Entergy Corporation
and Subsidiaries
2023 Annual Report
Entergy Corporation and Subsidiaries 2023
Entergy is a Fortune 500 company that powers life for 3 million customers through our operating companies
in Arkansas, Louisiana, Mississippi, and Texas. We’re investing in the reliability and resilience of the energy system
while helping our region transition to cleaner, more efficient energy solutions. With roots in our communities for
more than 100 years, Entergy is a nationally recognized leader in sustainability and corporate citizenship. Since
2018, we have delivered more than $100 million in economic benefits each year to local communities through
philanthropy, volunteerism, and advocacy. Entergy is headquartered in New Orleans, Louisiana, and has
approximately 12,000 employees.
We take an integrated approach to reporting on our company’s business objectives and outcomes. Our
Performance Report includes financial results and the economic, environmental, governance and social aspects
that we believe help drive our results and are of interest to our customers, employees, communities and owners as
we fulfill our mission to deliver sustainable value to all stakeholders.
We encourage you to visit our 2023 Performance Report at performancereport.entergy.com
Contents
1
3
8
9
12
45
46
51
53
54
56
58
59
198
199
200
Letter to Our Stakeholders
Forward-Looking Information and Regulation G Compliance
Comparison of Five-Year Cumulative Return
Definitions
Management’s Financial Discussion and Analysis
Report of Management
Report of Independent Registered Public Accounting Firm
Consolidated Income Statements
Consolidated Statements of Comprehensive Income
Consolidated Statements of Cash Flows
Consolidated Balance Sheets
Consolidated Statements of Changes in Equity
Notes to Financial Statements
Board of Directors
Executive Officers
Investor Information
Energy for a better future
In 2023, our leaders and our approximately 12,000 employees demonstrated their commitment to
continue growing a world-class energy business for the benefit of our customers, employees, communities
and owners.
Our company’s unprecedented growth potential stems from strong industrial sales driven by
macroeconomic trends encouraging industrial manufacturing investment in the United States, certain Gulf
Coast regional advantages unmatched anywhere else that focus that investment to our region, and our new
and existing customers’ desire to achieve their own carbon reduction goals.
Environmental stewardship for a cleaner world
We are ideally positioned to foster this industrial growth while also helping our customers lead a
clean energy transition in our region — and beyond. We operate one of the cleanest large-scale power
generation fleets in the country. We have clearly stated plans and commitments to continue reducing carbon
emissions from the energy we deliver. Beyond that, we’re well-equipped to extend our positive impact on
the environment by helping our customers reduce their own greenhouse gas emissions. And our power
generation team continues to perform at a high level every day: Even with challenges from record-breaking
heat this past summer, we achieved our lowest forced outage rate since 2011.
Reliability and resilience a customer focus
It’s critically important that we make the power grid in our region more reliable and resilient
through investments to strengthen and modernize our equipment to withstand more frequent and more
intense weather events.
Much of the electric grid was built decades ago to standards appropriate for that era. And yet,
today’s need for continuous connectivity and highly reliable electricity has made electric service essential
to how we live and work. In recent years, the value to customers of reliability and resilience investments
has been proven. During Hurricane Ida in 2021, for example, newer structures built to modern standards
held up extremely well.
These investments are designed to help reduce the number of outages for our existing customers
and make it easier to restore power after storms. Meanwhile, new customers need grid reliability that can
meet their expectations when they invest in the region. These factors accelerate the need to build a more
resilient power grid at a faster pace than we have in the past — but do so responsibly. This means improving
reliability while ensuring rates remain affordable for our customers.
Engaging our stakeholders: Promoting good governance, opportunity and diversity
We’re developing and maintaining a workforce that is prepared to support our growth and
investment while also reflecting the rich diversity of the communities we serve. We are committed to
working safely, and to improving educational, economic, and environmental outcomes that deliver benefits
equitably across our communities.
Last year, we broadened our engagement efforts to expand our conversations with a wide group of
stakeholders, including customers, employees, elected leaders, community leaders, vendors, and of course,
our regulators. Our engagement is a continual process, focused on building trust and understanding
stakeholder concerns well before final decisions are made.
1
Predictable and responsible growth
Financially in 2023, we again delivered steady, predictable growth. Our adjusted earnings per share
was $6.77, once again finishing in the top half of our guidance range. In addition, we increased our quarterly
dividend per share 6% to $1.13. Importantly, we met our cash flow credit metric targets as well.
The objective for our stakeholders is to capture this generational growth opportunity by balancing
customer affordability with investments in reliability, resilience and sustainability. Success on these fronts
is not optional.
We are mindful that a quarter of our approximately 3 million residential customers live at or below
the poverty line. This fact makes accelerated grid investments in resiliency even more critical. Without this
needed grid modernization, all customers will face a greater financial burden and disruption when storms
cause significant damage and longer power outages, but the burden is more keenly felt by those who are
most vulnerable. Fortunately, we provide power at rates below the national average. That comes from
relentlessly focusing on continuous improvement. But we don’t stop there, we are also fighting for every
dollar of federal and state funding available to offset grid improvement costs for our customers. Sometimes
securing that funding is still not enough, so we also support customers by advocating for federal energy
assistance as well as through our own bill payment assistance, flexible bill-pay options and philanthropic
giving.
Up for the challenge
Whenever I meet with our employees, we talk about this pivotal moment in our company's journey:
We have a generational growth opportunity led by our customers, while at the same time face an energy
transition, also led by our customers. In response, our employees are showing great creativity in improving
our workplace culture and building processes to create better outcomes for you — our stakeholders.
Together, we’re writing a growth story for the Entergy of tomorrow.
Drew Marsh
Chair of the Board and Chief Executive Officer
March 22, 2024
2
FORWARD-LOOKING INFORMATION AND REGULATION G COMPLIANCE
Forward-Looking Information
In this combined report and from time to time, Entergy Corporation and the Registrant
Subsidiaries each makes statements as a registrant concerning its expectations, beliefs, plans, objectives,
goals, projections, strategies, and future events or performance. Such statements are “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as
“may,” “will,” “could,” “project,” “believe,” “anticipate,” “intend,” “goal,” “commitment,” “expect,”
“estimate,” “continue,” “potential,” “plan,” “predict,” “forecast,” and other similar words or expressions
are intended to identify forward-looking statements but are not the only means to identify these
statements. Although each of these registrants believes that these forward-looking statements and the
underlying assumptions are reasonable, it cannot provide assurance that they will prove correct. Any
forward-looking statement is based on information current as of the date of this combined report and
speaks only as of the date on which such statement is made. Except to the extent required by the federal
securities laws, each registrant 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 or incorporated by reference in Item 1A. Risk Factors,
(b) those factors discussed or incorporated by reference in Management’s Financial Discussion and
Analysis, and (c) the following factors (in addition to others described elsewhere in this combined report
and in subsequent securities filings):
•
•
•
•
•
resolution of pending and future rate cases and related litigation, formula rate proceedings and
related negotiations, including various performance-based rate discussions, Entergy’s utility
supply plan, and recovery of fuel and purchased power costs, as well as delays in cost recovery
resulting from these proceedings;
regulatory and operating challenges and uncertainties and economic risks associated with the
Utility operating companies’ participation in MISO, including the benefits of continued MISO
participation, the effect of current or projected MISO market rules, market design and market
and system conditions in the MISO markets, the absence of a minimum capacity obligation for
load serving entities in MISO and the consequent ability of some load serving entities to “free
ride” on the energy market without paying appropriate compensation for the capacity needed to
produce that energy, the allocation of MISO system transmission upgrade costs, delays in
developing or interconnecting new generation or other resources or other adverse effects arising
from the volume of requests in the MISO transmission interconnection queue, the MISO-wide
base rate of return on equity allowed or any MISO-related charges and credits required by the
FERC, and the effect of planning decisions that MISO makes with respect to future transmission
investments by the Utility operating companies;
changes in utility regulation, including, with respect to retail and wholesale competition, the
ability to recover net utility assets and other potential stranded costs, and the application of more
stringent return on equity criteria, transmission reliability requirements, or market power criteria
by the FERC or the U.S. Department of Justice;
changes in the regulation or regulatory oversight of Entergy’s owned or operated nuclear
generating facilities, nuclear materials and fuel, and the effects of new or existing safety or
environmental concerns regarding nuclear power plants and fuel;
resolution of pending or future applications, and related regulatory proceedings and litigation,
for license modifications or other authorizations required of nuclear generating facilities and the
effect of public and political opposition on these applications, regulatory proceedings, and
litigation;
3
FORWARD-LOOKING INFORMATION AND REGULATION G COMPLIANCE (Continued)
•
•
•
the performance of and deliverability of power from Entergy’s generation resources, including
the capacity factors at Entergy’s nuclear generating facilities;
increases in costs and capital expenditures that could result from changing regulatory
requirements, changing economic conditions, and emerging operating and industry issues, and
the risks related to recovery of these costs and capital expenditures from Entergy’s customers
(especially in an increasing cost environment);
the commitment of substantial human and capital resources required for the safe and reliable
operation and maintenance of Entergy’s nuclear generating facilities;
• Entergy’s ability to develop and execute on a point of view regarding future prices of electricity,
•
natural gas, and other energy-related commodities;
the prices and availability of fuel and power Entergy must purchase for its Utility customers,
particularly given the recent and ongoing significant growth in liquified natural gas exports and
the associated significantly increased demand for natural gas and resulting increase in natural
gas prices, and Entergy’s ability to meet credit support requirements for fuel and power supply
contracts;
•
•
• volatility and changes in markets for electricity, natural gas, uranium, emissions allowances, and
other energy-related commodities, and the effect of those changes on Entergy and its customers;
changes in law resulting from federal or state energy legislation or legislation subjecting energy
derivatives used in hedging and risk management transactions to governmental regulation;
changes in environmental laws and regulations, agency positions, or associated litigation,
including requirements for reduced emissions of sulfur dioxide, nitrogen oxide, greenhouse
gases, mercury, particulate matter and other regulated air emissions, heat and other regulated
discharges to water, waste management and disposal, remediation of contaminated sites,
wetlands protection and permitting, and reporting, and changes in costs of compliance with
environmental laws and regulations;
changes in laws and regulations, agency positions, or associated litigation related to protected
species and associated critical habitat designations;
the effects of changes in federal, state, or local laws and regulations, and other governmental
actions or policies, including changes in monetary, fiscal, tax, environmental, trade/tariff,
domestic purchase requirements, or energy policies and related laws, regulations, and other
governmental actions, including as a result of prolonged litigation over proposed legislation or
regulatory actions;
the effects of full or partial shutdowns of the federal government or delays in obtaining
government or regulatory actions or decisions;
•
•
•
• uncertainty regarding the establishment of interim or permanent sites for spent nuclear fuel and
nuclear waste storage and disposal and the level of spent fuel and nuclear waste disposal fees
charged by the U.S. government or other providers related to such sites;
• variations in weather and the occurrence of hurricanes and other storms and disasters, including
uncertainties associated with efforts to remediate the effects of hurricanes, ice storms, wildfires,
or other weather events and the recovery of costs associated with restoration, including the ability
to access funded storm reserves, federal and local cost recovery mechanisms, securitization, and
insurance, as well as any related unplanned outages;
effects of climate change, including the potential for increases in extreme weather events, such
as hurricanes, drought or wildfires, and sea levels or coastal land and wetland loss;
the risk that an incident at any nuclear generation facility in the U.S. could lead to the assessment
of significant retrospective assessments and/or retrospective insurance premiums as a result of
Entergy’s participation in a secondary financial protection system and a utility industry mutual
insurance company;
•
•
4
FORWARD-LOOKING INFORMATION AND REGULATION G COMPLIANCE (Continued)
•
changes in the quality and availability of water supplies and the related regulation of water use
and diversion;
• Entergy’s ability to manage its capital projects, including by completing projects timely and
within budget, to obtain the anticipated performance or other benefits of such capital projects,
and to manage its capital and operation and maintenance costs;
the effects of supply chain disruptions, including those driven by geopolitical developments or
trade- related governmental actions, on Entergy’s ability to complete its capital projects in a
timely and cost- effective manner;
•
• Entergy’s ability to purchase and sell assets at attractive prices and on other attractive terms;
•
•
•
•
•
•
•
•
•
the economic climate, and particularly economic conditions in Entergy’s Utility service area and
events and circumstances that could influence economic conditions in those areas, including
power prices and inflation, and the risk that anticipated load growth may not materialize;
changes to federal income tax laws, regulations, and interpretive guidance, including the
Inflation Reduction Act of 2022 and the continued impact of the Tax Cuts and Jobs Act of 2017,
and any related intended or unintended consequences on financial results and future cash flows;
the effects of Entergy’s strategies to reduce tax payments;
the effect of increased interest rates and other changes in the financial markets and regulatory
requirements for the issuance of securities, particularly as they affect access to and cost of capital
and Entergy’s ability to refinance existing securities and fund investments and acquisitions;
actions of rating agencies, including changes in the ratings of debt and preferred stock, changes
in general corporate ratings, and changes in the rating agencies’ ratings criteria;
changes in inflation and interest rates and the impacts of inflation or a recession on our
customers;
the effects of litigation, including the outcome and resolution of the proceedings involving
System Energy currently before the FERC and any appeals of FERC decisions in those
proceedings;
the effects of government investigations, proceedings, or audits;
changes in technology, including (i) Entergy’s ability to effectively assess, implement, and
manage new or emerging technologies, including its ability to maintain and protect personally
identifiable information while doing so, (ii) the emergence of artificial intelligence (including
machine learning), which may present ethical, security, legal, operational, or regulatory
challenges, (iii) the impact of changes relating to new, developing, or alternative sources of
generation such as distributed energy and energy storage, renewable energy, energy efficiency,
demand side management, and other measures that reduce load and government policies
incentivizing development or utilization of the foregoing, and (iv) competition from other
companies offering products and services to Entergy’s customers based on new or emerging
technologies or alternative sources of generation;
• Entergy’s ability to effectively formulate and implement plans to increase its carbon-free energy
capacity and to reduce its carbon emission rate and aggregate carbon emissions, including its
commitment to achieve net-zero carbon emissions by 2050 and the related increasing investment
in renewable power generation sources, and the potential impact on its business and financial
condition of attempting to achieve such objectives;
the effects, including increased security costs, of threatened or actual terrorism, cyber attacks or
data security breaches, physical attacks on or other interference with facilities or infrastructure,
natural or man-made electromagnetic pulses that affect transmission or generation infrastructure,
accidents, and war or a catastrophic event such as a nuclear accident or a natural gas pipeline
explosion;
•
5
FORWARD-LOOKING INFORMATION AND REGULATION G COMPLIANCE (Continued)
•
•
impacts of perceived or actual cybersecurity or data security threats or events on Entergy and its
subsidiaries, its vendors, suppliers or other third parties interconnected through the grid, which
could, among other things, result in disruptions to its operations, including but not limited to, the
loss of operational control, temporary or extended outages, or loss of data, including but not
limited to, sensitive customer, employee, financial or operations data;
the effects of a catastrophe, pandemic (or other health-related event), or a global or geopolitical
event such as the military activities between Russia and Ukraine, or Israel and Hamas, including
resultant economic and societal disruptions; fuel procurement disruptions; volatility in the capital
markets (and any related increased cost of capital or any inability to access the capital markets
or draw on available bank credit facilities); reduced demand for electricity, particularly from
commercial and industrial customers; increased or unrecoverable costs; supply chain, vendor,
and contractor disruptions, including as a result of trade-related sanctions; delays in completion
of capital or other construction projects, maintenance, and other operations activities, including
prolonged or delayed outages; impacts to Entergy’s workforce availability, health, or safety;
increased cybersecurity risks as a result of many employees telecommuting; increased late or
uncollectible customer payments; regulatory delays; executive orders affecting, or increased
regulation of, Entergy’s business; changes in credit ratings or outlooks as a result of any of the
foregoing; or other adverse impacts on Entergy’s ability to execute on its business strategies and
initiatives or, more generally, on Entergy’s results of operations, financial condition, and
liquidity;
• Entergy’s ability to attract and retain talented management, directors, and employees with
specialized skills;
•
changes in accounting standards and corporate governance best practices;
• Entergy’s ability to attract, retain, and manage an appropriately qualified workforce;
•
• declines in the market prices of marketable securities and resulting funding requirements and the
effects on benefits costs for Entergy’s defined benefit pension and other postretirement benefits
plans;
future wage and employee benefits costs, including changes in discount rates and returns on
benefit plan assets;
changes in decommissioning trust fund values or earnings or in the timing of, requirements for,
or cost to decommission Entergy’s nuclear plant sites and the implementation of
decommissioning of such sites following shutdown;
the effectiveness of Entergy’s risk management policies and procedures and the ability and
willingness of its counterparties to satisfy their financial and performance commitments; and
• Entergy and its subsidiaries’ ability to successfully execute on their business strategies, including
•
•
their ability to complete strategic transactions that they may undertake.
6
FORWARD-LOOKING INFORMATION AND REGULATION G COMPLIANCE (Concluded)
Regulation G Compliance
This report includes the non-GAAP financial measure of adjusted earnings per share. The
reconciliation of this measure to the most directly comparable GAAP measure is below.
GAAP to Non-GAAP Reconciliation - Adjusted Earnings and Earnings Per Share
($ in millions, except diluted average common shares outstanding)
Net income attributable to ETR Corp
Less adjustments:
Utility – Customer-sharing of tax benefits as a result of the 2016-2018 IRS
audit resolution
Utility – E-AR write-off of assets related to the ANO stator incident
Utility – Impacts from storm cost approvals and securitizations, including
customer sharing (excluding income tax items below)
Utility – income tax effect on Utility adjustments above
Utility – 2016-2018 IRS audit resolution
Utility – E-LA reversal of regulatory liability associated with Hurricane Isaac
securitization, recognized in 2017 as a result of the TCJA
Utility – E-LA income tax benefit resulting from securitization
P&O – 2016-2018 IRS audit resolution
P&O – DOE spent nuclear fuel litigation settlement (IPEC)
P&O – income tax effect on adjustments above
ETR Adjusted Earnings
Diluted average common shares outstanding (in millions)
2023
2,357
(98)
(78)
(87)
73
568
106
129
275
40
(9)
1,438
212
11.10
(After-tax, $ per share) (a)
Net income attributable to ETR Corp
Less adjustments:
Utility – Customer-sharing of tax benefits as a result of the 2016-2018 IRS
audit resolution
Utility – E-AR write-off of assets related to the ANO stator incident
Utility – Impacts from storm cost approvals and securitizations, including
customer sharing (excluding income tax items below)
Utility – 2016-2018 IRS audit resolution
Utility – E-LA reversal of regulatory liability associated with Hurricane Isaac
securitization, recognized in 2017 as a result of the TCJA
Utility – E-LA income tax benefit resulting from securitization
P&O – 2016-2018 IRS audit resolution
P&O – DOE spent nuclear fuel litigation settlement (IPEC)
ETR Adjusted Earnings
Calculations may differ due to rounding
(a) Per share amounts are calculated by multiplying the corresponding earnings (loss) by the estimated income tax rate that is expected to
0.61
1.30
0.15
6.77
(0.29)
(0.28)
(0.34)
0.50
2.67
apply and dividing by the diluted average number of common shares outstanding for the period.
7
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
The following graph compares the performance of the common stock of Entergy Corporation with
the Philadelphia Utility Index and the S&P 500 Index (each of which includes Entergy Corporation) for the
last five years ended December 31.
Entergy Corporation
Philadelphia Utility Index
S&P 500 Index
2018
$100.00
$100.00
$100.00
2019
$144.33
$126.82
$131.47
2020
$124.54
$130.27
$155.65
2021
$145.88
$154.03
$200.29
2022
$151.02
$155.03
$163.98
2023
$141.85
$140.83
$207.04
Assumes $100 invested at the closing price on Dec. 31, 2018, in Entergy Corporation common
stock, the Philadelphia Utility Index and the S&P 500 Index, and reinvestment of all dividends.
Source: Bloomberg
8
Certain abbreviations or acronyms used in the text and notes are defined below:
Abbreviation or Acronym
Term
DEFINITIONS
AFUDC
ALJ
ANO 1 and 2
APSC
ASU
Board
Cajun
capacity factor
City Council
COVID-19
D.C. Circuit
DOE
Entergy
Entergy Corporation
Entergy Gulf States, Inc.
Entergy Gulf States
Louisiana
Entergy Louisiana
Entergy Texas
Entergy Wholesale
Commodities
EPA
ERCOT
FASB
FERC
FitzPatrick
GAAP
Grand Gulf
Allowance for Funds Used During Construction
Administrative Law Judge
Units 1 and 2 of Arkansas Nuclear One (nuclear), owned by Entergy Arkansas
Arkansas Public Service Commission
Accounting Standards Update issued by the FASB
Board of Directors of Entergy Corporation
Cajun Electric Power Cooperative, Inc.
Actual plant output divided by maximum potential plant output for the period
Council of the City of New Orleans, Louisiana
The novel coronavirus disease declared a pandemic by the World Health
Organization and the Centers for Disease Control and Prevention in March 2020
U.S. Court of Appeals for the District of Columbia Circuit
United States Department of Energy
Entergy Corporation and its direct and indirect subsidiaries
Entergy Corporation, a Delaware corporation
Predecessor company for financial reporting purposes to Entergy Gulf States
Louisiana that included the assets and business operations of both Entergy Gulf
States Louisiana and Entergy Texas
Entergy Gulf States Louisiana, L.L.C., a Louisiana limited liability company
formally created as part of the jurisdictional separation of Entergy Gulf States, Inc.
and the successor company to Entergy Gulf States, Inc. for financial reporting
purposes. The term is also used to refer to the Louisiana jurisdictional business of
Entergy Gulf States, Inc., as the context requires. Effective October 1, 2015, the
business of Entergy Gulf States Louisiana was combined with Entergy Louisiana.
Entergy Louisiana, LLC, a Texas limited liability company formally created as part
of the combination of Entergy Gulf States Louisiana and the company formerly
known as Entergy Louisiana, LLC (Old Entergy Louisiana) into a single public
utility company and the successor to Old Entergy Louisiana for financial reporting
purposes.
Entergy Texas, Inc., a Texas corporation formally created as part of the jurisdictional
separation of Entergy Gulf States, Inc. The term is also used to refer to the Texas
jurisdictional business of Entergy Gulf States, Inc., as the context requires.
Prior to January 1, 2023, one of Entergy’s reportable business segments consisting of
non-utility business activities primarily comprised of the ownership, operation, and
decommissioning of nuclear power plants, the ownership of interests in non-
nuclear power plants, and the sale of the electric power produced by its operating
power plants to wholesale customers.
United States Environmental Protection Agency
Electric Reliability Council of Texas
Financial Accounting Standards Board
Federal Energy Regulatory Commission
James A. FitzPatrick Nuclear Power Plant (nuclear), previously owned as part of
Entergy’s non-utility business, which was sold in March 2017
Generally Accepted Accounting Principles
Unit No. 1 of Grand Gulf Nuclear Station (nuclear), 90% owned or leased by System
Energy
9
Abbreviation or Acronym
Term
DEFINITIONS (Continued)
GWh
HLBV
Independence
Indian Point 2
Indian Point 3
IRS
ISO
kV
kW
kWh
LDEQ
LPSC
LURC
Mcf
MISO
MMBtu
MPSC
MW
MWh
Nelson Unit 6
Gigawatt-hour(s), which equals one million kilowatt-hours
Hypothetical liquidation at book value
Independence Steam Electric Station (coal), owned 16% by Entergy Arkansas, 25%
by Entergy Mississippi, and 7% by Entergy Power, LLC
Unit 2 of Indian Point Energy Center (nuclear), previously owned as part of
Entergy’s non-utility business, which ceased power production in April 2020 and
was sold in May 2021
Unit 3 of Indian Point Energy Center (nuclear), previously owned as part of
Entergy’s non-utility business, which ceased power production in April 2021 and
was sold in May 2021
Internal Revenue Service
Independent System Operator
Kilovolt
Kilowatt, which equals one thousand watts
Kilowatt-hour(s)
Louisiana Department of Environmental Quality
Louisiana Public Service Commission
Louisiana Utilities Restoration Corporation
1,000 cubic feet of gas
Midcontinent Independent System Operator, Inc., a regional transmission
organization
One million British Thermal Units
Mississippi Public Service Commission
Megawatt(s), which equals one thousand kilowatts
Megawatt-hour(s)
Unit No. 6 (coal) of the Nelson Steam Electric Generating Station, 70% of which is
co-owned by Entergy Louisiana (57.5%) and Entergy Texas (42.5%) and 10.9% of
which is owned by EAM Nelson Holding, LLC
Net debt to net capital ratio Gross debt less cash and cash equivalents divided by total capitalization less cash
and cash equivalents, which is a non-GAAP measure
NRC
Palisades
Parent & Other
Pilgrim
PPA
PRP
PUCT
Nuclear Regulatory Commission
Palisades Nuclear Plant (nuclear), previously owned as part of Entergy’s non-utility
business, which ceased power production in May 2022 and was sold in June 2022
The portions of Entergy not included in the Utility segment, primarily consisting of
the activities of the parent company, Entergy Corporation, and other business
activity, including Entergy’s non-utility operations business which owns interests
in non-nuclear power plants that sell the electric power produced by those plants to
wholesale customers and also provides decommissioning services to nuclear power
plants owned by non-affiliated entities in the United States
Pilgrim Nuclear Power Station (nuclear), previously owned as part of Entergy’s non-
utility business, which ceased power production in May 2019 and was sold in
August 2019
Purchased power agreement or power purchase agreement
Potentially responsible party (a person or entity that may be responsible for
remediation of environmental contamination)
Public Utility Commission of Texas
10 Abbreviation or Acronym
Registrant Subsidiaries
River Bend
RTO
SEC
System Agreement
System Energy
Unit Power Sales
Agreement
Utility
DEFINITIONS (Concluded)
Term
Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC,
Entergy New Orleans, LLC, Entergy Texas, Inc., and System Energy Resources,
Inc.
River Bend Station (nuclear), owned by Entergy Louisiana
Regional transmission organization
Securities and Exchange Commission
Agreement, effective January 1, 1983, as modified, among the Utility operating
companies relating to the sharing of generating capacity and other power
resources. The agreement terminated effective August 2016.
System Energy Resources, Inc.
Agreement, dated as of June 10, 1982, as amended and approved by the FERC,
among Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New
Orleans, and System Energy, relating to the sale of capacity and energy from
System Energy’s share of Grand Gulf
Entergy’s reportable segment that generates, transmits, distributes, and sells electric
power, with a small amount of natural gas distribution in portions of Louisiana
Utility operating companies Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and Entergy Texas
Vermont Yankee
Vermont Yankee Nuclear Power Station (nuclear), previously owned as part of
Entergy’s non-utility business, which ceased power production in December 2014
and was disposed of in January 2019
Waterford 3
Unit No. 3 (nuclear) of the Waterford Steam Electric Station, owned by Entergy
Louisiana
weather-adjusted usage
White Bluff
Electric usage excluding the effects of deviations from normal weather
White Bluff Steam Electric Generating Station, 57% owned by Entergy Arkansas
11 MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS
Entergy operates primarily through a single reportable segment, Utility. The Utility segment includes the
generation, transmission, distribution, and sale of electric power in portions of Arkansas, Mississippi, Texas, and
Louisiana, including the City of New Orleans; and operation of a small natural gas distribution business in portions
of Louisiana. See “Planned Sale of Gas Distribution Businesses” below for discussion of the planned sale of the
Entergy New Orleans and Entergy Louisiana gas distribution businesses.
Entergy completed its multi-year strategy to exit the merchant nuclear power business in 2022 and upon
completion of all transition activities, effective January 1, 2023, Entergy Wholesale Commodities is no longer a
reportable segment. Remaining business activity previously reported under Entergy Wholesale Commodities is now
included under Parent & Other. Historical segment financial information presented herein has been restated for
2022 and 2021 to reflect the change in reportable segments. The change in reportable segments had no effect on
Entergy’s consolidated financial statements or historical segment financial information for the Utility reportable
segment. See Note 13 to the financial statements for discussion of and financial information regarding Entergy’s
business segment.
Results of Operations
2023 Compared to 2022
Following are income statement variances for Utility, Parent & Other, and Entergy comparing 2023 to 2022
showing how much the line item increased or (decreased) in comparison to the prior period.
Utility
Parent &
Other (a)
(In Thousands)
Entergy
2022 Net Income (Loss) Attributable to Entergy
Corporation
$1,406,605
($303,439) $1,103,166
Operating revenues
Fuel, fuel-related expenses, and gas purchased for
resale
Purchased power
Other regulatory charges (credits) - net
Other operation and maintenance
Asset write-offs, impairments, and related charges
(credits)
Taxes other than income taxes
Depreciation and amortization
Other income (deductions)
Interest expense
Other expenses
Income taxes
Preferred dividend requirements of subsidiaries
and noncontrolling interests
2023 Net Income (Loss) Attributable to Entergy
(1,397,860)
(218,965)
(1,616,825)
(878,601)
(573,937)
(807,872)
(61,702)
79,962
35,951
92,806
145,999
66,468
23,324
(340,584)
(52,670)
(19,571)
—
(78,544)
126,181
(13,915)
(8,826)
(5,415)
27,701
(46,611)
(310,973)
(931,271)
(593,508)
(807,872)
(140,246)
206,143
22,036
83,980
140,584
94,169
(23,287)
(651,557)
11,802
—
11,802
Corporation
$2,507,127
($150,591) $2,356,536
(a)
Parent & Other includes eliminations, which are primarily intersegment activity.
12
Results of operations for 2023 include: (1) a $568 million reduction, recorded at Utility, and a $275 million
reduction, recorded at Parent & Other, in income tax expense as a result of the resolution of the 2016-2018 IRS
audit, partially offset by $98 million ($72 million net-of-tax) of regulatory charges, recorded at Utility, to reflect
credits expected to be provided to customers by Entergy Louisiana and Entergy New Orleans as a result of the
resolution of the 2016-2018 IRS audit; (2) the reversal of a $106 million regulatory liability, associated with the
Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act, recorded at Utility, as
part of the settlement of Entergy Louisiana’s test year 2017 formula rate plan filing; (3) a $129 million reduction in
income tax expense as a result of the Hurricane Ida securitization in March 2023, which also resulted in a $103
million ($76 million net-of-tax) regulatory charge, recorded at Utility, to reflect Entergy Louisiana’s obligation to
provide credits to its customers as described in an LPSC ancillary order issued as part of the securitization
regulatory proceeding; and (4) write-offs of $78 million ($59 million net-of-tax), recorded at Utility, as a result of
Entergy Arkansas’s approved motion to forgo recovery of identified costs resulting from the 2013 ANO stator
incident. See Note 3 to the financial statements for further discussion of the resolution of the 2016-2018 IRS audit.
See Note 2 to the financial statements for further discussion of the Entergy Louisiana formula rate plan global
settlement. See Notes 2 and 3 to the financial statements for further discussion of the Entergy Louisiana March
2023 storm cost securitization. See Note 8 to the financial statements for further discussion of the ANO stator
incident and the approved motion to forgo recovery.
Results of operations for 2022 include: (1) a regulatory charge of $551 million ($413 million net-of-tax),
recorded at Utility, as a result of System Energy’s partial settlement agreement and offer of settlement related to
pending proceedings before the FERC; (2) a $283 million reduction in income tax expense as a result of the
Hurricane Laura, Hurricane Delta, Hurricane Zeta, Winter Storm Uri, and Hurricane Ida May 2022 securitization
financing, which also resulted in a $224 million ($165 million net-of-tax) regulatory charge, recorded at Utility, to
reflect Entergy Louisiana’s obligation to provide credits to its customers as described in an LPSC ancillary order
issued as part of the securitization regulatory proceeding; and (3) a gain of $166 million ($130 million net-of-tax),
reflected in “Asset write-offs, impairments, and related charges (credits),” as a result of the sale of the Palisades
plant in June 2022. See Note 2 to the financial statements for further discussion of the System Energy settlement
agreement with the MPSC. See Notes 2 and 3 to the financial statements for further discussion of the Entergy
Louisiana May 2022 storm cost securitization. See Note 14 to the financial statements for discussion of the sale of
the Palisades plant.
Operating Revenues
Utility
Following is an analysis of the change in operating revenues comparing 2023 to 2022:
2022 operating revenues
Fuel, rider, and other revenues that do not
significantly affect net income
Storm restoration carrying costs
Volume/weather
Retail one-time bill credit
Return of unprotected excess accumulated
deferred income taxes to customers
Retail electric price
2023 operating revenues
Amount
(In Millions)
$13,421
(1,801)
(23)
5
37
53
331
$12,023
13
The Utility operating companies’ results include revenues from rate mechanisms designed to recover fuel,
purchased power, and other costs such that the revenues and expenses associated with these items generally offset
and do not affect net income. “Fuel, rider, and other revenues that do not significantly affect net income” includes
the revenue variance associated with these items.
Storm restoration carrying costs, representing the equity component of storm restoration carrying costs,
includes $22 million recognized by Entergy Texas as part of its April 2022 storm cost securitization, $37 million
recognized by Entergy Louisiana as part of its May 2022 storm cost securitization, $31 million recognized by
Entergy Louisiana as part of its March 2023 storm cost securitization, and $5 million recognized by Entergy New
Orleans as part of the City Council’s approval of the Entergy New Orleans storm cost certification report in
December 2023. See Note 2 to the financial statements for discussion of storm cost securitizations.
The volume/weather variance is primarily due to the effect of more favorable weather on commercial sales
and an increase in industrial usage, substantially offset by the effect of less favorable weather on residential sales.
The increase in industrial usage is primarily due to an increase in demand from new customers and expansion
projects, primarily in the primary metals, industrial gases, and chemicals industries, and an increase in demand from
small industrial customers, substantially offset by a decrease in demand from cogeneration customers.
The retail one-time bill credit represents the disbursement of settlement proceeds in the form of a one-time
bill credit provided to Entergy Mississippi’s retail customers during the September 2022 billing cycle as a result of
the System Energy settlement agreement with the MPSC. See Note 2 to the financial statements for discussion of
the settlement agreement and the MPSC directive related to the disbursement of settlement proceeds.
The return of unprotected excess accumulated deferred income taxes to customers resulted from activity at
the Utility operating companies in response to the enactment of the Tax Cuts and Jobs Act. The return of
unprotected excess accumulated deferred income taxes began in second quarter 2018. In 2022, $53 million was
returned to customers through reductions in operating revenues. There was no return of unprotected excess
accumulated deferred income taxes for Entergy or the Utility operating companies for 2023. There was no effect on
net income as the reductions in operating revenues were offset by reductions in income tax expense. See Note 2 to
the financial statements for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.
The retail electric price variance is primarily due to:
•
•
•
•
•
an increase in Entergy Arkansas’s formula rate plan rates effective January 2023;
increases in Entergy Louisiana’s formula rate plan revenues, including increases in the distribution and
transmission recovery mechanisms, effective September 2022 and September 2023;
increases in Entergy Mississippi’s formula rate plan rates effective August 2022, April 2023, and July 2023;
an increase in Entergy New Orleans’s formula rate plan rates effective September 2022; and
an increase in base rates, including the realignment of the costs previously being collected through the
distribution and transmission cost recovery factor riders and the generation cost recovery rider to base rates,
effective June 2023, at Entergy Texas.
See Note 2 to the financial statements for further discussion of the regulatory proceedings discussed above.
14 Total electric energy sales for Utility for the years ended December 31, 2023 and 2022 are as follows:
Residential
Commercial
Industrial
Governmental
Total retail
Sales for resale
Total
2023
2022
(GWh)
%
Change
36,372
28,221
52,807
2,458
119,858
15,189
135,047
37,134
27,982
52,501
2,512
120,129
15,968
136,097
(2)
1
1
(2)
—
(5)
(1)
See Note 18 to the financial statements for additional discussion of operating revenues.
Other Income Statement Items
Utility
Other operation and maintenance expenses decreased from $2,900 million for 2022 to $2,838 million for
2023 primarily due to:
•
•
•
•
•
•
a decrease of $59 million in compensation and benefits costs primarily due to lower health and welfare
costs, including higher prescription drug rebates in second quarter 2023, a decrease in net periodic pension
and other postretirement benefits service costs as a result of an increase in the discount rates used to value
the benefits liabilities, and a revision to estimated incentive compensation expense in first quarter 2023.
