1
Rebuilding Utility Infrastructure:Challenges and Opportunities
2
Growing Merchant Capacity in Entergy’s Control Area
More than 19,000 Megawatts of New Generation is Already Operating in Entergy’s Area
Source: Internal Analysis
3
Louisiana’s Fuel Costs AreDriven by Natural Gas Prices
Recent fuel cost increases in Louisiana have been caused by skyrocketing natural gas prices.
A majority of Louisiana’s generating output was fired by natural gas.
Only about 40% of Louisiana’s generating output was fired by stable fuel sources such as coal or nuclear.
Source: Energy Information Administration, Department of Energy and Platts (adjusted at CPI-U per Bureau of Labor Statistics, U.S. Department Of Labor)
FUEL SOURCES BY STATE '90 - '03
0%
20%
40%
60%
80%
100%
AL
'90
AL
'91
AL
'92
AL
'93
AL
'94
AL
'95
AL
'96
AL
'97
AL
'98
AL
'99
AL
'00
AL
'01
AL
'02
AL
'03
AR
'90
AR
'91
AR
'92
AR
'93
AR
'94
AR
'95
AR
'96
AR
'97
AR
'98
AR
'99
AR
'00
AR
'01
AR
'02
AR
'03
FL '9
0FL
'91
FL '9
2FL
'93
FL '9
4FL
'95
FL '9
6FL
'97
FL '9
8FL
'99
FL '0
0FL
'01
FL '0
2FL
'03
GA
'90
GA
'91
GA
'92
GA
'93
GA
'94
GA
'95
GA
'96
GA
'97
GA
'98
GA
'99
GA
'00
GA
'01
GA
'02
GA
'03
LA '9
0LA
'91
LA '9
2LA
'93
LA '9
4LA
'95
LA '9
6LA
'97
LA '9
8LA
'99
LA '0
0LA
'01
LA '0
2LA
'03
MS
'90
MS
'91
MS
'92
MS
'93
MS
'94
MS
'95
MS
'96
MS
'97
MS
'98
MS
'99
MS
'00
MS
'01
MS
'02
MS
'03
SC
'90
SC
'91
SC
'92
SC
'93
SC
'94
SC
'95
SC
'96
SC
'97
SC
'98
SC
'99
SC
'00
SC
'01
SC
'02
SC
'03
TN '9
0TN
'91
TN '9
2TN
'93
TN '9
4TN
'95
TN '9
6TN
'97
TN '9
8TN
'99
TN '0
0TN
'01
TN '0
2TN
'03
TX '9
0TX
'91
TX '9
2TX
'93
TX '9
4TX
'95
TX '9
6TX
'97
TX '9
8TX
'99
TX '0
0TX
'01
TX '0
2TX
'03
Nuclear Coal Natural Gas Petroleum Other
AL AR FL GA LA MS SC TN TX
4
Net Area Load by Resource (GWh)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
01 02 03 04 05E 06E 07E 08ENuclear Hydro Coal Owned Gas/Oil Purchases
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
01 02 03 04 05 06 07 08
We have reduced our dependence on older, less efficient gas resources…
… via market opportunities, reducing the implied heat rate, lowering fuel costs.
Gas/Oil and Purchases Heat Rate Improvement (Btu/KWh)
Illustrative Illustrative
Market Opportunities Lower Generation Costs
5
10,000
20,000
30,000
40,000
50,000
2000 2001 2002 2003 2004
GW
h
Nuclear CoalGas/Oil Purchased Power
Annual Energy Productionby Source Reflects Progress
2004 was characterized by the most nuclear production ever, the most coal production ever, the most purchased power ever, and the least gas & oil production ever
These efforts are allowing Entergy to lower its fuel costs for customers.
6
Storm Restoration Cost
Estimated Costs*
Company (U.S. $ in millions)
Entergy Gulf States - LA 195
Entergy Gulf States - TX 380
Entergy Louisiana 510
Entergy Mississippi 120
Entergy New Orleans 275
Other 20
Total 1,500
* Based on Jan 19, 2006 Earnings Release
7
Estimated Restoration Costs per Customer
770 620 560 290 274
3,930
EMIENO ELI CLECO EGS-LA
Estimated Restoration CostCost Per Customer
14.3x6.3x5.1x 7.0x
The scope of costs are incredible by nearly any measure.
What is most striking is that the costs per customers are many multiples of the total costs for the four storms that ravaged Florida in 2004.
13.6x
2004 Florida Storms
8
Recovery Initiatives
• Insurance Coverage - $400MOil Insurance Limited $250MAIG/Lloyd’s $150M
• Federal Relief Community Development Block Grants
• Rate Relief
9
Use of CDBG Funds
• Governmentally-owned (munis) and private non-profit (coops) electricity providers are eligible for Federal disaster relief assistance under the Stafford Act. Investor owned utilities are not.
• This disparate treatment is unwarranted.
• CDBG has been used on occasion to fund a variety of disaster relief costs that were ineligible under the Stafford Act
• CDBG provided assistance to New England investor-owned utilities after 1998 Ice Storms, and to Con Edison after the 9/11 terrorist attack.
• Mississippi plans to use CDBG funds for disaster relief to investor owned electric utilities.
10
Media Treatment
11
The Clarion-Ledger, Jackson, MS
Media Treatment