Investor Meetings. June 22 23, 2015

Transcription

1 Investor Meetings June 22 23,

2 Caution Regarding Forward-Looking Statements and Regulation G Compliance In this presentation, and from time to time, Entergy Corporation makes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Such forward-looking statements include, among other things, Entergy s 2015 operational earnings guidance, its current financial and operational outlook, and other statements of Entergy s plans, beliefs or expectations included in this presentation. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this presentation and in Entergy s most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q and Entergy s other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with rate proceedings, formula rate plans and other cost recovery mechanisms; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) nuclear plant relicensing, operating and regulatory risks, including any changes resulting from the nuclear crisis in Japan following its catastrophic earthquake and tsunami; (e) changes in decommissioning trust fund values or earnings or in the timing or cost of decommissioning VY or any of Entergy s other nuclear plant sites; (f) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; (g) risks and uncertainties associated with strategic transactions that Entergy or its subsidiaries may undertake, including the proposed acquisition of the Union Power Station near El Dorado, Arkansas and the proposed combination of ELL and EGSL, including the risk that any such transaction may not be completed as and when expected and the risk that the anticipated benefits of the transaction may not be realized and (h) economic conditions and conditions in commodity and capital markets during the periods covered by the forward-looking statements. This presentation includes the non-gaap financial measure of normalized ROE when describing Entergy s results of operations and financial performance. We have prepared reconciliations of this financial measure to the most directly comparable GAAP measure. These reconciliations can be found on slide 39. Additional information can be found in Entergy s investor earnings releases, which are posted on our website at Definitions of abbreviations and acronyms used in this presentation are provided on slides

3 What Has Changed? Section Slides Changes* 2015 to do list 3 Updated for developments Utility Cost recovery mechanisms 9 Updated Texas legislation Utility customer rates 10 Updated rates through 3/31/15 EWC Market energy and capacity prices Updated with June prices Indian Point update 20 Updated CZM path 1 status Appendix I Utility overview 25 Updated for ETI rate case filing EMI overview 31 Calculated ROE impact of 2014 write-off ETI additional regulatory highlights 34 New added summary of ETI rate case filing Union Power Station acquisition 36 Updated for ENOI settlement * Reflects updates since handout for June 1 2 investor meetings 2

4 2015 To Do List Indicative Timing for Significant Developments 1 (subject to change) 1Q 2Q 3Q 4Q Ninemile 6 ceremony AR rate case filing Lake Charles transmission project announced AR, MS legislation passed Draft AR federal Regional Haze plan Western RFP announcement TX rate case filing* Amite South RFP selection Algiers asset transfer order from CCNO TX legislation passed* Initiation of RFP or other market test process for WOTAB CCGT CZM decision on whether or not to accept appeal (appeal accepted)* EGSL/ELL business combination decision Final EPA greenhouse gas rule Union Power Station transaction close TX rate order Final AR federal Regional Haze plan AR rate case settlement deadline 1 Table provides estimated timing for completion of key initiatives, which are subject to regulatory approvals or other requirements * Reflects updates since handout for June 1 2 investor meetings 3

5 Entergy s Utility Business Entergy Arkansas Entergy s Utility Business 6 electric utilities in 4 contiguous states Entergy Louisiana Entergy Mississippi 2.8 million utility customers 22,000 MW generating capacity Entergy Texas Entergy Gulf States Louisiana Entergy New Orleans 15,500 miles of transmission lines 4

6 Our Opportunity Smart Growth Productive Investments Benefit Customers Investments to modernize infrastructure, strengthen reliability and meet new compliance standards promote better service to customers Earning Authorized Returns Supports Growth Earning authorized returns and constructive regulation help attract capital to make needed investment Sales Growth Helps Control Customer Rates Low rates today and continuing to manage costs help attract new business, which in turn allows us to keep rates low and support further economic growth and prosperity in our region 5

