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Entergy Corporation 2013 INTEGRATED REPORT 18
AT A GLANCE
Progress on Our 2013 Strategic Imperatives
IMPERATIVE RATIONALE 2013 PROGRESS HIGHLIGHTS
Execute MISO/ITC Joining the Midcontinent Independent System
Operator, Inc. offers access to a huge regional
energy market and significant customer savings.
Separating and merging our transmission business
with ITC Holdings Corp. offered a significant
step forward in addressing the issues related
to modernizing and strengthening the
transmission grid.
We transferred functional control to MISO on
Dec. 19, 2013, and project the move of our
transmission system to generate approximately
$1.4 billion in customer savings in the first 10 years.
We mutually agreed with ITC to end the pursuit of
a spin/merger of Entergy’s transmission business
due to a lack of regulatory support.
Grow our
utility business
Entergy utilities generally have the benefits of a
constructive regulatory environment, reasonable
rates, manageable environmental exposure
and service territories with solid economic
growth prospects.
We increased our focus on the regional economic
development opportunity driven by disparity in
global energy prices. As a result, we expanded
resources dedicated to attracting new industrial
customers. We have signed contracts for
1,040 megawatts and raised our projected
three-year compound annual average sales
growth rate to 2 to 2.25 percent through 2016,
compared to 1 to 1.25 percent normalized levels.
Continue to develop and
implement productive
regulatory constructs
The rates Entergy utilities charge for power
significantly influence their earnings and Entergy’s
financial position. We seek regulatory constructs
that match our cost structure, investment profile
and customer needs.
We filed rate cases in Arkansas, Louisiana and
Texas, and filed a 2012 test year formula rate plan
in Mississippi in 2013. We resolved all cases
except Texas where settlement discussions
are in progress. We sought and were granted
rehearing in Arkansas.
Improve EWC results Sustained low wholesale power prices negatively
impact results for our Entergy Wholesale
Commodities business.
We maintained a hedging program that provides
key downside protection yet allows for asymmetric
upside. We announced the difficult decision to
close Vermont Yankee at the end of its current fuel
cycle in late 2014 due to unfavorable economics,
and sold a small chilled water and steam business
for a gain. We accelerated cost reduction actions
under our companywide initiative.
Optimize the organization
through human capital
management
We believe our workforce is a key asset that must
be aligned and managed within our overall strategy
and direction. Re-evaluating our organizational
structure, processes and compensation and
benefit practices enables us to enhance
Entergy’s competitiveness.
We redesigned and restaffed our organization to
improve efficiency and effectiveness, and lower
costs. We eliminated approximately 800 positions,
took other actions, and expect ongoing estimated
savings of $200 million to $250 million by 2016,
with the majority of the savings in 2014.
Maintain financial
flexibility
Financial flexibility gives us the ability to
respond to opportunities and risks as market
conditions change.
We maintained liquidity of approximately $5 billion
as of Dec. 31, 2013, and other solid credit metrics.
We maintained investment-grade ratings for Entergy
Corporation and its subsidiaries. Four credit rating
upgrades were received following a recent
industrywide review.
Align the
corporate culture
Focusing on organizational health – our ability
to align, execute and renew faster than our
competitors – is just as important as focusing
on traditional drivers of business results such
as operational and financial performance.
In 2013, leaders introduced the concept of
organizational health to the workforce in both
personal meetings and through multimedia
channels. Central to these conversations was the
importance of a healthy, aligned culture in achieving
organizational goals. More focus on this key
ingredient to success is planned for 2014.
2013 Strategic Imperatives
We established seven strategic imperatives for 2013 to guide our actions and investments. Our performance against these imperatives is
presented here.