Entergy 2013 Annual Report Download - page 10

Entergy Corporation 2013 INTEGRATED REPORT 9
INTRODUCTION
Letter to Our Stakeholders
2013 was a year of continuing change and transition for Entergy. That was the expectation
I described in my first letter to you, and it certainly lived up to the billing.
In 2013, we defined our vision and mission and set seven strategic imperatives. We pursued
transformational strategies in our transmission and our merchant generation businesses.
We restructured and restaffed our organization. At a time when many of these major
initiatives involved retail and federal regulatory proceedings, we had a full slate of the
business-as-usual rate cases, license renewal and other regulatory activity underway.
In a normal year, just a few or even any single initiative would be a significant undertaking.
All combined, it made for a complex and challenging year for all our stakeholders.
If there is one word that describes what we were working toward, it would be clarity. We
worked to bring clarity to our purpose, our priorities and our structure. Clarity helps sharpen
our focus and improve our performance. Clarity makes it easier for all of our stakeholders –
our owners, customers, employees and communities – to support our company and help
drive our success.
Our many accomplishments in 2013 set the stage for exciting opportunity in the years
ahead. With a lower cost position, an improved risk profile and clarity, we believe Entergy is
positioned to fulfill our mission to deliver sustainable value to our four stakeholder groups.
2013: A Complex and Challenging Year
On balance, we largely accomplished what we set out to do in 2013.
We joined MISO. We transferred functional control of our transmission system to the Midcontinent
Independent System Operator, Inc. or MISO, in December 2013. It was the culmination of
extensive efforts by more than 600 Entergy employees over many years. We project the
move will provide approximately $1.4 billion in customer savings in the first decade in MISO.
We obtained new regulatory mechanisms. We established or renewed several regulatory
mechanisms that align our customers’ and the company’s success. The settlement in the
Louisiana rate case filings extended longstanding formula rate plans for three years. The Public
Utility Commission of Texas approved a new capacity rider mechanism, adding to the existing
distribution and transmission riders already approved. New riders were also approved for MISO
costs in Arkansas and Louisiana. We received a formula rate plan adjustment in Mississippi.
These progressive mechanisms all structurally link returns to our ability to manage costs
within our control.
We changed the way we work. Through our human capital management initiative,
we redesigned and restaffed our organization to improve efficiency and effectiveness, and
lower costs. The process was particularly arduous for our employees. We expect to realize
significant cost savings beginning in 2014 through the elimination of positions, changes to
our compensation and benefit practices, and renegotiation of major contracts.
We took action to improve EWC results. We applied, with urgency, our efforts to improve
results at Entergy Wholesale Commodities, which has been struggling in a low wholesale power
price environment. For the last few years, our business plan focus has been aimed at improving
our equipment reliability and improving our outage performance. We began to see results from
those efforts in the second half of 2013 when we had no extended forced outages, compared to
extended outages at Palisades and Pilgrim nuclear plants in the first half of 2013. We accelerated
the human capital management initiative to obtain the results faster in this business. We made
the decision to close or retire one nuclear and one fossil unit based on economics and sold a
small business that was better suited to grow with another company.
The decision to close the Vermont Yankee Nuclear Power Station at the end of its current fuel
cycle in 2014 was a difficult one. We know all our stakeholders are affected by this decision,
but hit hardest are Vermont Yankee employees and the local communities. Making the decision
when we did allowed time to plan for a safe and orderly shutdown. The decision also paved the
way to improve relations within the state of Vermont. In December, we reached a settlement
agreement that helps resolve certain longstanding issues and sets a path for a constructive
and transparent working relationship to facilitate the resolution of longer-term issues.
“If there is one word
that describes what
we were working
toward, it would be
clarity. We worked
to bring clarity to our
purpose, our priorities
and our structure.”