To all our stakeholders:
While preparing to write this letter, I was acutely aware that 2020 would be one of the most analyzed and scrutinized years in modern history, the subject of countless books, essays, films, debates, dissertations, and conversations for decades to come.
The task of describing a year like no other seemed a bit overwhelming at first. From a personal and professional standpoint, I had never seen anything like it in my more than six decades on the planet, and in many ways, I’m still processing the experience.
Telling Entergy’s 2020 story is a responsibility I am humbled by, and thankful for, because I am speaking on behalf of a team of employees who managed to make extraordinary things happen.
In my efforts to sum up the year, I find myself looking at it through two lenses: the first is how the year tried to divide us, and the second is how we chose to respond.
As for division, beyond any measure it was a year defined by forces and events that threatened to pull us apart:
- A frightening pandemic separated us from our families, friends, and co-workers;
- Social and political unrest polarized our nation; and
- Catastrophic storms disrupted lives and devastated communities.
These challenges took a profound toll on our lives and introduced new fears and uncertainties about the future. At times, it seemed like the best way to protect our physical, emotional, and spiritual wellbeing was to stay apart, hunker down, and hope for the best.
Thankfully, this mindset did not take hold at Entergy. For a company whose purpose is serving others, it became apparent early on that the only response to division was unity. Our ability to stay connected and united around a common purpose, grounded in our core values, helped us stay true to ourselves and our legacy of service. United by our vision to power the lives of those we serve, we focused relentlessly on our mission — creating sustainable value for customers, communities, employees, and owners.
To those who say there was no way to prepare for 2020, all I can tell you is that the 13,400 women and men of Entergy were prepared. Whatever 2020 threw at us, we didn’t back down. Whenever we encountered obstacles, we stuck together and worked through each day as one team. By choosing unity over division and estrangement, we delivered on our strategic, operational, and financial commitments, despite the challenges.
That’s what our stakeholders expect from us. And that’s what it takes to be the premier utility.
Planning for the COVID-19 Pandemic
Preparing for the unexpected has long been a hallmark of Entergy’s success. Well before the novel coronavirus was an actuality, we had a detailed pandemic response plan in place.
In January of 2020, we activated our plan and mobilized teams with four primary objectives: (1) ensuring the safety and wellness of our employees; (2) maintaining safe, reliable service for our customers; (3) supporting our communities through volunteerism and financial resources; and (4) mitigating financial impacts to the company.
“To those who say there was no way to prepare for 2020, all I can tell you is that the 13,400 women and men of Entergy were prepared.”
— Leo P. Denault, Chairman of the Board and Chief Executive Officer
Entergy’s extensive preparations allowed us to quickly adapt to new working arrangements, with much of our workforce telecommuting. For field employees and others for whom telecommuting was not an option, we made sure they were equipped with tools and resources to ensure their safety on and off the job while keeping the lights on and the gas flowing for our customers.
During uncertain times, our unity and continuity mattered more than ever.
The energy we supplied in 2020 was an essential, stabilizing necessity that made it possible for hospitals, nursing homes, healthcare clinics, and a broad range of medical providers to carry out their lifesaving mission in communities throughout our service area.
Our energy kept the supply chain in motion, making it possible for grocery stores, pharmacies, relief agencies, emergency responders, and other critical entities to provide vital supplies and services to keep our communities moving forward.
With many families homebound during the pandemic, our energy powered remote offices and classrooms while helping our customers stay connected to one another and the outside world.
When the pandemic created economic hardships in our communities, our philanthropic support and employee volunteerism provided relief for families in crisis. Through grants to more than 80 nonprofits, we provided food, rent and mortgage assistance, utility assistance, emergency grants, and workforce training for those who were laid off as a result of the pandemic.
Prepared for a Record-Breaking Storm Season
In 2020, our employees also demonstrated once again why Entergy is best-in-class in storm response. During a storm season unlike any other in our history, their commitment to health, safety, and preparedness was one of our proudest achievements.
When five named storms devastated portions of our service area — including Hurricane Laura, the strongest storm to hit Louisiana in over 160 years — our storm-response teams worked around the clock to safely restore service, rebuild infrastructure, and help our communities recover, all while following virus-prevention protocols.
To ensure our communities had access to critical resources after hurricanes Laura, Delta, and Zeta, we deployed 82 generators — equal to more than 43 MW of power — across the region, including underserved areas.
In 2020, our employees also demonstrated once again why Entergy is best-in-class in storm response.
When Hurricane Zeta struck the Gulf Coast in late October, we faced an additional challenge of ensuring that polling places had power by Election Day. Partnering with state and local governments, we deployed more than 200 power pods across six Louisiana parishes to ensure every polling place was operational.