See “Critical Accounting Estimates” below and Note 11 to the financial statements for further discussion
of pension and other postretirement benefits costs;
a decrease of $51 million in transmission costs allocated by MISO. See Note 2 to the financial statements
for further information on the recovery of these costs;
a decrease of $21 million in non-nuclear generation expenses primarily due to a lower scope of work,
including during plant outages, performed in 2023 as compared to 2022;
a decrease of $17 million in nuclear generation expenses primarily due to a lower scope of work performed
in 2023 as compared to 2022 and lower nuclear labor costs;
a decrease of $11 million in customer service center support costs primarily due to lower contract costs; and
the effects of recording a final judgment in first quarter 2023 to resolve claims in the ANO damages case
against the DOE related to spent nuclear fuel storage costs. The damages awarded include the
reimbursement of approximately $10 million of spent nuclear fuel storage costs previously recorded as
other operation and maintenance expenses. See Note 8 to the financial statements for discussion of the
spent nuclear fuel litigation.
The decrease was partially offset by:
•
•
•
•
an increase of $43 million in contract costs related to operational performance, customer service, and
organizational health initiatives;
an increase of $15 million in power delivery expenses primarily due to higher vegetation maintenance costs;
an increase of $11 million in insurance expenses primarily due to lower nuclear insurance refunds received
in 2023; and
several individually insignificant items.
15
Asset write-offs, impairments, and related charges (credits) includes the effects of Entergy Arkansas
forgoing recovery of identified costs resulting from the 2013 ANO stator incident. In third quarter 2023, Entergy
Arkansas recorded write-offs of its regulatory asset for deferred fuel of $68.9 million and the undepreciated balance
of $9.5 million in capital costs related to the ANO stator incident. See Note 8 to the financial statements for further
discussion of the ANO stator incident and the approved motion to forgo recovery.
Taxes other than income taxes increased primarily due to increases in ad valorem taxes resulting from
higher assessments.
Depreciation and amortization expenses increased primarily due to:
•
•
•
additions to plant in service;
an increase in depreciation rates at Entergy Texas, effective in June 2023. See Note 2 to the financial
statements for discussion of the 2022 base rate case at Entergy Texas; and
a reduction in depreciation expense at System Energy in 2022 related to the Grand Gulf sale-leaseback
property, which resulted from the FERC order on the Grand Gulf sale-leaseback renewal complaint in
December 2022. See Note 2 to the financial statements for further discussion of the Grand Gulf sale-
leaseback renewal complaint.
The increase was partially offset by a reduction in depreciation expense of $41 million in 2023 at System Energy as
a result of the approval by the FERC in August 2023 of the settlement establishing updated depreciation rates used
in calculating Grand Gulf plant depreciation and amortization expenses under the Unit Power Sales Agreement. See
Note 2 to the financial statements for discussion of the Unit Power Sales Agreement depreciation amendment
proceeding.
Other regulatory charges (credits) - net includes:
•
•
•
•
•
•
•
a regulatory charge of $103 million, recorded by Entergy Louisiana in first quarter 2023, to reflect its
obligation to provide credits to its customers as described in an LPSC ancillary order issued in the
Hurricane Ida securitization regulatory proceeding. See Note 2 to the financial statements for discussion of
the Entergy Louisiana March 2023 storm cost securitization;
a regulatory charge of $224 million, recorded by Entergy Louisiana in second quarter 2022, to reflect its
obligation to provide credits to its customers as described in an LPSC ancillary order issued in the
Hurricane Laura, Hurricane Delta, Hurricane Zeta, Winter Storm Uri, and Hurricane Ida securitization
regulatory proceeding. See Note 2 to the financial statements for discussion of the Entergy Louisiana May
2022 storm cost securitization;
a regulatory charge of $38 million, recorded by Entergy Louisiana in fourth quarter 2023, to reflect credits
expected to be provided to customers as a result of the resolution of the 2016-2018 IRS audit. See Note 3 to
the financial statements for discussion of the resolution of the 2016-2018 IRS audit;
regulatory credits of $23 million, recorded by Entergy Mississippi in third quarter 2022, to reflect the
effects of the joint stipulation reached in the 2022 formula rate plan filing proceeding. See Note 2 to the
financial statements for discussion of the Entergy Mississippi 2022 formula rate plan filing;
regulatory credits of $18 million, recorded by Entergy Mississippi in fourth quarter 2022, to reflect that the
2022 estimated earned return was below the formula bandwidth. See Note 2 to the financial statements for
discussion of Entergy Mississippi’s formula rate plan filings;
a regulatory charge of $60 million, recorded by Entergy New Orleans in fourth quarter 2023, to reflect
credits expected to be provided to customers as a result of the resolution of the 2016-2018 IRS audit. See
Note 3 to the financial statements for discussion of the resolution of the 2016-2018 IRS audit;
the reversal in third quarter 2023 of $22 million of regulatory liabilities to reflect the recognition of certain
receipts by Entergy Texas under affiliated PPAs that have been resolved. See Note 2 to the financial
statements for discussion of Entergy Texas’s 2022 base rate case; and
16 •
a regulatory charge of $551 million, recorded by System Energy in second quarter 2022, to reflect the
effects of the partial settlement agreement and offer of settlement related to pending proceedings before the
FERC. See Note 2 to the financial statements for discussion of the partial settlement agreement with the
MPSC.
In addition, Entergy records a regulatory charge or credit for the difference between asset retirement obligation-
related expenses and nuclear decommissioning trust earnings plus asset retirement obligation-related costs collected
in revenue.
Other income increased primarily due to:
•
•
•
•
an increase of $113 million in intercompany dividend income from affiliated preferred membership
interests related to storm cost securitizations. The intercompany dividend income on the affiliate preferred
membership interests is eliminated for consolidation purposes and has no effect on net income since the
investment is in another Entergy subsidiary;
an increase in the allowance for equity funds used during construction due to higher construction work in
progress in 2023, including the Orange County Advanced Power Station project at Entergy Texas;
a $32 million charge, recorded by Entergy Louisiana in second quarter 2022, for the LURC’s 1% beneficial
interest in the storm trust I established as part of the May 2022 storm cost securitization as compared to a
$15 million charge, recorded by Entergy Louisiana in first quarter 2023, for the LURC’s 1% beneficial
interest in the storm trust II established as part of the March 2023 storm cost securitization; and
changes in decommissioning trust fund activity, including portfolio rebalancing of decommissioning trust
funds in 2022.
This increase was partially offset by:
•
•
a decrease of $21 million in the amount of storm restoration carrying costs recognized in 2023 as compared
to 2022, primarily related to Hurricane Ida; and
lower interest income from carrying costs related to deferred fuel balances.
See Note 2 to the financial statements for discussion of the Entergy Louisiana storm cost securitizations.
Interest expense increased primarily due to:
•
•
•
•
•
the issuance by Entergy Arkansas of $425 million of 5.15% Series mortgage bonds in January 2023;
the issuance by Entergy Louisiana of $500 million of 4.75% Series mortgage bonds in August 2022;
the issuance by Entergy Texas of $325 million of 5.00% Series mortgage bonds in August 2022;
the issuance by Entergy Texas of $350 million of 5.80% Series mortgage bonds in August 2023; and
the issuance by System Energy of $325 million of 6.00% Series mortgage bonds in March 2023.
The increase was partially offset by the repayment by Entergy Louisiana of $200 million of 3.30% Series mortgage
bonds in December 2022 and the repayment by System Energy of $250 million of 4.10% Series mortgage bonds in
April 2023.
See Note 5 to the financial statements for a discussion of long-term debt.
Noncontrolling interests reflects the earnings or losses attributable to the noncontrolling partner of Entergy
Arkansas’s tax equity partnership for the Searcy Solar facility and Entergy Mississippi’s tax equity partnership for
the Sunflower Solar facility, both under HLBV accounting, and to the LURC’s beneficial interest in the Entergy
Louisiana storm trusts. Entergy Mississippi recorded regulatory charges of $9 million in 2023 compared to $21
million in 2022 to defer the difference between the losses allocated to the tax equity partner under the HLBV
method of accounting and the earnings/loss that would have been allocated to the tax equity partner under its
17 respective ownership percentage in the partnership. See Note 1 to the financial statements for discussion of the
HLBV method of accounting.
Parent and Other
Operating revenues decreased primarily due to the absence of revenues from Palisades, after it was shut
down in May 2022.
Other operation and maintenance expenses decreased primarily due to the absence of expenses from
Palisades, after it was shut down in May 2022.
Asset write-offs, impairments, and related charges (credits) includes a gain of $166 million as a result of the
sale of the Palisades plant in June 2022 and the effects of recording a final judgment of $40 million in third quarter
2023 to resolve claims in the Indian Point 2 fourth round and Indian Point 3 third round combined damages case
against the DOE. See Note 8 to the financial statements for discussion of the spent nuclear fuel litigation.
Taxes other than income taxes decreased primarily due to decreases in employment taxes due to the absence
of expenses from Palisades, after its sale in June 2022.
Depreciation and amortization expenses decreased primarily due to the absence of depreciation expense
from Palisades, after it was shut down in May 2022.
Other income decreased primarily due to the elimination for consolidation purposes of intercompany
dividend income of $113 million from affiliated preferred membership interests, as discussed above, substantially
offset by losses on Palisades decommissioning trust fund investments in 2022, the timing of charitable donations,
and higher non-service pension income. See “Critical Accounting Estimates – Qualified Pension and Other
Postretirement Benefits” below and Note 11 to the financial statements for discussion of pension and other
postretirement benefits costs.
Interest expense increased primarily due to higher variable interest rates on commercial paper and credit
facilities in 2023 and higher commercial paper balances, partially offset by the redemption by Entergy of $650
million of 4.00% Series senior notes in June 2022. See Note 4 to the financial statements for discussion of
Entergy’s commercial paper program and credit facilities. See Note 5 to the financial statements for a discussion of
long-term debt.
Other expenses decreased primarily due to the absence of decommissioning expense and nuclear refueling
outage expense as a result of the shutdown and sale of Palisades in second quarter 2022.
See Note 14 to the financial statements for a discussion of the shutdown and sale of the Palisades plant.
Income Taxes
The effective income tax rates were (41.3%) for 2023 and (3.7%) for 2022. See Note 3 to the financial
statements for a reconciliation of the federal statutory rate of 21% to the effective income tax rates and for
additional discussion regarding income taxes.
2022 Compared to 2021
See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Results of Operations” in
Item 7 of Entergy’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on
February 24, 2023, for discussion of results of operations for 2022 compared to 2021.
18 Income Tax Legislation and Regulation
The Inflation Reduction Act of 2022 (IRA), signed into law on August 16, 2022, significantly expanded
federal tax incentives for clean energy production, including the extension of production tax credits to solar projects
and certain qualified nuclear power plants. Additionally, the IRA enacted a 1% excise tax on the buyback of public
company stock and a new corporate alternative minimum tax (CAMT). Effective for tax years beginning after
December 31, 2022, the CAMT imposes a 15% tax on the Adjusted Financial Statement Income (AFSI) on each
corporation in a group of corporations that averages greater than $1 billion in AFSI over a three-year period.
Taxpayers subject to the CAMT regime must pay the greater of 15% of AFSI or their regular federal tax liability. In
December 2022 the IRS issued a notice which provided guidance regarding the application of the CAMT. Entergy
and the Registrant Subsidiaries are closely monitoring any potential impact associated with the expansion of federal
tax incentives, the 1% excise tax, and CAMT. Based on initial guidance and current internal forecasts, Entergy and
the Registrant Subsidiaries may be subject to the CAMT beginning in the next two to four years. The United States
Treasury Department is expected to issue further guidance that will clarify how the tax credit provisions and CAMT
provisions will be interpreted and applied. This guidance will determine the amount of tax credits and incremental
cash tax payments Entergy expects in the future as a result of the legislation. Prior to receiving this guidance,
Entergy cannot adequately assess the expected future effects on its results of operations, financial position, and cash
flows. There are no effects on the financial statements of Entergy or the Registrant Subsidiaries as of and for the
years ended December 31, 2023 and 2022.
In June 2023 the IRS issued temporary and proposed regulations related to applicable tax credit
transferability and direct pay provisions of the IRA. In August 2023 the IRS issued proposed regulations related to
the prevailing wage and apprenticeship requirements under the IRA. Entergy and the Registrant Subsidiaries are
closely monitoring any potential effects associated with such federal tax incentives to assess the expected future
effects on their results of operations, cash flows, and financial condition. There are no effects on the financial
statements of Entergy or the Registrant Subsidiaries as of and for the year ended December 31, 2023.
In April 2023 the IRS issued Revenue Procedure 2023-15, which provides a safe harbor method of
accounting that taxpayers may use to determine whether expenses to repair, maintain, replace, or improve natural
gas transmission and distribution property must be capitalized and provides procedures for taxpayers to obtain
automatic consent to change their method of accounting. Entergy intends to adopt this new method of income tax
accounting under the safe harbor in accordance with Revenue Procedure 2023-15, which is not expected to have a
significant effect on the results of operations, cash flows, or financial condition of Entergy or the Registrant
Subsidiaries.
Entergy Wholesale Commodities Exit from the Merchant Power Business
Entergy completed its multi-year strategy to exit the merchant nuclear power business in 2022. See Note 13
to the financial statements for discussion of the exit from the merchant nuclear power business.
Shutdown and Sale of Palisades
In July 2018, Entergy entered into a purchase and sale agreement with Holtec International to sell to a
Holtec subsidiary 100% of the equity interests in the subsidiary that owns Palisades and the Big Rock Point Site,
with a subsequent amendment to the purchase and sale agreement in February 2020. In December 2020, Entergy
and Holtec submitted a license transfer application to the NRC requesting approval to transfer the Palisades and Big
Rock Point licenses from Entergy to Holtec. In February 2021 several parties filed with the NRC petitions to
intervene and requests for hearing challenging the license transfer application. In March 2021, Entergy and Holtec
filed answers opposing the petitions to intervene and hearing requests, and the petitioners filed replies. In March
2021 an additional party also filed a petition to intervene and request for hearing. Entergy and Holtec filed an
answer to the March 2021 petition in April 2021. The NRC issued an order approving the application in December
2021, subject to the NRC’s authority to condition, revise, or rescind the approval order based on the resolution of
19 four pending requests for hearing. These petitions and requests for hearing remained pending with the NRC at the
time of the closing of the Palisades transaction in June 2022. In July 2022 the NRC issued an order granting the
Michigan Attorney General’s petition hearing request. The hearing was held in February 2023. A decision from the
NRC is pending. See Note 14 to the financial statements for discussion of the sale of the Palisades plant.
Planned Sale of Gas Distribution Businesses
On October 28, 2023, Entergy New Orleans and Entergy Louisiana each entered into separate purchase and
sale agreements with respect to the sale of their respective regulated natural gas local distribution company
businesses to two separate affiliates of Bernhard Capital Partners Management LP. Under the purchase and sale
agreements, Entergy New Orleans has agreed to sell its regulated natural gas local distribution company business
serving customers in the Parish of Orleans, Louisiana, and Entergy Louisiana has agreed to sell its regulated natural
gas local distribution company business serving customers in the Parish of East Baton Rouge, Louisiana.
The base purchase price to be paid by the buyer of the Entergy New Orleans gas business is $285.5 million,
and the base purchase price to be paid by the buyer of the Entergy Louisiana gas business is $198 million, in each
case subject to certain adjustments at the closing of the transactions. Each purchase and sale agreement contains
customary representations, warranties, and covenants related to the applicable business and the respective
transactions. Between the date of the purchase and sale agreements and the completion of the transactions, Entergy
New Orleans and Entergy Louisiana have each agreed to operate the respective gas businesses in the ordinary
course of business and subject to certain operating covenants.
The transactions will proceed in two phases: (1) an “Initial Phase” prior to regulatory approvals in
connection with both transactions; and (2) a “Second Phase” following regulatory approvals in connection with both
transactions to the extent that certain conditions are satisfied or, where permissible, waived for both transactions.
Required regulatory approvals include the approval of the City Council for the sale of the Entergy New Orleans gas
business and the approval of the LPSC and the Metropolitan Council for the City of Baton Rouge and Parish of East
Baton Rouge for the sale of the Entergy Louisiana gas business. Additionally, while approval of the transactions is
generally not required from the FERC, the parties will seek a waiver of the FERC’s capacity release rules, as
applicable. In December 2023, Entergy New Orleans and Entergy Louisiana and the respective buyers filed their
joint applications with the City Council and the LPSC, respectively, seeking approval for the proposed transactions.
The applications request a decision by June 2024. In February 2024 the City Council adopted a procedural schedule
in which the hearing officer shall certify the record of the proceeding for City Council consideration no later than
September 2024.
The purchase and sale agreements may be terminated by any party if the Second Phase does not start within
15 months of October 28, 2023, or within 18 months if the only remaining conditions to starting the Second Phase
are obtaining the regulatory approvals. The consummation of each of the transactions is subject to satisfaction of
certain customary closing conditions, including the receipt of the regulatory approvals, clearance under the Hart-
Scott Rodino Act, and the concurrent closing of the other transaction. Under the purchase and sale agreements, the
closing of the transactions is not required to occur earlier than the later of six months following the initiation of the
Second Phase and July 28, 2025, and the purchase and sale agreements may be terminated by either party in the
event the closing has not occurred prior to October 28, 2025. Neither transaction is subject to a financing condition
for the applicable buyer.
The purchase and sale agreements are subject to customary termination provisions. If the purchase and sale
agreements are terminated in certain circumstances, each seller may be liable to the applicable buyer for a portion of
the buyer’s transition costs incurred in connection with transitioning the applicable business. Entergy New
Orleans’s and Entergy Louisiana’s aggregate liability for such transaction costs shall not exceed $7.5 million if
termination occurs during the Initial Phase or $12.5 million if termination occurs during the Second Phase, with
responsibility allocated between the sellers pro rata based on the relative purchase price. If the purchase and sale
agreements are terminated in certain circumstances, each buyer may be liable to the corresponding seller for a
20 reverse termination fee, equal to 7% of the applicable base purchase price if termination occurs during the Initial
Phase, or 10% of the applicable base purchase price if the termination occurs in the Second Phase.
Liquidity and Capital Resources
This section discusses Entergy’s capital structure, capital spending plans and other uses of capital, sources
of capital, and the cash flow activity presented in the cash flow statement.
Capital Structure
Entergy’s debt to capital ratio is shown in the following table. The decrease in the debt to capital ratio is
primarily due to net income in 2023.
Debt to capital
Effect of excluding securitization bonds
Debt to capital, excluding securitization bonds (non-GAAP) (a)
Effect of subtracting cash
Net debt to net capital, excluding securitization bonds (non-GAAP) (a)
63.8%
(0.3%)
63.5%
(0.1%)
63.4%
66.9%
(0.3%)
66.6%
(0.1%)
66.5%
December 31,
2023
December 31,
2022
(a)
Calculation excludes the New Orleans and Texas securitization bonds, which are non-recourse to Entergy
New Orleans and Entergy Texas, respectively.
As of December 31, 2023, 19.6% of the debt outstanding is at the parent company, Entergy Corporation, and 79.9%
is at the Utility. The remaining 0.5% of the debt outstanding relates to the Vermont Yankee credit facility, as
discussed in Note 4 to the financial statements herein. Net debt consists of debt less cash and cash equivalents.
Debt consists of notes payable and commercial paper, finance lease obligations, and long-term debt, including the
currently maturing portion. Capital consists of debt, equity, and subsidiaries’ preferred stock without sinking fund.
Net capital consists of capital less cash and cash equivalents. The debt to capital ratio excluding securitization
bonds and net debt to net capital ratio excluding securitization bonds are non-GAAP measures. Entergy uses the
debt to capital ratios excluding securitization bonds in analyzing its financial condition and believes they provide
useful information to its investors and creditors in evaluating Entergy’s financial condition because the
securitization bonds are non-recourse to Entergy, as more fully described in Note 5 to the financial statements.
Entergy also uses the net debt to net capital ratio excluding securitization bonds in analyzing its financial condition
and believes it provides useful information to its investors and creditors in evaluating Entergy’s financial condition
because net debt indicates Entergy’s outstanding debt position that could not be readily satisfied by cash and cash
equivalents on hand.
The Utility operating companies and System Energy seek to optimize their capital structures in accordance
with regulatory requirements and to control their cost of capital while also maintaining equity capitalization at a
level consistent with investment-grade debt ratings. To the extent that their operating cash flows are in excess of
planned investments, cash may be used to reduce outstanding debt or may be paid as a dividend to their parent, to
the extent funds are legally available to do so, or both, in appropriate amounts to maintain the capital structure. To
the extent that their operating cash flows are insufficient to support planned investments, the Utility operating
companies and System Energy may issue incremental debt or reduce dividends, or both, to maintain their capital
structures. In addition, Entergy may make equity contributions to the Utility operating companies and System
Energy to maintain their capital structures in certain circumstances such as financing of large transactions or
payments that would materially alter the capital structure if financed entirely with debt and reduced dividends.
Long-term debt, including the currently maturing portion, makes up most of Entergy’s total debt
outstanding. Following are Entergy’s long-term debt principal maturities and estimated interest payments as of
21
December 31, 2023. To estimate future interest payments for variable rate debt, Entergy used the rate as of
December 31, 2023. The amounts below include payments on System Energy’s Grand Gulf sale-leaseback
transaction, which are included in long-term debt on the balance sheet.
Long-term debt maturities and
estimated interest payments
2024
2025
Utility
Parent & Other
Total
$2,753
244
$2,997
$1,481
894
$2,375
2026
(In Millions)
$2,315
833
$3,148
2027-2028
after 2028
$3,653
777
$4,430
$23,540
2,393
$25,933
Note 5 to the financial statements provides more detail concerning long-term debt outstanding.
Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in
June 2028. The facility includes fronting commitments for the issuance of letters of credit against $20 million of the
total borrowing capacity of the credit facility. The commitment fee is currently 0.225% of the undrawn
commitment amount. Commitment fees and interest rates on loans under the credit facility can fluctuate depending
on the senior unsecured debt ratings of Entergy Corporation. The weighted-average interest rate for the year ended
December 31, 2023 was 6.52% on the drawn portion of the facility. The following is a summary of the amounts
outstanding and capacity available under the credit facility as of December 31, 2023:
Capacity
Borrowings
Letters of
Credit
Capacity
Available
$3,500
$—
$3
$3,497
(In Millions)
Entergy Corporation’s credit facility includes a covenant requiring Entergy to maintain a consolidated debt
ratio, as defined, of 65% or less of its total capitalization. The calculation of this debt ratio under Entergy
Corporation’s credit facility is different than the calculation of the debt to capital ratio above. Entergy is currently
in compliance with the covenant and expects to remain in compliance with this covenant. If Entergy fails to meet
this ratio, or if Entergy Corporation or one of the Registrant Subsidiaries (except Entergy New Orleans and System
Energy) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of the Entergy
Corporation credit facility’s maturity date may occur.
Entergy Corporation has a commercial paper program with a Board-approved program limit of $2 billion.
As of December 31, 2023, Entergy Corporation had $1,138.1 million of commercial paper outstanding. The
weighted-average interest rate for the year ended December 31, 2023 was 5.44%.
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each
had credit facilities available as of December 31, 2023 as follows:
Company
Entergy Arkansas
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
Expiration
Date
April 2024
June 2028
June 2028
July 2025
June 2024
June 2028
Amount of
Facility
$25 million (b)
$150 million (c)
$350 million (c)
$150 million
$25 million (c)
$150 million (c)
Interest
Rate
(a)
7.29%
6.58%
6.71%
6.58%
7.08%
6.71%
Amount Drawn
as of
December 31, 2023
—
—
—
—
—
—
Letters of Credit
Outstanding as of
December 31, 2023
—
—
—
—
—
$1.1 million
22
(a)
(b)
(c)
The interest rate is the estimated interest rate as of December 31, 2023 that would have been applied to
outstanding borrowings under the facility.
Borrowings under this Entergy Arkansas credit facility may be secured by a security interest in its accounts
receivable at Entergy Arkansas’s option.
The credit facility includes fronting commitments for the issuance of letters of credit against a portion of the
borrowing capacity of the facility as follows: $5 million for Entergy Arkansas; $15 million for Entergy
Louisiana; $10 million for Entergy New Orleans; and $30 million for Entergy Texas.
Each of the credit facilities requires the Registrant Subsidiary borrower to maintain a debt ratio, as defined,
of 65% or less of its total capitalization. Each Registrant Subsidiary is in compliance with this covenant.
In addition, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy
Texas each have an uncommitted standby letter of credit facility as a means to post collateral to support their
obligations to MISO and for other purposes. The following is a summary of the uncommitted standby letter of
credit facilities as of December 31, 2023:
Company
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
Amount of
Uncommitted
Facility
$25 million
$125 million
$65 million
$15 million
$80 million
Letter of
Credit Fee
0.78%
0.78%
0.78%
1.625%
1.250%
Letters of Credit Issued as
of December 31, 2023
(a) (b)
$5.8 million
$17.1 million
$20.0 million
$0.5 million
$76.5 million
(a)
(b)
As of December 31, 2023, letters of credit posted with MISO covered financial transmission rights exposure
of $1.2 million for Entergy Arkansas, $0.5 million for Entergy Louisiana, $0.3 million for Entergy
Mississippi, and $0.1 million for Entergy Texas. See Note 15 to the financial statements for discussion of
financial transmission rights.
As of December 31, 2023, in addition to the $20 million in MISO letters of credit, Entergy Mississippi has
$1 million in non-MISO letters of credit outstanding under this facility.
Finance lease obligations are a minimal part of Entergy’s overall capital structure. Following are Entergy’s
payment obligations under those leases.
2024
2025
Finance lease payments
$20
$18
2026
(In Millions)
$16
2027-2028
after 2028
$25
$34
Finance leases are discussed in Note 10 to the financial statements.
Operating Lease Obligations and Guarantees of Unconsolidated Obligations
Entergy has a minimal amount of operating lease obligations and guarantees in support of unconsolidated
obligations. Entergy’s guarantees in support of unconsolidated obligations are not likely to have a material effect on
Entergy’s financial condition, results of operations, or cash flows. Following are Entergy’s payment obligations as
of December 31, 2023 on non-cancelable operating leases with a term over one year:
2024
2025
Operating lease payments
$67
$53
2026
(In Millions)
$45
2027-2028
after 2028
$47
$14
23
Operating leases are discussed in Note 10 to the financial statements.
Other Obligations
Entergy currently expects to contribute approximately $270 million to its qualified pension plans and
approximately $45.9 million to its other postretirement plans in 2024, although the 2024 required pension
contributions will be known with more certainty when the January 1, 2024 valuations are completed, which is
expected by April 1, 2024. See “Critical Accounting Estimates - Qualified Pension and Other Postretirement
Benefits” below and Note 11 to the financial statements for a discussion of qualified pension and other
postretirement benefits funding.
Entergy has $279 million of unrecognized tax benefits net of unused tax attributes plus interest for which
the timing of payments beyond 12 months cannot be reasonably estimated due to uncertainties in the timing of
effective settlement of tax positions. See Note 3 to the financial statements for additional information regarding
unrecognized tax benefits.
In addition, the Registrant Subsidiaries enter into fuel and purchased power agreements that contain
minimum purchase obligations. The Registrant Subsidiaries each have rate mechanisms in place to recover fuel,
purchased power, and associated costs incurred under these purchase obligations.
Capital Expenditure Plans and Other Uses of Capital
Following are the amounts of Entergy’s planned construction and other capital investments for 2024
through 2026.
Planned construction and capital investments
2024
Generation
Transmission
Distribution
Utility Support
Total
$2,270
1,190
2,110
350
$5,920
2025
(In Millions)
$2,675
1,385
2,125
315
$6,500
2026
$3,135
1,880
1,940
380
$7,335
Planned construction and capital investments refer to amounts Entergy plans to spend on routine capital
projects that are necessary to support reliability of its service, equipment, or systems and to support normal
customer growth. In addition to routine capital projects, they also refer to amounts Entergy plans to spend on non-
routine capital investments for which Entergy is either contractually obligated, has Board approval, or otherwise
expects to make to satisfy regulatory or legal requirements. Amounts include the following types of construction
and capital investments:
•
•
•
Investments in generation projects to modernize, decarbonize, and diversify Entergy’s portfolio, including
Walnut Bend Solar, West Memphis Solar, Driver Solar, Orange County Advanced Power Station, and
potential construction of additional generation;
Investments in Entergy’s Utility nuclear fleet;
Transmission spending to improve reliability and resilience while also supporting renewables expansion and
customer growth; and
• Distribution and Utility support spending to improve reliability, resilience, and customer experience through
projects focused on asset renewals and enhancements and grid stability.
For the next several years, the Utility’s owned and contracted generating capacity is projected to be adequate to
meet MISO reserve requirements; however, MISO recently implemented changes to its resource adequacy
24
construct, and continues to pursue other changes, that generally move from an annual to a seasonal design and that
change the way that resources are assigned capacity credit. As a result of these changes, there may be seasonal
variations in the capacity credit afforded to the Utility operating companies’ resources by MISO. Entergy is
monitoring the evolution and application of these rules, which may require the Utility operating companies to
procure additional capacity credits from the MISO market and in the longer-term may impact the incremental
additional supply resources needed. The Utility’s supply plan initiative will continue to seek to transform its
generation portfolio with new generation resources. Opportunities resulting from the supply plan initiative,
including new projects or the exploration of alternative financing sources, could result in increases or decreases in
the capital expenditure estimates given above. Estimated capital expenditures are subject to periodic review and
modification and may vary based on the ongoing effects of business restructuring, regulatory constraints and
requirements, government actions, environmental regulations, business opportunities, market volatility, economic
trends, changes in project plans, and the ability to access capital.
Renewables
Walnut Bend Solar
In October 2020, Entergy Arkansas filed a petition with the APSC seeking a finding that the purchase of the
100 MW Walnut Bend Solar facility is in the public interest. Entergy Arkansas primarily requested cost recovery
through the formula rate plan rider. In July 2021 the APSC granted Entergy Arkansas’s petition and approved the
acquisition of the resource and cost recovery through the formula rate plan rider. In addition, the APSC directed
Entergy Arkansas to file a report within 180 days detailing its efforts to obtain a tax equity partnership. In January
2022, Entergy Arkansas filed its tax equity partnership status report and will file subsequent reports until a tax
equity partnership is obtained or a tax equity partnership is no longer sought. The counterparty notified Entergy
Arkansas that it was terminating the project, though it was willing to consider an alternative for the site. Entergy
Arkansas disputed the right of termination. Negotiations were conducted, including with respect to cost and
schedule and to updates arising as a result of the Inflation Reduction Act of 2022. In April 2023, Entergy Arkansas
filed an application for an amended certificate of environmental compatibility and public need with the APSC
seeking approval by June 2023 for the updates to the cost and schedule that were previously approved by the APSC.
In June 2023, Entergy Arkansas, the APSC general staff, and the Arkansas Attorney General filed a unanimous
settlement supporting that the approval of the Walnut Bend Solar facility is in the public interest based on the terms
in the settlement, including the treatment for the production tax credits associated with the facility. In July 2023,
after requesting further testimony and purporting to modify several terms in the settlement and upon rehearing, the
APSC approved the settlement largely on the terms submitted, including a 30-year amortization period for the
production tax credits. In February 2024, Entergy Arkansas made an initial payment of approximately $169.7
million to acquire the facility. The project will achieve commercial operation once testing is completed and the
project has achieved substantial completion. Entergy Arkansas currently expects the project to achieve commercial
operation in the first half of 2024, at which time a substantial completion payment of approximately $20 million is
expected.
West Memphis Solar
In January 2021, Entergy Arkansas filed a petition with the APSC seeking a finding that the purchase of the
180 MW West Memphis Solar facility is in the public interest. In October 2021 the APSC granted Entergy
Arkansas’s petition and approved the acquisition of the West Memphis Solar facility and cost recovery through the
formula rate plan rider. In addition, the APSC directed Entergy Arkansas to file a report within 180 days detailing
its efforts to obtain a tax equity partnership. In April 2022, Entergy Arkansas filed its tax equity partnership status
report and will file subsequent reports until a tax equity partnership is obtained or a tax equity partnership is no
longer sought. In March 2022 the counterparty notified Entergy Arkansas that it was seeking changes to certain
terms of the build-own-transfer agreement, including both cost and schedule. In January 2023, Entergy Arkansas
filed a supplemental application with the APSC seeking approval for a change in the transmission route and updates
to the cost and schedule that were previously approved by the APSC. In March 2023 the APSC approved Entergy
25 Arkansas’s supplemental application. The project is currently expected to achieve commercial operation by the end
of 2024.
Driver Solar
In April 2022, Entergy Arkansas filed a petition with the APSC seeking a finding that the purchase of the
250 MW Driver Solar facility is in the public interest and requested cost recovery through the formula rate plan
rider. The APSC established a procedural schedule with a hearing scheduled in June 2022, but the parties later
agreed to waive the hearing and submit the matter to the APSC for a decision consistent with the filed record. In
August 2022 the APSC granted Entergy Arkansas’s petition and approved the acquisition of Driver Solar and cost
recovery through the formula rate plan rider. In addition, the APSC directed Entergy Arkansas to inform the APSC
as to the status of a tax equity partnership once construction is commenced. The parties are evaluating the effects of
certain matters related to the Inflation Reduction Act of 2022, including the viability of a tax equity partnership.
The project is expected to achieve commercial operation as early as mid-2024.
2021 Solar Certification and the Geaux Green Option
In November 2021, Entergy Louisiana filed an application with the LPSC seeking certification of and
approval for the addition of four new solar photovoltaic resources with a combined nameplate capacity of 475
megawatts (the 2021 Solar Portfolio) and the implementation of a new green tariff, the Geaux Green Option (Rider
GGO). The 2021 Solar Portfolio consists of four resources that are expected to provide $242 million in net benefits
to Entergy Louisiana’s customers. These resources, all of which would be constructed in Louisiana, include (i) the
Vacherie Facility, a 150 megawatt resource in St. James Parish; (ii) the Sunlight Road Facility, a 50 megawatt
resource in Washington Parish; (iii) the St. Jacques Facility, a 150 megawatt resource in St. James Parish; and (iv)
the Elizabeth Facility, a 125 megawatt resource in Allen Parish. The St. Jacques Facility would be acquired through
a build-own-transfer agreement; the remaining resources involve power purchase agreements. The Sunlight Road
Facility and the Elizabeth Facility have estimated in service dates in 2024, and the Vacherie Facility and the St.
Jacques Facility originally had estimated in service dates in 2025, but are now expected to be no sooner than 2027.
The filing proposed to recover the costs of the power purchase agreements through the fuel adjustment clause and
the formula rate plan and the acquisition costs through the formula rate plan.
The proposed Rider GGO is a voluntary rate schedule that will enhance Entergy Louisiana’s ability to help
customers meet their sustainability goals by allowing customers to align some or all of their electricity requirements
with renewable energy from the resources. Because subscription fees from Rider GGO participants are expected to
help offset the cost of the resources, the design of Rider GGO also preserves the benefits of the 2021 Solar Portfolio
for non-participants by providing them with the reliability and capacity benefits of locally-sited solar generation at a
discounted price.
In March 2022 direct testimony from Walmart, the Louisiana Energy Users Group (LEUG), and the LPSC
staff was filed. Each party recommended that the LPSC approve the resources proposed in Entergy Louisiana’s
application, and the LPSC staff witness indicated that the process through which Entergy Louisiana solicited or
obtained the proposals for the resources complied with applicable LPSC orders. The LPSC staff and LEUG’s
witnesses made recommendations to modify the proposed Rider GGO and Entergy Louisiana’s proposed rate relief.
