Entergy 2005 Annual Report Download - page 29

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25
ENTERGY CORPORATION AND SUBSIDIARIES 2005
short term. Now we are focused on recovering costs
and returning our utility business to the path it was
on before the storms by 2007. However, in the long
term, the success we experienced in 2005 relative to
our regulatory position will serve Entergy and its
stakeholders well for years to come.
A NUCLEAR POWERHOUSE
While not unaffected by the storms, our nuclear
business remained focused, efficient, and turned in
outstanding results for 2005. Market conditions,
the hard work of our nuclear team, and new federal
policies all combined to produce a year of
significant milestones and excellent performance.
Rising market prices for natural gas created
opportunity for our Northeast fleet. As the
fundamentals driving gas pricing became clear, we
adjusted our hedging strategy to take measured
market risks – selling forward less of our capacity
to take advantage of market pricing. We entered
2006 with a nine percent open position and, in the
future, that could potentially go higher if market
conditions warrant. While contract pricing in 2005
averaged $42 per megawatt-hour, a three percent
increase over 2004, we were able to enter into new
contracts with attractive pricing with both existing
and new customers, resulting in average prices per
MWh of $41, $45, and $49, for the years 2006,
2007, and 2008 respectively. As market conditions
change, we will continue to adjust our contract
terms and hedging strategy.
Our experienced nuclear team continues to
improve the productivity of both our regulated and
Northeast fleets. In 2005, our nuclear production
costs for our regulated fleet were $16.3 per MWh.
Production costs for our Northeast fleet were
$19.4 per MWh in 2005, a four percent decrease
versus 2004. Our regulated fleet costs are below