Entergy 2007 Annual Report Download - page 15

ur utilities unlock value by constantly nding better ways to
provide clean, reliable and aordable power to our customers.
In 2007, value came from a number of sources.
Excellent Performance in Service to Our Customers
Reliable power is a top priority for our customers and that makes it
a top priority for Entergy’s utilities. In 2007, outage frequency as
measured by total customer interruptions per customers served
improved to 1.79 from 1.83 in 2006. Outage duration as measured by total
minutes of customer interruptions per customers served improved to
184 in 2007 from 189 in 2006. We also continued to hold the line on
base rate increases for our customers, making our power reliable and
aordable. On an ination-adjusted basis, we delivered a real base
rate decrease to our residential customers over the past nine years.
For 2007, we won the Edison Electric Institute Emergency
Assistance Award for the assistance we provided in restoring power
following an ice storm in Oklahoma. We have won either EEI’s
Emergency Storm Response Award or Emergency Assistance Award
for 10 consecutive years and we are the only company to be honored
each year since the awards were created. Finally, our utility employees
once again demonstrated their commitment to safety. In 2007, several
utility sites earned Star status under the Occupational Safety and
Health Administration’s Voluntary Protection Program. Star status is
the highest possible safety rating for an industrial work site.
Closure of Storm Recovery Issues
Two years aer the biggest natural disaster to ever befall our company
and our communities, we achieved resolution on all regulatory
recovery issues related to the 2005 storm season. Perhaps the most
signicant milestone was the emergence of Entergy New Orleans
from bankruptcy in May 2007, following approval of a $200 million
Community Development Block Grant from the Louisiana Recovery
Authority and aer reaching a regulatory recovery agreement with
the New Orleans City Council. Under its approved reorganization
plan, all creditors were fully compensated and there were no changes
to Entergy New Orleans’ workforce of approximately 400 employees.
Work still continues, however, on the rebuild of Entergy New Orleans’
gas distribution system, a massive project that Entergy New Orleans
is striving to complete over an extended period with minimum
disruption to our customers and community.
In third quarter 2007, the Louisiana Public Service Commission
approved storm recovery for Entergy Louisiana and Entergy Gulf
States Louisiana, wrapping up regulatory recovery approvals for the
2005 storms. Entergy Louisiana will recover $545 million for the
balance of unrecovered storm restoration costs and Entergy Gulf
States Louisiana will recover $187 million. e approved plan also
includes recovery of storm reserves totaling $239 million to oset
the impact of future restoration eorts from storm events. Finally,
securitization of storm-related costs was approved, consistent with
similar actions taken in Mississippi and Texas. Securitization is a
new, improved vehicle for regulatory recovery that will result in lower
overall costs to customers.
Constructive Regulatory Process
In 2007, we realized constructive regulatory outcomes and participated
in constructive processes. We continue to believe Formula Rate Plans are
a good tool for setting appropriate rates in a timely manner. Formula
Rate Plans are currently in place for Entergy Mississippi, Entergy
Louisiana and Entergy Gulf States Louisiana.
In third quarter 2007, Entergy Texas initiated a base rate case. Base
rates have not been increased in over 16 years, and Entergy Texas is
seeking rates that align with its cost of doing business. Since rates were
frozen in 1999, Entergy Texas has never earned its authorized return on
equity on its approximate $1.8 billion rate base. If approved, new rates
could go into eect in September 2008.
In October 2007, the Public Utility Commission of Texas acted
on Entergy Texas’ submitted plan to connect its Texas utility with
the Electric Reliability Council of Texas, the primary Texas power
grid. Commissioners determined that more information was
needed to select the appropriate qualied power region for Entergy
Texas and abated the proceeding pending further study. Southwest
Power Pool, a regional grid entity serving parts of Louisiana, Texas,
Arkansas, Mississippi, Oklahoma, Kansas, Missouri and New Mexico,
is conducting a study to determine the costs/benets of including
Entergy Texas in its region. Likewise, Entergy Texas will study further
the costs/benets of remaining in the Southeastern Electric Reliability
Council. Entergy Texas continues to believe that ERCOT is the best
and only viable path forward consistent with the legislative objective to
oer competition to consumers.
In other Entergy Gulf States’ matters, the long-studied jurisdictional
separation became a reality at the end of 2007, when the company
separated into two vertically integrated utilities – Entergy Gulf States
Louisiana, L.L.C. and Entergy Texas, Inc. For the rst time, the newly
established companies can develop and implement separate business
Transforming Our Portfolio to Benefit Customers
ur utilities unlock value by constantly nding better ways to
provide clean, reliable and aordable power to our customers.
In 2007, value came from a number of sources.
Excellent Perform ance i n Service to Our Customers
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Entergy Corporation and Subsidiaries 2007
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Entergy Utilities