In April 2022 the LPSC staff and LEUG filed cross-answering testimony concerning each other’s proposed
modifications to Rider GGO and the proposed rate recovery. Entergy Louisiana filed rebuttal testimony in June
2022. In August 2022 the parties reached a settlement certifying the 2021 Solar Portfolio and approving
implementation of Rider GGO. In September 2022 the LPSC approved the settlement. Following the LPSC
approval, the St. James Parish council issued a moratorium on new land use permits for solar facilities until the later
of March 2023 or the completion of an environmental and economic impact study. In November 2023, St. James
Parish lifted the moratorium and adopted an ordinance modifying the parish’s land use plan to establish solar as an
approved land use and defining corresponding solar regulations. Entergy Louisiana is in discussions with the
counterparties to the Vacherie and St. Jacques facilities regarding amendments to the respective agreements to
26 address the impact of the St. James Parish ordinance, and the facilities are expected to reach commercial operation
no sooner than 2027, depending upon agreement by the parties on the terms of the amendments. In September
2023, Entergy Louisiana reported to the LPSC that it also entered into amended agreements related to the Sunlight
Road and Elizabeth facilities. Both facilities are still expected to achieve commercial operation in 2024.
2022 Solar Portfolio and Expansion of the Geaux Green Option
In February 2023, Entergy Louisiana filed an application with the LPSC seeking certification of the
Iberville/Coastal Prairie facility, which will provide 175 MW of capacity through a PPA with a third party, and the
Sterlington facility, a 49 MW self-build project located near the deactivated Sterlington power plant (the 2022 Solar
Portfolio). Entergy Louisiana is seeking to include these resources within the portfolio supporting the Rider GGO
rate schedule to help fulfill customer interest in access to renewable energy. Entergy Louisiana has requested the
costs of these facilities, as offset by Rider GGO revenues, be deemed eligible for recovery in accordance with the
terms of the formula rate plan and fuel adjustment clause rate mechanisms that exist at the time the facilities are
placed into service. In January 2024, the parties filed an uncontested stipulated settlement agreement on the key
issues in the case, which stated that the 2022 Solar Portfolio should be constructed, found that Entergy Louisiana’s
proposed cost recovery mechanisms were appropriate, and confirmed the resources’ eligibility for inclusion in Rider
GGO. The settlement was approved by the LPSC in January 2024. The Sterlington facility is expected to achieve
commercial operation in January 2026.
Alternative RFP and Certification
In March 2023, Entergy Louisiana made the first phase of a bifurcated filing to seek approval from the
LPSC for an alternative to the requests for proposals (RFP) process that would enable the acquisition of up to 3 GW
of solar resources on a faster timeline than the current RFP and certification process allows. The initial phase of the
filing established the need for the acquisition of additional resources and the need for an alternative to the RFP
process. The second phase of the filing, which contains the details of the proposal for the alternative competitive
procurement process and the information necessary to support certification, was filed in May 2023. In addition to
the acquisition of up to 3 GW of solar resources, the filing also seeks approval of a new renewable energy credits-
based tariff, Rider Geaux ZERO. Several parties have intervened, and a procedural schedule was established in
May 2023 with a hearing scheduled for March 2024. In October 2023 the LPSC staff and intervenors filed
testimony, with the LPSC staff supporting the amount of solar resources to be acquired and the alternative RFP
process. The LPSC staff also supported, subject to certain recommendations, the proposed framework for
evaluation and certification of the solar resources by the LPSC and the proposed tariff.
Other Generation
Orange County Advanced Power Station
In September 2021, Entergy Texas filed an application seeking PUCT approval to amend Entergy Texas’s
certificate of convenience and necessity to construct, own, and operate the Orange County Advanced Power Station,
a new 1,215 MW combined-cycle combustion turbine facility to be located in Bridge City, Texas at an initially-
estimated expected total cost of $1.2 billion inclusive of the estimated costs of the generation facilities, transmission
upgrades, contingency, an allowance for funds used during construction, and necessary regulatory expenses, among
others. The project includes combustion turbine technology with dual fuel capability, able to co-fire up to 30%
hydrogen by volume upon commercial operation and upgradable to support 100% hydrogen operations in the future.
In December 2021 the PUCT referred the proceeding to the State Office of Administrative Hearings. In March
2022 certain intervenors filed testimony opposing the hydrogen co-firing component of the proposed project and
others filed testimony opposing the project outright. Also in March 2022 the PUCT staff filed testimony opposing
the hydrogen co-firing component of the proposed project, but otherwise taking no specific position on the merits of
the project. The PUCT staff also proposed that the PUCT establish a maximum amount that Entergy Texas may
recover in rates attributable to the project. In April 2022, Entergy Texas filed rebuttal testimony addressing and
27 rebutting these various arguments. The hearing on the merits was held in June 2022, and post-hearing briefs were
submitted in July 2022. In September 2022 the ALJs with the State Office of Administrative Hearings issued a
proposal for decision recommending the PUCT approve Entergy Texas’s application for certification of Orange
County Advanced Power Station subject to certain conditions, including a cap on cost recovery at $1.37 billion, the
exclusion of investment associated with co-firing hydrogen, weatherization requirements, and customer receipt of
any contractual benefits associated with the facility’s guaranteed heat rate. In October 2022 the parties in the
proceeding filed exceptions and replies to exceptions to the proposal for decision. Also in October 2022, Entergy
Texas filed with the PUCT information regarding a new fixed pricing option for an estimated project cost of
approximately $1.55 billion associated with Entergy Texas’s issuance of limited notice to proceed by mid-
November 2022. In November 2022 the PUCT issued a final order approving the requested amendment to Entergy
Texas’s certificate of convenience and necessity to construct, own, and operate the Orange County Advanced Power
Station without the investment associated with hydrogen co-firing capability, without a cap on cost recovery, and
subject to certain conditions, including weatherization requirements and customer receipt of any contractual benefits
associated with the facility’s guaranteed heat rate.
In December 2022, Texas Industrial Energy Consumers and Sierra Club filed motions for rehearing of the
PUCT’s final order alleging the PUCT erred in granting the certification of the Orange County Advanced Power
Station, in not imposing a cost cap, in including certain findings related to the reasonableness of Entergy Texas’s
request for proposals from which the Orange County Advanced Power Station was selected, and in other regards.
Also in December 2022, Entergy Texas filed a response to the motions for rehearing refuting the points raised
therein. In January 2023 the PUCT issued letters noting that it voted to consider Texas Industrial Energy
Consumers’ motion for rehearing at its upcoming January 2023 open meeting and voted not to consider Sierra
Club’s motion for rehearing at an open meeting. At the January 2023 open meeting, the PUCT voted to grant Texas
Industrial Energy Consumers’ motion for rehearing for the limited purpose of issuing an order on rehearing that
excludes three findings related to Entergy Texas’s request for proposals. The order on rehearing does not change
the PUCT’s certification of the Orange County Advanced Power Station or the conditions placed thereon in the
PUCT’s November 2022 final order. Construction is in progress, and subject to receipt of required permits, the
facility is expected to be in service by mid-2026.
System Resilience and Storm Hardening
Entergy Louisiana
In December 2022, Entergy Louisiana filed an application with the LPSC seeking a public interest finding
regarding Phase I of Entergy Louisiana’s Future Ready resilience plan and approval of a rider mechanism to recover
the program’s costs. Phase I reflects the first five years of a ten-year resilience plan and includes investment of
approximately $5 billion, including hardening investment, transmission dead-end structures, enhanced vegetation
management, and telecommunications improvement. In April 2023 a procedural schedule was established with a
hearing scheduled for January 2024. The LPSC staff and certain intervenors filed direct testimony in August,
September, and October 2023. The LPSC staff filed cross-answering testimony in October 2023. The testimony
largely supports implementation of some level of accelerated investment in resilience, but raises various issues
related to the magnitude of the investment, the cost recovery mechanism applicable to the investment, and the
ratemaking for the investment. In January 2024 the hearing in this matter was rescheduled to April 2024.
The LPSC had previously opened a formal rulemaking proceeding in December 2021 to investigate efforts
to improve resilience of electric utility infrastructure. In April 2023 the LPSC staff issued a draft rule in the
rulemaking proceeding related to a requirement to file a grid resilience plan. The procedural schedule entered in the
rulemaking proceeding contemplated adoption of a final rule in October 2023, but this did not occur, and a new date
has not been set. The LPSC also has pending rulemakings addressing issues related to pole viability and grid
maintenance practices. In December 2023, in those rulemakings, the LPSC staff issued a report and
recommendation proposing to impose significant new reporting and compliance obligations related to jurisdictional
utilities’ distribution and transmission operations, including new obligations related to grid hardening plans, pole
28 inspections, pole replacement, vegetation management, storm restoration plans, new reliability metrics, software for
handling customer complaints and complaint resolution, required use of drone technology, and new penalties and
incentives for reliability performance and for compliance with the new obligations. In February 2024, Entergy
Louisiana and other parties filed comments on the LPSC staff’s report.
Entergy New Orleans
In October 2021 the City Council passed a resolution and order establishing a docket and procedural
schedule with respect to system resiliency and storm hardening. The docket will identify a plan for storm hardening
and resiliency projects with other stakeholders. In July 2022, Entergy New Orleans filed with the City Council a
response identifying a preliminary plan for storm hardening and resiliency projects, including microgrids, to be
implemented over ten years at an approximate cost of $1.5 billion. In February 2023 the City Council approved a
revised procedural schedule requiring Entergy New Orleans to make a filing in April 2023 containing a narrowed
list of proposed hardening projects, with final comments on that filing due July 2023. In April 2023, Entergy New
Orleans filed the required application and supporting testimony seeking City Council approval of the first phase
(five years and $559 million) of a ten-year infrastructure hardening plan totaling approximately $1 billion. Entergy
New Orleans also sought, among other relief, City Council approval of a rider to recover from customers the costs
of the infrastructure hardening plan. In July 2023, Entergy New Orleans filed comments in support of its
application. In February 2024 the City Council approved a resolution authorizing Entergy New Orleans to
implement a resilience project to be partially funded by $55 million of matching funding through the Department of
Energy’s Grid Resilience and Innovation Partnerships program. The resolution also requires Entergy New Orleans
to submit, no later than July 2024, a revised resilience plan consisting of projects in three-year intervals. Entergy
New Orleans continues to seek approval of its application.
Dividends and Stock Repurchases
Declarations of dividends on Entergy’s common stock are made at the discretion of the Board. Among
other things, the Board evaluates the level of Entergy’s common stock dividends based upon earnings per share
from the Utility segment and the Parent and Other portion of the business, financial strength, and future investment
opportunities. At its January 2024 meeting, the Board declared a dividend of $1.13 per share. Entergy paid $918
million in 2023, $842 million in 2022, and $775 million in 2021 in cash dividends on its common stock.
In accordance with Entergy’s stock-based compensation plans, Entergy periodically grants stock options,
restricted stock, performance units, and restricted stock unit awards to key employees, which may be exercised to
obtain shares of Entergy’s common stock. According to the plans, these shares can be newly issued shares, treasury
stock, or shares purchased on the open market. Entergy’s management has been authorized by the Board to
repurchase on the open market shares up to an amount sufficient to fund the exercise of grants under the plans.
In addition to the authority to fund grant exercises, the Board has authorized share repurchase programs to
enable opportunistic purchases in response to market conditions. In October 2010 the Board granted authority for a
$500 million share repurchase program. As of December 31, 2023, $350 million of authority remains under the
$500 million share repurchase program. The amount of repurchases may vary as a result of material changes in
business results or capital spending or new investment opportunities, or if limitations in the credit markets continue
for a prolonged period.
Sources of Capital
Entergy’s sources to meet its capital requirements and to fund potential investments include:
•
•
•
internally generated funds;
cash on hand ($133 million as of December 31, 2023);
storm reserve escrow accounts;
29 •
•
•
debt and equity issuances in the capital markets, including debt issuances to refund or retire currently
outstanding or maturing indebtedness;
bank financing under new or existing facilities or commercial paper; and
sales of assets.
Circumstances such as weather patterns, fuel and purchased power price fluctuations, and unanticipated expenses,
including unscheduled plant outages and storms, could affect the timing and level of internally generated funds in
the future. In addition to the financings necessary to meet capital requirements and contractual obligations, the
Registrant Subsidiaries expect to continue, when economically feasible, to retire higher-cost debt and replace it with
lower-cost debt if market conditions permit.
Provisions within the organizational documents relating to preferred stock or membership interests of
certain of Entergy Corporation’s subsidiaries could restrict the payment of cash dividends or other distributions on
their common and preferred equity. All debt and preferred equity issuances by the Registrant Subsidiaries require
prior regulatory approval and their debt issuances are also subject to issuance tests set forth in bond indentures and
other agreements. Entergy believes that the Registrant Subsidiaries have sufficient capacity under these tests to
meet foreseeable capital needs for the next twelve months and beyond.
The FERC has jurisdiction over securities issuances by the Utility operating companies and System Energy.
The City Council has concurrent jurisdiction over Entergy New Orleans’s securities issuances with maturities longer
than one year. The APSC has concurrent jurisdiction over Entergy Arkansas’s issuances of securities secured by
Arkansas property, including first mortgage bond issuances. No regulatory approvals are necessary for Entergy
Corporation to issue securities. The current FERC-authorized short-term borrowing limits and long-term financing
authorization for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy
Texas are effective through April 2025. The FERC-authorized short-term borrowing limit for System Energy is
effective through March 2025. Entergy Arkansas has obtained first mortgage bond/secured financing authorization
from the APSC that extends through December 2025. Entergy New Orleans also has obtained long-term financing
authorization from the City Council that extends through December 2025. Entergy Arkansas and Entergy Louisiana
each has obtained long-term financing authorization from the FERC that extends through April 2025 for issuances
by the nuclear fuel company variable interest entities. System Energy has obtained long-term financing
authorization from the FERC that extends through March 2025 for issuances by its nuclear fuel company variable
interest entity. In addition to borrowings from commercial banks, the Registrant Subsidiaries may also borrow from
the Entergy system money pool and from other internal short-term borrowing arrangements. The money pool is an
intercompany cash management program that makes possible intercompany borrowing and lending arrangements,
and the money pool and the other internal borrowing arrangements are designed to reduce Entergy’s subsidiaries’
dependence on external short-term borrowings. Borrowings from internal and external short-term borrowings
combined may not exceed the FERC-authorized limits. See Notes 4 and 5 to the financial statements for further
discussion of Entergy’s borrowing limits, authorizations, and amounts outstanding.
Equity Issuances and Equity Distribution Program
In January 2021, Entergy Corporation entered into an equity distribution sales agreement with several
counterparties establishing an at the market equity distribution program, pursuant to which Entergy Corporation
may offer and sell from time to time shares of its common stock. The sales agreement provides that, in addition to
the issuance and sale of shares of Entergy Corporation common stock, Entergy Corporation may enter into forward
sale agreements for the sale of its common stock. The aggregate number of shares of common stock sold under this
sales agreement and under any forward sale agreement may not exceed an aggregate gross sales price of $2 billion.
Through 2021, 2022, and 2023, Entergy Corporation utilized the equity distribution program either to sell or to
enter into forward sale agreements with respect to shares of common stock with an aggregate gross sales price of
approximately $1.5 billion, of which approximately $1.3 billion of aggregate gross sales price was the subject of
forward sale agreements and was subject to adjustment pursuant to the forward sale agreements. Entergy
Corporation settled the forward sales agreements for cash proceeds of $853 million in November 2022, $48 million
30 in November 2023, and $83 million in December 2023. Entergy Corporation currently expects to issue
approximately $1.4 billion of equity through 2026 under the at the market equity distribution program, with
approximately $280 million already contracted under forward sales agreements as of December 31, 2023. See Note
7 to the financial statements for discussion of the forward sales agreements and common stock issuances and sales
under the equity distribution program.
Hurricane Ida (Entergy Louisiana)
As discussed in Note 2 to the financial statements, in August 2020 and October 2020, Hurricane Laura,
Hurricane Delta, and Hurricane Zeta caused significant damage to portions of Entergy Louisiana’s service area. In
February 2021 two winter storms (collectively, Winter Storm Uri) brought freezing rain and ice to Louisiana. In
August 2021, Hurricane Ida caused extensive damage to Entergy Louisiana’s distribution and, to a lesser extent,
transmission systems resulting in widespread power outages.
In April 2022, Entergy Louisiana filed an application with the LPSC relating to Hurricane Ida restoration
costs. Total restoration costs for the repair and/or replacement of Entergy Louisiana’s electric facilities damaged by
Hurricane Ida were estimated to be approximately $2.54 billion, including approximately $1.96 billion in capital
costs and approximately $586 million in non-capital costs. Including carrying costs of $57 million through
December 2022, Entergy Louisiana was seeking an LPSC determination that $2.60 billion was prudently incurred
and, therefore, eligible for recovery from customers. As part of this filing, Entergy Louisiana also was seeking an
LPSC determination that an additional $32 million in costs associated with the restoration of Entergy Louisiana’s
electric facilities damaged by Hurricane Laura, Hurricane Delta, and Hurricane Zeta as well as Winter Storm Uri
was prudently incurred. This amount was exclusive of the requested $3 million in carrying costs through December
2022. In total, Entergy Louisiana was requesting an LPSC determination that $2.64 billion was prudently incurred
and, therefore, eligible for recovery from customers. As discussed in Note 2 to the financial statements, in March
2022 the LPSC approved financing of a $1 billion storm escrow account from which funds were withdrawn to
finance costs associated with Hurricane Ida restoration. In June 2022, Entergy Louisiana supplemented the
application with a request regarding the financing and recovery of the recoverable storm restoration costs.
Specifically, Entergy Louisiana requested approval to securitize its restoration costs pursuant to Louisiana Act 55
financing, as supplemented by Act 293 of the Louisiana Legislature’s Regular Session of 2021. In October 2022
the LPSC staff recommended a finding that the requested storm restoration costs of $2.64 billion, including
associated carrying costs of $59.1 million, were prudently incurred and eligible for recovery from customers. The
LPSC staff further recommended approval of Entergy Louisiana’s plans to securitize these costs, net of the $1
billion in funds withdrawn from the storm escrow account described above. The parties negotiated and executed an
uncontested stipulated settlement which was filed with the LPSC in December 2022. The settlement agreement
contains the following key terms: $2.57 billion of restoration costs from Hurricane Ida, Hurricane Laura, Hurricane
Delta, Hurricane Zeta, and Winter Storm Uri were prudently incurred and eligible for recovery; carrying costs of
$59.2 million were recoverable; and Entergy Louisiana was authorized to finance $1.657 billion utilizing the
securitization process authorized by Act 55, as supplemented by Act 293. A procedural motion to consider the
uncontested settlement at the December 2022 LPSC meeting did not pass and the settlement was not voted on. In
January 2023 an ALJ with the LPSC conducted a settlement hearing to receive the uncontested settlement and
supporting testimony into evidence and issued a report of proceedings, which allows the LPSC to consider the
uncontested settlement without the procedural motion that did not pass in December. In January 2023, the LPSC
approved the stipulated settlement subject to certain modifications. These modifications include the recognition of
accumulated deferred income tax benefits related to damaged assets and system restoration costs as a reduction of
the amount authorized to be financed utilizing the securitization process authorized by Act 55, as supplemented by
Act 293, from $1.657 billion to $1.491 billion. These modifications did not affect the LPSC’s conclusion that all
system restoration costs sought by Entergy Louisiana were reasonable and prudent. In February 2023 the Louisiana
Bond Commission voted to authorize the Louisiana Local Government Facilities and Community Development
Authority (LCDA) to issue the bonds authorized in the LPSC’s financing order.
31 In March 2023 the Hurricane Ida securitization financing closed, resulting in the issuance of approximately
$1.491 billion principal amount of bonds by the LCDA and a remaining regulatory asset of $180 million to be
recovered through the exclusion of the accumulated deferred income taxes related to damaged assets and system
restoration costs from the determination of future rates. The securitization was authorized pursuant to the Louisiana
Utilities Restoration Corporation Act, Part VIII of Chapter 9 of Title 45 of the Louisiana Revised Statutes, as
supplemented by Act 293 of the Louisiana Legislature’s Regular Session of 2021. The LCDA loaned the proceeds
to the LURC. Pursuant to Act 293, the LURC contributed the net bond proceeds to a State legislatively authorized
and LURC-sponsored trust, Restoration Law Trust II (the storm trust II).
Pursuant to Act 293, the net proceeds of the bonds were used by the storm trust II to purchase
14,576,757.48 Class B preferred, non-voting membership interest units (the preferred membership interests) issued
by Entergy Finance Company, LLC, a majority owned indirect subsidiary of Entergy. Entergy Finance Company is
required to make annual distributions (dividends) commencing on December 15, 2023 on the preferred membership
interests issued to the storm trust II. These annual dividends received by the storm trust II will be distributed to
Entergy Louisiana and the LURC, as beneficiaries of the storm trust II. Specifically, 1% of the annual dividends
received by the storm trust II will be distributed to the LURC for the benefit of customers, and 99% will be
distributed to Entergy Louisiana, net of storm trust expenses. The preferred membership interests have a stated
annual cumulative cash dividend rate of 7.5% and a liquidation price of $100 per unit. The terms of the preferred
membership interests include certain financial covenants to which Entergy Finance Company is subject. Semi-
annual redemptions of the preferred membership interests, subject to certain conditions, are expected to occur over
the next 15 years.
Entergy and Entergy Louisiana do not report the bonds issued by the LCDA on their balance sheets because
the bonds are the obligation of the LCDA. The bonds are secured by system restoration property, which is the right
granted by law to the LURC to collect a system restoration charge from customers. The system restoration charge is
adjusted at least semi-annually to ensure that it is sufficient to service the bonds. Entergy Louisiana collects the
system restoration charge on behalf of the LURC and remits the collections to the bond indenture trustee. Entergy
Louisiana began collecting the system restoration charge effective with the first billing cycle of April 2023 and the
system restoration charge is expected to remain in place for up to 15 years. Entergy and Entergy Louisiana do not
report the collections as revenue because Entergy Louisiana is merely acting as a billing and collection agent for the
LCDA and the LURC. In the remote possibility that the system restoration charge, as well as any funds in the
excess subaccount and funds in the debt service reserve account, are insufficient to service the bonds resulting in a
payment default, the storm trust II is required to liquidate Entergy Finance Company preferred membership interests
in an amount equal to what would be required to cure the default. The estimated value of this indirect guarantee is
immaterial.
From the proceeds from the issuance of the preferred membership interests, Entergy Finance Company
loaned approximately $1.5 billion to Entergy, which was indirectly contributed to Entergy Louisiana as a capital
contribution.
As discussed in Note 3 to the financial statements, the securitization resulted in recognition of a net
reduction of income tax expense of approximately $133 million, after taking into account a provision for uncertain
tax positions, by Entergy Louisiana. Entergy’s recognition of reduced income tax expense was offset by other tax
charges resulting in a net reduction of income tax expense of $129 million, after taking into account a provision for
uncertain tax positions. In recognition of its obligations described in an LPSC ancillary order issued as part of the
securitization regulatory proceeding, Entergy Louisiana recorded in first quarter 2023 a $103 million ($76 million
net-of-tax) regulatory charge and a corresponding regulatory liability to reflect its obligation to provide credits to its
customers.
As discussed in Note 6 and Note 17 to the financial statements, Entergy Louisiana consolidates the storm
trust II as a variable interest entity and the LURC’s 1% beneficial interest is presented as noncontrolling interest in
32 the financial statements. In first quarter 2023, Entergy Louisiana recorded a charge of $14.6 million in other
income to reflect the LURC’s beneficial interest in the storm trust II.
Cash Flow Activity
As shown in Entergy’s Consolidated Statements of Cash Flows, cash flows for the years ended
December 31, 2023, 2022, and 2021 were as follows:
Cash and cash equivalents at beginning of period
$224
2023
2022
(In Millions)
$443
2021
$1,759
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Net decrease in cash and cash equivalents
4,294
(4,629)
244
(91)
2,585
(5,710)
2,906
(219)
2,301
(6,179)
2,562
(1,316)
Cash and cash equivalents at end of period
$133
$224
$443
2023 Compared to 2022
Operating Activities
Net cash flow provided by operating activities increased $1,709 million in 2023 primarily due to:
•
•
•
•
•
lower fuel costs and the timing of recovery of fuel and purchased power costs. See Note 2 to the financial
statements for a discussion of fuel and purchased power cost recovery;
a decrease of $210 million in storm spending primarily due to Hurricane Ida restoration efforts in 2022;
a decrease of $203 million in pension contributions in 2023. See “Critical Accounting Estimates –
Qualified Pension and Other Postretirement Benefits” below and Note 11 to the financial statements for
a discussion of qualified pension and other postretirement benefits funding;
an increase of $57 million in interest received, including shorter-term financing interest earnings at Entergy
Louisiana and interest on storm reserve escrow accounts. See Note 2 to the financial statements for a
discussion of Entergy Louisiana’s shorter-term financing interest earnings; and
severance and retention payments of $40 million in 2022 related to Entergy’s exit from the merchant power
business. See Note 13 to the financial statements for further discussion of Entergy’s exit from the merchant
power business.
The increase was partially offset by:
•
•
•
lower collections from Utility customers;
net proceeds of $202 million received from the LURC in December 2022 from the Entergy New Orleans
storm cost securitization. See Note 2 to the financial statements for discussion of the Entergy New Orleans
storm cost securitization; and
an increase of $85 million in interest paid.
33
Investing Activities
Net cash flow used in investing activities decreased $1,081 million in 2023 primarily due to:
•
•
•
•
•
a decrease of $595 million in distribution construction expenditures primarily due to lower capital
expenditures for storm restoration in 2023. The decrease in storm restoration expenditures is primarily due
to Hurricane Ida restoration efforts in 2022;
net receipts from storm reserve escrow accounts of $79 million in 2023 compared to net payments to storm
reserve escrow accounts of $369 million in 2022;
a decrease of $86 million in information technology capital expenditures primarily due to decreased
spending on various technology projects in 2023;
the initial payment of approximately $105 million in 2022 as compared to the substantial completion and
final payments totaling approximately $35 million in 2023 for the purchase of the Sunflower Solar facility
by the Entergy Mississippi tax equity partnership. See Note 14 to the financial statements for discussion of
the Sunflower Solar facility purchase; and
a decrease of $57 million in transmission construction expenditures primarily due to lower capital
expenditures for storm restoration in 2023. The decrease in storm restoration expenditures is primarily due
to Hurricane Ida restoration efforts in 2022.
The decrease was partially offset by:
•
•
•
an increase of $98 million in non-nuclear generation construction expenditures primarily due to higher
spending at Entergy Texas on the Orange County Advanced Power Station project, partially offset by a
lower scope of work on projects performed, including during plant outages, in 2023 as compared to 2022;
an increase of $47 million in nuclear fuel purchases due to variations from year to year in the timing and
pricing of fuel reload requirements, materials and services deliveries, and the timing of cash payments
during the nuclear fuel cycle; and
an increase of $30 million in decommissioning trust fund investment activity.
Financing Activities
Net cash flow provided by financing activities decreased $2,662 million in 2023 primarily due to:
•
•
•
•
proceeds from securitization of $1.5 billion received by the storm trust II at Entergy Louisiana in 2023
compared to proceeds from securitization of $3.2 billion received by the storm trust I at Entergy Louisiana
in 2022;
long-term debt activity using approximately $862 million of cash in 2023 compared to providing
approximately $24 million of cash in 2022;
a decrease of $722 million in net proceeds from the issuance of common stock under the at the market
equity distribution program in 2023 as compared to 2022; and
an increase of $77 million in common stock dividends paid in 2023 as a result of an increase in the dividend
paid per share and an increase in the number of shares outstanding.
The decrease was partially offset by net issuances of $311 million of commercial paper in 2023 as compared to net
repayments of $374 million of commercial paper in 2022 and an increase of $110 million in prepaid deposits related
to contributions-in-aid-of-construction primarily for customer and generator interconnection agreements.
See Note 2 to the financial statements for a discussion of the Entergy Louisiana storm cost securitizations.
See Note 4 to the financial statements for details of Entergy’s commercial paper program. See Note 5 to the
financial statements for details of long-term debt. See Note 7 to the financial statements for discussion of the equity
distribution program.
34 2022 Compared to 2021
See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital
Resources - Cash Flow Activity” in Item 7 of Entergy’s Annual Report on Form 10-K for the year ended
December 31, 2022, filed with the SEC on February 24, 2023, for discussion of operating, investing, and financing
cash flow activities for 2022 compared to 2021.
Rate, Cost-recovery, and Other Regulation
State and Local Rate Regulation and Fuel-Cost Recovery
The rates that the Utility operating companies charge for their services significantly influence Entergy’s
financial position, results of operations, and liquidity. These companies are regulated, and the rates charged to their
customers are determined in regulatory proceedings. Governmental agencies, including the APSC, the LPSC, the
MPSC, the City Council, and the PUCT, are primarily responsible for approval of the rates charged to customers.
Following is a summary of the Utility operating companies’ authorized returns on common equity:
Company
Authorized Return on Common Equity
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
9.15% - 10.15%
9.0% - 10.0% Electric; 9.3% - 10.3% Gas
9.74% - 11.88%
8.85% - 9.85%
9.57%
Rate regulation and related regulatory proceedings and fuel and purchased power cost recovery proceedings for the
Utility operating companies are discussed in Note 2 to the financial statements.
Federal Regulation
The FERC regulates wholesale sales of electricity rates and interstate transmission of electricity, including
rates for System Energy’s sales of capacity and energy from Grand Gulf to Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans pursuant to the Unit Power Sales Agreement. The current return on
equity and capital structure of System Energy are currently the subject of complaints filed by certain of the Utility
operating companies’ retail regulators. The current return on equity under the Unit Power Sales Agreement is
10.94% for Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans and 9.65% for Entergy Mississippi as a
result of the System Energy settlement with the MPSC. If the System Energy settlement with the APSC is approved
by the FERC, the authorized rate of return on equity under the Unit Power Sales Agreement for Entergy Arkansas
will be adjusted to 9.65% in accordance with the settlement terms. Prior to each Utility operating companies’
termination of participation in the System Agreement (Entergy Arkansas in December 2013, Entergy Mississippi in
November 2015, and Entergy Louisiana, Entergy New Orleans, and Entergy Texas, each in August 2016), the
Utility operating companies engaged in the coordinated planning, construction, and operation of generating and bulk
transmission facilities under the terms of the System Agreement, which was a rate schedule approved by the FERC.
Certain of the Utility operating companies’ retail regulators are pursuing or have settled litigation involving the
System Agreement at the FERC and in federal courts. See Note 2 to the financial statements for discussion of the
complaints filed with the FERC, including challenges with respect to System Energy’s authorized return on equity
and capital structure, renewal of System Energy’s sale-leaseback arrangement, treatment of uncertain tax positions,
a broader investigation of rates under the Unit Power Sales Agreement, and two prudence complaints, one
challenging the extended power uprate completed at Grand Gulf in 2012 and the operation and management of
Grand Gulf, particularly in the 2016-2020 time period, and the second challenging the operation and management of
Grand Gulf in the 2021-2022 time period, as well as System Energy formula rate annual protocols formal challenges
35
concerning 2020 and 2021 calendar year bills and discussion of the System Energy settlements with the MPSC and
the APSC.
Market and Credit Risk Sensitive Instruments
Market risk is the risk of changes in the value of commodity and financial instruments, or in future net
income or cash flows, in response to changing market conditions. Entergy holds commodity and financial
instruments that are exposed to the following significant market risks.
•
•
•
•
The commodity price risk associated with the sale of electricity by Entergy’s non-utility operations
business.
The interest rate and equity price risk associated with Entergy’s investments in qualified pension and other
postretirement benefits trust funds. See Note 11 to the financial statements for details regarding Entergy’s
qualified pension and other postretirement benefits trust funds.
The interest rate and equity price risk associated with Entergy’s investments in nuclear plant
decommissioning trust funds. See Note 16 to the financial statements for details regarding Entergy’s
decommissioning trust funds.
The interest rate risk associated with changes in interest rates as a result of Entergy’s outstanding
indebtedness. Entergy manages its interest rate exposure by monitoring current interest rates and its debt
outstanding in relation to total capitalization. See Notes 4 and 5 to the financial statements for the details of
Entergy’s debt outstanding.
The Utility has limited exposure to the effects of market risk because it operates primarily under cost-based rate
regulation. To the extent approved by their retail regulators, the Utility operating companies use commodity and
financial instruments to hedge the exposure to price volatility inherent in their purchased power, fuel, and gas
purchased for resale costs that are recovered from customers.
Entergy’s commodity and financial instruments are also exposed to credit risk. Credit risk is the risk of loss
from nonperformance by suppliers, customers, or financial counterparties to a contract or agreement. Entergy is
also exposed to a potential demand on liquidity due to credit support requirements within its supply or sales
agreements.
Some of the agreements to sell the power produced by the non-utility operations business contain provisions
that require an Entergy subsidiary to provide credit support to secure its obligations under the agreements. The
primary form of credit support to satisfy these requirements is an Entergy Corporation guarantee. Cash and letters of
credit are also acceptable forms of credit support. At December 31, 2023, based on power prices at that time,
Entergy had liquidity exposure of $9 million under the guarantees in place supporting its non-utility operations
business transactions and $8 million of posted cash collateral.
Nuclear Matters
Entergy’s Utility business includes the ownership and operation of nuclear generating plants and is,
therefore, subject to the risks related to such ownership and operation. These include risks related to: the use,
storage, and handling and disposal of high-level and low-level radioactive materials; the substantial financial
requirements, both for capital investments and operational needs, including the financial requirements to address
emerging issues related to equipment reliability, to position Entergy’s nuclear fleet to meet its operational goals; the
performance and capacity factors of these nuclear plants; the risk of an adverse outcome to a challenge to the
prudence of operations at Grand Gulf; regulatory requirements and potential future regulatory changes, including
changes affecting the regulations governing nuclear plant ownership, operations, license amendments, and
decommissioning; the availability of interim or permanent sites for the disposal of spent nuclear fuel and nuclear
waste, including the fees charged for such disposal; the sufficiency of nuclear decommissioning trust fund assets
36 and earnings to complete decommissioning of each site when required; and limitations on the amounts of insurance
recoveries for losses in connection with nuclear plant operations and catastrophic events such as a nuclear accident.
NRC Reactor Oversight Process
The NRC’s Reactor Oversight Process is a program to collect information about plant performance, assess
the information for its safety significance, and provide for appropriate licensee and NRC response. The NRC
evaluates plant performance by analyzing two distinct inputs: inspection findings resulting from the NRC’s
inspection program and performance indicators reported by the licensee. The evaluations result in the placement of
each plant in one of the NRC’s Reactor Oversight Process Action Matrix columns: “licensee response column,” or
Column 1, “regulatory response column,” or Column 2, “degraded cornerstone column,” or Column 3, “multiple/
repetitive degraded cornerstone column,” or Column 4, and “unacceptable performance,” or Column 5. Plants in
Column 1 are subject to normal NRC inspection activities. Plants in Column 2, Column 3, or Column 4 are subject
to progressively increasing levels of inspection by the NRC with, in general, progressively increasing levels of
associated costs. Continued plant operation is not permitted for plants in Column 5. All of the nuclear generating
plants owned and operated by Entergy’s Utility business are currently in Column 1, except River Bend, which is in
Column 2.
In July 2023 the NRC placed River Bend in Column 2, effective April 2023, based on failure to inspect
wiring associated with the high pressure core spray system. In August 2023 the NRC issued a finding and notice of
violation related to a radiation monitor calibration issue at River Bend. In December 2023, River Bend successfully
completed the inspection on the high pressure core spray system issue and in February 2024, River Bend
successfully completed the supplemental inspection for the radiation monitor calibration issue involving radiation
monitor calibrations. River Bend will remain in Column 2 pending receipt of the formal report on the inspection,
which is expected in first quarter 2024.
Critical Accounting Estimates
The preparation of Entergy’s financial statements in conformity with GAAP requires management to apply
appropriate accounting policies and to make estimates and judgments that can have a significant effect on reported
financial position, results of operations, and cash flows. Management has identified the following accounting
estimates as critical because they are based on assumptions and measurements that involve a high degree of
uncertainty, and the potential for future changes in these assumptions and measurements could produce estimates
that would have a material effect on the presentation of Entergy’s financial position, results of operations, or cash
flows.
Nuclear Decommissioning Costs
Certain of the Utility operating companies and System Energy own nuclear generation facilities.
