Align With Our Stakeholders’ Expectations
We engage with our stakeholders to better understand their needs. Aligning our objectives with the expectations of our owners, customers, employees and communities helps us make better business decisions. We engage regularly with our stakeholders to communicate our strategies and plans, gather feedback and gain support to help us achieve our goals. We communicate face-to-face at stakeholder events and through numerous other channels including e-newsletters, social media and bill inserts.
Through our outreach efforts, we also are able to make our perspectives known to and understood by policymakers. We work with the NRC to ensure continued safe and secure operation of our nuclear fleet. On the state and local levels, we work constructively with our regulators to secure regulatory frameworks that support our ability to make productive investments to benefit our customers. Roughly 90 percent of the investments in our utility capital investment plan are under some form of progressive regulatory framework. Earning a reasonable return on our investments allows us to maintain low rates through operational and service excellence, which in turn helps us attract and retain customers. We made significant progress across our utility operating companies. For example:
- Legislation facilitating future investment was passed in Arkansas, Mississippi and Texas.
- The Mississippi Public Service Commission approved a rate modernization plan with forward-looking features.
- The Arkansas Public Service Commission approved a net $128 million base rate increase and 9.75 percent return on equity and established a framework for the forward test year formula rate plan.
- The Public Utility Commission of Texas allows rider mechanisms to facilitate investments in transmission and distribution infrastructure. Use of the distribution cost recovery rider was approved and the filing for the transmission cost recovery rider is in progress.
We also received approvals to end the Entergy System Agreement. The agreement will end in third quarter 2016, simplifying our regulatory structure and reducing risk and uncertainty for us and our customers. It will allow us to put greater focus on the distinct opportunities of each of our retail regulatory jurisdictions as well as our core operations without the distractions from the near constant inter-regional litigation associated with this agreement.
In 2015, the utility return on equity, normalizing for weather and tax items and excluding the impact of regulatory charges, was 8.9 percent. This is below our average allowed return levels of around 10 percent. With the expectations for load growth and cost management combined with the regulatory outcomes to facilitate investment for our customers, we expect to significantly close the gap to our average allowed return levels in the coming years.
On Oct. 1, 2015, Entergy Gulf States Louisiana and Entergy Louisiana combined into a single utility, which is expected to provide up to $140 million in customer benefits over the first decade from improved financial and operating structures, enhanced economic development efforts and reduced regulatory costs. Entergy Louisiana also transferred its Algiers, Louisiana, assets and some 22,500 electric customers in Orleans Parish to Entergy New Orleans. Electric service to all Orleans Parish customers is now consolidated in one company, simplifying regulatory processes and making Entergy New Orleans a larger company with greater financial flexibility and opportunities to generate long-term customer savings through economies of scale.
“Entergy Arkansas is considered a valuable partner to the state’s economic development efforts. Their competitive rates and willingness to step forward are vital to job creation in Arkansas.”
– Grant Tennille, former Executive Director of the Arkansas Economic Development Commission
“We appreciate Entergy Louisiana’s advice throughout our early design and now the close working relationship as we enter into our final construction with the actual physical power connection.”
– Vianney Vales, Chief Executive Officer of Juniper GTL
Our targets for environmental charitable investments include acres of land restored or placed under conservation, improved biodiversity and improved community resiliency and flood protection. Between 2010 and 2015 Entergy’s partnership with The Nature Conservancy resulted in:
- Reforestation of 500 acres of bottomland hardwood in the Big Woods/Cache River in Arkansas.
- 70,000 seedlings planted and 60 acres of long leaf pine forest restored in the Sandyland Sanctuary in Texas.
- Creation of a public-private partnership to provide incentives to private landowners in Mississippi to enroll their property in state conservation programs. Entergy provided seed funding that was leveraged 4:1 by federal and other funds.
- 85,000 trees planted and 135-acre restoration of Mollicy Bayou in Louisiana.