7 Productive Investment Opportunity ~$3 to $4B rate base growth through 2017 Projected Rate Base as of November ; $B 30 ~5 7% CAGR (2014 base) ~17 ~20 21 ~ E 19E 1 Internal estimate based on last-approved rate base adjusted for assumed changes in the major rate base components; deferred taxes are deducted from rate base for all Utility Operating Companies, including EAI 6

8 Modernizing Our Fleet ~12,700 MW at least 30 years old Utility Non-Nuclear Plant Capability; MW by Year of Commercial Operation 1 2,500 2,000 Gas 1,500 Gas/Oil 1, Coal Oil 1 ~17,000 MW, excludes hydro units 7

9 Investing in Infrastructure, Enabling Industrial Growth Western AR TX LA WOTAB MS Amite South DSG Expected ISD Resource Capacity (subject to change) Late 2015 Union Power Station 1,980 MW (targeted close) 2016 Driver Project and Mud Lake Project lines 230 kv each 2018 Lake Charles and two Amite South lines 500 kv 500 kv 230 kv Madison County line 230 kv Northern LA line 115 kv 2019 New Orleans CT ~195 MW 2020 WOTAB CT ~380 MW Amite South CCGT ~800 MW 2021 WOTAB CCGT ~800 MW Texas CCGT ~800 MW Western region line 230 kv Southeast LA terminal equipment upgrade 230 kv Note: After considering the results of the Amite South RFP, the Entergy Operating Committee has elected to proceed with the self-build alternative and elected not to move forward with any other proposal 8

10 Progressive Cost Recovery Mechanisms Creating shared value for our four key stakeholders Mechanism EAI EGSL ELL EMI ENOI ETI FRP (new legislation) (expired) In Texas, Governor Abbott signed HB 1535 (non-ercot legislation containing provisions to reduce regulatory lag)* FRP alternate ratemaking study 1 Transmission rider Distribution rider (extended) 1 Capacity rider (FRP) (FRP) (non-affiliate PPAs) Rider/FRP adjustment for plant acquisition FRP adjustment for major projects Energy efficiency Forward looking (new features in FRP legislation) 1 Legislation passed extending the DCRF until 2019 and requires a study of alternative ratemaking mechanisms * Reflects updates since handout for June 1 2 investor meetings 9

11 EMI ENOI EAI EGSL ELL ETI EMI ENOI ETI EAI ELL EGSL Low Customer Rates = More Industry Our objective: maintain and improve our rate advantage Utility Customer Rates; $/MWh for LTM 3/31/15* 400 Residential Industrial * Reflects updates since handout for June 1 2 investor meetings 10

12 Entergy Wholesale Commodities MISO NYISO ISO-NE Entergy Wholesale Commodities Nuclear units (4,406 MW) CCGT plants (796 MW) Wind facilities (80 MW) Coal facilities (181 MW) Nuclear plant managed (800 MW) 11

13 EWC Overview Region Breakdown; % Other 2 Generation Portfolio; % Gas & Oil 14 MISO 22 NEPOOL 23 NYISO 53 Other 5 Nuclear 81 EWC Nuclear Plants Entergy Purchase Date Commercial Operation Date License Expiration Date Indian Indian FitzPatrick Point 2 Point 3 Palisades Pilgrim 11/21/00 9/6/01 11/21/00 4/11/07 7/13/99 July 1975 August 1974 August 1976 December 1971 December /17/34 9/28/ /12/15 3/24/31 6/8/32 Net MW Owned 838 1,028 1, Energy Market NYISO A NYISO G NYISO G MISO (closest hubs) Indiana EWC Non-Nuclear Plants Commercial Operation Date Fuel Type/ Technology ISES 2 Nelson 6 RS Cogen RISEC Top of Iowa NEPOOL Mass Hub White Deer Coal Coal CCGT Cogen CCGT Wind Wind Net MW Owned Market MISO MISO MISO ISO-NE MISO SPP 1 On 9/28/13, Indian Point 2 began operating under timely renewal 12

14 Operational Excellence Is Foundational EWC Nuclear Fleet Capacity Factors; % Impacts from planned refueling outages and planned coast down for VY Q14 2Q14 3Q14 4Q14 1Q15 Operational excellence includes: Plant operations Cost management Hedging strategy and execution Constructive participation in regulatory processes 13