Regulations require these Entergy subsidiaries to decommission the nuclear power plants after each facility is taken
out of service, and cash is deposited in trust funds during the facilities’ operating lives in order to provide for this
obligation. Entergy conducts periodic decommissioning cost studies to estimate the costs that will be incurred to
decommission the facilities. The following key assumptions have a significant effect on these estimates.
•
Timing - In projecting decommissioning costs, two assumptions must be made to estimate the timing of
plant decommissioning. First, the date of the plant’s retirement must be estimated for those plants that do
not have an announced shutdown date. The estimate may include assumptions regarding the possibility that
the plant may have an operating life shorter than the operating license expiration. Second, an assumption
must be made regarding whether all decommissioning activity will proceed immediately upon plant
retirement, or whether the plant will be placed in SAFSTOR status. SAFSTOR is decommissioning a
facility by placing it in a safe, stable condition that is maintained until it is subsequently decontaminated
and dismantled to levels that permit license termination, normally within 60 years from permanent cessation
37 of operations. A change of assumption regarding either the period of continued operation, the use of a
SAFSTOR period, or whether Entergy will continue to hold the plant or the plant is held for sale can change
the present value of the asset retirement obligation.
•
• Cost Escalation Factors - Entergy’s current decommissioning cost studies include an assumption that
decommissioning costs will escalate over present cost levels by factors ranging from approximately 2% to
3% annually. A 50-basis point change in this assumption could change the estimated present value of the
decommissioning liabilities by approximately 10% to 17%. The timing assumption influences the
significance of the effect of a change in the estimated inflation or cost escalation rate because the effect
increases with the length of time assumed before decommissioning activity ends.
Spent Fuel Disposal - Federal law requires the DOE to provide for the permanent storage of spent nuclear
fuel, and legislation has been passed by Congress to develop a repository at Yucca Mountain, Nevada. The
DOE has not yet begun accepting spent nuclear fuel and is in non-compliance with federal law. The DOE
continues to delay meeting its obligation and Entergy’s nuclear plant owners are continuing to pursue
damage claims against the DOE for its failure to provide timely spent fuel storage. Until a federal site is
available, however, nuclear plant operators must provide for interim spent fuel storage on the nuclear plant
site, which can require the construction and maintenance of dry cask storage sites or other facilities. The
costs of developing and maintaining these facilities during the decommissioning period can have a
significant effect (as much as an average of 20% to 30% of total estimated decommissioning costs).
Entergy’s decommissioning studies include cost estimates for spent fuel storage. These estimates could
change in the future, however, based on the expected timing of when the DOE begins to fulfill its obligation
to receive and store spent nuclear fuel. See Note 8 to the financial statements for further discussion of
Entergy’s spent nuclear fuel litigation.
Technology and Regulation - Over the past several years, more practical experience with the actual
decommissioning of nuclear facilities has been gained and that experience has been incorporated into
Entergy’s current decommissioning cost estimates. Given the long duration of decommissioning projects,
additional experience, including technological advancements in decommissioning, could be gained and
affect current cost estimates. In addition, if regulations regarding nuclear decommissioning were to change,
this could affect cost estimates.
Interest Rates - The estimated decommissioning costs that are the basis for the recorded decommissioning
liability are discounted to present value using a credit-adjusted risk-free rate. When the decommissioning
liability is revised, increases in cash flows are discounted using the current credit-adjusted risk-free rate.
Decreases in estimated cash flows are discounted using the credit-adjusted risk-free rate used previously in
estimating the decommissioning liability that is being revised. Therefore, to the extent that a revised cost
study results in an increase in estimated cash flows, a change in interest rates from the time of the previous
cost estimate will affect the calculation of the present value of the revised decommissioning liability.
•
•
Revisions of estimated decommissioning costs that decrease the liability also result in a decrease in the asset
retirement cost asset. Revisions of estimated decommissioning costs that increase the liability result in an increase
in the asset retirement cost asset, which is then depreciated over the asset’s remaining economic life. See Note 9 to
the financial statements for further discussion of asset retirement obligations.
Utility Regulatory Accounting
Entergy’s Utility operating companies and System Energy are subject to retail regulation by their respective
state and local regulators and to wholesale regulation by the FERC. Because these regulatory agencies set the rates
the Utility operating companies and System Energy are allowed to charge customers based on allowable costs,
including a reasonable return on equity, the Utility operating companies and System Energy apply accounting
standards that require the financial statements to reflect the effects of rate regulation, including the recording of
regulatory assets and liabilities. Regulatory assets represent incurred costs that have been deferred because they are
probable of future recovery from customers through regulated rates. Regulatory liabilities represent (1) revenue or
gains that have been deferred because it is probable such amounts will be credited to customers through future
regulated rates or (2) billings in advance of expenditures for approved regulatory programs. See Note 2 to the
38 financial statements for a discussion of rate and regulatory matters, including details of Entergy’s and the Registrant
Subsidiaries’ regulatory assets and regulatory liabilities.
For each regulatory jurisdiction in which they conduct business, the Utility operating companies and
System Energy assess whether the regulatory assets and regulatory liabilities continue to meet the criteria for
probable future recovery or settlement at each balance sheet date and when regulatory events occur. This
assessment includes consideration of recent rate orders, historical regulatory treatment for similar costs, and factors
such as changes in applicable regulatory and political environments. If the assessments made by the Utility
operating companies and System Energy are ultimately different than actual regulatory outcomes, it could
materially affect the results of operations, financial position, and cash flows of Entergy or the Registrant
Subsidiaries.
Taxation and Uncertain Tax Positions
Management exercises significant judgment in evaluating the potential tax effects of Entergy’s operations,
transactions, and other events. Entergy accounts for uncertain income tax positions using a recognition model under
a two-step approach with a more likely-than-not recognition threshold and a measurement approach based on the
largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. Management
evaluates each tax position based on the technical merits and facts and circumstances of the position, assuming the
position will be examined by a taxing authority having full knowledge of all relevant information. Significant
judgment is required to determine whether available information supports the assertion that the recognition
threshold has been met. Additionally, measurement of unrecognized tax benefits to be recorded in the consolidated
financial statements is based on the probability of different potential outcomes. Income tax expense and tax
positions recorded could be significantly affected by events such as additional transactions contemplated or
consummated by Entergy as well as audits by taxing authorities of the tax positions taken in transactions.
Management believes that the financial statement tax balances are accounted for and adjusted appropriately each
quarter, as necessary, in accordance with applicable authoritative guidance; however, the ultimate outcome of tax
matters could result in favorable or unfavorable effects on the consolidated financial statements.
Certain Entergy subsidiaries have elected to apply the mark-to-market method of accounting for income tax
return purposes to wholesale power purchase agreements as appropriate under the Internal Revenue Code and U.S.
Treasury Regulations. The mark-to-market tax gain or loss computed each year is based on an estimated fair market
valuation which includes analyses of market prices and conditions. Entergy and the Registrant Subsidiaries’ mark-
to-market gain or loss could be affected by federal and state income tax audits should taxing authorities challenge
such valuations.
Entergy’s income taxes, including unrecognized tax benefits, open audits, and other significant tax matters,
are discussed in Note 3 to the financial statements. See “Income Tax Legislation and Regulation” above for
discussion of income tax legislation and regulation.
Qualified Pension and Other Postretirement Benefits
Entergy sponsors qualified, defined benefit pension plans, including cash balance plans and final average
pay plans. Generally, plan participation is determined based on the employee’s most recent date of hire and
collective bargaining agreement, where applicable. Additionally, Entergy currently provides other postretirement
health care and life insurance benefits for full-time employees whose most recent date of hire or rehire is before July
1, 2014, and who reach retirement age and meet certain eligibility requirements while still working for Entergy.
Entergy’s reported costs of providing these benefits, as described in Note 11 to the financial statements, are
affected by numerous factors including the provisions of the plans, changing employee demographics, and various
actuarial calculations, assumptions, and accounting mechanisms. Because of the complexity of these calculations,
39 the long-term nature of these obligations, and the importance of the assumptions utilized, Entergy’s estimate of
these costs is a critical accounting estimate for Entergy and the Registrant Subsidiaries.
Assumptions
Key actuarial assumptions utilized in determining qualified pension and other postretirement health care
and life insurance costs include discount rates, projected healthcare cost rates, expected long-term rate of return on
plan assets, rate of increase in future compensation levels, retirement rates, expected timing and form of payments,
and mortality rates.
Annually, Entergy reviews and, when necessary, adjusts the assumptions for the qualified pension and other
postretirement plans. Every three-to-five years, a formal actuarial assumption experience study that compares
assumptions to the actual experience of the qualified pension and other postretirement health care and life insurance
plans is conducted. The interest rate environment over the past few years and volatility in the financial equity
markets have affected Entergy’s funding and reported costs for these benefits.
Discount rates
In selecting an assumed discount rate to calculate benefit obligations, Entergy uses a yield curve based on
high-quality corporate debt with cash flows matching the expected plan benefit payments. In estimating the service
cost and interest cost components of net periodic benefit cost, Entergy discounts the expected cash flows by the
applicable spot rates.
Projected health care cost trend rates
Entergy’s health care cost trend is affected by both medical cost inflation and, with respect to capped costs
under the plan, the effects of general inflation. Entergy reviews actual recent cost trends and projected future trends
in establishing its health care cost trend rates.
Expected long-term rate of return on plan assets
In determining its expected long-term rate of return on plan assets used in the calculation of benefit plan
costs, Entergy reviews past performance, current and expected future asset allocations, and capital market
assumptions of its investment consultant and some of its investment managers. Entergy conducts periodic asset/
liability studies in order to set its target asset allocations.
In 2023, Entergy implemented a new asset allocation strategy for its pension assets, based on the funded
status of each plan within the trust. The new strategy no longer focuses on targeting an overall asset allocation for
the trust, but rather a target asset allocation for each plan within the trust that adjusts dynamically based on the
funded status. The ultimate asset allocation for each plan is expected to be attained when the plan is 110% funded.
The 2023 weighted-average target pension asset allocation is 49% equity and 51% fixed income securities, of which
43% is long duration fixed income.
In 2017, Entergy implemented a new asset allocation strategy for its non-taxable and taxable other
postretirement assets, based on the funded status of each sub-account within each trust. The new strategy no longer
focuses on targeting an overall asset allocation for each trust, but rather a target asset allocation for each sub-
account within each trust that adjusts dynamically based on the funded status. The 2023 weighted-average target
postretirement asset allocation is 42% equity and 58% fixed income securities.
See Note 11 to the financial statements for discussion of the current asset allocations for Entergy’s pension
and other postretirement assets.
40 Costs and Sensitivities
The estimated 2024 and actual 2023 qualified pension and other postretirement costs and related underlying
assumptions and sensitivities are shown below:
Costs
Qualified pension cost
Other postretirement income
Assumptions
Discount rates
Qualified pension
Service cost
Interest cost
Other postretirement
Service cost
Interest cost
Estimated
2024
2023
(In Millions)
$52.6
($24.3)
2024
5.08%
4.97%
4.82%
4.91%
$253.7 (a)
($13.8)
2023
5.26%
5.16%
5.00%
5.09%
Expected long-term rates of return
Qualified pension assets
Other postretirement - non-taxable assets
Other postretirement - taxable assets - after tax rate
6.75%
7.00%
6.50% - 7.25% 6.00% - 7.00%
5.25%
5.25%
Weighted-average rate of increase in future
compensation
3.98% - 4.40% 3.98% - 4.40%
Assumed health care cost trend rates
Pre-65 retirees
Post-65 retirees
Ultimate health care cost trend rate
Year ultimate health care cost trend rate is reached and
beyond
Pre-65 retirees
Post-65 retirees
6.95%
7.88%
4.75%
2032
2032
6.65%
7.50%
4.75%
2032
2032
(a)
In 2023, qualified pension cost included settlement costs of $160.4 million.
Actual asset returns have an effect on Entergy’s qualified pension and other postretirement costs. In 2023,
Entergy’s actual annual return on qualified pension assets was approximately 15% and on other postretirement
assets was approximately 13%, as compared to the 2023 expected long-term rates of return discussed above.
41 The following chart reflects the sensitivity of qualified pension cost and qualified pension projected benefit
obligation to changes in certain actuarial assumptions (dollars in millions):
Actuarial Assumption
Discount rate
Rate of return on plan assets
Rate of increase in compensation
Change in
Assumption
(0.25%)
(0.25%)
0.25%
Impact on 2024
Qualified Pension
Cost
Increase/(Decrease)
$4
$14
$4
Impact on 2023
Qualified Projected
Benefit Obligation
$145
$—
$24
The following chart reflects the sensitivity of postretirement benefits cost and accumulated postretirement
benefit obligation to changes in certain actuarial assumptions (dollars in millions):
Actuarial Assumption
Discount rate
Health care cost trend
Change in
Assumption
(0.25%)
0.25%
Impact on 2024
Postretirement
Benefits Cost
Increase/(Decrease)
$1
$2
Impact on 2023
Accumulated
Postretirement
Benefit Obligation
$21
$14
Each fluctuation above assumes that the other components of the calculation are held constant.
Accounting Mechanisms
In accordance with pension accounting standards, Entergy utilizes a number of accounting mechanisms that
reduce the volatility of reported pension costs. Differences between actuarial assumptions and actual plan results
are deferred and are amortized into expense only when the accumulated differences exceed 10% of the greater of the
projected benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over the
average remaining service period of active employees. If almost all of the plan participants are inactive, as is the
case for certain qualified pension plans, the excess is amortized over the remaining life expectancy of plan
participants. Additionally, accounting standards allow for the deferral of prior service costs/credits arising from
plan amendments that attribute an increase or decrease in benefits to employee service in prior periods. Prior
service costs/credits are then amortized into expense over the average future working life of active employees.
Certain decisions, including workforce reductions, plan amendments, and plant shutdowns, may significantly reduce
the expense amortization period and result in immediate recognition of certain previously-deferred costs and gains/
losses in the form of curtailment gains or losses. Similarly, payments made to settle benefit obligations, including
lump sum benefit payments, can also result in accelerated recognition in the form of settlement losses or gains.
Several Entergy subsidiaries received regulatory approval to defer the expense portion of settlement charges and
amortize into expense over time. See Note 11 to the financial statements for further discussion.
Entergy calculates the expected return on pension and other postretirement benefits plan assets by
multiplying the long-term expected rate of return on assets by the market-related value (MRV) of plan assets.
Entergy determines the MRV of its pension plan assets, except for the long duration fixed income assets, by
calculating a value that uses a 20-quarter phase-in of the difference between actual and expected returns. For the
long duration fixed income assets in the pension trust and for its other postretirement benefits plan assets, Entergy
uses fair value as the MRV.
Accounting standards require an employer to recognize in its balance sheet the funded status of its benefit
plans. See Note 11 to the financial statements for further discussion of Entergy’s funded status.
42
Employer Contributions
Entergy contributed $267 million to its qualified pension plans in 2023. Entergy estimates pension
contributions will be approximately $270 million in 2024, although the 2024 required pension contributions will be
known with more certainty when the January 1, 2024, valuations are completed, which is expected by April 1, 2024.
Minimum required funding calculations as determined under Pension Protection Act guidance, as amended
by the American Rescue Plan Act of 2021, are performed annually as of January 1 of each year and are based on
measurements of the assets and funding liabilities as measured at that date. Any excess of the funding liability over
the calculated fair market value of assets results in a funding shortfall that must be funded over a fifteen-year rolling
period. The Pension Protection Act also imposes certain plan limitations if the funded percentage, which is based
on calculated fair market values of assets divided by funding liabilities, does not meet certain thresholds. For
funding purposes, asset gains and losses are smoothed into the calculated fair market value of assets. The funding
liability is based upon a weighted-average 24-month corporate bond rate published by the U.S. Treasury which is
generally subject to a corridor of the 25-year average of prior segment rates. Periodic changes in asset returns and
interest rates can affect funding shortfalls and future cash contributions.
Entergy contributed $49.1 million to its postretirement plans in 2023 and plans to contribute $45.9 million
in 2024.
Other Contingencies
As a company with multi-state utility operations, Entergy is subject to a number of federal and state laws
and regulations and other factors and conditions in the areas in which it operates, which potentially subjects it to
environmental, litigation, and other risks. Entergy periodically evaluates its exposure for such risks and records a
provision for those matters which are considered probable and estimable in accordance with GAAP.
Environmental
Entergy must comply with environmental laws and regulations applicable to air emissions, water
discharges, solid waste (including coal combustion residuals), hazardous waste, toxic substances, protected species,
and other environmental matters. Under these various laws and regulations, Entergy could incur substantial costs to
comply or address any impacts to the environment. Entergy conducts studies to determine the extent of any
required remediation and has recorded liabilities based upon its evaluation of the likelihood of loss and expected
dollar amount for each issue. Additional sites or issues could be identified which require environmental
remediation or corrective action for which Entergy could be liable. The amounts of environmental liabilities
recorded can be significantly affected by the following external events or conditions.
• Changes to existing federal, state, or local regulation by governmental authorities having jurisdiction over
air quality, water quality, control of toxic substances and hazardous and solid wastes, and other
environmental matters.
The identification of additional impacts, sites, issues, or the filing of other complaints in which Entergy may
be asserted to be a potentially responsible party.
The resolution or progression of existing matters through the court system or resolution by the EPA or
relevant state or local authority.
•
•
Litigation
Entergy is regularly named as a defendant in a number of lawsuits involving employment, customers, and
injuries and damages issues, among other matters. Entergy periodically reviews the cases in which it has been
named as defendant and assesses the likelihood of loss in each case as probable, reasonably possible, or remote and
records liabilities for cases that have a probable likelihood of loss and the loss can be estimated. Given the
43 environment in which Entergy operates, and the unpredictable nature of many of the cases in which Entergy is
named as a defendant, the ultimate outcome of the litigation to which Entergy is exposed has the potential to
materially affect the results of operations, financial position, and cash flows of Entergy or the Registrant
Subsidiaries.
Complaints Against System Energy
System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related
costs associated with its 90% ownership/leasehold interest in Grand Gulf. System Energy sells its Grand Gulf
capacity and energy to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans
pursuant to the Unit Power Sales Agreement. System Energy and the Unit Power Sales Agreement are currently the
subject of several litigation proceedings at the FERC (or on appeal from the FERC to the United States Court of
Appeals for the Fifth Circuit). See Note 2 to the financial statements for discussion of these proceedings.
New Accounting Pronouncements
See Note 1 to the financial statements for discussion of new accounting pronouncements.
44 Table of Contents
ENTERGY CORPORATION AND SUBSIDIARIES
REPORT OF MANAGEMENT
Management of Entergy Corporation and its subsidiaries has prepared and is responsible for the financial
statements and related financial information included in this document. To meet this responsibility, management
establishes and maintains a system of internal controls over financial reporting designed to provide reasonable
assurance regarding the preparation and fair presentation of financial statements in accordance with generally
accepted accounting principles. This system includes communication through written policies and procedures, an
employee Code of Entegrity, and an organizational structure that provides for appropriate division of responsibility
and training of personnel. This system is also tested by a comprehensive internal audit program.
Entergy management assesses the design and effectiveness of Entergy’s internal control over financial
reporting on an annual basis. In making this assessment, management uses the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework.
The 2013 COSO Framework was utilized for management’s assessment. Management acknowledges, however, that
all internal control systems, no matter how well designed, have inherent limitations and can provide only reasonable
assurance with respect to financial statement preparation and presentation.
Entergy Corporation’s independent registered public accounting firm, Deloitte & Touche LLP, has issued
an attestation report on the effectiveness of Entergy Corporation’s internal control over financial reporting as of
December 31, 2023.
In addition, the Audit Committee of the Board of Directors, composed solely of independent Directors,
meets with the independent auditors, internal auditors, management, and internal accountants periodically to discuss
internal controls, and auditing and financial reporting matters. The Audit Committee appoints the independent
auditors annually, seeks shareholder ratification of the appointment, and reviews with the independent auditors the
scope and results of the audit effort. The Audit Committee also meets periodically with the independent auditors
and the chief internal auditor without management present, providing free access to the Audit Committee.
Based on management’s assessment of internal controls using the 2013 COSO criteria, management
believes that Entergy maintained effective internal control over financial reporting as of December 31, 2023.
Management further believes that this assessment, combined with the policies and procedures noted above, provides
reasonable assurance that Entergy’s financial statements are fairly and accurately presented in accordance with
generally accepted accounting principles.
ANDREW S. MARSH
Chair of the Board and Chief Executive Officer of
Entergy Corporation
KIMBERLY A. FONTAN
Executive Vice President and Chief Financial Officer of
Entergy Corporation
45 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and Board of Directors of
Entergy Corporation and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Entergy Corporation and Subsidiaries (the
“Corporation”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive
income, cash flows, and changes in equity for each of the three years in the period ended December 31, 2023, and
the related notes (collectively, referred to as the “financial statements”). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Corporation as of December 31, 2023 and 2022,
and the results of its operations and its cash flows for each of the three years in the period ended December 31,
2023, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Corporation’s internal control over financial reporting as of December 31, 2023,
based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2024, expressed an
unqualified opinion on the Corporation’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express
an opinion on the Corporation’s financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Corporation in accordance with the US
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our
opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they
relate.
Rate and Regulatory Matters — Entergy Corporation and Subsidiaries — Refer to Note 2 to the financial
statements
Critical Audit Matter Description
The Corporation is subject to rate regulation by their respective state utility regulatory agencies and wholesale
regulation by the Federal Energy Regulatory Commission (collectively, the “Commissions”). Management has
determined it meets the requirements under accounting principles generally accepted in the United States of
America to prepare its financial statements applying the specialized rules to account for the effects of cost-based
rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and
disclosures.
46 The Corporation’s rates are subject to regulatory rate-setting processes and annual earnings oversight. Because the
Commissions set the rates, the Corporation is allowed to charge customers based on allowable costs, including a
reasonable return on equity, and the Corporation applies accounting standards that require the financial statements
to reflect the effects of rate regulation, including the recording of regulatory assets and liabilities. The Corporation
assesses whether the regulatory assets and regulatory liabilities continue to meet the criteria for probable future
recovery or settlement at each balance sheet date and when regulatory events occur. This assessment includes
consideration of recent rate orders, historical regulatory treatment for similar costs, and factors such as changes in
applicable regulatory and political environments. While the Corporation has indicated it expects to recover costs
from customers through regulated rates, there is a risk that the Commissions will not approve: (1) full recovery of
the costs of providing utility service or (2) full recovery of amounts invested in the utility business and a reasonable
return on that investment.
We identified the impact of rate regulation as a critical audit matter due to the judgments made by management to
support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved
in assessing the impact of future regulatory orders on the financial statements. Management judgments include
assessing the (1) likelihood of recovery in future rates of incurred costs and the (2) likelihood of refunds to
customers. Auditing management’s judgments regarding the outcome of future decisions by the Commissions,
recovery in future rates of regulatory assets and refunds or future reductions in rates related to regulatory liabilities
involved specialized knowledge of accounting for rate regulation and the rate-setting process due to its inherent
complexities and auditor judgment to evaluate management estimates and the subjectivity of audit evidence.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commissions, recovery in future rates of
regulatory assets and refunds or future reductions in rates related to regulatory liabilities included the following,
among others:
• We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the
recovery in future rates of regulatory assets; and (2) a refund or a future reduction in rates that should be
reported as regulatory liabilities. We also tested the effectiveness of management’s controls over the initial
recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory
developments that may affect the likelihood of recovering costs in future rates or of a future reduction in
rates.
• We evaluated the Corporation’s disclosures related to the impacts of rate regulation, including the balances
recorded and regulatory developments.
• We read relevant regulatory orders issued by the Commissions for the Corporation to assess the likelihood
of recovery in future rates or of a future reduction in rates based on precedents of the Commissions’
treatment of similar costs under similar circumstances. We evaluated the external information and compared
to management’s recorded regulatory asset and liability balances for completeness.
•
For regulatory matters in process, we inspected the Corporation’s and intervenors’ filings with the
Commissions, initial Administrative Law Judge decisions and orders issued, and settlement offers and
agreements with the Commissions for any evidence that might contradict management’s assertions.
• We obtained an analysis from management and support from the Corporation’s internal and external legal
counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction
in rates for regulatory liabilities not yet addressed in a regulatory order, to assess management’s assertion
that amounts are probable of recovery or a future reduction in rates.
• We obtained representation from management regarding probability of recovery for regulatory assets or
refund or future reduction in rates for regulatory liabilities to assess management’s assertion that amounts
are probable of recovery, refund, or a future reduction in rates.
47 Securitization Financing — Storm Cost Recovery Filings with Retail Regulators — Entergy Corporation and
Subsidiaries — Refer to Note 2 to the financial statements
Critical Audit Matter Description
Hurricane Ida in 2021 caused significant damage to portions of the Corporation’s service area within the state of
Louisiana. In January 2023, the Louisiana Public Service Commission (“LPSC”) issued a Financing Order
authorizing financing of $1.491 billion of system restoration costs utilizing the securitization process authorized by
Louisiana Act 55 financing, as supplemented by Act 293 of the Louisiana Legislature’s Regular Session of 2021
(“Act 55, as supplemented by Act 293”). In March 2023, the securitization financing closed, resulting in the
issuance of $1.491 billion principal amount bonds by Louisiana Local Government Environmental Facilities and
Community Development Authority (“LCDA”), a political subdivision of the State of Louisiana. The LCDA loaned
the proceeds to the Louisiana Utilities Restoration Corporation (“LURC”), and the LURC contributed the net bond
proceeds to a State legislatively authorized and LURC-sponsored trust, Restoration Law Trust II (the “storm trust
II”). The Corporation and the LURC each hold beneficial interests in the storm trust II.
The Corporation does not report the bonds issued by the LCDA on its balance sheet because the bonds are the
obligation of the LCDA. The bonds are secured by system restoration property, which is the right granted by law to
the LURC to collect a system restoration charge from customers. The Corporation collects the system restoration
charge on behalf of the LURC and remits the collections to the bond indenture trustee. The Corporation does not
report the collection of system restoration charges as revenue because the Corporation is merely acting as a billing
and collection agent for the LCDA and the LURC. In the remote possibility that the system restoration charge, as
well as any funds in the excess subaccount and funds in the debt service reserve account, are insufficient to service
the bonds resulting in a payment default, the storm trust II is required to liquidate Entergy Finance Company
preferred interests in an amount equal to what would be required to cure the default. The estimated value of this
indirect guarantee is immaterial. The Corporation consolidates the storm trust II as a variable interest entity and the
LURC’s 1% beneficial interest is shown as a noncontrolling interest in the financial statements.
We identified management’s conclusion that the bonds issued by the LCDA are the obligation of the LCDA as a
critical audit matter due to the judgments made by management to support its conclusion. Auditing management’s
judgments involved especially subjective judgment and specialized knowledge of accounting for securitization
financing transactions.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Act 55, as supplemented by Act 293, securitization financing included the
following, among others:
• We tested the effectiveness of management’s controls over the evaluation of the accounting impact of this
securitization financing transaction, including the conclusion that the bonds issued by the LCDA are the
obligation of the LCDA.
• We evaluated the Corporation’s disclosures related to the impacts of the Act 55, as supplemented by Act
293, securitization financing, including the balances recorded.
• We read relevant regulatory and financing orders issued by the LPSC for the Corporation, the LURC, and
the LCDA, and evaluated external information to compare to management’s conclusions.
• We obtained an analysis from management and support from the Corporation’s internal and external legal
counsel regarding the legal status of the bonds issued by the LCDA and the system restoration property
granted to the LURC to assess management’s assertion that the bonds issued by the LCDA are the
obligation of the LCDA.
• With the assistance of professionals in our firm having expertise and experience in addressing the
accounting for securitization financing transactions by regulated utilities, we evaluated the Company’s
conclusion, including the conclusion that the bonds issued by the LCDA are the obligation of the LCDA.
48 Uncertain Tax Positions — Entergy Corporation and Subsidiaries — Refer to Note 3 to the financial statements
Critical Audit Matter Description
The Corporation accounts for uncertain income tax positions under a two-step approach with a more likely-than-not
recognition threshold and a measurement approach based on the largest amount of tax benefit that is greater than
fifty percent likely of being realized upon settlement. The Corporation has uncertain tax positions which require
management to make judgments and assumptions to determine whether available information supports the assertion
that the recognition threshold is met, particularly related to the technical merits and facts and circumstances of each
position, as well as the probability of different potential outcomes. These uncertain tax positions could be
significantly affected by audits by taxing authorities of the tax positions and changes to relevant tax law. There is an
uncertain tax position related to the March 2023 securitization financing that provided for a tax benefit in the first
quarter of 2023 of approximately $129 million.
Given the judgments made by management, we identified management’s conclusion that the securitization uncertain
tax position met the more-likely-than-not recognition threshold as a critical audit matter. Auditing management’s
judgments regarding this uncertain tax position involved specialized knowledge of uncertain tax positions and
auditor judgment to evaluate the subjectivity of audit evidence.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the securitization uncertain tax position included the following, among others:
• We tested the effectiveness of controls related to the securitization uncertain tax position, including those
over the recognition and measurement of the income tax benefit.
• We evaluated the Corporation’s disclosures, and the balances recorded, related to the securitization
uncertain tax position.
• We evaluated the methods and assumptions used by management to estimate the securitization uncertain tax
position by testing the underlying data that served as the basis for the uncertain tax position.
• With the assistance of our income tax specialists, we tested the technical merits of the securitization
uncertain tax position and management’s key estimates and judgments made by:
• Assessing the technical merits of the uncertain tax position by comparing to similar cases filed with
the Internal Revenue Service.
• Obtaining an opinion from the Corporation’s external legal counsel regarding certain federal
income tax consequences related to the Act 55, as supplemented by Act 293, securitization
financing and evaluating whether the analysis was consistent with our interpretation of the relevant
laws and circumstances.
• Considering the impact of changes or settlements in the tax environment on management’s methods
and assumptions used to estimate the uncertain tax position.
/s/ DELOITTE & TOUCHE LLP
New Orleans, Louisiana
February 23, 2024
We have served as the Corporation’s auditor since 2001.
49 Table of Contents
Attestation Report of Registered Public Accounting Firm
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and Board of Directors of
Entergy Corporation and Subsidiaries
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Entergy Corporation and Subsidiaries (the
“Corporation”) as of December 31, 2023, based on criteria established in Internal Control —Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our
opinion, the Corporation maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by
COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023 of
the Corporation and our report dated February 23, 2024 expressed an unqualified opinion on those consolidated
financial statements.
Basis for Opinion
The Corporation’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in Item 9A, Internal
Control over Financial Reporting. Our responsibility is to express an opinion on the Corporation’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
New Orleans, Louisiana
February 23, 2024
1
50 ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
OPERATING REVENUES
Electric
Natural gas
Other
TOTAL
OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale
Purchased power
Nuclear refueling outage expenses
Other operation and maintenance
Asset write-offs, impairments, and related charges (credits)
Decommissioning
Taxes other than income taxes
Depreciation and amortization
Other regulatory charges (credits) - net
TOTAL
For the Years Ended December 31,
2023
2021
2022
(In Thousands, Except Share Data)
$11,842,454
180,490
124,468
12,147,412
$13,186,845
233,920
343,472
13,764,237
$10,873,995
170,610
698,291
11,742,896
2,801,580
968,036
150,147
2,898,213
42,679
206,674
755,574
1,845,003
(138,469)
9,529,437
3,732,851
1,561,544
156,032
3,038,459
(163,464)
224,076
733,538
1,761,023
669,403
11,713,462
2,458,096
1,271,677
172,636
2,968,621
263,625
306,411
660,290
1,684,286
111,628
9,897,270
OPERATING INCOME
2,617,975
2,050,775
1,845,626
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction
Interest and investment income (loss)
Miscellaneous - net
TOTAL
INTEREST EXPENSE
Interest expense
Allowance for borrowed funds used during construction
TOTAL
98,493
162,726
(201,013)
60,206
72,832
(75,581)
(77,629)
(80,378)
70,473
430,466
(201,778)
299,161
1,046,164
(39,758)
1,006,406
940,060
(27,823)
912,237
863,712
(29,018)
834,694
INCOME BEFORE INCOME TAXES
1,671,775
1,058,160
1,310,093
Income taxes
(690,535)
(38,978)
191,374
CONSOLIDATED NET INCOME
2,362,310
1,097,138
1,118,719
Preferred dividend requirements of subsidiaries and noncontrolling
interests
5,774
(6,028)
227
NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION
$2,356,536
$1,103,166
$1,118,492
Earnings per average common share:
Basic
Diluted
$11.14
$11.10
$5.40
$5.37
$5.57
$5.54
Basic average number of common shares outstanding
Diluted average number of common shares outstanding
211,569,931
212,376,495
204,450,354
205,547,578
200,941,511
201,873,024
See Notes to Financial Statements.
51
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52
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended December 31,
2022
2021
2023
(In Thousands)
Net Income
$2,362,310
$1,097,138
$1,118,719
Other comprehensive income
Cash flow hedges net unrealized gain (loss)
(net of tax benefit of $—, $—, and ($7,935))
Pension and other postretirement liabilities
(net of tax expense of $9,248, $46,789, and $55,161)
Net unrealized investment loss
(net of tax benefit of $—, ($2,231), and ($28,435))
Other comprehensive income
—
1,035
(29,754)
29,294
146,893
195,929
—
29,294
(7,154)
140,774
(49,496)
116,679
Comprehensive Income
Preferred dividend requirements of subsidiaries and noncontrolling
interests
Comprehensive Income Attributable to Entergy Corporation
2,391,604
1,237,912
1,235,398
5,774
$2,385,830
(6,028)
$1,243,940
227
$1,235,171
See Notes to Financial Statements.
53
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
OPERATING ACTIVITIES
Consolidated net income
Adjustments to reconcile consolidated net income to net cash flow
provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel
amortization
Deferred income taxes, investment tax credits, and non-current taxes
accrued
Asset write-offs, impairments, and related charges (credits)
Changes in working capital:
Receivables
Fuel inventory
Accounts payable
Taxes accrued
Interest accrued
Deferred fuel costs
Other working capital accounts
Changes in provisions for estimated losses
Changes in regulatory assets
Changes in other regulatory liabilities
Effect of securitization on regulatory asset
Changes in pension and other postretirement liabilities
Other
Net cash flow provided by operating activities
INVESTING ACTIVITIES
Construction/capital expenditures
Allowance for equity funds used during construction
Nuclear fuel purchases
Payment for purchase of assets
Net proceeds (payments) from sale of assets
Insurance proceeds received for property damages
Litigation proceeds from settlement agreement
Changes in securitization account
Payments to storm reserve escrow accounts
Receipts from storm reserve escrow accounts
Decrease (increase) in other investments
Litigation proceeds for reimbursement of spent nuclear fuel storage costs
Proceeds from nuclear decommissioning trust fund sales
Investment in nuclear decommissioning trust funds
Net cash flow used in investing activities
See Notes to Financial Statements.
For the Years Ended December 31,
2021
2022
2023
(In Thousands)
$2,362,310
$1,097,138
$1,118,719
2,244,479
2,190,371
2,242,944
(707,822)
42,679
(47,154)
(163,464)
248,719
263,599
101,801
(45,166)
(135,048)
10,122
18,933
759,361
(210,038)
(68,631)
435,877
463,805
(491,150)
(610,479)
123,295
4,294,328
(4,440,652)
98,493
(270,973)
(35,094)
11,000
19,493
—
5,493
(19,780)
98,529
(16,733)
23,655
1,082,722
(1,185,130)
(4,628,977)
(157,267)
6,943
(102,013)
4,263
4,113
(393,746)
(157,235)
374,079
576,859
(266,559)
(941,035)
(699,261)
1,259,458
2,585,490
(5,065,126)
72,832
(223,613)
(106,193)
(1,195)
—
9,829
15,514
(1,494,048)
1,125,279
(3,328)
32,367
1,636,686
(1,708,901)
(5,709,897)
(84,629)
18,359
269,797
(21,183)
(10,640)
(466,050)
(53,883)
(85,713)
(536,707)
43,631
—
(897,167)
250,917
2,300,713
(6,087,296)
70,473
(166,512)
(168,304)
17,421
—
—
13,669
(25)
83,105
2,343
49,236
5,553,629
(5,547,015)
(6,179,276)
54
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FINANCING ACTIVITIES
Proceeds from the issuance of:
Long-term debt
Treasury stock
Common stock
Retirement of long-term debt
Changes in commercial paper - net
Capital contributions from noncontrolling interests
Proceeds received by storm trusts related to securitization
Other
Dividends paid:
Common stock
Preferred stock
Net cash flow provided by financing activities
For the Years Ended December 31,
2021
2022
2023
(In Thousands)
4,273,297
9,823
130,649
(5,135,753)
310,550
25,708
1,457,676
107,595
6,019,835
32,042
852,555
(5,995,903)
(373,556)
24,702
3,163,572
42,761
8,308,427
5,977
200,776
(4,827,827)
(426,312)
51,202
—
43,221
(918,193)
(18,319)
243,033
(841,677)
(18,319)
2,906,012
(775,122)
(18,319)
2,562,023
Net decrease in cash and cash equivalents
(91,616)
(218,395)
(1,316,540)
Cash and cash equivalents at beginning of period
224,164
442,559
1,759,099
Cash and cash equivalents at end of period
$132,548
$224,164
$442,559
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized
Income taxes
Noncash investing activities:
Accrued construction expenditures
See Notes to Financial Statements.
