Entergy
639 Loyola Avenue
New Orleans, LA 70113
News
Release
| Date: | September 30, 2008 |
For Release: | Immediately |
Contact: | Yolanda Pollard (News Media) | Michele Lopiccolo (Investor Relations) |
Exhibit 99.1
Entergy Provides Hurricane Ike Update
New Orleans, La. - After back-to-back strikes by catastrophic hurricanes in less than two weeks left nearly 1.7 million customers without electricity in four states, Entergy Corporation (NYSE: ETR) announced today its utilities had restored power to all of the 705,400 customers affected by Hurricane Ike who can take power.
Entergy's utilities' Ike restoration record was on par with Hurricane Gustav, the fastest and safest storm restoration effort in the company's history. Crews restored power to 85 percent of all customers within seven days of Hurricane Ike and within eight days in Texas. By comparison, it took 13 days to reach that level for Hurricane Rita and 16 days following Hurricane Katrina in 2005, excluding extended restoration customers. Hurricane Ike generally ranks as the third or fourth most destructive hurricane across a range of measures in the 95-year history of Entergy's four-state utility system. Ike also heavily damaged coastal communities served by Entergy Texas, Inc., including approximately 7,300 homes and businesses that were damaged, destroyed or flooded by the storm and will require significant reconstruction.
Total restoration costs for the repair and/or replacement of the electrical facilities damaged by Hurricane Ike are estimated to be in the range of $525 million to $625 million.
While Entergy also expects to report lower utility revenues primarily due to temporary power outages associated with the hurricanes, Entergy believes its total liquidity is sufficient to meet its current obligations; nevertheless, each utility company is responsible for its restoration cost obligations and for recovering its storm-related costs.
Entergy's utilities are considering all reasonable avenues to recover storm-related costs from Gustav and Ike, including -- but not limited to -- accessing funded storm reserves, federal and local recovery on an interim and permanent basis, securitization and insurance, to the extent deductibles are met.
Hurricane Ike Assessment
On Sept. 13, 2008, Hurricane Ike made landfall in Galveston, Texas. Hurricane Ike traveled through Entergy's Texas service area, causing the most outages in Entergy Texas' history, and also caused outages in Louisiana and Arkansas. Ike's path included five non-nuclear generation plant sites, with the Sabine plant sustaining damage from flooding that spread throughout portions of Texas and Louisiana. The storm also caused extensive damage to the transmission and distribution system. Hurricane Ike affected 238 transmission lines, as well as 383 substations. Counted as damaged or destroyed are 10,300 poles and 2,900 transformers. Entergy expects that reported utility revenues will be lower during the third quarter due to the temporary Ike power outages in the affected service territories.
As of yesterday, 222 of the 238 affected transmission lines and 365 of the 383 affected substations had been restored. The Sabine power plant remains off-line, where cleanup and restoration work has begun. All other generating units have been returned to service.
Preliminary Hurricane Financial Effects
Total restoration costs for the repair and/or replacement of the electric facilities damaged by Hurricane Ike are estimated to be in the range of $525 million to $625 million. Utility companies affected by Hurricanes Gustav and Ike and estimated restoration costs are as follows:
Company | Hurricane Ike | Hurricane Gustav |
Entergy Arkansas | 14 - 20 | 10 - 15 |
Entergy Gulf States Louisiana | 65 - 75 | 210 - 250 |
Entergy Louisiana | 10 - 15 | 230 - 270 |
Entergy Mississippi | - | 10 - 15 |
Entergy New Orleans | 1 - 5 | 40 - 50 |
Entergy Texas | 435 - 510 | - |
Total | 525 - 625 | 500 - 600 |
Entergy expects that reported utility revenues will be lower during the third quarter due to the temporary Gustav and Ike power outages in the affected service territories.
Recovery Initiatives
Entergy's utilities are considering all reasonable avenues to recover storm-related costs from Gustav and Ike, including -- but not limited -- to accessing funded storm reserves, federal and local recovery on an interim and permanent basis, securitization and insurance, to the extent deductibles are met.
Entergy noted that it is unable to predict the degree of success it may have in these initiatives and the amount of restoration costs it may recover or the timing of such recovery,although Entergy believes that utilities are entitled to recover prudently incurred storm costs in accordance with applicable regulatory and legal principles.