15 Moderately Bullish on Power Prices Driver Considerations Natural Gas Strong demand growth story Supply rationalization due to low crude, liquids and natural gas prices Takeaway constraints Northeast Basis Infrastructure constraints Winter driven by weather and LNG Will remain volatile Market Heat Rates Generally poor market liquidity Declining reserve margins New build cost and NIMBY challenges Improved Market Structure Energy price formation Competitive capacity markets Compensation of nuclear generation attributes 14

16 Avg. Contracted Revenue Change; $/MWh Asymmetric Hedging to Capture Price Increases EWC Nuclear Revenue Sensitivity on Contracted Energy (5) (10) (20) (10) Market Price Change; $/MWh Balance of Avg. expected contracted revenue/mwh Balance of 2015: $43 on ~23.3 TWh 2016: $49 on ~29.8 TWh 2017: $50 on ~13.8 TWh 2018: $56 on ~6 TWh 1 Based on market prices and contracted revenue projections as of March 31,

17 Current Market Prices Down from Quarter-end EWC Nuclear Energy Prices; $/MWh /31/15 (Solid: weighted by capacity) /31/15 (Dotted: weighted by open 6/15/15 (Solid: weighted by capacity) Bal 15E 16E 17E 18E 19E 1 Represents capacity-weighted forward prices for EWC s Northeast Nuclear markets (except for the dotted lines); does not take into account unit contingent discounts or hedging costs 2 Reflects day ahead market prices through 6/15/15 and balance of year forwards thereafter 16

18 Increasing Capacity Prices NYISO Cleared Capacity Prices For Delivery January 2014 October 2015; $/kw-mo* Monthly LHV Spot LHV Strip Jan-14 Jul-14 Jan-15 Jul-15 0 Jan-14 Jul-14 Jan-15 Jul-15 ISO-NE Capacity Prices For Delivery January 2014 May 2019; $/kw-mo* FCAs Reconfiguration Auctions Monthly Auctions Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan Spot Monthly ROS FCA8 Existing Resources FCA9 SEMARI Zone ROS Strip * Reflects updates since handout for June 1 2 investor meetings 17

19 Advocating for Energy Price Formation Improvements Ensuring long-term health of energy markets Principles Market clearing price set by full cost of marginal decision Transparency required for well-functioning markets Prices should reflect start-up and no-load costs when clearing a generator offer and reflect reliability-driven operator actions in both the day ahead and real time market clearing price Move costs out of uplift (opaque and difficult to hedge) and into locational marginal prices that are visible to all Correct day ahead commitment and pricing Unwarranted mitigation is detrimental to market Co-optimized energy and reserve prices should provide market signals that encourage proper day ahead and real time reliability/reserve planning, unit commitment and system dispatch Absent evidence of market power, participants must be allowed to submit risk-adjusted offers and bids without fear of mitigation 18

20 Market Reforms Will Benefit All Stakeholders The prudent option for long-term reliability and cost efficiency Customer Energy Cost 3 If we properly compensate for attributes generators provide in the wholesale market, it would temporarily raise wholesale prices 2 With market reform Illustrative However, when low prices induce needed units to shut down, total energy cost to customers would rise to reflect shortage/ cost of new build 1 Out-of-market intervention can suppress wholesale power prices and customer energy cost in the short term Time 4 However, it would minimize shutdowns and the need for new builds 19

