Entergy 2006 Annual Report Download - page 9

customers’ demand for power, diversify
and modernize our generation fleet and
create opportunities to lower our customers’
rates. Our portfolio transformation
framework assures consistency with our
market-based point of view in order to
produce the long-term least cost to
customers after considering and pricing
all risks. We are actively pursuing a number
of attractive opportunities to meet our
customers’ demand requirements
conditioned on the receipt of regulatory
approval for rate recovery.
We also continued to pursue constructive
resolution of other outstanding regulatory
issues in 2006. Proving the value of
creativity and persistence, our Independent
Coordinator of Transmission was approved,
installed and began performing all of its
functions, including tariff administration,
available flowgate capacity calculation,
transmission planning and operation of the
Entergy OASIS. Crossing these milestones
were significant events for Entergy, as we
have worked for nearly a decade to align
our transmission operations with changing
federal policy, while meeting local
regulators’ and policymakers’ needs. In a
testament to the hard work of all parties
involved, on November 17, 2006, the
transition was completed seamlessly.
We still have work ahead to resolve
outstanding issues associated with the
System Agreement litigation and Entergy
Arkansas’ decision to provide its eight-year
notice to exit from this agreement. We also
expect Entergy Gulf States to separate into
Louisiana and Texas operating companies
by the end of 2007, allowing the separate
companies to develop plans that are
consistent with local public policy,
including potentially the pursuit of
retail customer choice in Texas.
Nuclear: Strong Earnings
and Opportunity
We continue to focus on safety and
security first in all our nuclear operations.
While our operational excellence is second
to none and our aspiration is to continue
our growth in this business, we have
remained disciplined investors.
In 2006, we seized an opportunity that
aligned with how we create value for
sellers of plants and for our owners. We
announced our intent to purchase the
798-megawatt Palisades Nuclear Plant
near South Haven, Michigan, for a net
amount of $350 million, or $303 per KW.
The Palisades plant is of a design and
vintage that is problematic for most
operators. Entergy’s experience with this
technology and its technical challenges
was a clear advantage in constructing the
successful bid. We are confident in our
operating plan to maintain the reliability
and safety of the plant as it meets technical
challenges in the years ahead. When this
transaction closes – expected in the second
quarter of 2007 – we will own and operate
11 nuclear plants in the South, Northeast
and Midwest. We also continue to operate
the Cooper Nuclear Station under a service
contract with the Nebraska Public Power
District. With our positive point of view
relative to clean, affordable nuclear
power generation, we continue to seek
opportunities to further expand our
nuclear business portfolio through
acquisitions, management service contracts
and other types of agreements. We have
also continued to preserve our option to
pursue new nuclear development through
the construction and operating license
initiatives at Grand Gulf Nuclear Station
and River Bend Station.
The Time to Aspire for More
By any measure, 2006 was a defining year
for Entergy. Thanks to a lot of hard work
by our employees, the support of our
customers, communities and owners and
the collaborative efforts of too many to
mention at the federal, state and local
jurisdiction levels, we recovered from two
unprecedented storms that devastated our
service territories and much of our
infrastructure. Then we moved beyond
survival and recovery. We took steps to
manage our regulatory and operating risks,
reduce our impact on the environment
and ensure our customers have access to
reliable, affordable power for years to
come. Our shareholder return was top-
quartile at 38 percent for the year. While
we are pleased to report progress, we are
far from done. We recognize that after
overcoming such adversity there is a great
temptation to become satisfied and
complacent. Instead, now is the time to
aspire for more.
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“Most importantly, in 2006, our employees achieved the
safest year in the history of the company.”
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