$987,252
$42,821
$901,884
$28,354
$843,228
$98,377
$487,439
$461,748
$722,622
55
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
CURRENT ASSETS
Cash and cash equivalents:
Cash
Temporary cash investments
Total cash and cash equivalents
Accounts receivable:
Customer
Allowance for doubtful accounts
Other
Accrued unbilled revenues
Total accounts receivable
Deferred fuel costs
Fuel inventory - at average cost
Materials and supplies - at average cost
Deferred nuclear refueling outage costs
Prepayments and other
TOTAL
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds
Non-utility property - at cost (less accumulated depreciation)
Storm reserve escrow accounts
Other
TOTAL
PROPERTY, PLANT, AND EQUIPMENT
Electric
Natural gas
Construction work in progress
Nuclear fuel
TOTAL PROPERTY, PLANT, AND EQUIPMENT
Less - accumulated depreciation and amortization
PROPERTY, PLANT, AND EQUIPMENT - NET
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets (includes securitization property of $250,830 as of December 31,
2023 and $282,886 as of December 31, 2022)
Deferred fuel costs
Goodwill
Accumulated deferred income taxes
Other
TOTAL
TOTAL ASSETS
See Notes to Financial Statements.
December 31,
2023
2022
(In Thousands)
$71,609
60,939
132,548
699,411
(25,905)
225,334
494,615
1,393,455
169,967
192,799
1,418,969
140,115
213,016
3,660,869
4,863,710
418,546
323,206
69,494
5,674,956
66,850,474
717,503
2,109,703
707,852
70,385,532
26,551,203
43,834,329
$115,290
108,874
224,164
788,552
(30,856)
241,702
495,859
1,495,257
710,401
147,632
1,183,308
143,653
190,611
4,095,026
4,121,864
366,405
401,955
102,259
4,992,483
64,646,911
691,970
1,844,171
582,119
67,765,171
25,288,047
42,477,124
5,669,404
172,201
374,099
16,367
301,171
6,533,242
6,036,397
241,085
377,172
84,100
291,804
7,030,558
$59,703,396
$58,595,191
56
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Currently maturing long-term debt
Notes payable and commercial paper
Accounts payable
Customer deposits
Taxes accrued
Interest accrued
Deferred fuel costs
Pension and other postretirement liabilities
Sale-leaseback/depreciation regulatory liability
Other
TOTAL
NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued
Accumulated deferred investment tax credits
Regulatory liability for income taxes-net
Other regulatory liabilities
Decommissioning and asset retirement cost liabilities
Accumulated provisions
Pension and other postretirement liabilities
Long-term debt (includes securitization bonds of $263,007 as of December 31, 2023 and
$292,760 as of December 31, 2022)
Other
TOTAL
Commitments and Contingencies
December 31,
2023
2022
(In Thousands)
$2,099,057
1,138,171
1,566,745
446,146
434,213
214,197
218,927
59,508
—
219,528
6,396,492
4,245,982
205,973
1,033,242
3,116,926
4,505,782
462,570
648,413
$2,309,037
827,621
1,777,590
424,723
424,091
195,264
—
104,845
103,497
202,779
6,369,447
4,818,837
211,220
1,258,276
2,324,590
4,271,531
531,201
1,213,555
23,008,839
1,116,661
38,344,388
23,623,512
688,720
38,941,442
Subsidiaries’ preferred stock without sinking fund
219,410
219,410
EQUITY
Preferred stock, no par value, authorized 1,000,000 shares in 2023 and 2022; issued shares
in 2023 and 2022 - none
Common stock, $0.01 par value, authorized 499,000,000 shares in 2023 and 2022; issued
280,975,348 shares in 2023 and 279,653,929 shares in 2022
Paid-in capital
Retained earnings
Accumulated other comprehensive loss
Less - treasury stock, at cost (68,126,778 shares in 2023 and 68,477,429 shares in 2022)
Total shareholders' equity
Subsidiaries’ preferred stock without sinking fund and noncontrolling interests
TOTAL
—
—
2,810
7,795,411
11,940,384
(162,460)
4,953,498
14,622,647
120,459
14,743,106
2,797
7,632,895
10,502,041
(191,754)
4,978,994
12,966,985
97,907
13,064,892
TOTAL LIABILITIES AND EQUITY
$59,703,396
$58,595,191
See Notes to Financial Statements.
57
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Years Ended December 31, 2023, 2022, and 2021
Shareholders’ Equity
Subsidiaries’
Preferred
Stock and
Noncontrolling
Interests
Common
Stock
Treasury
Stock
Paid-in
Capital
Retained
Earnings
(In Thousands)
Accumulated
Other
Comprehensive
Loss
Total
Balance at December 31, 2020
Consolidated net income (a)
Other comprehensive income
Common stock issuances and
sales under the at the market
equity distribution program
Common stock issuance costs
Common stock issuances related
to stock plans
Common stock dividends
declared
Capital contributions from
noncontrolling interest
Preferred dividend requirements
of subsidiaries (a)
Balance at December 31, 2021
Consolidated net income (loss) (a)
Other comprehensive income
Common stock issuances and
sales under the at the market
equity distribution program
Common stock issuance costs
Common stock issuances related
to stock plans
Common stock dividends
declared
Beneficial interest in storm trust
Capital contributions from
noncontrolling interests
Distributions to noncontrolling
interests
Preferred dividend requirements
of subsidiaries (a)
Balance at December 31, 2022
Consolidated net income (a)
Other comprehensive income
Common stock issuances and
sales under the at the market
equity distribution program
Common stock issuance costs
Common stock issuances related
to stock plans
Common stock dividends
declared
Beneficial interest in storm trust
Capital contributions from
noncontrolling interest
Distributions to noncontrolling
interests
Preferred dividend requirements
of subsidiaries (a)
Balance at December 31, 2023
See Notes to Financial Statements.
$35,000
227
—
$2,700
—
—
($5,074,456) $6,549,923
—
—
—
—
$9,897,182
1,118,492
—
($449,207) $10,961,142
1,118,719
116,679
—
116,679
—
—
—
—
51,202
20
—
—
—
—
—
—
204,194
(3,438)
34,757
15,560
—
—
—
—
—
—
—
(775,122)
—
—
—
—
—
—
204,214
(3,438)
50,317
(775,122)
51,202
(18,319)
$68,110
(6,028)
—
—
$2,720
—
—
—
—
—
—
31,636
24,702
(2,194)
77
—
—
—
—
—
—
(18,319)
$97,907
5,774
—
—
$2,797
—
—
—
—
—
—
14,577
25,708
(5,188)
13
—
—
—
—
—
—
(18,319)
$120,459
—
$2,810
—
—
($5,039,699) $6,766,239
—
—
—
—
—
$10,240,552
1,103,166
—
—
(18,319)
($332,528) $11,705,394
1,097,138
140,774
—
140,774
—
—
861,916
(9,438)
60,705
14,178
—
—
—
—
—
—
—
—
—
—
—
(841,677)
—
—
—
—
—
—
—
—
—
—
861,993
(9,438)
74,883
(841,677)
31,636
24,702
(2,194)
—
—
($4,978,994) $7,632,895
—
—
—
—
—
$10,502,041
2,356,536
—
—
(18,319)
($191,754) $13,064,892
2,362,310
29,294
—
29,294
—
—
132,404
(1,768)
25,496
31,880
—
—
—
—
—
—
—
—
—
—
—
(918,193)
—
—
—
—
—
—
—
—
—
—
132,417
(1,768)
57,376
(918,193)
14,577
25,708
(5,188)
—
—
($4,953,498) $7,795,411
—
$11,940,384
—
(18,319)
($162,460) $14,743,106
(a) Consolidated net income (loss) and preferred dividend requirements of subsidiaries include $16 million for 2023, 2022, and 2021 of
preferred dividends on subsidiaries’ preferred stock without sinking fund that is not presented as equity.
58
Table of Contents
ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include the accounts of Entergy Corporation and its
subsidiaries. As required by GAAP in the United States of America, all intercompany transactions have been
eliminated in the consolidated financial statements. Entergy’s Registrant Subsidiaries (Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy) and many other Entergy
subsidiaries also maintain accounts in accordance with FERC and other regulatory guidelines. Certain previously
reported amounts in the financial statements have been reclassified to conform to current classification, with no
effect on results of operations, financial positions, or cash flows.
Use of Estimates in the Preparation of Financial Statements
In conformity with GAAP in the United States of America, the preparation of Entergy Corporation’s
consolidated financial statements requires management to make estimates and assumptions that affect the reported
amounts of assets,
the disclosure of contingent assets and
liabilities. Adjustments to the reported amounts of assets and liabilities may be necessary in the future to the extent
that future estimates or actual results are different from the estimates used.
liabilities, revenues, and expenses, and
Revenues and Fuel Costs
See Note 18 to the financial statements for a discussion of Entergy’s revenues and fuel costs.
Property, Plant, and Equipment
is stated at original cost
Property, plant, and equipment
less regulatory disallowances and
impairments. Depreciation is computed on the straight-line basis at rates based on the applicable estimated service
lives of the various classes of property. For the Registrant Subsidiaries, the original cost of plant retired or
removed, less salvage, is charged to accumulated depreciation. Normal maintenance, repairs, and minor
replacement costs are charged to operating expenses. Certain combined-cycle gas turbine generating units are
maintained under long-term service agreements with third-party service providers. The costs under these
agreements are split between operating expenses and capital additions based upon the nature of the work performed.
Substantially all of the Registrant Subsidiaries’ plant is subject to mortgage liens.
Electric plant includes the portion of Grand Gulf that was sold and leased back in a prior period. For
financial reporting purposes, this sale and leaseback arrangement is reported as a financing transaction.
59 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Net property, plant, and equipment (including property under lease and associated accumulated
amortization) for Entergy by functional category, as of December 31, 2023 and 2022, is shown below:
Production
Nuclear
Other
Transmission
Distribution
Other
Construction work in progress
Nuclear fuel
Property, plant, and equipment - net
2023
2022
(In Millions)
$7,944
7,045
9,927
12,927
3,173
2,110
708
$43,834
$7,936
7,256
9,590
12,363
2,906
1,844
582
$42,477
Depreciation rates on average depreciable property for Entergy approximated 2.9% in 2023, 2.8% in 2022,
and 2.7% in 2021.
Entergy amortizes nuclear fuel using a units-of-production method. Nuclear fuel amortization is included in
fuel expense in the income statements.
Non-utility property - at cost (less accumulated depreciation) for Entergy is reported net of accumulated
depreciation of $193 million as of December 31, 2023 and $208 million as of December 31, 2022.
60
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Jointly-Owned Generating Stations
Certain Entergy subsidiaries jointly own electric generating facilities with affiliates or third parties. All
parties are required to provide their own financing. The investments, fuel expenses, and other operation and
maintenance expenses associated with these generating stations are recorded by the Entergy subsidiaries to the
extent of their respective undivided ownership interests. As of December 31, 2023, the subsidiaries’ investment and
accumulated depreciation in each of these generating stations were as follows:
Generating Stations
Utility:
Entergy Arkansas -
Independence
Independence
White Bluff
Ouachita (b)
Union (c)
Entergy Louisiana -
Roy S. Nelson
Roy S. Nelson
Big Cajun 2
Big Cajun 2
Ouachita (b)
Acadia
Union (c)
Entergy Mississippi -
Independence
Entergy New Orleans -
Union (c)
Entergy Texas -
Roy S. Nelson
Roy S. Nelson
Big Cajun 2
Unit 1
Common Facilities
Units 1 and 2
Common Facilities
Common Facilities
Unit 6
Unit 6 Common
Facilities
Unit 3
Unit 3 Common
Facilities
Common Facilities
Common Facilities
Common Facilities
Units 1 and 2 and
Common Facilities
Common Facilities
Unit 6
Unit 6 Common
Facilities
Unit 3
Unit 3 Common
Facilities
Big Cajun 2
Montgomery County Unit 1
System Energy -
Grand Gulf (d)
Other:
Independence
Independence
Roy S. Nelson
Unit 1
Roy S. Nelson
Unit 2
Common Facilities
Unit 6
Unit 6 Common
Facilities
Total
Megawatt
Capability
(a)
Fuel
Type
Ownership
Investment
Accumulated
Depreciation
(In Millions)
Coal
Coal
Coal
Gas
Gas
Coal
Coal
Coal
Coal
Gas
Gas
Gas
Coal
Gas
Coal
Coal
Coal
Coal
Gas
824
1,244
31.50%
15.75%
57.00%
66.67%
25.00%
514
40.25%
548
22.04%
24.15%
8.05%
33.33%
50.00%
50.00%
$145
$42
$593
$173
$29
$299
$22
$149
$5
$91
$22
$59
1,666
25.00%
$293
25.00%
514
29.75%
548
915
16.30%
17.85%
5.95%
92.44%
$30
$211
$8
$112
$4
$745
$108
$31
$404
$159
$12
$224
$11
$136
$3
$79
$3
$14
$182
$10
$141
$4
$101
$2
$54
Nuclear
1,383
90.00%
$5,499
$3,494
Coal
Coal
Coal
Coal
842
514
14.37%
7.18%
10.90%
5.97%
$79
$21
$120
$3
$59
$15
$74
$1
(a)
“Total Megawatt Capability” is the dependable summer load carrying capability as demonstrated under
actual operating conditions based on the primary fuel (assuming no curtailments) that each station was
designed to utilize.
61
Entergy Corporation and Subsidiaries
Notes to Financial Statements
(b)
(c)
(d)
Ouachita Units 1 and 2 are owned 100% by Entergy Arkansas and Ouachita Unit 3 is owned 100% by
Entergy Louisiana. The investment and accumulated depreciation numbers above are only for the common
facilities and not for the generating units.
Union Unit 1 is owned 100% by Entergy New Orleans, Union Unit 2 is owned 100% by Entergy Arkansas,
Union Units 3 and 4 are owned 100% by Entergy Louisiana. The investment and accumulated depreciation
numbers above are only for the specified common facilities and not for the generating units.
Includes a leasehold interest held by System Energy. System Energy’s Grand Gulf lease obligations are
discussed in Note 5 to the financial statements.
Nuclear Refueling Outage Costs
Nuclear refueling outage costs are deferred during the outage and amortized over the estimated period to the
next outage because these refueling outage expenses are incurred to prepare the units to operate for the next
operating cycle without having to be taken off line.
Allowance for Funds Used During Construction (AFUDC)
AFUDC represents the approximate net composite interest cost of borrowed funds and a reasonable return
on the equity funds used for construction by the Registrant Subsidiaries. AFUDC increases both the plant balance
and earnings and is realized in cash through depreciation provisions included in the rates charged to customers.
Income Taxes
Entergy Corporation and the majority of its subsidiaries file a United States consolidated federal income tax
return. Each tax-paying entity records income taxes as if it were a separate taxpayer and consolidating adjustments
are allocated to the tax filing entities in accordance with Entergy’s intercompany income tax allocation
agreements. Deferred income taxes are recorded for temporary differences between the book and tax basis of assets
and liabilities, and for certain losses and credits available for carryforward.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion of the deferred tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates in the period in which the tax or rate was enacted. See the
“Other Tax Matters - Tax Cuts and Jobs Act” section in Note 3 to the financial statements for discussion of the
effects of the enactment of the Tax Cuts and Jobs Act in December 2017.
The benefits of investment tax credits are deferred and amortized over the average useful life of the related
property, as a reduction of income tax expense, for such credits associated with rate-regulated operations in
accordance with ratemaking treatment.
62 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Earnings per Share
The following table presents Entergy’s basic and diluted earnings per share calculations included on the
consolidated income statements:
For the Years Ended December 31,
2023
2022
2021
(Dollars In Thousands, Except Per Share Data; Shares in Millions)
$/share
$/share
$/share
$2,362,310
$1,097,138
$1,118,719
Consolidated net income
Less: Preferred dividend requirements of
subsidiaries and noncontrolling interests
5,774
(6,028)
227
Net income attributable to Entergy
Corporation
Basic shares and earnings per average
common share
Average dilutive effect of:
Stock options
Other equity plans
Equity forwards
$2,356,536
$1,103,166
$1,118,492
211.6
$11.14
204.5
$5.40
200.9
$5.57
0.3
0.5
—
(0.01)
(0.03)
—
0.4
0.5
0.1
(0.01)
(0.02)
—
0.4
0.6
—
(0.01)
(0.02)
—
Diluted shares and earnings per average
common share
212.4
$11.10
205.5
$5.37
201.9
$5.54
The calculation of diluted earnings per share excluded 1,179,962 options outstanding at December 31, 2023,
931,453 options outstanding at December 31, 2022, and 1,013,320 options outstanding at December 31, 2021
because they were antidilutive. In addition, as discussed further in Note 7 to the financial statements, at
December 31, 2023, 1,762,709 shares under a forward sale agreement were not included in the calculation of diluted
earnings per share because their effect would have been antidilutive, and at December 31, 2021, 1,158,917 shares
under then-outstanding forward sale agreements were not included in the calculation of diluted earnings per share
because their effect would have been antidilutive.
Stock-based Compensation Plans
Entergy grants stock options, restricted stock, performance units, and restricted stock unit awards to key
employees of the Entergy subsidiaries under its Equity Ownership Plans, which are shareholder-approved stock-
based compensation plans. These plans are described more fully in Note 12 to the financial statements. The cost of
the stock-based compensation is charged to income over the vesting period. Awards under Entergy’s plans
generally vest over three years. Entergy accounts for forfeitures of stock-based compensation when they occur.
Entergy recognizes all income tax effects related to share-based payments through the income statement.
Accounting for the Effects of Regulation
Entergy’s Utility operating companies and System Energy are rate-regulated entities that are required to
reflect the effects of rate regulation in their financial statements, including the recording of regulatory assets and
liabilities, as the Utility operating companies and System Energy have rates that meet the following three criteria:
(1) are approved by a third-party regulator; (2) are designed to recover the entities’ cost of providing the regulated
services or products; and (3) can reasonably be assumed will be charged to and collected from customers. These
criteria may also be applied to separable portions of a utility’s business, such as the generation or transmission
functions, or to specific classes of customers.
Regulatory assets represent incurred costs that have been deferred because they are probable of future
recovery from customers through regulated rates. Regulatory liabilities represent (1) revenue or gains that have
63
Entergy Corporation and Subsidiaries
Notes to Financial Statements
been deferred because it is probable such amounts will be credited to customers through future regulated rates or (2)
billings in advance of expenditures for approved regulatory programs. To the extent that all or portions of the
Utility operating companies or System Energy’s operations cease to be subject to rate regulation, or future recovery
or settlement is no longer probable as a result of changes in regulation or other reasons, the related regulatory assets
and liabilities are eliminated from the balance sheet and the impact is recognized on the income statement.
In addition, regulatory accounting requires recognition of an impairment loss if it becomes probable that
part of the cost of a recently completed plant asset will be disallowed for rate-making purposes and a reasonable
estimate of the amount of the disallowance can be made.
Entergy Louisiana does not apply regulatory accounting standards to the Louisiana retail deregulated
portion of River Bend, the 30% interest in River Bend formerly owned by Cajun unless specific cost recovery is
provided for in tariff rates. The Louisiana retail deregulated portion of River Bend is operated under a deregulated
asset plan representing a portion (approximately 15%) of River Bend plant costs, generation, revenues, and
expenses established under a 1992 LPSC order. The plan allows Entergy Louisiana to sell the electricity from the
deregulated assets to Louisiana retail customers at 4.6 cents per kWh or off-system at higher prices, with certain
provisions for sharing incremental revenue above 4.6 cents per kWh between customers and shareholders.
Regulatory Asset or Liability for Income Taxes
Accounting standards for income taxes provide that a regulatory asset or liability be recorded if it is
probable that the currently determinable future increase or decrease in regulatory income tax expense will be
recovered from or credited to customers through future rates. There are two main sources of Entergy’s regulatory
asset or liability for income taxes. There is a regulatory asset related to the ratemaking treatment of the tax effects
of book depreciation for the equity component of AFUDC that has been capitalized to property, plant, and
equipment but for which there is no corresponding tax basis. Equity-AFUDC is a component of property, plant, and
equipment that is included in rate base when the plant is placed in service. There is a regulatory liability related to
the adjustment of Entergy’s net deferred income taxes that was required by the enactment in December 2017 of a
change in the federal corporate income tax rate, which is discussed in Note 2 and 3 to the financial statements.
Cash and Cash Equivalents
Entergy considers all unrestricted highly liquid debt instruments with an original maturity of three months
or less at date of purchase to be cash equivalents.
Securitization Recovery Trust Accounts
The funds that Entergy New Orleans and Entergy Texas hold in their securitization recovery trust accounts
are not classified as cash and cash equivalents or restricted cash and cash equivalents because of their nature, uses,
and restrictions. These funds are classified as part of other current assets and other investments, depending on the
timeframe within which the Registrant Subsidiary expects to use the funds.
Allowance for Doubtful Accounts
The allowance for doubtful accounts reflects Entergy’s best estimate of expected losses on its accounts
receivable balances. The allowance is calculated as the historical rate of customer write-offs multiplied by the
current accounts receivable balance, taking into account the length of time the receivable balances have been
outstanding. Although the rate of customer write-offs has historically experienced minimal variation, management
monitors the current condition of individual customer accounts to manage collections and ensure bad debt expense
is recorded in a timely manner. The Utility operating companies’ customer accounts receivable are written off
consistent with approved regulatory requirements. See Note 18 to the financial statements for further details on the
allowance for doubtful accounts.
64 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Investments
Entergy records decommissioning trust funds on the balance sheet at their fair value. Because of the ability
of the Registrant Subsidiaries to recover decommissioning costs in rates and in accordance with the regulatory
treatment for decommissioning trust funds, for unrealized gains/(losses) on investment securities, the Registrant
Subsidiaries record an offsetting amount in other regulatory liabilities/assets. For the 30% interest in River Bend
formerly owned by Cajun, Entergy Louisiana records an offsetting amount in other deferred credits for the
unrealized trust earnings not currently expected to be needed to decommission the plant. Decommissioning trust
funds for the nuclear plants previously owned by Entergy’s non-utility operations, all of which have been sold as of
June 2022, did not meet the criteria for regulatory accounting treatment. Accordingly, unrealized gains/(losses)
recorded on the equity securities in the trust funds for these plants were recognized in earnings with no offsetting
regulatory liability/asset amount. Unrealized gains/(losses) recorded on the available-for-sale debt securities in the
trust funds were recognized in the accumulated other comprehensive income component of shareholders’ equity.
Entergy’s trusts are managed by third parties who operate in accordance with agreements that define investment
guidelines and place restrictions on the purchases and sales of investments. See Note 16 to the financial statements
for details on the decommissioning trust funds.
Partnerships with Disproportionate Allocation of Earnings and Losses in Relation to an Investor’s
Ownership Interest
Entergy Arkansas and Entergy Mississippi, as managing members, each control a tax equity partnership
with a third party tax equity investor and consolidate the partnerships for financial reporting purposes. For each
respective partnership, the limited liability company agreement with the tax equity investor stipulates a
disproportionate allocation of tax attributes, earnings, and cash flows between the Registrant Subsidiary and the tax
equity investor with the tax equity investor being allocated a significant portion of the tax attributes, earnings, and
cash flows until it receives its target return, at which point the earnings and cash flows will primarily be allocated to
the Registrant Subsidiary. Each Registrant Subsidiary has the option to purchase, at a future date specified in their
respective partnership agreement, the tax equity investor’s interests at the then-current fair market value, plus an
amount that results in the tax equity investor reaching its target return, if needed.
Because of this disproportionate allocation, each Registrant Subsidiary accounts for its earnings in the
partnership using the HLBV method of accounting. Under the HLBV method, the amounts of income and loss
attributable to both the Registrant Subsidiary and the tax equity investor reflect changes in the amount each would
hypothetically receive at the balance sheet date under the respective liquidation provisions of the limited liability
company agreement, assuming the net assets of the partnership were liquidated at book value, after consideration of
contributions and distributions, between the Registrant Subsidiary and the tax equity investor. Once the tax equity
investor reaches its target return in the hypothetical liquidation, the remaining proceeds are primarily allocated to
the Registrant Subsidiary. This allocation may result in fluctuations of income on a periodic basis that differ
significantly from what would otherwise be recognized if the earnings were allocated under the relative ownership
percentages between the Registrant Subsidiary and the tax equity investor. Entergy Arkansas and Entergy
Mississippi have determined these differences are primarily due to timing, and both the APSC and the MPSC have
approved that, for purposes of ratemaking, each Registrant Subsidiary reflect its interest in its respective partnership
using its relative ownership percentage and disregard the effects of the HLBV method of accounting. Because of
this, each Registrant Subsidiary has recorded a regulatory liability for the difference between the earnings allocated
to it under the HLBV method of accounting and the earnings that would have been allocated to it under its
respective ownership percentage in the partnership.
Derivative Financial Instruments and Commodity Derivatives
The accounting standards for derivative instruments and hedging activities require that all derivatives be
recognized at fair value on the balance sheet, either as assets or liabilities, unless they meet various exceptions
65 Entergy Corporation and Subsidiaries
Notes to Financial Statements
including the normal purchase/normal sale criteria. The changes in the fair value of recognized derivatives are
recorded each period in current earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and the type of hedge transaction. Due to regulatory treatment, an
offsetting regulatory asset or liability is recorded for changes in fair value of recognized derivatives for the
Registrant Subsidiaries.
Contracts for commodities that will be physically delivered in quantities expected to be used or sold in the
ordinary course of business, including certain purchases and sales of power and fuel, meet the normal purchase,
normal sales criteria and are not recognized on the balance sheet. Revenues and expenses from these contracts are
reported on a gross basis in the appropriate revenue and expense categories as the commodities are received or
delivered.
For other contracts for commodities in which Entergy is hedging the variability of cash flows related to a
variable-rate asset, liability, or forecasted transactions that qualify as cash flow hedges, the changes in the fair value
of such derivative instruments are reported in other comprehensive income. To qualify for hedge accounting, the
relationship between the hedging instrument and the hedged item must be documented to include the risk
management objective and strategy and, at inception and on an ongoing basis, the effectiveness of the hedge in
offsetting the changes in the cash flows of the item being hedged. Gains or losses accumulated in other
comprehensive income are reclassified to earnings in the periods when the underlying transactions actually
occur. Changes in the fair value of derivative instruments that are not designated as cash flow hedges are recorded
in current-period earnings on a mark-to-market basis.
Entergy has determined that contracts to purchase uranium do not meet the definition of a derivative under
the accounting standards for derivative instruments because they do not provide for net settlement and the uranium
markets are not sufficiently liquid to conclude that forward contracts are readily convertible to cash. If the uranium
markets do become sufficiently liquid in the future and Entergy begins to account for uranium purchase contracts as
derivative instruments, the fair value of these contracts would be accounted for consistent with Entergy’s other
derivative instruments. See Note 15 to the financial statements for further details on Entergy’s derivative
instruments and hedging activities.
Fair Values
The estimated fair values of Entergy’s financial instruments and derivatives are determined using historical
prices, bid prices, market quotes, and financial modeling. Considerable judgment is required in developing the
estimates of fair value. Therefore, estimates are not necessarily indicative of the amounts that Entergy could realize
in a current market exchange. Gains or losses realized on financial instruments are reflected in future rates and
therefore do not affect net income. Entergy considers the carrying amounts of most financial instruments classified
as current assets and liabilities to be a reasonable estimate of their fair value because of the short maturity of these
instruments. See Note 15 to the financial statements for further discussion of fair value.
Impairment of Long-lived Assets
Entergy periodically reviews long-lived assets whenever events or changes in circumstances indicate that
recoverability of these assets is uncertain. Generally, the determination of recoverability is based on the
undiscounted net cash flows expected to result from such operations and assets. Projected net cash flows depend on
the expected operating life of the assets, the future operating costs associated with the assets, the efficiency and
availability of the assets and generating units, and the future market and price for energy and capacity over the
remaining life of the assets.
66 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Reacquired Debt
The premiums and costs associated with reacquired debt of Entergy’s Utility operating companies and
System Energy (except that portion allocable to the deregulated operations of Entergy Louisiana) are included in
regulatory assets and are being amortized over the life of the related new issuances, or over the life of the original
debt issuance if the debt is not refinanced, in accordance with ratemaking treatment.
Taxes Imposed on Revenue-Producing Transactions
Governmental authorities assess taxes that are both imposed on and concurrent with a specific revenue-
producing transaction between a seller and a customer, including, but not limited to, sales, use, value added, and
some excise taxes. Entergy presents these taxes on a net basis, excluding them from revenues, unless required to
report them differently by a regulatory authority.
New Accounting Pronouncements
The accounting standard-setting process is ongoing, and the FASB is currently working on several projects
that have not yet resulted in final pronouncements. Final pronouncements that result from these projects could have
a material effect on Entergy’s future results of operations, financial positions, or cash flows.
In November 2023 the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures.” The ASU is intended to improve reportable segment disclosure requirements,
primarily through enhanced disclosures about significant segment expenses. In addition, the ASU requires
enhanced interim disclosures, provides new segment disclosure requirements for entities with a single reportable
segment, and contains other new disclosure requirements. ASU 2023-07 is effective for Entergy for fiscal years
beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.
Entergy does not expect ASU 2023-07 to materially affect its results of operations, financial positions, or cash
flows.
In December 2023 the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income
Tax Disclosures.” The ASU is intended to enhance the transparency and decision usefulness of income tax
disclosures. The amendments in the ASU require enhanced income tax disclosures, primarily related to consistent
categorization and disaggregation of information in the rate reconciliation and income taxes paid disaggregated by
jurisdiction. The ASU also removes certain disclosures that are no longer considered cost beneficial or relevant.
ASU 2023-09 is effective for Entergy for fiscal years beginning after December 15, 2024. Entergy does not expect
ASU 2023-09 to materially affect its results of operations, financial positions, or cash flows.
67 Entergy Corporation and Subsidiaries
Notes to Financial Statements
NOTE 2. RATE AND REGULATORY MATTERS
Regulatory Assets and Regulatory Liabilities
Regulatory assets represent incurred costs that have been deferred because they are probable of future
recovery from customers through regulated rates. Regulatory liabilities represent (1) revenue or gains that have
been deferred because it is probable such amounts will be credited to customers through future regulated rates or (2)
billings in advance of expenditures for approved regulatory programs. In addition to the regulatory assets and
liabilities that are specifically disclosed on the face of the balance sheets, the tables below provide detail of “Other
regulatory assets” and “Other regulatory liabilities” that are included on Entergy’s balance sheets as of
December 31, 2023 and 2022:
Other Regulatory Assets
Entergy
Pension & postretirement costs (Note 11 - Qualified Pension Plans, Other
Postretirement Benefits, and Non-Qualified Pension Plans) (a)
Asset retirement obligation - recovery dependent upon timing of decommissioning
of nuclear units or shutdown of non-nuclear power plants (Note 9) (a)
Removal costs (Note 9)
Storm damage costs, including hurricane costs - recovered through securitization
and retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators
and Note 5 - Securitization Bonds)
Qualified Pension Settlement Cost Deferral - recovered through October 2034
(Note 11 - Qualified Pension Settlement Cost)
Retail rate deferrals - recovered through formula rates or rate riders as rates are
redetermined by retail regulators
Retired electric and gas meters - recovered through retail rates as determined by
retail regulators (Note 2 - Retail Rate Proceedings)
Opportunity Sales - recovery will be determined after final order in proceeding
(Note 2 - Entergy Arkansas Opportunity Sales Proceeding) (b)
Deferred COVID-19 costs - recovered through retail rates as determined by retail
regulators (Note 2 - Retail Rate Proceedings) (b)
Unamortized loss on reacquired debt - recovered over term of debt
Pension & postretirement benefits expense deferral - recovered through retail
rates (Note 2 - Retail Rate Proceedings and Note 11 - Entergy Texas Reserve)
Rate case depreciation relate back deferral - will be recovered over a six-month
period beginning January 2024 (Note 2 - Retail Rate Proceedings)
Attorney General litigation costs - recovered over a six-year period through
March 2026 (b)
Formula rate plan historical year rate adjustment (Note 2 - Retail Rate
Proceedings)
Other
Entergy Total
(a)
(b)
Does not earn a return on investment, but is offset by related liabilities.
Does not earn a return on investment.
2023
2022
(In Millions)
$1,655.5
$1,968.5
1,285.0
1,010.7
1,103.2
1,058.9
536.9
250.9
248.6
153.8
131.8
118.0
63.1
32.7
27.6
10.9
841.3
194.7
160.0
166.8
131.8
120.9
68.4
30.6
—
15.7
—
143.9
$5,669.4
18.2
157.4
$6,036.4
68
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Other Regulatory Liabilities
Entergy
Unrealized gains on nuclear decommissioning trust funds (Note 16) (a)
Securitization financing savings obligation (Note 3)
Complaints against System Energy - potential future refunds (Note 2) (b)
Retail rate over-recovery - refunded through formula rate or rate riders as rates are
redetermined by retail regulators
Credits expected to be shared with customers from resolution of the 2016-2018
IRS audit (Note 3)
Refund from System Energy settlement with the APSC - return to customers to
be determined (Note 2)
Vidalia purchased power agreement (Note 8)
Deferred tax equity partnership earnings (Note 1)
Entergy Arkansas’s accumulated accelerated Grand Gulf amortization - will
be returned to customers when approved by the APSC and the FERC
Asset retirement obligation - return to customers dependent upon timing of
decommissioning (Note 9) (a)
Other
Entergy Total
2023
2022
(In Millions)
$1,826.2
405.2
177.9
$1,237.9
327.7
249.8
138.0
180.2
98.0
93.0
82.5
57.9
44.4
—
—
95.4
43.8
44.4
44.3
149.5
$3,116.9
43.5
101.9
$2,324.6
(a)
(b)
Offset by related asset.
As discussed in “Complaints Against System Energy” below, there was an additional $103.5 million
classified as a current regulatory liability as of December 31, 2022.
Regulatory activity regarding the Tax Cuts and Jobs Act
See the “Other Tax Matters - Tax Cuts and Jobs Act” section in Note 3 to the financial statements for
discussion of the effects of the December 2017 enactment of the Tax Cuts and Jobs Act (Tax Act), including its
effects on Entergy’s regulatory asset/liability for income taxes.
Entergy Arkansas
Consistent with its previously stated intent to return unprotected excess accumulated deferred income taxes
to customers as expeditiously as possible, Entergy Arkansas initiated a tariff proceeding in February 2018 proposing
to establish a tax adjustment rider to provide retail customers with certain tax benefits of $467 million associated
with the Tax Act. For the residential customer class, unprotected excess accumulated deferred income taxes were
returned to customers over a 21-month period from April 2018 through December 2019. For all other customer
classes, unprotected excess accumulated deferred income taxes were returned to customers over a nine-month
period from April 2018 through December 2018. A true-up provision also was included in the rider, with any over-
or under-returned unprotected excess accumulated deferred income taxes credited or billed to customers during the
billing month of January 2020, with any residual amounts of over- or under-returned unprotected excess
accumulated deferred income taxes to be flowed through Entergy Arkansas’s energy cost recovery rider. In March
2018 the APSC approved the tax adjustment rider effective with the first billing cycle of April 2018.
