Entergy 2010 Annual Report Download - page 7

ENTERGY CORPORATION AND SUBSIDIARIES 2010
major regulatory achievements in 2010 came in Arkansas
and Texas. Entergy Arkansas achieved a $63.7 million rate
increase and a 10.2 percent allowed ROE – its fi rst base
rate increase in 25 years. And Entergy Texas received a
$68 million rate increase and a 10.125 percent allowed ROE.
Productive
investments are another key factor in the
Utility business’ long-term growth outlook. Investments
in generation, transmission and distribution operations
are made to ensure
safe delivery
of
ry
reliable, clean
and
affordable
power to customers. Through the portfolio
transformation strategy, the Utility continues to
pursue opportunities to procure the right generation
technologies in the right place for our customers in the
most effi cient manner possible.
In early 2011, Entergy Louisiana expects to close
on the Acadia Energy Center Unit 2 acquisition, a
highly effi cient, load-following natural gas-fi red plant
in southern Louisiana. 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. Also planned
is the 178-megawatt uprate at Grand Gulf Nuclear Station
scheduled for completion in 2012. These and other
planned investments at the utility operating companies
deliver tangible benefi ts to customers while generating
solid returns for shareholders.
During 2010, work continued with the Federal Energy
Regulatory Commission and state and local regulators
through the Entergy Regional State Committee to address
matters related to the utility operating companies’
transmission operations. The current independent
coordinator of transmission arrangement was extended
on an interim basis for up to two years, through
November 2012, providing time for analysis of longer-term
structures, including post-System Agreement structures.
Looking ahead, the Utility business is well positioned
to capitalize on opportunities as they arise in the coming
years. With its disciplined capital approach, effective
regulatory constructs and investment outlook, the Utility
expects to generate compound average net income
growth of 6 to 8 percent from 2010 to 2014 (2009 base
year) – an increase from the previous 5 to 6 percent
growth outlook for the same period.
Entergy Wholesale Commodities:
A Unique Generation Business
In June 2010, following the rejection of the planned
spin-off of our non-utility nuclear fl eet (Enexus) by the
New York Public Service Commission, we redesigned the
organization structure to strengthen the effectiveness
of our non-utility generation business. Named Entergy
Wholesale Commodities or EWC, the organization
substantially replicates the way Enexus would have
looked as a stand-alone company. It brings an increased
commercial focus, greater integration and accountability
for business unit risk and fi nance functions, and a
heightened and unifi ed focus on state government and
regulatory affairs.
As EWC moves forward, its top priority is to preserve
its existing nuclear assets by obtaining license renewals.
EWC worked with the Atomic Safety and Licensing Board
and the Nuclear Regulatory Commission staff to advance
processes in 2010 for Indian Point Units 2 and 3, Pilgrim
and Vermont Yankee. In March 2011, the NRC said that
they expect Vermont Yankee’s renewed operating license
for an additional 20 years will be issued soon.
Also at Vermont Yankee, we continue to strive to
restore a tarnished image locally in the state of Vermont.
EWC is faced with disproving a negative perception put
in the minds of the public that the age of the plant is
the
determinant of its operating condition. Having completed
another breaker-to-breaker run in 2010, as well as earning
an evaluation in the “excellence” category compared to
peers, Vermont Yankee’s operating record clearly supports
the plant’s reputation as one of the best in the country. But
that is not the perception in the state where we are located,
our employees live and where we do a lot of business (i.e.,
wholesale power sales). We do not want an adversarial
relationship in Vermont or any place we do business. But
we are a business and have every right to be there.
At Indian Point, EWC is pursuing resolution of
proceedings before the New York State Department of
Environmental Conservation where the central issue
is the staff decision to order the installation of cooling
towers. EWC believes wedgewire screens are now the Best
Technology Available and are proven to be effective on
large-scale plants such as Indian Point. Moreover it is clear
to us the staff’s decision is fatally fl awed because cooling
towers emit fi ne particulates. Thus these towers cannot
receive the necessary air permits to be constructed in a
non-attainment area. A trial addressing these threshold
issues, among others, is scheduled to begin around mid-2011.
The Cooper Nuclear Station, which EWC manages
under a long-term management services contract for the
Nebraska Public Power District, successfully renewed its
license for another 20-year term. The extensive process
took the EWC business development team, which is
recognized worldwide for its license renewal services,
26 months to complete.
Even with progress made in 2010, the license renewal
process has become increasingly uncertain since our
original license renewal fi lings for Vermont Yankee and
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