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Letter from Leo Denault Chairman of the Board and Chief Executive Officer

Today, we are a simpler and stronger company for the benefit of all our stakeholders. Our operating and financial positions are strong, and our track record is consistent. We are delivering sustainable value for our stakeholders, and as we continue to build the premier utility, we have an unprecedented opportunity to do even better.

What does it take to be the best — to be the premier utility?

It takes a powerful purpose with a bright vision, a clear strategy, and an engaged and resilient workforce. It requires a genuine dedication to sustainability and a strong desire always to be better in a rapidly changing world.

Years ago, Entergy set out on a path to grow a world-class energy business that creates sustainable value for our four key stakeholders — customers, employees, communities, and owners. Our mission supports our vision — We Power Life — which is the driving force that advances both our short- and long-term strategic plans and aspirations.

We have a clear strategy — to strengthen and grow the utility while managing the risks to our business — and we have successfully executed on that strategy. Through years of hard work, discipline, and innovation, combined with difficult and necessary decisions, we have made significant progress.

With a robust customer-centric investment plan, we have grown our business while maintaining electricity rates that are among the lowest in the country, benefiting our customers and contributing to strong economic development and industrial growth across our region. The growth of our business is supported by a visible, executable utility investment plan, and we see no shortage of investment opportunities to benefit our customers and support our growth.

We’ve managed business risks through (1) the planned and orderly exit from our merchant business, (2) the creation of a world-class capital project management organization that delivers our projects on time and on budget, and (3) building constructive relationships with our regulators that have enabled the development of progressive regulatory mechanisms. Ninety percent of our capital plan over the next three years requires no further regulatory approval to execute and 90 percent is expected to be recovered through timely, progressive regulatory mechanisms.

Our strong financial results and returns to our owners have validated the choices we have made. We realized top-decile total shareholder return of 44 percent in 2019 as compared to our peer companies in the Philadelphia Utility Index. Over the three-year period 2017 through 2019, we delivered top-quartile total shareholder returns of 85 percent.

Our leadership in sustainability and environmental stewardship has been a hallmark of who we are for nearly two decades. In 2002, our board of directors adopted a visionary statement committing us to “develop and conduct our business in a responsible manner that is environmentally, socially, and economically sustainable.” While Entergy already operates one of the cleanest large-scale power generation fleets in the country, in 2019 we further intensified our efforts to address climate risks by setting a new commitment to reduce our carbon emission rate to 50 percent below year-2000 levels by 2030. Our leadership was nationally recognized in 2019 by the Dow Jones Sustainability Index for the 18th consecutive year, by The Civic 50 for being among the top 50 community-minded companies in the U.S. for the fourth consecutive year, and by the U.S. Chamber of Commerce Foundation Corporate Citizenship Center’s Corporate Citizenship Hall of Fame.

Today, we are a simpler and stronger company for the benefit of all our stakeholders. Our operating and financial positions are strong, and our track record is consistent. We are delivering sustainable value for our stakeholders, and as we continue to build the premier utility, we have an unprecedented opportunity to do even better.

The emergence of new technologies and data analytics is bringing promising change and new growth opportunities beyond traditional generating equipment, substations, poles and wires, vehicles, and tools. Our customers expect far more from us than keeping their lights on. In fact, reliable power at the flip of a switch is just the beginning of our relationship with customers.

In the past, utilities were expected to keep the grid running. Today, we want to go beyond that by helping customers achieve their aspirations. Instead of simply providing an input — electricity or gas service — to a customer’s home or business, we’re working to understand the outcomes they need and desire in their personal lives, in their manufacturing plants, and in their retail businesses: a warm house on a cold day, efficient industrial processes, environmentally sustainable energy, and more. Engaging with customers on a new level requires a new mindset. By building on our interactions and understanding the outcomes customers want from their power consumption, we can develop new customer solutions that match those outcomes — and make their lives better.

To help us realize this customer-centric growth opportunity, we launched KeyString Labs, an innovation center that focuses on three key functions: engaging with our stakeholders, including our most impoverished customers, to understand their expectations; evaluating new technologies and devices that enable distributed energy resources like residential and utility-scale solar, battery storage, backup generators, microgrids, and electric vehicle infrastructure; and developing scalable and innovative customer solutions that we can pilot and ultimately deploy across our service area. These include:

  • Customer-sited generation available to the customer during power outages, and available to the utility in other times of need,
  • Beneficial electrification / shore power services that extend the grid to marine vessels in port,
  • Shared solar power solutions that make clean energy participation easy for customers,
  • Targeted microgrids through application of modular alternative technologies, and
  • Centralized solutions for demand-side management.

Furthermore, we’re on a continuous journey to optimize our business. With no shortage of customer-centric investment opportunities, we’re actively identifying ways to create headroom to make more investments while managing the impact on customers’ bills. We are working smarter and more efficiently by improving processes, products, and services and using advanced technologies such as automation to improve our business. These efforts will benefit customers through additional investments that will result in higher levels of service and reliability without significantly affecting their bills. That’s our objective, to allow our customers to achieve their most ambitious dreams at the lowest possible cost.

Finally, as we continue to build the premier utility, we’re focused on strengthening our employee culture in the areas of diversity, inclusion, and belonging. We are committed to developing and retaining a workforce that reflects the rich diversity of the communities we have the privilege to serve. The diversity of employee ideas, backgrounds, perspectives, abilities, skills, and knowledge enables us to more effectively create innovative business and customer solutions. To ensure that we fully realize the potential of our diverse workforce, we are also focused on creating and nurturing a culture of belonging, with the goal of assuring that all employees feel valued, heard, and respected. A powerful and dynamic culture retains top talent, provides an environment for more engaged employees, and empowers our workforce to enthusiastically deliver on customer-centric opportunities and continuous improvement efforts expected of the premier utility, creating additional sustainable value for all our stakeholders.

At Entergy, every day is a new opportunity to do even better than we did the day before. It’s a way of doing business that has driven us to continuously raise the bar on performance and unleash our imaginations to dream bigger. It’s an outlook that has positioned Entergy as a forward-thinking company that has decisively embraced a broader role in our efforts to maximize value for our stakeholders while contributing to the greater good. We Power Life when we bring our whole selves to work each day and ensure safe, reliable energy is delivered to our customers. We Power Life when we partner with communities to make them stronger and more resilient. We Power Life for current and future generations when we lead in sustainability and environmental stewardship.

Entergy is well positioned for continued value creation that benefits our stakeholders without leaving any of them behind. With a successful transition from a hybrid to a pure-play utility largely behind us, we are taking the business to the next level by identifying customer-focused investment opportunities, investing in people and culture, and maximizing prospective growth through continuous improvement and innovation.

We are well on our way to being the best — the premier utility. Thank you for your continued commitment and engagement with us on this journey.

Leo P. Denault
Chairman of the Board and
Chief Executive Officer

March 27, 2020