21 IPEC License Renewal Proceedings Progressing Expect process to successfully continue through the decade Path NRC CZM WQC/ SPDES Background Track 1 appeals resolved in Entergy s favor; two appeals remain pending, NRC ordered further briefing to assist with final decisions Track 2 hearings scheduled 11/16/15 through 11/20/15 Path 1: IPEC held grandfathered, thus exempt from CZM Act review in 5-0 decision by NYS Appellate Division, December 2014; NY Court of Appeals (highest state court) granted NYSDOS leave to appeal 6/4/15; briefing schedule to be established* Path 2: NRC staff is considering filings by ETR, NYSDOS on whether IPEC was previously reviewed under CZM Act; once staff states its position, disappointed party may propose a contention Path 3: Consistency certification withdrawn November 2014; NYSDOS disputes withdrawal; December 2014 standstill agreement preserves parties positions, provides for deemed extension of NYSDOS decision to 6/30/15 if NYSDOS is correct Path 1: Per 2/3/15 ALJ ruling, hearings on NYSDEC Staff s alternative BTA proposal (fish protection outages) and other pending issues scheduled for 9/14/15 through 10/2/15 Path 2: Waiver notice pending for WQC before NRC while litigation continues * Reflects updates since handout for June 1 2 investor meetings 20

22 Conditions Exist to Improve Challenging Business Over Time Improving Fundamentals Over Time Increasing clarity around IPEC Improving prices reflecting our outlook on prices Improving prices due to market reforms Importance of nuclear becoming more apparent Supported By Continued operational excellence Aggressive pursuit of IPEC legal paths Positioning EWC for the Future Continued disciplined hedging and risk management Continued improvements to market structure 21

23 Corporate Summary Entergy s Businesses More than $12 billion revenues 13,000 employees Utility 6 electric utilities in 4 contiguous states 2.8 million utility customers 22,000 MW generating capacity 15,500 miles of transmission lines Entergy Wholesale Commodities Nuclear units (4,406 MW) CCGT plants (796 MW) Wind facilities (80 MW) Coal facilities (181 MW) Nuclear plant managed (800 MW) 22

24 Conclusions Utility Superior Growth Capital investment required to meet resource needs of the operating companies Load growth to keep customer costs down EWC Well-Positioned Assets Plants play a critical role in their regions to achieve economic, reliability and environmental objectives Improved regulatory position at Indian Point; believe this asset will operate well into the next decade or beyond Committed to investment grade credit and capital returns 23

25 Appendix I Utility Supplement 24

26 Utility Overview 2014 Electric Retail Sales; % 1 EAI EGSL ELL Residential Industrial Commercial 2 Governmental 2014 Generation Portfolio; % 1 Coal Nuclear Gas/Oil/Hydro 66 Electric utility 700,000 electric customers Authorized ROE: 9.5% Base rate case filed on 4/24/15 (10 month jurisdictional deadline) Forward test year FRP expected to go into effect in 2017 EMI Electric utility 443,000 electric customers Authorized ROE: 10.07% FRP with forward looking features Electric and gas utility 397,000 electric customers 94,000 gas customers Authorized ROE ranges: Electric % Gas % Electric FRP, Gas Rate Stabilization Plan ENOI Electric and gas utility 172,000 electric customers 105,000 gas customers Authorized ROE ranges: Electric % Gas % Rate cases Electric utility 681,000 electric customers Authorized ROE range: % FRP ETI Electric utility 430,000 electric customers Authorized ROE: 9.8% Base rate case filed on 6/12/15 (statutory 185 day deadline for rate case decision)* 1 % of 2014 MWhs for electric retail sales and % of owned and leased MW capability for generation portfolio * Reflects updates since handout for June 1 2 investor meetings 25

27 EAI Entergy Arkansas LTM 3/31/15 Book ROE; % Book Normalized 1 EAI Electric Utility Metric Customers 700,000 Authorized ROE 9.5% Capital Investment vs. Depreciation as of February 2015; $M 1, Detail Last Completed Rate Case Filed Rate Base $4.802B retail rate base, as of 12/31/12 on 1/9/14 with known and measurable changes through 12/31/13 WACC (after-tax) 4.35% Equity Ratio Regulatory Construct Riders Next Rate Case 28.98% including $1.74B ADIT at 0% cost (45.02% traditional equity ratio) Rate case MISO, capacity costs, Grand Gulf, energy efficiency, fuel and purchased power Filed rate case on 4/24/15, see Additional Regulatory Highlights for details Depreciation expense E 16E 17E Capital 1 See slide 39 for calculation 26

