Entergy 2003 Annual Report Download - page 16

Our point of view is instrumental to our performance, so we
must make sure it’s in tune with the fundamentals of the
environment in which we operate. Here’s how we see some
key issues now:
ELECTRICITY PRICES:Merchant generation overcapacity
will continue, and improved performance of coal and nuclear
units will meet a portion of demand growth. In this market,
we can purchase low-cost power for our utility customers.
GAS PRICES:Gas prices and volatility will remain above
historical norms for several years. The utility will have to
focus on recovery of high fuel costs, but these market
conditions create opportunities for trading.
INDUSTRY STRUCTURE:With the right transmission pricing
signals – especially locational marginal pricing – we won’t need
additional incentives for investment in the transmission grid
to serve the market and prevent future blackouts.
GENERATION ASSETS:Merchant plants are overpriced,
as owners remain unwilling to take write-offs. But as
the generation glut continues, “second owner”
opportunities will become
available to companies
that are ready.
ENTERGY CORPORATION AND SUBSIDIARIES 2003
In early 2003, the Arkansas Electric
Consumer Choice Act was repealed, ending
plans to move to a competitive retail market
for electricity in the state. The repeal provides
us much greater certainty in planning for
the needs of our Arkansas customers, after
nearly five years in an environment of
uncertain progress toward deregulation.
TEXAS – In recent months, Entergy Gulf
States has won key approvals from state and
federal regulators to move toward retail
competition in our Texas territory which has
been in limbo since 2001. By approving the
rules for open access in our territory,
regulators have set the stage for a pilot
program later this year. This brings us
closer to resolution of the issue and the
opportunity to improve upon sub-standard
financial results in our Texas service area,
where base rates have been frozen since 1999.
If the Public Utility Commission of Texas
ultimately approves retail open access,
competition could begin in the first half
of 2005. If the PUCT decides against
competition, Entergy will file in Texas
for an increase in our regulated rates.
In 1949, Middle South Utilities was formed as a
holding company for Arkansas Power and Light,
Louisiana Power and Light, Mississippi Power and
Light, and New Orleans Public Service. In these
last days of the golden age of radio, the
Louisiana Hayride began
broadcasting country music in
1948. The Hayride became a
“Cradle of the Stars,” helping
launch Hank Williams, Slim
Whitman, Elvis Presley,
Johnny Cash, George
Jones, and others.