In July 2018, Entergy Arkansas made its formula rate plan filing to set its formula rate for the 2019 calendar
year. A hearing was held in May 2018 regarding the APSC’s inquiries into the effects of the Tax Act, including
Entergy Arkansas’s proposal to utilize its formula rate plan rider for its customers to realize the remaining benefits
69
Entergy Corporation and Subsidiaries
Notes to Financial Statements
of the Tax Act. Entergy Arkansas’s formula rate plan rider included a netting adjustment that compared actual
annual results to the allowed rate of return on common equity. In July 2018 the APSC issued an order agreeing
with Entergy Arkansas’s proposal to have the effects of the Tax Act on current income tax expense flow through
Entergy Arkansas’s formula rate plan rider and with Entergy Arkansas’s treatment of protected and unprotected
excess accumulated deferred income taxes. The APSC also directed Entergy Arkansas to submit in the tax
adjustment rider proceeding, discussed above, the adjustments to all other riders affected by the Tax Act and to
include an amendment for a true up mechanism where a rider affected by the Tax Act does not already contain a
true-up mechanism. Pursuant to a 2018 settlement agreement in Entergy Arkansas’s formula rate plan proceeding,
Entergy Arkansas also removed the net operating loss accumulated deferred income tax asset caused by the Tax Act
from Entergy Arkansas’s tax adjustment rider. Entergy Arkansas’s compliance tariff filings were accepted by the
APSC in October 2018. In February 2021, pursuant to its 2020 formula rate plan evaluation report settlement,
Entergy Arkansas flowed $5.6 million in credits to customers through the tax adjustment rider based on the outcome
of certain federal tax positions and a decrease in the state tax rate. In the October 2023 settlement agreement filed
in the 2023 formula rate plan proceeding, discussed below in “Retail Rate Proceedings - Filings with the APSC
(Entergy Arkansas) - Retail Rates - 2023 Formula Rate Plan Filing”, Entergy Arkansas included recovery of
$34.9 million related to the resolution of the 2016 and 2017 IRS audits from previous tax positions that are no
longer uncertain, partially offset by $24.7 million in excess accumulated deferred income taxes from reductions in
state income tax rates, each before consideration of their respective tax gross-up. The settlement was approved by
the APSC in December 2023. See Note 3 to the financial statements for further discussion of the resolution of the
2016-2018 IRS audit and the State of Arkansas corporate income tax rate changes.
Entergy Louisiana
In an electric formula rate plan settlement approved by the LPSC in April 2018, the parties agreed that
Entergy Louisiana would return to customers one-half of its eligible unprotected excess deferred income taxes from
May 2018 through December 2018 and return to customers the other half from January 2019 through August 2022.
In addition, the settlement provided that in order to flow back to customers certain other tax benefits created by the
Tax Act, Entergy Louisiana established a regulatory liability effective January 1, 2018 in the amount of $9.1 million
per month to reflect these tax benefits already included in retail rates until new base rates under the formula rate
plan were established in September 2018, and this regulatory liability was returned to customers over the September
2018 through August 2019 formula rate plan rate-effective period. The LPSC staff and intervenors in the settlement
reserved the right to obtain data from Entergy Louisiana to confirm the determination of excess accumulated
deferred income taxes resulting from the Tax Act and the analysis thereof as part of the formula rate plan review
proceeding for the 2017 test year filing. As discussed below in “Retail Rate Proceedings - Filings with the LPSC
(Entergy Louisiana) - Retail Rates - Electric - Formula Rate Plan Global Settlement”, a global settlement resolving
the outstanding issues related to the 2017 formula rate plan filing was reached in October 2023 and approved by the
LPSC in November 2023.
Entergy New Orleans
After enactment of the Tax Act the City Council passed a resolution ordering Entergy New Orleans to,
effective January 1, 2018, record deferred regulatory liabilities to account for the Tax Act’s effect on Entergy New
Orleans’s revenue requirement and to make a filing by mid-March 2018 regarding the Tax Act’s effects on Entergy
New Orleans’s operating income and rate base and potential mechanisms for customers to receive benefits of the
Tax Act. The City Council’s resolution also directed Entergy New Orleans to request that Entergy Services file
with the FERC for revisions of the Unit Power Sales Agreement and MSS-4 replacement tariffs to address the return
of excess accumulated deferred income taxes. Entergy submitted filings of this type to the FERC.
In March 2018, Entergy New Orleans filed its response to the resolution stating that the Tax Act reduced
income tax expense from what was then reflected in rates by approximately $8.2 million annually for electric
operations and by approximately $1.3 million annually for gas operations. In the filing, Entergy New Orleans
proposed to return to customers from June 2018 through August 2019 the benefits of the reduction in income tax
70 Entergy Corporation and Subsidiaries
Notes to Financial Statements
expense and its unprotected excess accumulated deferred income taxes through a combination of bill credits and
investments in energy efficiency programs, grid modernization, and Smart City projects. Entergy New Orleans
submitted supplemental information in April 2018 and May 2018. Shortly thereafter, Entergy New Orleans and the
City Council’s advisors reached an agreement in principle that provides for benefits that will be realized by Entergy
New Orleans customers through bill credits that started in July 2018 and offsets to future investments in energy
efficiency programs, grid modernization, and Smart City projects, as well as additional benefits related to the filings
made at the FERC. The agreement in principle was approved by the City Council in June 2018. In April 2023,
Entergy New Orleans completed the bill credits necessary to comply with the 2018 agreement in principle.
Entergy Texas
After enactment of the Tax Act the PUCT issued an order requiring most utilities, including Entergy Texas,
beginning January 25, 2018, to record a regulatory liability for the difference between revenues collected under
existing rates and revenues that would have been collected had existing rates been set using the new federal income
tax rates and also for the balance of excess accumulated deferred income taxes. Entergy Texas had previously
provided information to the PUCT staff and stated that it expected the PUCT to address the lower tax expense as
part of Entergy Texas’s rate case expected to be filed in May 2018.
In May 2018, Entergy Texas filed its 2018 base rate case with the PUCT. Entergy Texas’s proposed rates
and revenues reflected the inclusion of the federal income tax reductions due to the Tax Act. The PUCT issued an
order in December 2018 establishing that (1) $25 million be credited to customers through a rider to reflect the
lower federal income tax rate applicable to Entergy Texas from January 2018 through the date new rates were
implemented; (2) $242.5 million of protected excess accumulated deferred income taxes be returned to customers
through base rates under the average rate assumption method over the lives of the associated assets; and (3)
$185.2 million of unprotected excess accumulated deferred income taxes be returned to customers through a rider.
The unprotected excess accumulated deferred income taxes rider included carrying charges and was in effect over a
period of 12 months for larger customers and over a period of four years for other customers.
System Energy
In a filing made with the FERC in March 2018, System Energy proposed revisions to the Unit Power Sales
Agreement to reflect the effects of the Tax Act. In the filing System Energy proposed to return identified quantities
of unprotected excess accumulated deferred income taxes to its customers by the end of 2018. In May 2018 the
FERC accepted System Energy’s proposed tax revisions with an effective date of June 1, 2018, subject to refund
and the outcome of settlement and hearing procedures. Settlement discussions were terminated in April 2019, and a
hearing was held in March 2020. The retail regulators of the Utility operating companies that are parties to the Unit
Power Sales Agreement challenged the treatment and amount of excess accumulated deferred income tax liabilities
associated with uncertain tax positions related to nuclear decommissioning. In July 2020 the presiding ALJ in the
proceeding issued an initial decision finding that there is an additional $147 million in unprotected excess
accumulated deferred income taxes related to System Energy’s uncertain decommissioning tax deduction. The
initial decision determined that System Energy should have included the $147 million in its March 2018 filing.
System Energy had not included credits related to the effect of the Tax Act on the uncertain decommissioning tax
position because it was uncertain whether the IRS would allow the deduction. The initial decision rejected both
System Energy’s alternative argument that any crediting should occur over a ten-year period and the retail
regulators’ argument that any crediting should occur over a two-year period. Instead, the initial decision concluded
that System Energy should credit the additional unprotected excess accumulated deferred income taxes in a single
lump sum revenue requirement reduction following a FERC order addressing the initial decision.
In September 2020, System Energy filed a brief on exceptions with the FERC, re-urging its positions and
requesting the reversal of the ALJ’s initial decision. In December 2020, the LPSC, APSC, MPSC, City Council,
and FERC trial staff filed briefs opposing exceptions.
71 Entergy Corporation and Subsidiaries
Notes to Financial Statements
As discussed below in “Grand Gulf Sale-leaseback Renewal Complaint and Uncertain Tax Position
Rate Base Issue,” in September 2020 the IRS issued a Notice of Proposed Adjustment (NOPA) and Entergy
executed it. In September 2020, System Energy filed a motion to lodge the NOPA into the record in the FERC
proceeding. In October 2020 the LPSC, APSC, MPSC, City Council, and FERC trial staff filed oppositions to
System Energy’s motion. As a result of the NOPA, System Energy filed, in October 2020, a new Federal Power
Act section 205 filing at the FERC to credit the excess accumulated deferred income taxes resulting from the
decommissioning uncertain tax position. System Energy proposed to credit the entire amount of the excess
accumulated deferred income taxes arising from the successful portion of the decommissioning uncertain tax
position by issuing a one-time credit of $17.8 million. In November 2020, the LPSC, APSC, MPSC, and City
Council filed a protest to the filing, and System Energy responded.
In November 2020 the IRS issued the Revenue Agent’s Report (RAR) for the 2014-2015 tax years and in
December 2020 Entergy executed it. In December 2020, System Energy filed a motion to lodge the RAR into the
record in the FERC proceeding addressing the Tax Act. In January 2021 the LPSC, APSC, MPSC, and City
Council filed a joint answer opposing System Energy’s motion, and the FERC trial staff also filed an answer
opposing System Energy’s motion.
As a result of the RAR, in December 2020, System Energy also filed an amendment to its Federal Power
Act section 205 filing to credit excess accumulated deferred income taxes arising from the successful portion of the
decommissioning uncertain tax position. The amendment proposed the inclusion of the RAR as support for the
filing. In December 2020 the LPSC, APSC, and City Council filed a protest in response to the amendment,
reiterating objections to the filing to credit excess accumulated deferred income taxes arising from the successful
portion of the decommissioning uncertain tax position. In February 2021 the FERC issued an order accepting
System Energy’s Federal Power Act section 205 filing subject to refund, setting it for hearing, and holding the
hearing in abeyance.
In November 2020, System Energy filed a motion to vacate the ALJ’s decision, arguing that it had been
overtaken by changed circumstances because of the IRS’s determination resulting from the NOPA and RAR. In
January 2021 the LPSC, APSC, MPSC, and City Council filed a joint answer opposing System Energy’s motion,
and the FERC trial staff also filed an answer opposing System Energy’s motion. Additional responsive pleadings
were filed in February and March 2021.
In December 2022 the FERC issued an order addressing the ALJ’s initial decision and denying System
Energy’s motion to vacate the initial decision. The FERC disagreed with the ALJ’s determination that $147 million
should be credited to customers in the same manner as the excess accumulated deferred income taxes addressed in
System Energy’s March 2018 filing, which had included a stated amount of excess accumulated deferred income
taxes to be returned pursuant to a specified methodology and had not included any excess accumulated deferred
income taxes associated with the decommissioning tax position. Instead, the FERC ordered System Energy to
compute the amount of excess accumulated deferred income taxes associated with the decommissioning tax position
with consideration for the resolution of the tax position by the IRS. System Energy had previously issued a one-
time credit for the excess accumulated deferred income taxes associated with the decommissioning tax position, and
System Energy believes no further refunds are required under the methodology provided in the order. The FERC
further ordered System Energy to submit a compliance filing within 60 days addressing the justness and
reasonableness of the Unit Power Sales Agreement, with respect to its provisions for excess accumulated deferred
income taxes. In February 2023, System Energy filed the compliance filing with the FERC, which provided the
calculation of the excess accumulated deferred income taxes associated with the decommissioning tax position with
consideration for the resolution of the tax position by the IRS. System Energy confirmed that this amount of excess
accumulated deferred income taxes had already been credited to customers, and therefore concluded that no further
modifications to the Unit Power Sales Agreement are needed to address excess accumulated deferred income taxes
associated with the Tax Act.
72 Entergy Corporation and Subsidiaries
Notes to Financial Statements
In June 2023 the FERC issued a deficiency letter requesting additional information about the IRS’s
resolution of the tax position for 2016 and 2017. In July 2023, System Energy provided the additional information.
Fuel and purchased power cost recovery
The Utility operating companies are allowed to recover fuel and purchased power costs through fuel
mechanisms included in electric and gas rates that are recorded as fuel cost recovery revenues. The difference
between revenues collected and the current fuel and purchased power costs is generally recorded as “Deferred fuel
costs” on the Utility operating companies’ financial statements. The table below shows the amount of deferred fuel
costs as of December 31, 2023 and 2022 that each Utility operating company expects to recover (or return to
customers) through fuel mechanisms, subject to subsequent regulatory review.
Entergy Arkansas (a)
Entergy Louisiana (b)
Entergy Mississippi
Entergy New Orleans (b)
Entergy Texas
2023
2022
(In Millions)
($88.3)
$192.9
($130.6)
$10.2
$139.0
$208.6
$327.3
$143.2
$14.2
$258.1
(a)
(b)
Includes $68.9 million in 2022 of fuel and purchased power costs whose recovery period was indeterminate
but was expected to be recovered over a period greater than twelve months. In 2023, Entergy Arkansas
recorded a write-off of its regulatory asset for deferred fuel of $68.9 million as a result of Entergy
Arkansas’s approved motion to forgo recovery of identified costs resulting from the 2013 ANO stator
incident. See Note 8 to the financial statements for further discussion of the 2013 ANO stator incident.
Includes $168.1 million in both years for Entergy Louisiana and $4.1 million in both years for Entergy New
Orleans of fuel, purchased power, and capacity costs, which do not currently earn a return on investment
and whose recovery periods are indeterminate but are expected to be recovered over a period greater than
twelve months.
Entergy Arkansas
Energy Cost Recovery Rider
Entergy Arkansas’s retail rates include an energy cost recovery rider to recover fuel and purchased energy
costs in monthly customer bills. The rider utilizes the prior calendar-year energy costs and projected energy sales
for the twelve-month period commencing on April 1 of each year to develop an energy cost rate, which is
redetermined annually and includes a true-up adjustment reflecting the over- or under-recovery, including carrying
charges, of the energy costs for the prior calendar year. The energy cost recovery rider tariff also allows an interim
rate request depending upon the level of over- or under-recovery of fuel and purchased energy costs.
In January 2014, Entergy Arkansas filed a motion with the APSC relating to its upcoming energy cost rate
redetermination filing that was made in March 2014. In that motion, Entergy Arkansas requested that the APSC
authorize Entergy Arkansas to exclude from the redetermination of its 2014 energy cost rate $65.9 million of
incremental fuel and replacement energy costs incurred in 2013 as a result of the ANO stator incident. Entergy
Arkansas requested that the APSC authorize Entergy Arkansas to retain that amount in its deferred fuel balance,
with recovery to be reviewed in a later period after more information was available regarding various claims
associated with the ANO stator incident. In February 2014 the APSC approved Entergy Arkansas’s request to retain
that amount in its deferred fuel balance. In July 2017, Entergy Arkansas filed for a change in rates pursuant to its
formula rate plan rider. In that proceeding, the APSC approved a settlement agreement agreed upon by the parties,
including a provision that requires Entergy Arkansas to initiate a regulatory proceeding for the purpose of
73
Entergy Corporation and Subsidiaries
Notes to Financial Statements
recovering funds currently withheld from rates and related to the stator incident, including the $65.9 million of
deferred fuel and purchased energy costs and costs related to the incremental oversight previously noted, subject to
certain timelines and conditions set forth in the settlement agreement. In October 2023, Entergy Arkansas made a
commitment to the APSC to make a filing to forgo its opportunity to seek recovery of the incremental fuel and
purchased energy expense, among other identified costs, resulting from the ANO stator incident. As a result, in
third quarter 2023, Entergy Arkansas recorded a write-off of its regulatory asset for deferred fuel of $68.9 million,
which includes interest, related to the ANO stator incident. Consistent with its October 2023 commitment, Entergy
Arkansas filed a motion to forgo recovery in November 2023, and the motion was approved by the APSC in
December 2023. See the “ANO Damage, Outage, and NRC Reviews” section in Note 8 to the financial
statements for further discussion of the ANO stator incident and the approved motion to forgo recovery.
In March 2017, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the
energy cost recovery rider, which reflected an increase in the rate from $0.01164 per kWh to $0.01547 per kWh.
The APSC staff filed testimony in March 2017 recommending that the redetermined rate be implemented with the
first billing cycle of April 2017 under the normal operation of the tariff. Accordingly, the redetermined rate went
into effect on March 31, 2017 pursuant to the tariff. In July 2017 the Arkansas Attorney General requested
additional information to support certain of the costs included in Entergy Arkansas’s 2017 energy cost rate
redetermination.
In March 2018, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the
energy cost recovery rider, which reflected an increase in the rate from $0.01547 per kWh to $0.01882 per kWh.
The Arkansas Attorney General filed a response to Entergy Arkansas’s annual redetermination filing requesting that
the APSC suspend the proposed tariff to investigate the amount of the redetermination or, alternatively, to allow
recovery subject to refund. Among the reasons the Attorney General cited for suspension were questions pertaining
to how Entergy Arkansas forecasted sales and potential implications of the Tax Cuts and Jobs Act. Entergy
Arkansas replied to the Attorney General’s filing and stated that, to the extent there are questions pertaining to its
load forecasting or the operation of the energy cost recovery rider, those issues exceed the scope of the instant rate
redetermination. Entergy Arkansas also stated that potential effects of the Tax Cuts and Jobs Act are appropriately
considered in the APSC’s separate proceeding regarding potential implications of the tax law. The APSC general
staff filed a reply to the Attorney General’s filing and agreed that Entergy Arkansas’s filing complied with the terms
of the energy cost recovery rider. The redetermined rate became effective with the first billing cycle of April 2018.
Subsequently in April 2018 the APSC issued an order declining to suspend Entergy Arkansas’s energy cost
recovery rider rate and declining to require further investigation at that time of the issues suggested by the Attorney
General in the proceeding. Following a period of discovery, the Attorney General filed a supplemental response in
October 2018 raising new issues with Entergy Arkansas’s March 2018 rate redetermination and asserting that
$45.7 million of the increase should be collected subject to refund pending further investigation. Entergy Arkansas
filed to dismiss the Attorney General’s supplemental response, the APSC general staff filed a motion to strike the
Attorney General’s filing, and the Attorney General filed a supplemental response disputing Entergy Arkansas and
the APSC staff’s filing. Applicable APSC rules and processes authorize its general staff to initiate periodic audits
of Entergy Arkansas’s energy cost recovery rider. In late-2018 the APSC general staff notified Entergy Arkansas it
has initiated an audit of the 2017 fuel costs. The time in which the audit will be complete is uncertain at this time.
In March 2021, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the
energy cost recovery rider, which reflected a decrease from $0.01052 per kWh to $0.00959 per kWh. The
redetermined rate calculation also included an adjustment to account for a portion of the increased fuel costs
resulting from the February 2021 winter storms. The redetermined rate became effective with the first billing cycle
in April 2021 through the normal operation of the tariff.
In March 2022, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the
energy cost recovery rider, which reflected an increase from $0.00959 per kWh to $0.01785 per kWh. The primary
reason for the rate increase was a large under-recovered balance as a result of higher natural gas prices in 2021,
particularly in the fourth quarter 2021. At the request of the APSC general staff, Entergy Arkansas deferred its
74 Entergy Corporation and Subsidiaries
Notes to Financial Statements
request for recovery of $32 million from the under-recovery related to the February 2021 winter storms until the
2023 energy cost rate redetermination, unless a request for an interim adjustment to the energy cost recovery rider is
necessary. This resulted in a redetermined rate of $0.016390 per kWh, which became effective with the first billing
cycle in April 2022 through the normal operation of the tariff. In February 2023 the APSC issued orders initiating
proceedings with the utilities under its jurisdiction to address the prudence of costs incurred and appropriate cost
allocation of the February 2021 winter storms. With respect to any prudence review of Entergy Arkansas fuel costs,
as part of the APSC’s draft report issued in its February 2021 winter storms investigation docket, the APSC
included findings that the load shedding plans of the investor-owned utilities and some cooperatives were
appropriate and comprehensive, and, further, that Entergy Arkansas’s emergency plan was comprehensive and had a
multilayered approach supported by a system-wide response plan, which is considered an industry standard. In
September 2023 the APSC issued an order in Entergy Arkansas's company-specific proceeding and found that
Entergy Arkansas’s practices during the winter storms were prudent.
In March 2023, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the
energy cost recovery rider, which reflected an increase from $0.01639 per kWh to $0.01883 per kWh. The primary
reason for the rate increase is a large under-recovered balance as a result of higher natural gas prices in 2022 and a
$32 million deferral related to the February 2021 winter storms consistent with the APSC general staff’s request in
2022. The under-recovered balance included in the filing was partially offset by the proceeds of the $41.7 million
refund that System Energy made to Entergy Arkansas in January 2023 related to the sale-leaseback renewal costs
and depreciation litigation as calculated in System Energy’s January 2023 compliance report filed with the FERC.
See “Complaints Against System Energy - Grand Gulf Sale-leaseback Renewal Complaint and Uncertain Tax
Position Rate Base Issue” below for discussion of the compliance report filed by System Energy with the FERC in
January 2023. The redetermined rate of $0.01883 per kWh became effective with the first billing cycle in April
2023 through the normal operation of the tariff.
Entergy Louisiana
Entergy Louisiana recovers electric fuel and purchased power costs for the billing month based upon the
level of such costs incurred two months prior to the billing month. Entergy Louisiana’s purchased gas adjustments
include estimates for the billing month adjusted by a surcharge or credit that arises from an annual reconciliation of
fuel costs incurred with fuel cost revenues billed to customers, including carrying charges.
In February 2021, Entergy Louisiana incurred extraordinary fuel costs associated with the February 2021
winter storms. To mitigate the effect of these costs on customer bills, in March 2021, Entergy Louisiana requested
and the LPSC approved the deferral and recovery of $166 million in incremental fuel costs over five months
beginning in April 2021. The incremental fuel costs remain subject to review for reasonableness and eligibility for
recovery through the fuel adjustment clause mechanism. The final amount of incremental fuel costs is subject to
change through the resettlement process. At its April 2021 meeting, the LPSC authorized its staff to review the
prudence of the February 2021 fuel costs incurred by all LPSC-jurisdictional utilities, including both gas and
electric utilities. At its June 2021 meeting, the LPSC approved the hiring of consultants to assist its staff in this
review. In May 2022 the LPSC staff issued an audit report regarding Entergy Louisiana’s fuel adjustment clause
charges (for its electric operations) recommending no financial disallowances, but including several prospective
recommendations. Responsive testimony was filed by one intervenor and the parties agreed to suspend any
procedural schedule and move toward settlement discussions to close the matter. Also in May 2022 the LPSC staff
issued an audit report regarding Entergy Louisiana’s purchased gas adjustment charges (for its gas operations) that
did not propose any financial disallowances. The LPSC staff and Entergy Louisiana submitted a joint report on the
audit report and draft order to the LPSC concluding that Entergy Louisiana’s gas distribution operations and fuel
costs were not significantly adversely affected by the February 2021 winter storms and the resulting increase in
natural gas prices. The LPSC issued an order approving the joint report in October 2022.
In March 2021 the LPSC staff provided notice of an audit of Entergy Louisiana’s purchased gas adjustment
clause filings covering the period January 2018 through December 2020. The audit included a review of the
75 Entergy Corporation and Subsidiaries
Notes to Financial Statements
reasonableness of charges flowed through Entergy Louisiana’s purchased gas adjustment clause for that period. In
August 2023 the LPSC submitted its audit report and found that materially all costs recovered through the
purchased gas adjustment filings were reasonable and eligible for recovery through the purchased gas adjustment
clause. The LPSC approved the report in December 2023.
To mitigate high electric bills, primarily driven by high summer usage and elevated gas prices, Entergy
Louisiana deferred approximately $225 million of fuel expense incurred in April, May, June, July, August, and
September 2022 (as reflected on June, July, August, September, October, and November 2022 bills). These
deferrals were included in the over/under calculation of the fuel adjustment clause, which is intended to recover the
full amount of the costs included on a rolling twelve-month basis.
In January 2023 the LPSC staff provided notice of an audit of Entergy Louisiana’s purchased gas
adjustment clause filings. The audit includes a review of the reasonableness of charges flowed through Entergy
Louisiana’s purchased gas adjustment clause for the period from 2021 through 2022. Discovery is ongoing, and no
audit report has been filed.
In January 2023 the LPSC staff provided notice of an audit of Entergy Louisiana’s fuel adjustment clause
filings. The audit includes a review of the reasonableness of charges flowed through Entergy Louisiana’s fuel
adjustment clause for the period from 2020 through 2022. Discovery is ongoing, and no audit report has been filed.
Entergy Mississippi
Entergy Mississippi’s rate schedules include an energy cost recovery rider and a power management rider,
both of which are adjusted annually to reflect accumulated over- or under-recoveries. Entergy Mississippi recovers
fuel and purchased energy costs through its energy cost recovery rider and recovers costs associated with natural gas
hedging and capacity payments through its power management rider. Entergy Mississippi’s fuel cost recoveries are
subject to annual audits conducted pursuant to the authority of the MPSC.
In November 2020, Entergy Mississippi filed its annual redetermination of the annual factor to be applied
under the energy cost recovery rider. The calculation of the annual factor included an over-recovery of
approximately $24.4 million as of September 30, 2020. In January 2021 the MPSC approved the proposed energy
cost factor effective for February 2021 bills.
In November 2021, Entergy Mississippi filed its annual redetermination of the annual factor to be applied
under the energy cost recovery rider. The calculation of the annual factor included an under-recovery of
approximately $80.6 million as of September 30, 2021. In December 2021, at the request of the MPSC, Entergy
Mississippi submitted a proposal to mitigate the impact of rising fuel costs on customer bills during 2022. Entergy
Mississippi proposed that the deferred fuel balance as of December 31, 2021, which was $121.9 million, be
amortized over three years and that the MPSC authorize Entergy Mississippi to apply its weighted-average cost of
capital as the carrying cost for the unamortized fuel balance. In January 2022 the MPSC approved the amortization
of $100 million of the deferred fuel balance over two years and authorized Entergy Mississippi to apply its
weighted-average cost of capital as the carrying cost for the unamortized fuel balance. The MPSC approved the
proposed energy cost factor effective for February 2022 bills.
See “Complaints Against System Energy - System Energy Settlement with the MPSC” below for
discussion of the settlement agreement filed with the FERC in June 2022. The settlement, which was approved by
the FERC in November 2022, provided for a refund of $235 million from System Energy to Entergy Mississippi. In
July 2022 the MPSC directed the disbursement of settlement proceeds, ordering Entergy Mississippi to provide a
one-time $80 bill credit to each of its approximately 460,000 retail customers to be effective during the September
2022 billing cycle and to apply the remaining proceeds to Entergy Mississippi’s under-recovered deferred fuel
balance. In accordance with the MPSC’s directive, Entergy Mississippi provided approximately $36.7 million in
customer bill credits as a result of the settlement. In November 2022, Entergy Mississippi applied the remaining
76 Entergy Corporation and Subsidiaries
Notes to Financial Statements
settlement proceeds in the amount of approximately $198.3 million to Entergy Mississippi’s under-recovered
deferred fuel balance.
Entergy Mississippi had a deferred fuel balance of approximately $291.7 million under the energy cost
recovery rider as of July 31, 2022, along with an over-recovery balance of $51.1 million under the power
management rider. Without further action, Entergy Mississippi anticipated a year-end deferred fuel balance of
approximately $200 million after application of a portion of the System Energy settlement proceeds, as discussed
above. In September 2022, Entergy Mississippi filed for interim adjustments under both the energy cost recovery
rider and the power management rider. Entergy Mississippi proposed five monthly incremental adjustments to the
net energy cost factor designed to collect the under-recovered fuel balance as of July 31, 2022 and to reflect the
recovery of a higher natural gas price. Entergy Mississippi also proposed five monthly incremental adjustments to
the power management adjustment factor designed to flow through to customers the over-recovered power
management rider balance as of July 31, 2022. In October 2022 the MPSC approved modified interim adjustments
to Entergy Mississippi’s energy cost recovery rider and power management rider. The MPSC approved dividing the
energy cost recovery rider interim adjustment into two components that would allow Entergy Mississippi to (1)
recover a natural gas fuel rate that is better aligned with current prices; and (2) recover the estimated under-
recovered deferred fuel balance as of September 30, 2022 over a period of 20 months. The MPSC approved six
monthly incremental adjustments to the net energy cost factor designed to reflect the recovery of a higher natural
gas price. The MPSC also approved six monthly incremental adjustments to the power management adjustment
factor designed to flow through to customers the over-recovered power management rider balance. In accordance
with the order of the MPSC, Entergy Mississippi did not file an annual redetermination of the energy cost recovery
rider or the power management rider in November 2022.
In June 2023 the MPSC approved the joint stipulation agreement between Entergy Mississippi and the
Mississippi Public Utilities Staff for Entergy Mississippi’s 2023 formula rate plan filing. The stipulation directed
Entergy Mississippi to make a compliance filing to revise its power management cost adjustment factor, to revise its
grid modernization cost adjustment factor, and to include a revision to reduce the net energy cost factor to a level
necessary to reflect an average natural gas price of $4.50 per MMBtu. The MPSC approved the compliance filing
in June 2023, effective for July 2023 bills. See “Retail Rate Proceedings - Filings with the MPSC (Entergy
Mississippi) - Retail Rates - 2023 Formula Rate Plan Filing” below for further discussion of the 2023 formula rate
plan filing and the joint stipulation agreement.
In November 2023 Entergy Mississippi filed its annual redeterminations of the energy cost factor and the
power management cost adjustment factor. The calculation of the annual factor for the energy cost recovery rider
included a projected over-recovery balance of approximately $142 million at the end of January 2024. The
calculation of the annual factor for the power management rider included a projected under-recovery of $47 million
at the end of January 2024. In January 2024 the MPSC approved the proposed energy cost factor and the proposed
power management cost factor effective for February 2024 bills.
Entergy New Orleans
Entergy New Orleans’s electric rate schedules include a fuel adjustment tariff designed to reflect no more
than targeted fuel and purchased power costs, adjusted by a surcharge or credit for deferred fuel expense arising
from the monthly reconciliation of actual fuel and purchased power costs incurred with fuel cost revenues billed to
customers, including carrying charges.
Entergy New Orleans’s gas rate schedules include a purchased gas adjustment to reflect estimated gas costs
for the billing month, adjusted by a surcharge or credit similar to that included in the electric fuel adjustment clause,
including carrying charges.
77 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Entergy Texas
Entergy Texas’s rate schedules include a fixed fuel factor to recover fuel and purchased power costs,
including interest, not recovered in base rates. Historically, semi-annual revisions of the fixed fuel factor have been
made in March and September based on the market price of natural gas and changes in fuel mix. The amounts
collected under Entergy Texas’s fixed fuel factor and any interim surcharge or refund are subject to fuel
reconciliation proceedings before the PUCT. In 2023 the Texas legislature modified the Texas Utilities Code to
provide that material over- and under-recovered fuel balances are to be refunded or surcharged through interim fuel
adjustments and that fuel reconciliations must be filed at least once every two years. Entergy Texas expects the
PUCT to undertake a rulemaking to effectuate the new legislation by the end of 2024.
In May 2022, Entergy Texas filed an application with the PUCT to implement an interim fuel surcharge to
collect the cumulative under-recovery of approximately $51.7 million, including interest, of fuel and purchased
power costs incurred from May 1, 2020 through December 31, 2021. The under-recovery balance is primarily
attributable to the impacts of Winter Storm Uri, including historically high natural gas prices, partially offset by
settlements received by Entergy Texas from MISO related to Hurricane Laura. Entergy Texas proposed that the
interim fuel surcharge be assessed over a period of six months beginning with the first billing cycle after the PUCT
issues a final order, but no later than the first billing cycle of September 2022. Also in May 2022, the PUCT
referred the proceeding to the State Office of Administrative Hearings. In July 2022, Entergy Texas filed on behalf
of the parties an unopposed settlement resolving all issues in the proceeding. In addition, Entergy Texas filed on
behalf of the parties a motion to admit evidence, to approve interim rates as requested in the initial application, and
to remand the proceeding to the PUCT to consider the unopposed settlement. In August 2022 the ALJ with the
State Office of Administrative Hearings issued an order granting Entergy Texas’s motion, approving interim rates
effective with the first billing cycle of September 2022, and remanding the case to the PUCT for final approval.
The interim fuel surcharge was approved by the PUCT in January 2023.
In September 2022, Entergy Texas filed an application with the PUCT to reconcile its fuel and purchased
power costs for the period from April 2019 through March 2022. During the reconciliation period, Entergy Texas
incurred approximately $1.7 billion in eligible fuel and purchased power expenses, net of certain revenues credited
to such expenses and other adjustments. As of the end of the reconciliation period, Entergy Texas’s cumulative
under-recovery balance was approximately $103.1 million, including interest, which Entergy Texas requested
authority to carry over as the beginning balance for the subsequent reconciliation period beginning April 2022,
pending future surcharges or refunds as approved by the PUCT. In November 2022 the PUCT referred the
proceeding to the State Office of Administrative Hearings. In May 2023, Entergy Texas filed, and the ALJ with the
State Office of Administrative Hearings granted, a joint motion to abate the proceeding to give parties additional
time to finalize a settlement. In July 2023, Entergy Texas filed an unopposed settlement, supporting testimony, and
an agreed motion to admit evidence and remand the proceeding to the PUCT. Pursuant to the unopposed settlement,
Entergy Texas would receive no disallowance of fuel costs incurred over the three-year reconciliation period and
retain $9.3 million in margins from off-system sales made during the reconciliation period, resulting in a cumulative
under-recovery balance of approximately $99.7 million, including interest, as of the end of the reconciliation period.
In July 2023 the ALJ with the State Office of Administrative Hearings granted the motion to admit evidence and
remanded the proceeding to the PUCT for consideration of the unopposed settlement. The PUCT approved the
settlement in September 2023.
78 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Retail Rate Proceedings
Filings with the APSC (Entergy Arkansas)
Retail Rates
2020 Formula Rate Plan Filing
In July 2020, Entergy Arkansas filed with the APSC its 2020 formula rate plan filing to set its formula rate
for the 2021 calendar year. The filing contained an evaluation of Entergy Arkansas’s earnings for the projected year
2021, as amended through subsequent filings in the proceeding, and a netting adjustment for the historical year
2019. The filing showed that Entergy Arkansas’s earned rate of return on common equity for the 2021 projected
year was 8.22% resulting in a revenue deficiency of $64.3 million. The earned rate of return on common equity for
the 2019 historical year was 9.07% resulting in a $23.9 million netting adjustment. The total proposed revenue
change for the 2021 projected year and 2019 historical year netting adjustment was $88.2 million. By operation of
the formula rate plan, Entergy Arkansas’s recovery of the revenue requirement is subject to a four percent annual
revenue constraint. Because Entergy Arkansas’s revenue requirement in this filing exceeded the constraint, the
resulting increase was limited to $74.3 million. As part of the formula rate plan tariff the calculation for the revenue
constraint was updated based on actual revenues which had the effect of reducing the initially-proposed
$74.3 million revenue requirement increase to $72.6 million. In October 2020, Entergy Arkansas filed with the
APSC a unanimous settlement agreement reached with the other parties that resolved all but one issue. As a result
of the settlement agreement, Entergy Arkansas’s requested revenue increase was $68.4 million, including a
$44.5 million increase for the projected 2021 year and a $23.9 million netting adjustment. The remaining issue
litigated concerned the methodology used to calculate the netting adjustment within the formula rate plan. In
December 2020 the APSC issued an order rejecting the netting adjustment method used by Entergy Arkansas.