28 EAI Additional regulatory highlights Base Rate Case APSC Docket U Base rate case filed with the APSC on 4/24/15 Requested newly-approved progressive rate mechanisms designed to reduce regulatory lag, facilitate infrastructure investment and encourage economic development in Arkansas Requested a Formula Rate Review Rider based on a forward test year that includes provisions to allow for known changes in expenses and revenues for the rate effective period Rate base $5.929B based on 3/31/15 test year, including pro-forma adjustments to reflect capital additions to rate base and other known and measurable changes through 3/31/ % WACC (10.2% ROE, 30.4% equity ratio, including $1.9B accumulated deferred income taxes at 0% cost) 44.1% traditional equity ratio Estimated full year net income impact of request ~$120M Key Dates Date Event 9/29/15 Staff/intervenors direct testimony due 10/27/15 Company rebuttal 11/24/15 Staff/intervenors surrebuttal 12/10/15 Company sur-surrebuttal 12/31/15 Settlement filing date 1/19/16-1/22/16 Hearing Select Major Components of Rate Increase Category $M Power Block 2 of Union Power Station 53 Depreciation and amortization 30 Return on rate base 77 Rate schedule revenue decrease 15 Storm reserves and vegetation management 12 ROE (10.2% ask vs. 9.5% current) 21 Payroll and pension costs 21 Incentive compensation 22 Other 18 Sub-total 269 Rider offsets and reductions 1 (102) Total For additional details, see April 28, 2015 earnings call webcast slide 27

29 EGSL Entergy Gulf States Louisiana LTM 3/31/15 Book ROE; % Book Normalized 1 See slide 39 for calculation 1 EGSL Electric and Gas Utility Metric Detail Electric Detail Gas Customers 397,000 94,000 Authorized ROE % % Last Filed Rate Base $2.666B, filed on 2/15/13; based on 6/30/12 test year WACC (after-tax) 7.95% 7.24% Equity Ratio 51.72% 51.32% Regulatory 3-year FRP, Construct test years (60/40 customer/company sharing outside bandwidth) Riders/Specific Recovery Capacity, MISO, Ninemile 6 outside sharing, fuel $0.055B, filed on 1/30/15; based on 9/30/14 test year Rate Stabilization Plan (50BP dead band, BP 50% sharing, >200BP adjust to 200BP plus 75BP sharing) Gas infrastructure Capital Investment vs. Depreciation as of February 2015; $M 1, Depreciation expense E 16E 17E Capital 28

30 ELL Entergy Louisiana LTM 3/31/15 Book ROE; % Book Normalized 1 1 See slide 39 for calculation ELL Electric Utility Metric Capital Investment vs. Depreciation as of February 2015; $M 1, Detail Customers 681,000 Authorized ROE Range % Last Filed Rate Base $4.475B, based on 6/30/12 test year; ~$645M on 2/15/13 rate base adj. for Ninemile 6 (2015 average) WACC (after-tax) 7.95% Equity Ratio 52.8% Regulatory Construct 3-year FRP, test years (60/40 customer/company sharing outside bandwidth); $10M rate change effective December 2014 and cumulative $30M cap on increases over the 3-year FRP cycle Ninemile 6 Rate Change Riders/Specific Recovery $99.2M effective January 2015 with billings of $26.6M to EGSL and $21.3M to ENOI Capacity, MISO, Ninemile 6 outside sharing mechanism, fuel Depreciation expense E 16E 17E Capital 29