Widespread storm damage deepened the crisis for many communities already struggling from impacts of the pandemic. In addition to restoring power and rebuilding infrastructure, Entergy led economic recovery efforts through charitable donations and volunteer support that helped our communities build back.
Leading on Environmental Stewardship
Entergy’s environmental leadership is well-established, and 2020 was another milestone year in our efforts to combat climate change. After more than two decades of setting and achieving voluntary emission-reduction targets, we intensified our commitment to achieve net-zero carbon emissions by 2050.
Our longstanding commitment to sustainability has led to measurable, undeniable results:
- For the past two decades, our emission rate has been well below the sector average,
- Our utility CO2 emission rate has decreased approximately 37% since 2000, and
- Today we operate one of the cleanest large-scale power generating fleets in the nation.
We know that creating a carbon-free future calls for more investments in renewables. Entergy is already the largest utility provider of renewable energy in Arkansas and Louisiana, and we’re building the largest utility-owned solar facility in Mississippi. We’re working with our regulators and stakeholders to responsibly expand access to renewable energy across our service area under a framework that balances reliability, affordability, and environmental stewardship.
We’re also exploring emerging technologies and innovative partnerships to accelerate our net-zero carbon emissions actions, most recently through a partnership with Mitsubishi Power. We are focused on advancing technologies and expertise to co-fire our generation with hydrogen.
We are working today to make this a reality. With the selection of the Orange County Power Station, a self-build project in Southeast Texas, we will develop a state-of-the-art generation facility with the option to be powered partially or fully with hydrogen. Additionally, we’re exploring the potential use of carbon capture and sequestration once that technology is economically available.
Being a premier utility means doing our part to create a more sustainable future for our customers, communities, and the world — a goal we are continuously striving for in all aspects of our operations.
After more than two decades of setting and achieving voluntary emission-reduction targets, we intensified our commitment to achieve net-zero carbon emissions by 2050.
Championing Diversity, Inclusion, and Belonging
For Entergy, keeping the power on and gas flowing is just part of what we do. Our focus on diversity, inclusion, and belonging is also a critical business imperative, and our ability to deliver sustainable value to our stakeholders now and in the future depends on it.
We strategically elevated diversity, inclusion, and belonging as one of our corporate priorities in 2018. As part of our efforts, we’ve delivered training courses to better equip leaders at all levels to effectively engage in meaningful conversations about race and other sensitive issues and increase awareness of unconscious biases that may play out in the workplace.
In June of 2020, my executive team held an employee town hall on race and equality with a goal to foster transparent, productive, and even raw conversations among employees and leaders at all levels. Since that time, teams have been hard at work laying a firm foundation on which to continue building and strengthening our culture of diversity, inclusion, and belonging.
We also published a 2020 Inclusive Climate Report based on our organizational health survey results, which we made available to the entire workforce. In addition to a 90% survey participation rate, employees provided 25,000 comments on topics ranging from our COVID-19 response to our diversity, inclusion, and belonging efforts — valuable insights we are using to improve our performance and responsiveness.
Delivering Financial Results
Our stock performance in 2020 did not reflect the extraordinary accomplishments of our organization. And of course, we’re disappointed. But our strong financial results demonstrated otherwise: Entergy’s adjusted earnings per share of $5.66 was in the top half of our guidance range. We achieved this by exceeding our $100 million cost-savings target for the year, which we established to offset lower revenues resulting from COVID-19.
Challenges and headwinds are a natural part of doing business. No company is immune, no utility is immune, and Entergy is no exception. However, the test of sustainability is less about challenges and headwinds and more about how we are equipped and prepared to successfully address them. The reality is that our achievements and strong financial results in 2020 proved our ability, in the face of adversity, to deliver on our commitments.
Today, we’re positioned to accomplish even greater things in the future. I say that with confidence because of what I saw our employees do last year. All across our company, they rose to the challenge to power life while safeguarding others’ health and safety.
Despite obstacles imposed by the pandemic, our employees found ways to connect, innovate, drive growth, and build toward the future. When storms caused unprecedented destruction in our service area, our workforce answered the call, again and again, with an unwavering commitment to safety, service, and professionalism.
While it’s important to acknowledge our progress, we know there’s more work to be done in our mission to become the premier utility. We are taking a critical look at our performance in 2020 and building on our knowledge and experience to find better ways to serve our stakeholders.
During a year marked by personal loss, crisis, and chaos, we proved that outside forces are no match for the ties that bind us. Through our decisions and actions, we proved that the values we hold in common are much more meaningful and powerful than our differences.
By moving forward with unity, we will create a stronger foundation for continued success in 2021 and beyond. And as we focus on the journey ahead, there’s nowhere else I’d rather be than working alongside the employees of Entergy.
Leo P. Denault
Chairman of the Board and
Chief Executive Officer
March 26, 2021