Applying the approach ordered by the APSC changed the netting adjustment for the 2019 historical year from a
$23.9 million deficiency to $43.5 million excess. Overall, the decision reduced Entergy Arkansas’s revenue
adjustment for 2021 to $1 million. In December 2020, Entergy Arkansas filed a petition for rehearing of the
APSC’s decision in the 2020 formula rate plan proceeding regarding the 2019 netting adjustment, and in January
2021 the APSC granted further consideration of Entergy Arkansas’s petition. Based on the progress of the
proceeding at that point, in December 2020, Entergy Arkansas recorded a regulatory liability of $43.5 million to
reflect the netting adjustment for 2019, as included in the APSC’s December 2020 order, which would be returned
to customers in 2021. Entergy Arkansas also requested an extension of the formula rate plan rider for a second five-
year term. In March 2021 the Arkansas Governor signed HB1662 into law (Act 404). Act 404 clarified aspects of
the original formula rate plan legislation enacted in 2015, including with respect to the extension of a formula rate
plan, the methodology for the netting adjustment, and debt and equity levels; it also reaffirmed the customer
protections of the original formula rate plan legislation, including the cap on annual formula rate plan rate changes.
Pursuant to Act 404, Entergy Arkansas’s formula rate plan rider was extended for a second five-year term. Entergy
Arkansas filed a compliance tariff in its formula rate plan docket in April 2021 to effectuate the netting provisions
of Act 404, which reflected a net change in required formula rate plan rider revenue of $39.8 million, effective with
the first billing cycle of May 2021. In April 2021 the APSC issued an order approving the compliance tariff and
recognizing the formula rate plan extension. Also in April 2021, Entergy Arkansas filed for approval of
modifications to the formula rate plan tariff incorporating the provisions in Act 404, and the APSC approved the
tariff modifications in April 2021. Given the APSC general staff’s support for the expedited approval of these
filings by the APSC, Entergy Arkansas supported an amendment to Act 404 to achieve a reduced return on equity
from 9.75% to 9.65% to apply for years applicable to the extension term; that amendment was signed by the
Arkansas Governor in April 2021 and is now Act 894. Based on the APSC’s order issued in April 2021, in the first
quarter 2021, Entergy Arkansas reversed the remaining regulatory liability for the netting adjustment for 2019. In
June 2021, Entergy Arkansas filed another compliance tariff in its formula rate plan proceeding to effectuate the
additional provisions of Act 894, and the APSC approved the second compliance tariff filing in July 2021.
79 Entergy Corporation and Subsidiaries
Notes to Financial Statements
2021 Formula Rate Plan Filing
In July 2021, Entergy Arkansas filed with the APSC its 2021 formula rate plan filing to set its formula rate
for the 2022 calendar year. The filing contained an evaluation of Entergy Arkansas’s earnings for the projected year
2022 and a netting adjustment for the historical year 2020. The filing showed that Entergy Arkansas’s earned rate
of return on common equity for the 2022 projected year was 7.65% resulting in a revenue deficiency of
$89.2 million. The earned rate of return on common equity for the 2020 historical year was 7.92% resulting in a
$19.4 million netting adjustment. The total proposed revenue change for the 2022 projected year and 2020
historical year netting adjustment was $108.7 million. By operation of the formula rate plan, Entergy Arkansas’s
recovery of the revenue requirement is subject to a four percent annual revenue constraint. Because Entergy
Arkansas’s revenue requirement in this filing exceeded the constraint, the resulting increase was limited to
$72.4 million. In October 2021, Entergy Arkansas filed with the APSC a settlement agreement reached with other
parties resolving all issues in the proceeding. As a result of the settlement agreement, the total proposed revenue
change was $82.2 million, including a $62.8 million increase for the projected 2022 year and a $19.4 million netting
adjustment. Because Entergy Arkansas’s revenue requirement exceeded the constraint, the resulting increase was
limited to $72.1 million. In December 2021 the APSC approved the settlement as being in the public interest and
approved Entergy Arkansas’s compliance tariff effective with the first billing cycle of January 2022.
2022 Formula Rate Plan Filing
In July 2022, Entergy Arkansas filed with the APSC its 2022 formula rate plan filing to set its formula rate
for the 2023 calendar year. The filing contained an evaluation of Entergy Arkansas’s earnings for the projected year
2023 and a netting adjustment for the historical year 2021. The filing showed that Entergy Arkansas’s earned rate
of return on common equity for the 2023 projected year was 7.40% resulting in a revenue deficiency of
$104.8 million. The earned rate of return on common equity for the 2021 historical year was 8.38% resulting in a
$15.2 million netting adjustment. The total proposed revenue change for the 2023 projected year and 2021
historical year netting adjustment was $119.9 million. By operation of the formula rate plan, Entergy Arkansas’s
recovery of the revenue requirement is subject to a four percent annual revenue constraint. Because Entergy
Arkansas’s revenue requirement in this filing exceeded the constraint, the resulting increase was limited to
$79.3 million. In October 2022 other parties filed their testimony recommending various adjustments to Entergy
Arkansas’s overall proposed revenue deficiency, and Entergy Arkansas filed a response including an update to
actual revenues through August 2022, which raised the constraint to $79.8 million. In November 2022, Entergy
Arkansas filed with the APSC a settlement agreement reached with other parties resolving all issues in the
proceeding. As a result of the settlement agreement, the total revenue change was $102.8 million, including a
$87.7 million increase for the 2023 projected year and a $15.2 million netting adjustment. Because Entergy
Arkansas’s revenue requirement exceeded the constraint, the resulting increase was limited to $79.8 million. In
December 2022 the APSC approved the settlement agreement as being in the public interest and approved Entergy
Arkansas’s compliance tariff effective with the first billing cycle of January 2023.
2023 Formula Rate Plan Filing
In July 2023, Entergy Arkansas filed with the APSC its 2023 formula rate plan filing to set its formula rate
for the 2024 calendar year. The filing contained an evaluation of Entergy Arkansas’s earnings for the projected year
2024 and a netting adjustment for the historical year 2022. The filing showed that Entergy Arkansas’s earned rate
of return on common equity for the 2024 projected year was 8.11% resulting in a revenue deficiency of
$80.5 million. The earned rate of return on common equity for the 2022 historical year was 7.29% resulting in a
$49.8 million netting adjustment. The total proposed revenue change for the 2024 projected year and 2022
historical year netting adjustment is $130.3 million. By operation of the formula rate plan, Entergy Arkansas’s
recovery of the revenue requirement is subject to a four percent annual revenue constraint. Because Entergy
Arkansas’s revenue requirement in this filing exceeded the constraint, the resulting increase was limited to
$88.6 million. The APSC general staff and intervenors filed their errors and objections in October 2023, proposing
certain adjustments, including the APSC general staff’s update to annual filing year revenues which lowers the
80 Entergy Corporation and Subsidiaries
Notes to Financial Statements
constraint to $87.7 million. Entergy Arkansas filed its rebuttal in October 2023. In October 2023, Entergy
Arkansas filed with the APSC a settlement agreement reached with other parties resolving all issues in the
proceeding, none of which affected Entergy Arkansas’s requested recovery up to the cap constraint of $87.7 million.
The settlement agreement provided for amortization of the approximately $39 million regulatory asset for costs
associated with the COVID-19 pandemic over a 10-year period as well as recovery of $34.9 million related to the
resolution of the 2016 and 2017 IRS audits from previous tax positions that are no longer uncertain, partially offset
by $24.7 million in excess accumulated deferred income taxes from reductions in state income tax rates, each before
consideration of their respective tax gross-up. See Note 3 to the financial statements for further discussion of the
resolution of the 2016-2018 IRS audit and the State of Arkansas corporate income tax rate changes. In December
2023 the APSC approved the settlement agreement as being in the public interest and approved Entergy Arkansas’s
compliance tariff effective with the first billing cycle of January 2024.
Filings with the LPSC (Entergy Louisiana)
Retail Rates - Electric
2017 Formula Rate Plan Filing
In June 2018, Entergy Louisiana filed its formula rate plan evaluation report for its 2017 calendar year
operations. The 2017 test year evaluation report produced an earned return on equity of 8.16%, due in large part to
revenue-neutral realignments to other recovery mechanisms. Without these realignments, the evaluation report
produces an earned return on equity of 9.88% and a resulting base rider formula rate plan revenue increase of
$4.8 million. Excluding the Tax Cuts and Jobs Act credits provided for by the tax reform adjustment mechanisms,
total formula rate plan revenues were further increased by a total of $98 million as a result of the evaluation report
due to adjustments to the additional capacity and MISO cost recovery mechanisms of the formula rate plan, and
implementation of the transmission recovery mechanism. In August 2018, Entergy Louisiana filed a supplemental
formula rate plan evaluation report to reflect changes from the 2016 test year formula rate plan proceedings, a
decrease to the transmission recovery mechanism to reflect lower actual capital additions, and a decrease to
evaluation period expenses to reflect the terms of a new power sales agreement. Based on the August 2018 update,
Entergy Louisiana recognized a total decrease in formula rate plan revenue of approximately $17.6 million. Results
of the updated 2017 evaluation report filing were implemented with the September 2018 billing month subject to
refund and review by the LPSC staff and intervenors. In accordance with the terms of the formula rate plan, in
September 2018 the LPSC staff filed its report of objections/reservations and intervenors submitted their responses
to Entergy Louisiana’s original formula rate plan evaluation report and supplemental compliance updates. In
August 2021 the LPSC staff issued a letter updating its objections/reservations for the 2017 test year formula rate
plan evaluation report. In its letter, the LPSC staff reiterated its original objections/reservations. The LPSC staff
further reserved its rights for future proceedings and to dispute future proposed adjustments to the 2017 test year
formula rate plan evaluation report. The LPSC staff withdrew all other objections/reservations.
In November 2023 the LPSC approved a global settlement which resolved all outstanding issues related to
the 2017, 2018, and 2019 formula rate plan filings and resolved certain issues with respect to the 2020 and 2021
formula rate plan filings. See “Formula Rate Plan Global Settlement” below for further discussion of the
settlement.
2018 Formula Rate Plan Filing
In May 2019, Entergy Louisiana filed its formula rate plan evaluation report for its 2018 calendar year
operations. The 2018 test year evaluation report produced an earned return on common equity of 10.61% leading to
a base rider formula rate plan revenue decrease of $8.9 million. While base rider formula rate plan revenue
decreased as a result of this filing, overall formula rate plan revenues increased by approximately $118.7 million.
This outcome was primarily driven by a reduction to the credits previously flowed through the tax reform
adjustment mechanism and an increase in the transmission recovery mechanism, partially offset by reductions in the
81 Entergy Corporation and Subsidiaries
Notes to Financial Statements
additional capacity mechanism revenue requirements and extraordinary cost items. The filing was subject to review
by the LPSC. Resulting rates were implemented in September 2019, subject to refund.
Several parties intervened in the proceeding and the LPSC staff filed its report of objections/reservations in
accordance with the applicable provisions of the formula rate plan. In August 2021 the LPSC staff issued a letter
updating its objections/reservations for the 2018 test year formula rate plan evaluation report. In its letter, the LPSC
staff reiterated its original objection/reservation pertaining to test year expenses billed from Entergy Services to
Entergy Louisiana and outstanding issues from the 2017 test year formula rate plan evaluation report. The LPSC
staff withdrew all other objections/reservations.
Commercial operation at Lake Charles Power Station commenced in March 2020. In March 2020, Entergy
Louisiana filed an update to its 2018 formula rate plan evaluation report to include the estimated first-year revenue
requirement of $108 million associated with the Lake Charles Power Station. The resulting interim adjustment to
rates became effective with the first billing cycle of April 2020.
In November 2023 the LPSC approved a global settlement which resolved all outstanding issues related to
the 2017, 2018, and 2019 formula rate plan filings and resolved certain issues with respect to the 2020 and 2021
formula rate plan filings. See “Formula Rate Plan Global Settlement” below for further discussion of the
settlement.
2019 Formula Rate Plan Filing
In May 2020, Entergy Louisiana filed with the LPSC its formula rate plan evaluation report for its 2019
calendar year operations. The 2019 test year evaluation report produced an earned return on common equity of
9.66%. As such, no change to base rider formula rate plan revenue is required. Although base rider formula rate
plan revenue did not change as a result of this filing, overall formula rate plan revenues increased by approximately
$103 million. This outcome is driven by the removal of prior year credits associated with the sale of the Willow
Glen Power Station and an increase in the transmission recovery mechanism. Also contributing to the overall
change was an increase in legacy formula rate plan revenue requirements driven by legacy Entergy Louisiana
capacity cost true-ups and higher annualized legacy Entergy Gulf States Louisiana revenues due to higher billing
determinants, offset by reductions in MISO cost recovery mechanism and tax reform adjustment mechanism
revenue requirements. In August 2020 the LPSC staff submitted a list of items for which it needs additional
information to confirm the accuracy and compliance of the 2019 test year evaluation report. The LPSC staff
objected to a proposed revenue neutral adjustment regarding a certain rider as being beyond the scope of permitted
formula rate plan adjustments. Rates reflected in the May 2020 filing, with the exception of a revenue neutral rider
adjustment, and as updated in an August 2020 filing, were implemented in September 2020, subject to refund. In
August 2021 the LPSC staff issued a letter updating its objections/reservations for the 2019 test year formula rate
plan filing. In its letter, the LPSC staff disputed Entergy Louisiana’s exclusion of approximately $251 thousand of
interest income allocated from Entergy Operations and Entergy Services to Entergy Louisiana to the extent that
there are other adjustments that would move Entergy Louisiana out of the formula rate plan deadband. The LPSC
staff reserved the right to further contest the issue in future proceedings. The LPSC staff further reserved
outstanding issues from the 2017 and 2018 formula rate plan evaluation reports and withdrew all other remaining
objections/reservations.
In November 2023 the LPSC approved a global settlement which resolved all outstanding issues related to
the 2017, 2018, and 2019 formula rate plan filings and resolved certain issues with respect to the 2020 and 2021
formula rate plan filings. See “Formula Rate Plan Global Settlement” below for further discussion of the
settlement.
82 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Request for Extension and Modification of Formula Rate Plan
In May 2020, Entergy Louisiana filed with the LPSC its application for authority to extend its formula rate
plan. In its application, Entergy Louisiana sought to maintain a 9.8% return on equity, with a bandwidth of 60 basis
points above and below the midpoint, with a first-year midpoint reset. The parties reached a settlement in April
2021 regarding Entergy Louisiana’s proposed formula rate plan extension. In May 2021 the LPSC approved the
uncontested settlement. Key terms of the settlement include: a three year term (test years 2020, 2021, and 2022)
covering a rate-effective period of September 2021 through August 2024; a 9.50% return on equity, with a smaller,
50 basis point deadband above and below (9.0%-10.0%); elimination of sharing if earnings are outside the
deadband; a $63 million rate increase for test year 2020 (exclusive of riders); continuation of existing riders
(transmission, additional capacity, etc.); addition of a distribution recovery mechanism permitting $225 million per
year of distribution investment above a baseline level to be recovered dollar for dollar; modification of the tax
mechanism to allow timely rate changes in the event the federal corporate income tax rate is changed from 21%; a
cumulative rate increase limit of $70 million (exclusive of riders) for test years 2021 and 2022; and deferral of up to
$7 million per year in 2021 and 2022 of expenditures on vegetation management for outside of right of way hazard
trees.
2020 Formula Rate Plan Filing
In June 2021, Entergy Louisiana filed its formula rate plan evaluation report for its 2020 calendar year
operations. The 2020 test year evaluation report produced an earned return on common equity of 8.45%, with a
base formula rate plan revenue increase of $63 million. Certain reductions in formula rate plan revenue driven by
lower sales volumes, reductions in capacity cost and net MISO cost, and higher credits resulting from the Tax Cuts
and Jobs Act offset the base formula rate plan revenue increase, leading to a net increase in formula rate plan
revenue of $50.7 million. The report also included multiple new adjustments to account for, among other things, the
calculation of distribution recovery mechanism revenues. The effects of the changes to total formula rate plan
revenue were different for each legacy company, primarily due to differences in the legacy companies’ capacity cost
changes, including the effect of true-ups. Legacy Entergy Louisiana formula rate plan revenues increased by
$27 million and legacy Entergy Gulf States Louisiana formula rate plan revenues increased by $23.7 million.
Subject to LPSC review, the resulting changes became effective for bills rendered during the first billing cycle of
September 2021, subject to refund. Discovery commenced in the proceeding. In August 2021, Entergy Louisiana
submitted an update to its evaluation report to account for various changes. Relative to the June 2021 filing, the
total formula rate plan revenue increased by $14.2 million to an updated total of $64.9 million. Legacy Entergy
Louisiana formula rate plan revenues increased by $32.8 million and legacy Entergy Gulf States Louisiana formula
rate plan revenues increased by $32.1 million. The results of the 2020 test year evaluation report bandwidth
calculation were unchanged as there was no change in the earned return on common equity of 8.45%. In September
2021 the LPSC staff filed a letter with a general statement of objections/reservations because it had not completed
its review and indicated it would update the letter once its review was complete. Should the parties be unable to
resolve any objections, those issues will be set for hearing, with recovery of the associated costs subject to refund.
In November 2023 the LPSC approved a global settlement which resolved all outstanding issues related to
the 2017, 2018, and 2019 formula rate plan filings and resolved certain issues with respect to the 2020 and 2021
formula rate plan filings. See “Formula Rate Plan Global Settlement” below for further discussion of the
settlement.
2021 Formula Rate Plan Filing
In May 2022, Entergy Louisiana filed its formula rate plan evaluation report for its 2021 calendar year
operations. The 2021 test year evaluation report produced an earned return on common equity of 8.33%, with a
base formula rate plan revenue increase of $65.3 million. Other increases in formula rate plan revenue driven by
reductions in Tax Cut and Jobs Act credits and additions to transmission and distribution plant in service reflected
through the transmission recovery mechanism and distribution recovery mechanism are partly offset by an increase
83 Entergy Corporation and Subsidiaries
Notes to Financial Statements
in net MISO revenues, leading to a net increase in formula rate plan revenue of $152.9 million. The effects of the
changes to total formula rate plan revenue are different for each legacy company, primarily due to differences in the
legacy companies’ capacity cost changes, including the effect of true-ups. Legacy Entergy Louisiana formula rate
plan revenues increased by $86 million and legacy Entergy Gulf States Louisiana formula rate plan revenues
increased by $66.9 million. In August 2022 the LPSC staff filed a list of objections/reservations, including
outstanding issues from the test years 2017-2020 formula rate plan filings, utilizing the extraordinary cost
mechanism to address one-time changes such as state tax rate changes, and failing to include an adjustment for
revenues not received as a result of Hurricane Ida. Subject to LPSC review, the resulting changes to formula rate
plan revenues became effective for bills rendered during the first billing cycle of September 2022, subject to refund.
In November 2023 the LPSC approved a global settlement which resolved all outstanding issues related to
the 2017, 2018, and 2019 formula rate plan filings and resolved certain issues with respect to the 2020 and 2021
formula rate plan filings. See “Formula Rate Plan Global Settlement” below for further discussion of the
settlement.
2022 Formula Rate Plan Filing
In May 2023, Entergy Louisiana filed its formula rate plan evaluation report for its 2022 calendar year
operations. The 2022 test year evaluation report produced an earned return on common equity of 8.33%, requiring
an approximately $70.7 million increase to base rider revenue. Due to a cap for the 2021 and 2022 test years,
however, base rider formula rate plan revenues are only being increased by approximately $4.9 million, resulting in
a revenue deficiency of approximately $65.9 million and providing for prospective return on common equity
opportunity of approximately 8.38%. Other changes in formula rate plan revenue driven by increases in capacity
costs, primarily legacy capacity costs, additions eligible for recovery through the transmission recovery mechanism
and distribution recovery mechanism, and higher sales during the test period are offset by reductions in net MISO
costs as well as credits for FERC-ordered refunds. Also included in the 2022 test year distribution recovery
mechanism revenue requirement is a $6 million credit relating to the distribution recovery mechanism performance
accountability standards and requirements. In total, the net increase in formula rate plan revenues, including base
formula rate plan revenues inside the formula rate plan bandwidth and subject to the cap, as well as other formula
rate plan revenues outside of the bandwidth, is $85.2 million. In August 2023 the LPSC staff filed a list of
objections/reservations, including outstanding issues from the test years 2017-2021 formula rate plan filings, the
calculation of certain refunds from System Energy, and certain calculations relating to the tax reform adjustment
mechanism. Subject to LPSC review, the resulting net increase in formula rate plan revenues of $85.2 million
became effective for bills rendered during the first billing cycle of September 2023, subject to refund.
2023 Entergy Louisiana Rate Case and Formula Rate Plan Extension Request
In August 2023, Entergy Louisiana filed an application for approval of a regulatory blueprint necessary for
it to strengthen the electric grid for the State of Louisiana, which contains a dual-path request to update rates
through either: (1) extension of Entergy Louisiana’s current formula rate plan (with certain modifications) for three
years (the Rate Mitigation Proposal), which is Entergy Louisiana’s recommended path; or (2) implementation of
rates resulting from a cost-of-service study (the Rate Case path). The application complies with Entergy
Louisiana’s previous formula rate plan extension order requiring that for Entergy Louisiana to obtain another
extension of its formula rate plan that included a rate reset, Entergy Louisiana would need to submit a full cost-of-
service/rate case. Entergy Louisiana’s filing supports the need to extend Entergy Louisiana’s formula rate plan with
credit supportive mechanisms to facilitate investment in the distribution, transmission, and generation functions.
The Rate Case path proposes a 2024-2026 test year formula rate plan with an initial revenue requirement
increase of $430 million, net of $17 million of one-time credits, and a return on common equity of 10.5%.
Depreciation rates would be updated for all asset classes. The Rate Mitigation Proposal proposes a 2023-2025 test
year formula rate plan with an expected initial revenue requirement increase of $173 million, also net of $17 million
84 Entergy Corporation and Subsidiaries
Notes to Financial Statements
of one-time credits, based on a 2023 formula rate plan test year, and a return on common equity of 10.0%.
Depreciation rates would be updated only for nuclear assets and would be phased in over three years.
Under both paths, Entergy Louisiana’s filing proposes removing the cap on amounts allowed to be
recovered through the distribution recovery mechanism and continuing the distribution recovery mechanism
performance accountability targets, which tie Entergy Louisiana’s ability to fully recover its distribution recovery
mechanism investments to its reliability performance. Entergy Louisiana’s filing also includes new customer-
centric programs specifically focused on affordability, including reducing late fees and certain other fees assessed to
customers, lowering additional facilities charge rates, providing eligible low-income seniors with monthly discounts
on their electric bill, and adding new voluntary customer options to support new transportation electrification
technologies. A status conference was held in October 2023 at which a procedural schedule was adopted that
includes three technical conferences, the last of which is in March 2024, and a hearing date in August 2024.
Formula Rate Plan Global Settlement
In October 2023 the LPSC staff and Entergy Louisiana reached a global settlement which resolved all
outstanding issues related to the 2017, 2018, and 2019 formula rate plan filings and resolved certain issues with
respect to the 2020 and 2021 formula rate plan filings. The settlement was approved by the LPSC in November
2023. The settlement resulted in a one-time cost of service credit to customers of $5.8 million, allowed Entergy
Louisiana to retain approximately $6.2 million of securitization over-collection as recovery of a regulatory asset
associated with late fees related to the 2016 Baton Rouge flood, and resulted in Entergy Louisiana recording the
reversal of a $105.6 million regulatory liability, associated with the Hurricane Isaac securitization, recognized in
2017 as a result of the Tax Cuts and Jobs Act. See Note 3 to the financial statements for further discussion of the
reversal of the regulatory liability.
Investigation of Costs Billed by Entergy Services
In November 2018 the LPSC issued a notice of proceeding initiating an investigation into costs incurred by
Entergy Services that are included in the retail rates of Entergy Louisiana. As stated in the notice of proceeding, the
LPSC observed an increase in capital construction-related costs incurred by Entergy Services. Discovery was
issued and included efforts to seek highly detailed information on a broad range of matters unrelated to the scope of
the audit. There has been no further activity in the investigation since May 2019.
COVID-19 Orders
In April 2020 the LPSC issued an order authorizing utilities to record as a regulatory asset expenses
incurred from the suspension of disconnections and collection of late fees imposed by LPSC orders associated with
the COVID-19 pandemic. In addition, utilities may seek future recovery, subject to LPSC review and approval, of
losses and expenses incurred due to compliance with the LPSC’s COVID-19 orders. The suspension of late fees
and disconnects for non-pay was extended until the first billing cycle after July 16, 2020. In January 2021, Entergy
Louisiana resumed disconnections for customers in all customer classes with past-due balances that had not made
payment arrangements. Utilities seeking to recover the regulatory asset must formally petition the LPSC to do so,
identifying the direct and indirect costs for which recovery is sought. Any such request is subject to LPSC review
and approval. In April 2023, Entergy Louisiana filed an application proposing to utilize approximately $1.6 billion
in certain low interest debt to generate earnings to apply toward the reduction of the COVID-19 regulatory asset, as
well as to conduct additional outside right-of-way vegetation management activities and fund the minor storm
reserve account. In that filing, Entergy Louisiana proposed to delay repayment of certain shorter-term first
mortgage bonds that were issued to finance storm restoration costs until the costs could be securitized, and to invest
the funds that otherwise would be used to repay those bonds in the money pool to take advantage of the spread
between prevailing interest rates on investments in the money pool and the interest rates on the bonds. The LPSC
approved Entergy Louisiana’s requested relief in June 2023. A subsequent filing will be required to permit the
LPSC to review the COVID-19 regulatory asset. As of December 31, 2023, Entergy Louisiana had a regulatory
85 Entergy Corporation and Subsidiaries
Notes to Financial Statements
asset of $47.8 million for costs associated with the COVID-19 pandemic and a regulatory liability of $36.8 million
for the deferred earnings related to the approximately $1.6 billion in low interest debt.
Filings with the MPSC (Entergy Mississippi)
Retail Rates
2021 Formula Rate Plan Filing
In March 2021, Entergy Mississippi submitted its formula rate plan 2021 test year filing and 2020 look-
back filing showing Entergy Mississippi’s earned return for the historical 2020 calendar year to be below the
formula rate plan bandwidth and projected earned return for the 2021 calendar year to be below the formula rate
plan bandwidth. The 2021 test year filing showed a $95.4 million rate increase was necessary to reset Entergy
Mississippi’s earned return on common equity to the specified point of adjustment of 6.69% return on rate base,
within the formula rate plan bandwidth. The change in formula rate plan revenues, however, was capped at 4% of
retail revenues, which equated to a revenue change of $44.3 million. The 2021 evaluation report also included
$3.9 million in demand side management costs for which the MPSC approved realignment of recovery from the
energy efficiency rider to the formula rate plan. These costs were not subject to the 4% cap and resulted in a total
change in formula rate plan revenues of $48.2 million. The 2020 look-back filing compared actual 2020 results to
the approved benchmark return on rate base and reflected the need for a $16.8 million interim increase in formula
rate plan revenues. In addition, the 2020 look-back filing included an interim capacity adjustment true-up for the
Choctaw Generating Station, which increased the look-back interim rate adjustment by $1.7 million. These interim
rate adjustments totaled $18.5 million. In accordance with the provisions of the formula rate plan, Entergy
Mississippi implemented a $22.1 million interim rate increase, reflecting a cap equal to 2% of 2020 retail revenues,
effective with the April 2021 billing cycle, subject to refund, pending a final MPSC order. The $3.9 million of
demand side management costs and the Choctaw Generating Station true-up of $1.7 million, which were not subject
to the 2% cap of 2020 retail revenues, were included in the April 2021 rate adjustments.
In June 2021, Entergy Mississippi and the Mississippi Public Utilities Staff entered into a joint stipulation
that confirmed the 2021 test year filing that resulted in a total rate increase of $48.2 million. Pursuant to the joint
stipulation, Entergy Mississippi’s 2020 look-back filing reflected an earned return on rate base of 6.12% in calendar
year 2020, which was below the look-back bandwidth, resulting in a $17.5 million increase in formula rate plan
revenues on an interim basis through June 2022. This included $1.7 million related to the Choctaw Generating
Station and $3.7 million of COVID-19 non-bad debt expenses. The joint stipulation also included Entergy
Mississippi’s quantification and methodology for calculating incremental COVID-19 bad debt expenses and
provided for Entergy Mississippi to continue to defer these incremental COVID-19 bad debt expenses through
December 2021. In June 2021 the MPSC approved the joint stipulation with rates effective for the first billing cycle
of July 2021. In June 2021, Entergy Mississippi recorded regulatory credits of $19.9 million to reflect the effects of
the joint stipulation.
2022 Formula Rate Plan Filing
In March 2022, Entergy Mississippi submitted its formula rate plan 2022 test year filing and 2021 look-
back filing showing Entergy Mississippi’s earned return for the historical 2021 calendar year to be below the
formula rate plan bandwidth and projected earned return for the 2022 calendar year to be below the formula rate
plan bandwidth. The 2022 test year filing showed a $69 million rate increase was necessary to reset Entergy
Mississippi’s earned return on common equity to the specified point of adjustment of 6.70% return on rate base,
within the formula rate plan bandwidth. The change in formula rate plan revenues, however, was capped at 4% of
retail revenues, which equated to a revenue change of $48.6 million. The 2021 look-back filing compared actual
2021 results to the approved benchmark return on rate base and reflected the need for a $34.5 million interim
increase in formula rate plan revenues. In fourth quarter 2021, Entergy Mississippi recorded a regulatory asset of
$19 million to reflect the then-current estimate in connection with the look-back feature of the formula rate plan. In
86 Entergy Corporation and Subsidiaries
Notes to Financial Statements
accordance with the provisions of the formula rate plan, Entergy Mississippi implemented a $24.3 million interim
rate increase, reflecting a cap equal to 2% of 2021 retail revenues, effective in April 2022. With the implementation
of the interim formula rate plan rates, Entergy Mississippi began recovery of the bad debt expense deferral resulting
from the COVID-19 pandemic over a three-year period.
In June 2022, Entergy Mississippi and the Mississippi Public Utilities Staff entered into a joint stipulation
that confirmed the 2022 test year filing that resulted in a total rate increase of $48.6 million. Pursuant to the joint
stipulation, Entergy Mississippi’s 2021 look-back filing reflected an earned return on rate base of 5.99% in calendar
year 2021, which was below the look-back bandwidth, resulting in a $34.3 million increase in the formula rate plan
revenues on an interim basis through June 2023. In July 2022 the MPSC approved the joint stipulation with rates
effective in August 2022. In July 2022, Entergy Mississippi recorded regulatory credits of $22.6 million to reflect
the effects of the joint stipulation. In August 2022 an intervenor filed a statutorily-authorized direct appeal to the
Mississippi Supreme Court seeking review of the MPSC’s July 2022 order approving the joint stipulation
confirming Entergy Mississippi’s 2022 formula rate plan filing. Formula rate plan rates are not stayed or otherwise
impacted while the appeal is pending.
In July 2022 the MPSC directed Entergy Mississippi to flow $14.1 million of the power management rider
over-recovery balance to customers beginning in August 2022 through December 2022 to mitigate the bill impact of
the increase in formula rate plan revenues.
2023 Formula Rate Plan Filing
In March 2023, Entergy Mississippi submitted its formula rate plan 2023 test year filing and 2022 look-
back filing showing Entergy Mississippi’s earned return on rate base for the historical 2022 calendar year to be
below the formula rate plan bandwidth and projected earned return for the 2023 calendar year to be below the
formula rate plan bandwidth. The 2023 test year filing showed a $39.8 million rate increase was necessary to reset
Entergy Mississippi’s earned return on rate base to the specified point of adjustment of 6.67%, within the formula
rate plan bandwidth. The 2022 look-back filing compared actual 2022 results to the approved benchmark return on
rate base and reflected the need for a $19.8 million temporary increase in formula rate plan revenues, including the
refund of a $1.3 million over-recovery resulting from the demand-side management costs true-up for 2022. In
fourth quarter 2022, Entergy Mississippi recorded a regulatory asset of $18.2 million in connection with the look-
back feature of the formula rate plan to reflect that the 2022 estimated earned return was below the formula rate plan
bandwidth. In accordance with the provisions of the formula rate plan, Entergy Mississippi implemented a
$27.9 million interim rate increase, reflecting a cap equal to 2% of 2022 retail revenues, effective in April 2023.
In May 2023, Entergy Mississippi and the Mississippi Public Utilities Staff entered into a joint stipulation
that confirmed a 2023 test year filing resulting in a total revenue increase of $26.5 million for 2023. Pursuant to the
joint stipulation, Entergy Mississippi’s 2022 look-back filing reflected an earned return on rate base of 6.10% in
calendar year 2022, which was below the look-back bandwidth, resulting in a $19.0 million increase in the formula
rate plan revenues on an interim basis through June 2024. Entergy Mississippi recorded a regulatory credit of
$0.8 million in June 2023 to reflect the increase in the look-back regulatory asset. In addition, certain long-term
service agreement and conductor handling costs were authorized for realignment from the formula rate plan to the
annual power management and grid modernization riders effective January 2023, resulting in regulatory credits
recorded in June 2023 of $4.1 million and $4.3 million, respectively. Also, the amortization of Entergy
Mississippi’s COVID-19 bad debt expense deferral was suspended for calendar year 2023 and will resume in 2024.
In June 2023 the MPSC approved the joint stipulation with rates effective in July 2023.
87 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Filings with the City Council (Entergy New Orleans)
Retail Rates
2021 Formula Rate Plan Filing
In July 2021, Entergy New Orleans submitted to the City Council its formula rate plan 2020 test year filing.
The 2020 test year evaluation report produced an earned return on equity of 6.26% compared to the authorized
return on equity of 9.35%. Entergy New Orleans sought approval of a $64 million rate increase based on the
formula set by the City Council in the 2018 rate case. The formula resulted in an increase in authorized electric
revenues of $40 million and an increase in authorized gas revenues of $18.8 million. Entergy New Orleans also
sought to commence collecting $5.2 million in electric revenues and $0.3 million in gas revenues that were
previously approved by the City Council for collection through the formula rate plan. The filing was subject to
review by the City Council and other parties over a 75-day review period, followed by a 25-day period to resolve
any disputes among the parties. In October 2021 the City Council’s advisors filed a 75-day report recommending a
reduction of $10 million for electric revenues and a reduction of $4.5 million for gas revenues, along with one-time
credits funded by certain electric regulatory liabilities currently held by Entergy New Orleans for customers. On
October 26, 2021, Entergy New Orleans provided notice to the City Council that it intends to implement rates
effective with the first billing cycle of November 2021, with such rates reflecting an amount agreed-upon by
Entergy New Orleans including adjustments filed in the City Council’s 75-day report, per the approved process for
formula rate plan implementation. The total formula rate plan increase implemented was $49.5 million, with an
increase of $34.9 million in electric revenues and $14.6 million in gas revenues. Also, credits of $17.4 million
funded by certain regulatory liabilities currently held by Entergy New Orleans for customers will be issued over a
five-month period from November 2021 through March 2022. Resulting rates went into effect with the first billing
cycle of November 2021 pursuant to the formula rate plan tariff.
2022 Formula Rate Plan Filing
In April 2022, Entergy New Orleans submitted to the City Council its formula rate plan 2021 test year
filing. The 2021 test year evaluation report, subsequently updated in a July 2022 filing, produced an earned return
on equity of 6.88% compared to the authorized return on equity of 9.35%. Entergy New Orleans sought approval of
a $42.1 million rate increase based on the formula set by the City Council in the 2018 rate case. The formula
resulted in an increase in authorized electric revenues of $34.1 million and an increase in authorized gas revenues of
$3.3 million. Entergy New Orleans also sought to commence collecting $4.7 million in electric revenues that were
previously approved by the City Council for collection through the formula rate plan. In July 2022 the City
Council’s advisors issued a report seeking a reduction to Entergy New Orleans’s proposed increase of
approximately $17.1 million in total for electric and gas revenues. Effective with the first billing cycle of
September 2022, Entergy New Orleans implemented rates reflecting an amount agreed upon by Entergy New
Orleans and the City Council including adjustments filed in the City Council’s advisors’ report, per the approved
process for formula rate plan implementation. The total formula rate plan increase implemented was $24.7 million,
which includes an increase of $18.2 million in electric revenues, $4.7 million in previously approved electric
revenues, and an increase of $1.8 million in gas revenues. Additionally, credits of $13.9 million funded by certain
regulatory liabilities currently held by Entergy New Orleans for customers were issued over an eight-month period
beginning September 2022.