31 EGSL and ELL Additional regulatory highlights Business Combination LPSC Docket U Proposed rates for the combined company are designed to be revenue neutral and to minimize costshifting among customers Up to $128M in customer benefits including guaranteed savings of $97M in the first ten years from the anticipated savings that come from the business combination Approval for business combination received from FERC on 4/3/15 (Docket EC15-47) Two dockets still open at FERC: Docket ES15-11 for new company to issue and sell securities and assume liabilities, Docket AC to transfer net operating loss carryovers to new company Approval also required from NRC (for direct and indirect license transfers) On 4/1/15, Staff and Intervenors recommended a set of conditions that would be required in order for the staff to recommend that the business combination is in the public interest While not a part of the business combination, on 5/14/15, the CCNO unanimously approved the transfer of Algiers assets to ENOI from ELL; FERC approved Algiers transfer on 4/3/15 (Docket EC ) The parties are currently working toward settlement of the matter and a revised procedural schedule was approved to allow additional time for discussions to take place Key Dates Date Event Date Event 6/26/15 Deadline to issue written discovery regarding rebuttal 7/20/15 7/24/15 Hearing testimony and cross-answering testimony 7/13/15 Filing date for jointly-prepared pre-trial order; prehearing briefs due 3Q15 4Q15 Expected transaction close 30

32 EMI Entergy Mississippi LTM 3/31/15 Book ROE; % Excluding write-off 2 2 Book Normalized 1 EMI Electric Utility Metric Detail Customers 443,000 Authorized ROE 10.07%; annual redetermination based on formula Rate Base $2.014B, as of 12/31/15 test year WACC (after-tax) 7.51% Equity Ratio 47 48% based on 2015 forecast Regulatory Construct Capital Investment vs. Depreciation as of February 2015; $M FRP with forward looking features; annual redetermination subject to performance based bandwidth calculation Last Rate Change Net rate increase of $16M (base rates and riders) effective 1/30/15, including $16M depreciation increase Riders Power Management Rider, Grand Gulf, Fuel, MISO, Unit Power Cost Depreciation expense E 16E 17E Capital 1 See slide 39 for calculation 2 Includes $36.7M after-tax write-off of regulatory asset in 2014, which has ~3.8% impact on ROE 31

33 ENOI ENOI Electric and Gas Utility Metric Detail Electric Detail Gas Customers 172, ,000 Authorized ROE Range % % Last Filed Rate Base on 5/31/12 $0.299B, based on $0.089B, based on 12/31/11 test year 12/31/11 test year WACC (after-tax) 8.58% 8.40% Equity Ratio 50.08% 50.08% Entergy New Orleans LTM 3/31/15 Book ROE; % Book Normalized 1 Regulatory Construct Rate case Rate case Riders/Specific Recovery Fuel, Ninemile 6 Purchased Gas Capital Investment vs. Depreciation as of February 2015; $M 100 Depreciation expense 95 Capital E 16E 17E 1 See slide 39 for calculation 32

34 ETI Entergy Texas LTM 3/31/15 Book ROE; % Book Normalized 1 ETI Electric Utility Metric Capital Investment vs. Depreciation as of February 2015; $M See slide 39 for calculation * Reflects updates since handout for June 1 2 investor meetings 0 Detail Customers 430,000 Authorized ROE 9.8% Last Filed Rate Base $1.634B, based on 3/31/13 adjusted test on 9/25/13 year WACC (after-tax) 8.22% Equity Ratio 48.6% Regulatory Construct Rate case Last Rate Change DCRF increase of $3.6M effective 1/1/15 Riders Rate case expenses; RPCE payments; riders in place or available include fuel, capacity, distribution and transmission, among others Next Rate Case Filed rate case on 6/12/15, see Additional Regulatory Highlights for details 555 Depreciation expense E 16E 17E Capital 33

35 ETI Additional regulatory highlights Base Rate Case PUCT Docket 44704* Base rate case filed with the PUCT on 6/12/15 Rate base $2.004B for test year period ending December 2014 including pro-forma adjustments to reflect acquisition of Union Station s Power Block 1 Includes Rate Case Expense Rider 4 to recover over a three-year period the deferred rate case expenses associated with this rate case filing 8.36% WACC (10.2% ROE, 50.08% common equity ratio) Key Dates Date Event TBD Procedural schedule set 1/1/16 Rates Effective (statutory 185 day deadline for rate case decisions) Select Major Components of Rate Increase Category $M Power Block 1 of Union Power Station 56 Other rate base (excluding Union) 11 O&M (vegetation, plant maintenance) 14 Depreciation and amortization (excl. Union) 10 ROE (10.2% ask vs. 9.8% current) 9 Reduction in long-term debt rate (3) MSS-4 revenues (7) Rate schedule revenues (12) Other (2) Sub-total before Rider RCE 4 76 Rider RCE 4 3 Sub-total before Rider DCRF 79 Rider DCRF (4) Total 75 * Reflects updates since handout for June 1 2 investor meetings 34

