the treatment of that assumes a transferability or that's not included in the FFO calculation? Yeah, we've done a few of those already over the last few years, and they're treated in the normal course. So I wouldn't expect that to be any different.
Speaker Change: Great and maybe it's more of a rating agency question, but it's one of the options were tax equity do you know if they if they the treatment of that is some of their transferability or that's not included in the <unk> and the <unk> calculation.
Speaker Change: Yeah, we've done a few of those already over the last few years and they're treated in the normal course, and so I wouldn't expect that to be any different.
Anthony Crowdell: Great, thanks for taking my questions, congrats on a good quarter. Thanks, Anthony.
Speaker Change: Great. Thanks for taking my questions Congrats on a good quarter.
Speaker Change: Thanks.
Speaker Change: Thanks Anthony.
Andrew Weisel: And our next question comes from the line of Andrew Weisel with Scotiabank.
Speaker Change: And our next question comes from the line of Andrew Weisel with Scotiabank Andrew. Please go ahead.
Andrew Weisel: Andrew, please go ahead. 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? Yes, I think that's a fair assumption.
Andrew Weisel: Hi, Thanks, good morning, everyone.
Andrew Weisel: First just to 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.
Speaker Change: Yes, I think that's a fair assumption.
Kimberly Fontan: 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? 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.
Speaker Change: Okay, Great and then I recognize the EPS impact is modest but can you detail you originally guided to 11%, 12% industrial growth in 2025, what's your new forecast for the industrial class.
Speaker Change: I don't think it's substantially change 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.
Kimberly Fontan: 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? And is there sort of risk adjustment for some or all of these projects? And would there be upside or down?
Speaker Change: Okay very good and then one more if I may I appreciate the easy to read a 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.
Speaker Change: And is there sort of a risk adjustment for some or all of these projects and would there be upside or them.
Kimberly Fontan: Slide. to the plan pending regulatory approval. $37 billion 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 look at whatever that is in the future, depending on additional customers and that sort of thing. Okay, appreciate you clarifying.
Speaker Change: Yeah.
Speaker Change: That's the plan pending regulatory approved 37 billion 320, 28, what you're seeing on 15 that list of investments those are all I would assume those are in the financial plan.
Speaker Change: 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.
Speaker Change: Okay. I appreciate you clarifying thank you.
Unknown Executive: Thank you. Thanks, Andrew.
Speaker Change: Absolutely.
Speaker Change: Thanks, Andrew.
Travis Miller: And our last question today comes from the line of Travis Miller with Morningstar.
Speaker Change: And our last question today comes from the line of Travis Miller.
Travis Miller: Travis, your line is open. Thank you. Good morning. A high level question here with all the large load conversation and the potential needs for new generation, transmission, etc. 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? I'll take types of contracts or fixed price types of contracts. Just wondering, has there been any change there in your strategy? 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 other features, termination features, and things like that, and adapt them for the current environment, and particularly with the data centers.
Speaker Change: With Morningstar Travis your line is open.
Travis Miller: Thank you good morning, good morning.
Speaker Change: High level question here with all the large load conversation and the potential needs for new generation transmission et cetera.
Speaker Change: Have you changed any of your strategic conversations when you're thinking about contracting with these customers. So you're going from maybe shorter term types of contracts to a longer term.
Speaker Change: I'll take types of contracts or fixed price type types of contracts I'm just wondering.
Speaker Change: Okay.
Speaker Change: Any change there in your strategy.
Speaker Change: I'm not actually not really one of the advantages that we have is we've been serving large industrial customers for a while and then we were able to take advantage of those.
Speaker Change: Structures and frameworks that we had been contracting with previously that included.
Speaker Change: Credit provisions are fixed demand charges, yeah, what we call minimum bill I guess, sometimes minimum bill charges and other features termination features and things like that and adapt them for the current environment with the and particularly with the data centers, but I don't.
Drew Marsh: But I don't think our strategy changed all that much, but we have had to be disciplined with the way that we approach this, 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.
Speaker Change: I don't think our strategy changed all that much 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.
Speaker Change: In a good spot, while we get these new customers up and running.
Drew Marsh: Sure, okay, that makes sense.
Speaker Change: Sure. Okay that makes sense and then a specific one on the Louisiana new customer.
Drew Marsh: 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? researched for a decision like this? Is there any kind of precedent ruling you've seen? I'm sorry, I missed the first part. A precedent ruling on transmission investment in Louisiana? No, the new customer investment. Oh, the new customer. Yes. Okay. Um, well, I mean, I think the components themselves, nothing is new that's in there, and so it's standard generation and transmission investments that have been requested before. 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 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.
Speaker Change: Is there a precedent either in Louisiana or other states you serve or other states.
Speaker Change: Research.
For a decision like this is there any kind of precedent ruling you've seen.
Speaker Change: Oh, I'm, sorry, I missed the first part of precedent ruling on transmission investment in Louisiana.
Speaker Change: No, but the new customer investment Oh, the new customer, yes, okay, well I mean I.
Speaker Change: I think the the components themselves nothing is new that's in there and so it's the standard generation and transmission investments that have been requested before.
Speaker Change: You know there is a specific customer that we are now aiming to serve them in this docket, but outside of that and I think that actually helps because it helps illustrate how we will manage the overall impact to existing customer bills and so I think that probably.
Speaker Change: Helps the conversation.
Speaker Change: But the investments themselves are nothing new for the commission to consider.
Drew Marsh: Okay.
Drew Marsh: I was thinking more of the kind of fixed price type long-term contract approval. Yeah. Well, again, we've had those kinds of contracts before. They exist in our 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 the new customers.
Speaker Change: Okay, I was thinking more of the kind of fixed price stable long term contracts.
Speaker Change: Yeah, well again, that's we've had those kind of contract or they exist.
And our our existing tariffs that we have went in fact in Louisiana, we have an existing high factor.
Speaker Change: Load, serving tariff and that allows us to serve a lot of these large industrial customers. We were able to use that same exact tariff for for the.
Speaker Change: The new customer.
Drew Marsh: Okay, perfect. Oh, that's great. I appreciate it. Absolutely.
Speaker Change: Okay perfect that's great I appreciate it.
Speaker Change: Absolutely.
Unknown Executive: All right. Thank you, Travis.
Speaker Change: Alright, Thank you Travis.
Liz Hunter: And that does conclude our Q&A session today. Thank you so much, everyone.
Liz Hunter: And that does conclude our Q&A session. Today. Thank you. So much everyone I will now turn the call back to lose Hunter for closing comments.
Liz Hunter: I will now turn the call back to Liz Hunter for closing comments. Liz? Thank you, Greg, and thanks to everyone for participating this morning.
Speaker Change: Thank you Craig 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.
Liz Hunter: Our quarterly report on Form 10-Q is due to the SEC on May 12th and provides more details and disclosures about our financial statement. 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.
Speaker Change: 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.
Liz Hunter: 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, and this concludes our call. Thank you very much.
Speaker Change: Also as a reminder, we maintain a web page as part of entities Investor Relations website called regulatory and other information, which provides key updates of regulatory proceedings and important milestones on our strategic execution.
Speaker Change: While some of this information may be considered material information you should not rely exclusively on this page for all relevant company information and this concludes our call. Thank you very much.
Speaker Change:
Yeah.
Speaker Change: Yeah.