Entergy 2007 Annual Report Download - page 7

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Entergy Corporation and Subsidiaries 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. In August, we received the nal regulatory approval
for Entergy Louisiana and Entergy Gulf States Louisiana from the
Louisiana Public Service Commission for recovery of roughly
$1 billion, representing the balance of storm restoration costs
and the establishment of storm reserves. Securitization – a new,
improved mechanism for cost recovery that results in lower overall
bills to our customers – was also approved by the LPSC, consistent
with actions taken in Mississippi and Texas, and nal securitization
proceeds are expected in 2008. In other utility matters, the long-studied
jurisdictional separation became a reality at the end of 2007, when
Entergy Gulf States, Inc. separated into two vertically integrated
utilities – Entergy Gulf States Louisiana, L.L.C. and Entergy Texas, Inc.
IN OUR NUCLEAR BUSINESS, we closed on our acquisition of
the 798-megawatt Palisades Nuclear Plant in Michigan. We also
completed the implementation of our eet alignment initiative
for our utility and non-utility nuclear teams – with goals to
eliminate redundancies, capture economies of scale and clearly
establish organizational governance. Our rst priority in our
nuclear operations is safety and security. Only then do we pursue
productivity improvements and cost eciencies. When operational
issues surface, we focus on resolving the issue at hand in the most
appropriate manner and that may include temporarily suspending
operations at a plant. While the forced outage levels we experienced
in 2007 are not the performance we expect from our eet, as good
nuclear operators we take the opportunity to review our programs
and procedures to ensure we adjust and perform up to our high
standards going forward.
At the same time, it should be acknowledged not all forced
outages are the same. Some were the result of events outside the
plant itself, like the extended transformer-related outage at Indian
Point 3. While there was some opportunity to mitigate the nancial
eect of this outage by starting the unit earlier using the other
transformer at the plant and running at a lower capacity factor, we
did not do that. It is simply not consistent with the Entergy Nuclear
standards for safety, redundancy, reliability and risk management.
We continued our license renewal eorts and reached several
key milestones. e Nuclear Regulatory Commission issued
its nal environmental impact statements for Vermont Yankee
Nuclear Power Station, Pilgrim Nuclear Station, and most recently in
January for the James A. FitzPatrick Nuclear Power Plant, nding
no environmental impacts that would preclude license renewal at
these sites. All three sites are on track to receive renewed licenses
during 2008. Also in 2007, the NRC accepted the license renewal
application for the Indian Point Energy Center. While there has
been signicant public rhetoric surrounding the safety or need for
Indian Point, we are condent the NRC license renewal process
provides a fair hearing of any legitimate issues and concerns raised
by the public and interested parties. We are condent Indian Point
exceeds all the parameters for license renewal. Simply put, Indian
Point is safe, secure and vital to the community interests.
AS A CORPORATION, we continued our unwavering commitment
to sustainable development. We believe action must be taken to
rst stabilize and then reduce emissions of greenhouse gases. For
this reason, we made a second voluntary commitment to stabilize
our CO2 emissions at 20 percent below year 2000 levels from 2006
to 2010 even as we continue to grow our electric production. Our
cumulative CO2 emissions for 2006 and 2007 were 79.0 tons, 7.2
percent better than our stabilization goal of 85.1 tons. Our belief in
the realities of climate change and the principles that should guide
us as a society as we develop a carbon policy are detailed later in
this report.
I am proud of what we accomplished in 2007. I’m particularly
proud to be part of a Board of Directors that over the last nine years
has been faced with some of the hardest decisions Boards ever
encounter. Without exception, they have never wavered from their
obligations and commitments. e decision to pursue a spin-o of
the non-utility nuclear business is evidence of this. It is one thing
for companies to spin off businesses that are “losing” the war.
It is another to spin o a winning, but relatively small segment,
particularly under shareholder pressure. It is quite another, under
no external pressures, to spin o the most protable, highest
growth business with potentially a bigger market capitalization
than the remaining business. is was a hard decision, not because
Our premier nuclear fleet presents a
major opportunity for value realization
with its safe, secure and emission-free
power generation.
NUCLEAR