36 SERI Energy and Capacity Allocation 2 ; % ENOI 17 EMI 33 ELL 14 EAI 36 SERI Generation Company Metric Detail Principal asset Authorized ROE 10.94% An ownership and leasehold interest in the Grand Gulf Nuclear Station Last Calculated Rate $1.359B, as of 3/31/15 Base WACC (after-tax) 9.01% Equity Ratio 65% 1 Regulatory Construct Monthly cost of service Capital Investment vs. Depreciation as of February 2015; $M Depreciation expense GAAP FERC ratemaking treatment (dotted) E 16E 17E Capital 1 Sale/leaseback is excluded from capital structure; treated as an operating lease and recovered as an O&M cost 2 Reflects percentages under SERI s Unit Power Sales Agreement 35

37 Union Power Station Acquisition Regulatory approval process Transaction Overview OpCo MW Proposed Recovery Method EAI 495 Proposed recovery through Capacity Acquisition Rider starting the month following closing, until rates from next EAI base rate case are effective EGSL 990 Proposed recovery through interim adjustment to FRP starting the month following closing; 20% of EGSL s capacity to be provided to ENOI through a PPA subject to CCNO approval ETI 495 Planning for recovery through ETI base rate case planned for filing in 2Q15 Procedural Schedules * Reflects updates since handout for June 1 2 investor meetings Other Details Purchase price of $948M Contingent on the buyers obtaining necessary regulatory approvals (including full cost recovery) from various federal and state regulatory authorities Targeted to close in late 2015 (assumes timely regulatory approvals and satisfaction of other closing conditions) Event EGSL (U-33510) ETI CCN (43958) EAI ( U) ENOI PPA (UD-15-01) Filing 1/13 12/30 1/16 2/9 Intervenor testimony, cross-answering 5/4, 5/29 4/29, 5/13, 7/7* 7/2, 8/21 5/15 Staff testimony, cross-answering 5/4, 5/29 5/6, 5/13, 7/13* 7/2, 8/21 5/29 Company rebuttal testimony 6/5 5/13, 7/20* 7/31, 8/28 6/5 Pre-hearing conference/statements 7/24 5/28, 7/28* n/a n/a Hearing 8/5 7 6/1 2, 7/30* 9/15 n/a FERC 203 filing made 3/17/15; other FERC filings made on 4/1/15 HSR Antitrust Act filing made 2/27/15; on 3/30/15, DOJ requested additional information and documentary material from each of the purchasing companies and Union Power Partners, which will have the effect of extending the DOJ review period ENOI s Agreement in Principal was approved by the Utility Committee and will be presented to the Council on 7/9/15* 36

38 Entergy s Investor Relations App Entergy s IR app provides a convenient way to access the company's latest financial news and information, including financial releases, presentations and Securities and Exchange Commission filings, as well as the ETR stock quote. The mobile web app is available at iretr.com. 37

