Entergy 2010 Annual Report Download - page 21

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ENTERGY CORPORATION AND SUBSIDIARIES 2010
invest to address current capacity shortfalls, meet long-
term load growth and plan for deactivation of aging
generation assets as appropriate.
Entergy’s utility operating companies have procured
approximately 4,000 megawatts of long-term capacity
resources since 2005. The most recent acquisition of
Acadia Energy Center Unit 2, a 580-megawatt, highly
effi cient, load-following natural gas-fi red plant in
southern Louisiana, is expected to close in early 2011.
Pursuant to the Summer 2009 Request for Proposals
for Long-Term Resources, the Utility is negotiating the
purchase of additional power capacity and evaluating
the self-build of a 550-megawatt combined-cycle, gas-
turbine generation facility at our Ninemile Point Power
Plant in Westwego, La.
The utility operating companies continue to invest
in clean, effi cient and safe nuclear power generation.
Entergy Louisiana is currently undertaking the
replacement of two steam generators and other
equipment at Waterford 3 pursuant to a Louisiana
Public Service Commission order that found the project
to be in the public interest and, therefore, prudent.
Recently, the equipment manufacturer informed
Entergy Louisiana that the replacement generators
would not be ready for installation as planned during
the scheduled 2011 refueling outage. As a result, the
refueling outage will be used for extensive inspections
to validate Waterford 3 can continue to run safely for
another full cycle. Development of a 178-megawatt
uprate at Grand Gulf is also under way. Upon completion
next year, Grand Gulf will be the single most powerful
nuclear generating unit in the nation. Finally, in 2010,
Entergy Louisiana, Entergy Gulf States Louisiana and
Entergy Mississippi submitted fi lings seeking approval to
preserve new nuclear development options.
The Utility also sees substantial opportunities in the
power transmission business – opportunities to send
the right price signals for the location of generation
investment and to encourage investments that benefi t
the whole system. The utility operating companies are
working with federal, state and local regulators in the
evaluation of the appropriate structure for transmission
operations going forward.
The Federal Energy Regulatory Commission
extended the current independent coordinator of
transmission arrangement on an interim basis by up
to two years, providing time for analysis of longer-
term structures. The utility operating companies are
currently evaluating three options using third-party
cost-benefi t analyses by Charles River Associates.
These three options include the Entergy system joining
the Southwest Power Pool Regional Transmission
Organization or the Midwest Independent System
Operator, or implementing a modifi ed ICT arrangement.
State and local regulators of Entergy’s utility operating
companies are participating in an Entergy Regional
State Committee to consider these matters. As part
of the current ICT arrangement, the utility operating
companies also agreed to give E-RSC authority, upon a
unanimous vote, to add specifi c projects to the utility
operating companies’ construction plan and to seek
changes to the cost-allocation methodologies.
In addition, Entergy Arkansas continues to evaluate
options for its exit from the System Agreement in
December 2013. Evaluation of various strategic options
is under way, including cost-benefi t analysis by Charles
River Associates for Entergy Arkansas joining the
SPP RTO and MISO on a standalone basis. Decisions
regarding critical-path issues on Entergy Arkansas’
post-System Agreement transition plan are expected
in late 2011.
Forging a Path to Strong Net Income Growth
Looking ahead, the Utility expects load growth to
return to the long-term trend of 1 to 1.5 percent annual
increases. Industrial facility expansions are expected
to drive higher growth in 2011. Combined with growth
from productive investments and constructive
regulatory outcomes, the utility business has the
potential to generate 6 to 8 percent compound average
annual net income growth in the 2010 to 2014 period
(2009 base year). As the Utility strives for industry-
leading growth, it will continue to pursue opportunities
to improve customer service, while keeping its focus on
the reliability and affordability of the power delivered
to customers.
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