Liquidity
Entergy believes its total liquidity is sufficient to meet its current obligations; nevertheless, each utility company is responsible for its restoration cost obligations and for recovering its storm-related costs. Entergy had $2.7 billion of cash and cash equivalents on hand on a consolidated basis as of Aug. 31, 2008 and additional financing authority, subject to debt covenants. Under previously obtained authority, Entergy may issue in the aggregate approximately $2.1 billion of new short-term debt and $4.1 billion of new long-term debt, including undrawn revolving credit facility capacity of $380 million at Entergy Corporation and $100 million at Entergy Arkansas, subject to debt covenants. Entergy Corporation's revolving credit facility requires it to maintain a consolidated debt ratio of 65 percent or less of its total capitalization. Some of the utility company credit facilities also have similar covenants.
Additional preliminary statistics on hurricanes Gustav and Ike and details on restoration progress achieved to date are included in appendix A to this release, as well as comparative statistics to hurricanes Katrina and Rita. Entergy's consolidated cash position and financing authority is outlined in appendix B.
Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $11 billion and approximately 14,300 employees.
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Additional investor information can be accessed online at
www.entergy.com/investor_relations
In this news release, and from time to time, Entergy Corporation makes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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 involve a number of risks and uncertainties. There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including (a) those factors discussed in (i) Entergy's Form 10-K for the year ended December 31, 2007, (ii) Entergy's Form 10-Q for the quarterly periods ended March 31 and June 30, 2008 and (iii) Entergy's other reports and filings made under the Securities Exchange Act of 1934,(b)the uncertainties associated with efforts to remediate the effects of Hurricanes Gustav and Ike and recovery of costs associated with restoration, and (c) the following transactional factors (in addition to others described elsewhere in this news release and in subsequent securities filings):(i) risks inherent in the contemplated spin-off, joint venture and related transactions (including the level of debt to be incurred by Enexus Energy Corporation and the terms and costs related thereto), (ii) legislative and regulatory actions, and (iii) conditions of the capital markets during the periods covered by the forward-looking statements. Entergy cannot provide any assurances that the spin-off or any of the proposed transactions related thereto will be completed, nor can it give assurances as to the terms on which such transactions will be consummated. The transaction is subject to certain conditions precedent, including regulatory approvals and the final approval by the Board of Directors of Entergy.
Appendix A provides Hurricane Outage Restoration Statistics
Table 1: Outage Restoration Statistics - Retail Electric Customers and Distribution-Related | ||||
Number | Ike (a) | Gustav (a) | Katrina | Rita |
Retail electric customers (in thousands) | 705 | 964 | 1,091 | 800 |
Distribution poles | 10,300 | 10,476 | 17,400 | 11,500 |
Distribution transformers | 2,900 | 4,349 | 3,478 | 2,301 |
Distribution circuit miles | 31,819 | 53,185 | 28,500 | 43,800 |
(a) Work in progress estimates subject to final reconciliation following completion of storm restoration.
Table 2: Outage Restoration Statistics - Transmission Lines and Substation Outages | ||||||
Ike | Ike | Gustav | Gustav | Katrina | Rita | |
Number of Outages | Total as of | Total as of Storm Peak | Total as of | Total as of Storm Peak | Total as of Storm Peak | Total as of Storm Peak |
Transmission lines | 16 | 238 | 8 | 241 | 182 | 344 |
Substations | 18 | 383 | 5 | 354 | 263 | 443 |
Appendix B provides Entergy's Consolidated Cash Position and Financing Authority
Table 3: Financing Authority (subject to debt covenants) | |||||
Short-term | Long-term | ||||
Cash and Cash Equivalents |
|
| FERC/ State | Available as of 8/31/08 | |
($ in millions) | |||||
Entergy Corporation | 43 | 3,500 | 380 (b) | - | - |
Entergy Arkansas | 134 | 250 | 250 | 450 (c) | 150 |
Entergy Gulf States Louisiana | 143 | 200 | 200 | 750 | 275 |
Entergy Louisiana | 176 | 250 | 250 | 2,140 | 1,640 |
Entergy Mississippi | 3 | 175 | 125 | 400 | 400 |
Entergy New Orleans | 130 | 100 | 100 | 230 (c) | 230 |
Entergy Texas | 75 | 200 | 200 | 1,300 | 1,200 |
Entergy Nuclear | 995 | - | - | - | - |
Other | 1,037 | 920 | 618 | 275 | 180 |
Total | 2,736 | 5,595 | 2,123 | 5,545 | 4,075 |
(b) As of Sept. 15, 2008, the available amount had been reduced further to $230 million.
(c) Authority granted by local regulator.