39 Appendix II Regulation G Reconciliations and Abbreviations and Acronyms 38

40 Regulation G Reconciliations Table 1: Normalized ROE Reconciliation of GAAP to Non-GAAP Measures LTM Ending March 31, 2015 ($ in millions) EAI EGSL ELL EMI ENOI ETI Utility 1 As-reported earnings available to common stock (a) Add back: Preferred dividend requirement (b) Income taxes (c) As-reported income before income taxes (d) = (a)+(b)+(c) ,317.1 Less certain items (pre-tax): Transmission spin-merge expenses (e) HCM implementation expenses (f) (1.3) (1.7) (2.5) (1.6) (0.4) (1.2) (8.6) Weather (g) (5.2) (3.3) 3.8 (0.6) 0.4 (3.6) (8.6) Normalized income before taxes (h) = (d)-(e)-(f)-(g) ,334.3 State-specific standard income tax rate (i) 39.23% 38.48% 38.48% 38.25% 38.48% 35.00% 38.50% Income tax at state-specific standard rate (j) = (h)*(i) Normalized earnings applicable to common stock (k) = (h)-(j)-(b) Affiliated preferred (l) Normalized earnings applicable to common stock, adjusted for affiliate preferred (m) = (h)-[(h)-(l)]*(i)-(b) Average common equity (n) 1, , , ,038.4 As-reported ROE (a)/(n) 5.8% 11.5% 10.1% 7.2% 13.7% 8.9% 9.4% Normalized ROE (m)/(n) 5.9% 11.5% 9.4% 7.9% 12.2% 9.7% 9.4% Write-off of regulatory asset (o) 36.7 Impact of write-off on ROE (o)/(n) 3.8%* 1 Utility does not equal the sum of the operating companies due primarily to SERI as-reported income of $97M, normalized income of ~$109M, average common equity of $881M and income taxes recorded at Entergy Louisiana Holdings (parent of ELL) Calculations may differ due to rounding * Reflects updates since handout for June 1 2 meetings 39

41 Abbreviations and Acronyms Abbreviations and Acronyms ADIT Accumulated deferred income taxes ALJ Administrative law judge APSC Arkansas Public Service Commission BTA Best technology available CAGR Compound annual growth rate CCGT Combined cycle gas turbine CCN Certificate of Convenience and Necessity CCNO Council of the City of New Orleans, Louisiana CT Simple cycle combustion turbine CZM Coastal zone management DCRF Distribution cost recovery factor rider DSG Downstream of Little Gypsy EAI Entergy Arkansas, Inc. EGSL Entergy Gulf States Louisiana, L.L.C. ELL Entergy Louisiana, LLC EMI Entergy Mississippi, Inc. ENOI Entergy New Orleans, Inc. EPA U.S. Environmental Protection Agency ETI Entergy Texas, Inc. ETR Entergy Corporation EWC Entergy Wholesale Commodities Abbreviations and Acronyms FCA Forward capacity auction FERC Federal Energy Regulatory Commission FitzPatrick James A. FitzPatrick Nuclear Power Plant FRP Formula rate plan GAAP Generally accepted accounting principles HCM Human Capital Management program HSR Hart-Scott-Rodino Indian Point 2 Unit 2 of Indian Point Energy Center (nuclear) Indian Point 3 Unit 3 of Indian Point Energy Center (nuclear) IPEC Indian Point Energy Center (nuclear) ISD In-service date ISES Independence Steam Electric Station (coal) ISO Independent system operator ISO-NE ISO New England LHV Lower Hudson Valley LPSC Louisiana Public Service Commission LTM Last twelve months MISO Midcontinent Independent System Operator, Inc. MPSC Mississippi Public Service Commission NEPOOL New England Power Pool 40

42 Abbreviations and Acronyms (continued) Abbreviations and Acronyms NRC Nuclear Regulatory Commission NYISO New York Independent System Operator, Inc. NYS New York State NYSDEC New York State Department of Environmental Conservation NYSDOS New York State Department of State O&M Operation and maintenance expense OpCo Utility operating company Palisades Palisades Power Plant (nuclear) Pilgrim Pilgrim Nuclear Power Station (nuclear) PPA Purchased power agreement or power purchase agreement PUCT Public Utility Commission of Texas RFP Request for proposal RISEC Rhode Island State Energy Center ROE Return on equity ROS Rest of state RPCE Rough production cost equalization SEMARI Southeast Massachusetts/Rhode Island SERI System Energy Resources, Inc. SPDES State Pollutant Discharge Elimination System SPP Southwest Power Pool VY Vermont Yankee Nuclear Power Station (nuclear) WACC Weighted-average cost of capital WOTAB West of the Atchafalaya Basin WQC Water Quality Certification 41