2023 Formula Rate Plan Filing
In April 2023, Entergy New Orleans submitted to the City Council its formula rate plan 2022 test year
filing. The 2022 test year evaluation report produced an electric earned return on equity of 7.34% and a gas earned
return on equity of 3.52% compared to the authorized return on equity for each of 9.35%. Entergy New Orleans
sought approval of a $25.6 million rate increase based on the formula set by the City Council in the 2018 rate case.
The formula would result in an increase in authorized electric revenues of $17.4 million and an increase in
88 Entergy Corporation and Subsidiaries
Notes to Financial Statements
authorized gas revenues of $8.2 million. Entergy New Orleans also sought to commence collecting $3.4 million in
electric revenues that were previously approved by the City Council for collection through the formula rate plan. In
July 2023, Entergy New Orleans filed a report to decrease its requested formula rate plan revenues by
approximately $0.5 million to account for minor errors discovered after the filing. The City Council advisors issued
a report seeking a reduction in the requested formula rate plan revenues of approximately $8.3 million, combined
for electric and gas, due to alleged errors. The City Council advisors proposed additional rate mitigation in the
amount of $12 million through offsets to the formula rate plan rate increase by certain regulatory liabilities. In
September 2023 the City Council approved an agreement to settle the 2023 formula rate plan filing. Effective with
the first billing cycle of September 2023, Entergy New Orleans implemented rates reflecting an amount agreed upon
by Entergy New Orleans and the City Council, per the approved process for formula rate plan implementation. The
agreement provides for a total increase in electric revenues of $10.5 million and a total increase in gas revenues of
$6.9 million. The agreement also provides for a minor storm accrual of $0.5 million per year and the distribution of
$8.9 million of currently held customer credits
the City Council advisors’ mitigation
to
recommendations.
implement
Request for Extension and Modification of Formula Rate Plan
In September 2023, Entergy New Orleans filed a motion seeking City Council approval of a three-year
extension of Entergy New Orleans’s electric and gas formula rate plans. In October 2023 the City Council granted
Entergy New Orleans’s request for an extension, subject to minor modifications which included a 55% fixed capital
structure for rate setting purposes.
Filings with the PUCT and Texas Cities (Entergy Texas)
Retail Rates
2022 Base Rate Case
In July 2022, Entergy Texas filed a base rate case with the PUCT seeking a net increase in base rates of
approximately $131.4 million. The base rate case was based on a 12-month test year ending December 31, 2021.
Key drivers of the requested increase were changes in depreciation rates as the result of a depreciation study and an
increase in the return on equity. In addition, Entergy Texas included capital additions placed into service for the
period of January 1, 2018 through December 31, 2021, including those additions reflected in the then-effective
distribution and transmission cost recovery factor riders and the generation cost recovery rider, all of which have
been reset to zero as a result of this proceeding. In July 2022 the PUCT referred the proceeding to the State Office
of Administrative Hearings. In October 2022 intervenors filed direct testimony challenging and supporting various
aspects of Entergy Texas’s rate case application. The key issues addressed included the appropriate return on
equity, generation plant deactivations, depreciation rates, and proposed tariffs related to electric vehicles. In
November 2022 the PUCT staff filed direct testimony addressing a similar set of issues and recommending a
reduction of $50.7 million to Entergy Texas’s overall cost of service associated with the requested net increase in
base rates of approximately $131.4 million. Entergy Texas filed rebuttal testimony in November 2022. In
December 2022 the ALJs with the State Office of Administrative Hearings issued two orders, one adopting the
parties’ joint proposal that issues related to electric vehicle charging infrastructure be decided exclusively on written
evidence and briefing, and one adopting a joint proposed briefing outline and schedule with deadlines in January
2023 for the parties to submit briefing on issues related to electric vehicle charging infrastructure and admitting
evidence related to electric vehicle charging infrastructure issues. In January 2023 the parties filed initial and reply
briefs addressing issues related to electric vehicle charging infrastructure.
In May 2023, Entergy Texas filed on behalf of the parties an unopposed settlement resolving all issues in
the proceeding, except for issues related to electric vehicle charging infrastructure, and Entergy Texas filed an
agreed motion for interim rates, subject to refund or surcharge to the extent that the interim rates differ from the
final approved rates. The unopposed settlement reflected a net base rate increase to be effective and relate back to
89 Entergy Corporation and Subsidiaries
Notes to Financial Statements
December 2022 of $54 million, exclusive of, and incremental to, the costs being realigned from the distribution and
transmission cost recovery factor riders and the generation cost recovery rider and $4.8 million of rate case expenses
to be recovered through a rider over a period of 36 months. The net base rate increase of $54 million includes
updated depreciation rates and a total annual revenue requirement of $14.5 million for the accrual of a self-insured
storm reserve and the recovery of the regulatory assets for the pension and postretirement benefits expense deferral,
costs associated with the COVID-19 pandemic, and retired non-advanced metering system electric meters. In May
2023 the ALJ with the State Office of Administrative Hearings granted the motion for interim rates, which became
effective in June 2023. Additionally, the ALJ remanded the proceeding, except for the issues related to electric
vehicle charging infrastructure, to the PUCT to consider the settlement. In June 2023 the ALJ issued a proposal for
decision related to the electric vehicle charging infrastructure issues and which noted recent legislation enacted
which permits electric utilities to own and operate such infrastructure. The ALJ’s proposal for decision deferred to
the PUCT regarding whether it is appropriate for any vertically integrated electric utility, or Entergy Texas
specifically, to own electric vehicle charging infrastructure, and in the event that the PUCT decided ownership is
permissible, the ALJ recommended approval of the proposed tariff to charge host customers for utility-owned and
operated electric vehicle charging infrastructure sited on customer premises and denial of the proposed tariff to
temporarily adjust billing demand charges for separately metered electric vehicle charging infrastructure, citing
cost-shifting concerns. In July 2023 the parties filed exceptions and replies to exceptions to the proposal for
decision. In August 2023 the PUCT issued an order approving the unopposed settlement and also issued an order
severing the issues related to electric vehicle charging infrastructure addressed in the ALJ’s proposal for decision to
a separate proceeding. Concurrently, Entergy Texas recorded the reversal of $21.9 million of regulatory liabilities
to reflect the recognition of certain receipts by Entergy Texas under affiliated PPAs that have been resolved.
Following the PUCT’s approval of the unopposed settlement in August 2023, Entergy Texas recorded a
regulatory liability of $10.3 million, which reflects the net effects of higher depreciation and amortizations for the
relate back period, partially offset by the relate back of base rate revenues that would have been collected had the
approved rates been in effect for the period from December 2022 through June 2023, the date the new base rates
were implemented on an interim basis. In October 2023, Entergy Texas filed a relate back surcharge rider to collect
over six months beginning in January 2024 an additional approximately $24.6 million, which is the revenue
requirement associated with the relate back of rates from December 2022 through June 2023, including carrying
costs, as authorized by the PUCT’s August 2023 order. In November 2023, Entergy Texas filed an amended relate
back surcharge rider to collect approximately $24.1 million based on a revised carrying cost rate. The amended
relate back surcharge rider was approved by the PUCT in December 2023. The higher depreciation and
amortizations for the relate back period will also be recognized over the six months beginning in January 2024,
resulting in no effect on net income from the collection of the relate back surcharge rider.
In December 2023 the PUCT referred the separate proceeding to resolve issues related to electric vehicle
charging infrastructure to the State Office of Administrative Hearings. In January 2024, the ALJ with the State
Office of Administrative Hearings adopted a procedural schedule setting a hearing on the merits for April 2024.
Distribution Cost Recovery Factor (DCRF) Rider
In October 2020, Entergy Texas filed with the PUCT a request to amend its DCRF rider. The amended
rider was designed to collect from Entergy Texas’s retail customers approximately $26.3 million annually, or
$6.8 million in incremental annual revenues beyond Entergy Texas’s then-effective DCRF rider based on its capital
invested in distribution between January 1, 2020 and August 31, 2020. In February 2021 the ALJ with the State
Office of Administrative Hearings approved Entergy Texas's agreed motion for interim rates, which went into effect
in March 2021. In March 2021 the parties filed an unopposed settlement recommending that Entergy Texas be
allowed to collect its full requested DCRF revenue requirement and resolving all issues in the proceeding. In May
2021 the PUCT issued an order approving the settlement.
In August 2021, Entergy Texas filed with the PUCT a request to amend its DCRF rider. The amended rider
was designed to collect from Entergy Texas’s retail customers approximately $40.2 million annually, or
90 Entergy Corporation and Subsidiaries
Notes to Financial Statements
$13.9 million in incremental annual revenues beyond Entergy Texas’s then-effective DCRF rider based on its
capital invested in distribution between September 1, 2020 and June 30, 2021. In September 2021 the PUCT
referred the proceeding to the State Office of Administrative Hearings. A procedural schedule was established with
a hearing scheduled in December 2021. In December 2021 the parties filed an unopposed settlement recommending
that Entergy Texas be allowed to collect its full requested DCRF revenue requirement and resolving all issues in the
proceeding, including a motion for interim rates to take effect for usage on and after January 24, 2022. Also, in
December 2021, the ALJ with the State Office of Administrative Hearings issued an order granting the motion for
interim rates, which went into effect in January 2022, admitting evidence, and remanding the proceeding to the
PUCT to consider the settlement. In March 2022 the PUCT issued an order approving the settlement.
Transmission Cost Recovery Factor (TCRF) Rider
In December 2018, Entergy Texas filed with the PUCT a request to set a new TCRF rider. The new TCRF
rider was designed to collect approximately $2.7 million annually from Entergy Texas’s retail customers based on
its capital invested in transmission between January 1, 2018 and September 30, 2018. In April 2019 parties filed
testimony proposing a load growth adjustment, which would fully offset Entergy Texas’s proposed TCRF revenue
requirement. In July 2019 the PUCT granted Entergy Texas’s application as filed to begin recovery of the requested
$2.7 million annual revenue requirement, rejecting opposing parties’ proposed adjustment; however, the PUCT
found that the question of prudence of the actual investment costs should be determined in Entergy Texas’s next rate
case similar to the procedure used for the costs recovered through the DCRF rider. In October 2019 the PUCT
issued an order on a motion for rehearing, clarifying and affirming its prior order granting Entergy Texas’s
application as filed. Also in October 2019 a second motion for rehearing was filed, and Entergy Texas filed a
response in opposition to the motion. The second motion for rehearing was overruled by operation of law. In
December 2019, Texas Industrial Energy Consumers filed an appeal to the PUCT order in district court alleging that
the PUCT erred in declining to apply a load growth adjustment.
In October 2020, Entergy Texas filed with the PUCT a request to amend its TCRF rider. The amended
rider was designed to collect from Entergy Texas’s retail customers approximately $51 million annually, or
$31.6 million in incremental annual revenues beyond Entergy Texas’s then-effective TCRF rider based on its capital
invested in transmission between July 1, 2019 and August 31, 2020. In March 2021 the parties filed an unopposed
settlement recommending that Entergy Texas be allowed to collect its full requested TCRF revenue requirement
with interim rates effective March 2021 and resolving all issues in the proceeding. In March 2021 the ALJ granted
the motion for interim rates, admitted evidence, and remanded the case to the PUCT for consideration of a final
order at a future open meeting. In June 2021 the PUCT issued an order approving the settlement.
In October 2021, Entergy Texas filed with the PUCT a request to amend its TCRF rider. The amended
rider was designed to collect from Entergy Texas’s retail customers approximately $66.1 million annually, or
$15.1 million in incremental annual revenues beyond Energy Texas’s then-effective TCRF rider based on its capital
invested in transmission between September 1, 2020 and July 31, 2021 and changes in approved transmission
charges. In January 2022 the PUCT referred the proceeding to the State Office of Administrative Hearings. In
February 2022 the parties filed an unopposed settlement recommending that Entergy Texas be allowed to collect its
full requested TCRF revenue requirement with interim rates effective March 2022. In February 2022 the ALJ
granted the motion for interim rates, admitted evidence, and remanded the case to the PUCT for consideration of a
final order at a future open meeting. In June 2022 the PUCT issued an order approving the settlement.
Generation Cost Recovery Rider
In October 2020, Entergy Texas filed an application to establish a generation cost recovery rider with an
initial annual revenue requirement of approximately $91 million to begin recovering a return of and on its
generation capital investment in the Montgomery County Power Station through August 31, 2020. In December
2020, Entergy Texas filed an unopposed settlement supporting a generation cost recovery rider with an annual
revenue requirement of approximately $86 million. The settlement revenue requirement was based on a
91 Entergy Corporation and Subsidiaries
Notes to Financial Statements
depreciation rate intended to fully depreciate Montgomery County Power Station over 38 years and the removal of
certain costs from Entergy Texas’s request. Under the settlement, Entergy Texas retained the right to propose a
different depreciation rate and seek recovery of a majority of the costs removed from its request in its next base rate
proceeding, and such depreciation rate was revised to fully depreciate Montgomery County Power Station over 40
years and all requested capital additions were approved as prudent in the 2022 base rate case proceeding discussed
above. On January 14, 2021, the PUCT approved the generation cost recovery rider settlement rates on an interim
basis and abated the proceeding. In March 2021, Entergy Texas filed to update its generation cost recovery rider to
include its generation capital investment in Montgomery County Power Station after August 31, 2020. In April
2021 the ALJ issued an order unabating the proceeding and in May 2021 the ALJ issued an order finding Entergy
Texas’s application and notice of the application to be sufficient. In May 2021, Entergy Texas filed an amendment
to the application to reflect the PUCT’s approval of the sale of a 7.56% partial interest in the Montgomery County
Power Station to East Texas Electric Cooperative, Inc., which closed in June 2021. In June 2021 the PUCT referred
the proceeding to the State Office of Administrative Hearings. In July 2021 the ALJ with the State Office of
Administrative Hearings adopted a procedural schedule setting a hearing on the merits for September 2021. In July
2021 the parties filed a motion to abate the procedural schedule noting they had reached an agreement in principle
and to allow the parties time to finalize a settlement agreement, which motion was granted by the ALJ. In October
2021, Entergy Texas filed on behalf of the parties an unopposed settlement agreement that would adjust its
generation cost recovery rider to recover an annual revenue requirement of approximately $88.3 million related to
Entergy Texas’s investment in the Montgomery County Power Station through January 1, 2021, with Entergy Texas
able to seek recovery of the remainder of its investment in its next base rate case, and all requested capital additions
were approved as prudent in the 2022 base rate case proceeding discussed above. Also in October 2021 the ALJ
granted a motion to admit evidence and remand the proceeding to the PUCT. In January 2022 the PUCT issued an
order approving the unopposed settlement. In February 2022, Entergy Texas filed a relate-back rider to collect over
five months an additional approximately $5 million, which is the difference between the interim revenue
requirement approved in January 2021 and the revenue requirement approved in January 2022 that reflects Entergy
Texas’s full generation capital investment and ownership in Montgomery County Power Station on January 1, 2021,
plus carrying costs from January 2021 through January 2022 when the updated revenue requirement took effect. In
April 2022, Entergy Texas and the PUCT staff filed a joint proposed order supporting approval of Entergy Texas’s
as-filed request. The PUCT approved the relate-back rider consistent with Entergy Texas’s as-filed request, and
rates became effective over a five-month period, in August 2022.
In December 2020, Entergy Texas also filed an application to amend its generation cost recovery rider to
reflect its acquisition of the Hardin County Peaking Facility, which closed in June 2021. Because Hardin was to be
acquired in the future, the initial generation cost recovery rider rates proposed in the application represented no
change from the generation cost recovery rider rates established in Entergy Texas’s previous generation cost
recovery rider proceeding. In July 2021 the PUCT issued an order approving the application. In August 2021,
Entergy Texas filed an update application to recover its actual investment in the acquisition of the Hardin County
Peaking Facility. In September 2021 the PUCT referred the proceeding to the State Office of Administrative
Hearings. A procedural schedule was established with a hearing scheduled in April 2022. In January 2022, Entergy
Texas filed an update to its application to align the requested revenue requirement with the terms of the generation
cost recovery rider settlement approved by the PUCT in January 2022. In March 2022, Entergy Texas filed on
behalf of the parties an unopposed motion, which motion was granted by the ALJ with the State Office of
Administrative Hearings, to abate the procedural schedule indicating that the parties had reached an agreement in
principle. In April 2022, Entergy Texas filed on behalf of the parties a unanimous settlement agreement that would
adjust its generation cost recovery rider to recover an annual revenue requirement of approximately $92.8 million,
which is $4.5 million in incremental annual revenue above the $88.3 million approved in January 2022, related to
Entergy Texas’s actual investment in the acquisition of the Hardin County Peaking Facility. Concurrently with
filing of the unanimous settlement agreement, Entergy Texas submitted an agreed motion to admit evidence and
remand the case to the PUCT for review and consideration of the settlement agreement, which motion was granted
by the ALJ with the State Office of Administrative Hearings. The PUCT approved the settlement agreement and
rates became effective in August 2022. In September 2022, Entergy Texas filed a relate-back rider designed to
collect over three months an additional approximately $5.7 million, which is the revenue requirement, plus carrying
92 Entergy Corporation and Subsidiaries
Notes to Financial Statements
costs, associated with Entergy Texas’s acquisition of Hardin County Peaking Facility from June 2021 through
August 2022 when the updated revenue requirement took effect. In April 2023 the PUCT approved Entergy
Texas’s as-filed request with rates effective over three months beginning in May 2023. See Note 14 to the financial
statements for discussion of the Hardin County Peaking Facility purchase.
Entergy Arkansas Opportunity Sales Proceeding
In June 2009 the LPSC filed a complaint requesting that the FERC determine that certain of Entergy
Arkansas’s sales of electric energy to third parties: (a) violated the provisions of the System Agreement that
allocated the energy generated by Entergy System resources; (b) imprudently denied the Entergy System and its
ultimate consumers the benefits of low-cost Entergy System generating capacity; and (c) violated the provision of
the System Agreement that prohibited sales to third parties by individual companies absent an offer of a right-of-
first-refusal to other Utility operating companies. The LPSC’s complaint challenged sales made beginning in 2002
and requested refunds. In July 2009 the Utility operating companies filed a response to the complaint arguing
among other things that the System Agreement contemplates that the Utility operating companies may make sales to
third parties for their own account, subject to the requirement that those sales be included in the load (or load shape)
for the applicable Utility operating company. The FERC subsequently ordered a hearing in the proceeding.
After a hearing, the ALJ issued an initial decision in December 2010. The ALJ found that the System
Agreement allowed for Entergy Arkansas to make the sales to third parties but concluded that the sales should be
accounted for in the same manner as joint account sales. The ALJ concluded that “shareholders” should make
refunds of the damages to the Utility operating companies, along with interest. Entergy disagreed with several
aspects of the ALJ’s initial decision and in January 2011 filed with the FERC exceptions to the decision.
The FERC issued a decision in June 2012 and held that, while the System Agreement is ambiguous, it does
provide authority for individual Utility operating companies to make opportunity sales for their own account and
Entergy Arkansas made and priced these sales in good faith. The FERC found, however, that the System
Agreement does not provide authority for an individual Utility operating company to allocate the energy associated
with such opportunity sales as part of its load but provides a different allocation authority. The FERC further found
that the after-the-fact accounting methodology used to allocate the energy used to supply the sales was inconsistent
with the System Agreement. The FERC in its decision established further hearing procedures to quantify the effect
of repricing the opportunity sales in accordance with the FERC’s June 2012 decision. The hearing was held in May
2013 and the ALJ issued an initial decision in August 2013. The LPSC, the APSC, the City Council, and FERC
staff filed briefs on exceptions and/or briefs opposing exceptions. Entergy filed a brief on exceptions requesting
that the FERC reverse the initial decision and a brief opposing certain exceptions taken by the LPSC and FERC
staff.
In April 2016 the FERC issued orders addressing requests for rehearing filed in July 2012 and the ALJ’s
August 2013 initial decision. The first order denied Entergy’s request for rehearing and affirmed the FERC’s earlier
rulings that Entergy’s original methodology for allocating energy costs to the opportunity sales was incorrect and, as
a result, Entergy Arkansas must make payments to the other Utility operating companies to put them in the same
position that they would have been in absent the incorrect allocation. The FERC clarified that interest should be
included with the payments. The second order affirmed in part, and reversed in part, the rulings in the ALJ’s
August 2013 initial decision regarding the methodology that should be used to calculate the payments Entergy
Arkansas is to make to the other Utility operating companies. The FERC affirmed the ALJ’s ruling that a full re-run
of intra-system bills should be performed but required that methodology be modified so that the sales have the same
priority for purposes of energy allocation as joint account sales. The FERC reversed the ALJ’s decision that any
payments by Entergy Arkansas should be reduced by 20%. The FERC also reversed the ALJ’s decision that
adjustments to other System Agreement service schedules and excess bandwidth payments should not be taken into
account when calculating the payments to be made by Entergy Arkansas. The FERC held that such adjustments and
excess bandwidth payments should be taken into account but ordered further proceedings before an ALJ to address
93 Entergy Corporation and Subsidiaries
Notes to Financial Statements
whether a cap on any reduction due to bandwidth payments was necessary and to implement the other adjustments
to the calculation methodology.
In May 2016, Entergy Services filed a request for rehearing of the FERC’s April 2016 order arguing that
payments made by Entergy Arkansas should be reduced as a result of the timing of the LPSC’s approval of certain
contracts. Entergy Services also filed a request for clarification and/or rehearing of the FERC’s April 2016 order
addressing the ALJ’s August 2013 initial decision. The APSC and the LPSC also filed requests for rehearing of the
FERC’s April 2016 order. In September 2017 the FERC issued an order denying the request for rehearing on the
issue of whether any payments by Entergy Arkansas to the other Utility operating companies should be reduced due
to the timing of the LPSC’s approval of Entergy Arkansas’s wholesale baseload contract with Entergy Louisiana. In
November 2017 the FERC issued an order denying all of the remaining requests for rehearing of the April 2016
order. In November 2017, Entergy Services filed a petition for review in the D.C. Circuit of the FERC’s orders in
the first two phases of the opportunity sales case. In December 2017 the D.C. Circuit granted Entergy Services’
request to hold the appeal in abeyance pending final resolution of the related proceeding before the FERC. In
January 2018 the APSC and the LPSC filed separate petitions for review in the D.C. Circuit, and the D.C. Circuit
consolidated the appeals with Entergy Services’ appeal.
The hearing required by the FERC’s April 2016 order was held in May 2017. In July 2017 the ALJ issued
an initial decision addressing whether a cap on any reduction due to bandwidth payments was necessary and
whether to implement the other adjustments to the calculation methodology. In August 2017 the Utility operating
companies, the LPSC, the APSC, and FERC staff filed individual briefs on exceptions challenging various aspects
of the initial decision. In September 2017 the Utility operating companies, the LPSC, the APSC, the MPSC, the
City Council, and FERC staff filed separate briefs opposing exceptions taken by various parties.
Based on testimony previously submitted in the case and its assessment of the April 2016 FERC orders, in
the first quarter 2016, Entergy Arkansas recorded a liability of $87 million, which included interest, for its estimated
increased costs and payment to the other Utility operating companies, and a deferred fuel regulatory asset of
$75 million. Following its assessment of the course of the proceedings, including the FERC’s denial of rehearing in
November 2017 described above, in the fourth quarter 2017, Entergy Arkansas recorded an additional liability of
$35 million and a regulatory asset of $31 million.
In October 2018 the FERC issued an order addressing the ALJ’s July 2017 initial decision. The FERC
reversed the ALJ’s decision to cap the reduction in Entergy Arkansas’s payment to account for the increased
bandwidth payments that Entergy Arkansas made to the other operating companies. The FERC also reversed the
ALJ’s decision that Grand Gulf sales from January through September 2000 should be included in the calculation of
Entergy Arkansas’s payment. The FERC affirmed on other grounds the ALJ’s rejection of the LPSC’s claim that
certain joint account sales should be accounted for as part of the calculation of Entergy Arkansas’s payment. In
November 2018 the LPSC requested rehearing of the FERC’s October 2018 decision. In December 2019 the FERC
denied the LPSC’s request for rehearing. In January 2020 the LPSC appealed the December 2019 decision to the
D.C. Circuit.
94 In December 2018, Entergy made a compliance filing in response to the FERC’s October 2018 order. The
compliance filing provided a final calculation of Entergy Arkansas’s payments to the other Utility operating
companies, including interest. No protests were filed in response to the December 2018 compliance filing. Refunds
and interest in the following amounts were paid by Entergy Arkansas to the other operating companies in December
2018:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
Total refunds including interest
Payment/(Receipt)
(In Millions)
Interest
$67
($29)
($18)
($4)
($16)
Principal
$68
($30)
($18)
($3)
($17)
Total
$135
($59)
($36)
($7)
($33)
Entergy Arkansas previously recognized a regulatory asset with a balance of $116 million as of December 31, 2018
for a portion of the payments due as a result of this proceeding.
As described above, the FERC’s opportunity sales orders were appealed to the D.C. Circuit. In February
2020 all of the appeals were consolidated and in April 2020 the D.C. Circuit established a briefing schedule.
Briefing was completed in September 2020 and oral argument was heard in December 2020. In July 2021 the D.C.
Circuit issued a decision denying all of the petitions for review filed in response to the FERC’s opportunity sales
orders.
In February 2019 the LPSC filed a new complaint relating to two issues that were raised in the opportunity
sales proceeding, but that, in its October 2018 order, the FERC held were outside the scope of the proceeding. In
March 2019, Entergy Services filed an answer and motion to dismiss the new complaint. In November 2019 the
FERC issued an order denying the LPSC’s complaint. The order concluded that the settlement agreement approved
by the FERC in December 2015 terminating the System Agreement barred the LPSC’s new complaint. In
December 2019 the LPSC requested rehearing of the FERC’s November 2019 order, and in July 2020 the FERC
issued an order dismissing the LPSC’s request for rehearing. In September 2020 the LPSC appealed to the D.C.
Circuit the FERC’s orders dismissing the new opportunity sales complaint. In November 2020 the D.C. Circuit
issued an order establishing that briefing will occur in January 2021 through April 2021. Oral argument was held in
September 2021. In December 2021 the D.C. Circuit denied the LPSC’s Petition for Review of the new opportunity
sales complaint. The opportunity sales cases are complete at FERC and at the D.C. Circuit and no additional refund
amounts are owed by Entergy Arkansas.
In May 2019, Entergy Arkansas filed an application and supporting testimony with the APSC requesting
approval of a special rider tariff to recover the costs of these payments from its retail customers over a 24-month
period. The application requested that the APSC approve the rider to take effect within 30 days or, if suspended by
the APSC as allowed by commission rule, approve the rider to take effect in the first billing cycle of the first month
occurring 30 days after issuance of the APSC’s order approving the rider. In June 2019 the APSC suspended
Entergy Arkansas’s tariff and granted Entergy Arkansas’s motion asking the APSC to establish the proceeding as
the single designated proceeding in which interested parties may assert claims related to the appropriate retail rate
treatment of the FERC’s October 2018 order and related FERC orders in the opportunity sales proceeding. In
January 2020 the APSC adopted a procedural schedule with a hearing in April 2020. In January 2020 the Attorney
General and Arkansas Electric Energy Consumers, Inc. filed a joint motion seeking to dismiss Entergy Arkansas’s
application alleging that the APSC, in a prior proceeding, ruled on the issues addressed in the application and
determined that Entergy Arkansas’s requested relief violates the filed rate doctrine and the prohibition against
retroactive ratemaking. Entergy Arkansas responded to the joint motion in February 2020 rebutting these
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Entergy Corporation and Subsidiaries
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arguments, including demonstrating that the claims in this proceeding differ substantially from those the APSC
addressed previously and that the payment resulting from a FERC tariff violation for which Entergy Arkansas seeks
retail cost recovery in this proceeding differs materially from the refunds resulting from a FERC tariff amendment
that the APSC previously rejected on filed rate doctrine and the retroactive ratemaking grounds. In addition, in
January 2020 the Attorney General and Arkansas Electric Energy Consumers, Inc. filed testimony opposing the
recovery by Entergy Arkansas of the opportunity sales payment but also claiming that certain components of the
payment should be segregated and refunded to customers. In March 2020, Entergy Arkansas filed rebuttal
testimony.
In July 2020 the APSC issued a decision finding that Entergy Arkansas’s application is not in the public
interest. The order also directed Entergy Arkansas to refund to its retail customers within 30 days of the order the
FERC-determined over-collection of $13.7 million, plus interest, associated with a recalculated bandwidth remedy.
In addition to these primary findings, the order also denied the Attorney General’s request for Entergy Arkansas to
prepare a compliance filing detailing all of the retail impacts from the opportunity sales and denied a request by the
Arkansas Electric Energy Consumers to recalculate all costs using the revised responsibility ratio. Entergy
Arkansas filed a motion for temporary stay of the 30-day requirement to allow Entergy Arkansas a reasonable
opportunity to seek rehearing of the APSC order, but in July 2020 the APSC denied Entergy Arkansas’s request for
a stay and directed Entergy Arkansas to refund to its retail customers the component of the total FERC-determined
opportunity sales payment that was associated with increased bandwidth remedy payments of $13.7 million, plus
interest. The refunds were issued in the August 2020 billing cycle. While the APSC denied Entergy Arkansas’s
stay request, Entergy Arkansas believes its actions were prudent and, therefore, the costs, including the
$13.7 million, plus interest, are recoverable. In July 2020, Entergy Arkansas requested rehearing of the APSC
order, which rehearing was denied by the APSC in August 2020. In September 2020, Entergy Arkansas filed a
complaint in the U.S. District Court for the Eastern District of Arkansas challenging the APSC’s order denying
Entergy Arkansas’s request to recover the costs of these payments. In October 2020 the APSC filed a motion to
dismiss Entergy Arkansas’s complaint, to which Entergy Arkansas responded. Also in December 2020, Entergy
Arkansas and the APSC held a pre-trial conference, and filed a report with the court in January 2021. The court
held a hearing in February 2021 regarding issues addressed in the pre-trial conference report, and in June 2021 the
court stayed all discovery until it rules on pending motions, after which the court will issue an amended schedule if
necessary. In March 2022 the court denied the APSC’s motion to dismiss, and, in April 2022, issued a scheduling
order including a trial date in February 2023. In June 2022, Entergy Arkansas filed a motion asserting that it is
entitled to summary judgment because Entergy Arkansas’s position that the APSC’s order is pre-empted by the filed
rate doctrine and violates the Dormant Commerce Clause is premised on facts that are not subject to genuine
dispute. In July 2022, Arkansas Electric Energy Consumers, Inc., an industrial customer association, filed a motion
to intervene and to hold Entergy Arkansas’s motion for summary judgment in abeyance pending a ruling on the
motion to intervene. Entergy Arkansas filed a consolidated opposition to both motions. In August 2022 the APSC
filed a motion for summary judgment arguing that there is no genuine issue as to any material fact and the APSC is
entitled to judgment as a matter of law. In September 2022, Entergy Arkansas filed an opposition to the motion. In
October 2022 the APSC filed a motion asking the court to hold further proceedings in abeyance pending a decision
on the motions for summary judgment filed by Entergy Arkansas and the APSC. Also in October 2022, Entergy
Arkansas filed an opposition to the motion, and the APSC filed a reply in support of its motion for summary
judgment. In January 2023 the judge assigned to the case, on her own motion, identified facts that may present a
conflict and recused herself; a new judge was assigned to the case, but he also recused due to a conflict. The case
again was reassigned to a new judge. In January 2023 the court denied all pending motions (including those
described above) except for a motion by the APSC to exclude certain testimony and further ruled that the matter
would proceed to trial. In January 2023, Arkansas Electric Energy Consumers, Inc. filed a notice of appeal of the
court’s order denying its motion to intervene to the United States Court of Appeals for the Eighth Circuit and a
motion with the district court to stay the proceedings pending the appeal, which was denied. In February 2023,
Arkansas Electric Energy Consumers, Inc. filed a motion with the United States Court of Appeals for the Eighth
District to stay the proceedings pending the appeal, which also was denied. The trial was held in February 2023.
Following the trial, Entergy Arkansas filed a motion with the United States Court of Appeals for the Eighth District
to expedite the appeal filed by Arkansas Electric Energy Consumers, Inc. The United States Court of Appeals for
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Notes to Financial Statements
the Eighth District granted Entergy Arkansas’s request, and oral arguments were held in June 2023. In August 2023
the United States Court of Appeals for the Eighth District affirmed the order of the court denying Arkansas Electric
Energy Consumers, Inc.’s motion to intervene. An order from the district court is pending and is anticipated in
2024.
Complaints Against System Energy
System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related
costs associated with its 90% ownership/leasehold interest in Grand Gulf. System Energy sells its Grand Gulf
capacity and energy to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans
pursuant to the Unit Power Sales Agreement. System Energy and the Unit Power Sales Agreement are currently the
subject of several litigation proceedings at the FERC (or on appeal from the FERC to the United States Court of
Appeals for the Fifth Circuit), including challenges with respect to System Energy’s authorized return on equity and
capital structure, renewal of its sale-leaseback arrangement, treatment of uncertain tax positions, a broader
investigation of rates under the Unit Power Sales Agreement, and two prudence complaints, one challenging the
extended power uprate completed at Grand Gulf in 2012 and the operation and management of Grand Gulf,
particularly in the 2016-2020 time period, and the second challenging the operation and management of Grand Gulf
in the 2021-2022 time period. The settlement with the MPSC described in “System Energy Settlement with the
MPSC” below, and the settlement in principle with the APSC described in “System Energy Settlement with the
APSC” below, if approved by the FERC, substantially reduce the aggregate amount of exposure resulting from
these claims. The claims in these proceedings include claims for refunds and claims for rate adjustments; the
aggregate amount of refunds claimed in these proceedings, after reduction for settlements reached with the MPSC
and the APSC (subject in the latter case to approval by the FERC), exceeds the current net book value of System
Energy. Following are discussions of the proceedings.
Return on Equity and Capital Structure Complaints
In January 2017 the APSC and MPSC filed a complaint with the FERC against System Energy. The
complaint seeks a reduction in the return on equity component of the Unit Power Sales Agreement pursuant to
which System Energy sells its Grand Gulf capacity and energy to Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans. Entergy Arkansas also sells some of its Grand Gulf capacity and energy to
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans under separate agreements. The current return
on equity under the Unit Power Sales Agreement is 10.94%, which was established in a rate proceeding that became
final in July 2001. As discussed below in “System Energy Settlement with the MPSC,” beginning with the July
2022 service month, bills issued to Entergy Mississippi under the Unit Power Sales Agreement reflect a return on
equity of 9.65%.
The APSC and MPSC complaint alleges that the return on equity is unjust and unreasonable because capital
market and other considerations indicate that it is excessive. The complaint requests proceedings to investigate the
return on equity and establish a lower return on equity, and also requests that the FERC establish January 23, 2017
as a refund effective date. The complaint includes return on equity analysis that purports to establish that the range
of reasonable return on equity for System Energy is between 8.37% and 8.67%. System Energy answered the
complaint in February 2017 and disputes that a return on equity of 8.37% to 8.67% is just and reasonable. The
LPSC and the City Council intervened in the proceeding expressing support for the complaint. In September 2017
the FERC established a refund effective date of January 23, 2017 and directed the parties to engage in settlement
proceedings before an ALJ. The parties were unable to settle the return on equity issue and a FERC hearing judge
was assigned in July 2018. The 15-month refund period in connection with the APSC/MPSC complaint expired on
April 23, 2018.
In April 2018 the LPSC filed a complaint with the FERC against System Energy seeking an additional 15-
month refund period. The LPSC complaint requests similar relief from the FERC with respect to System Energy’s
return on equity and also requests the FERC to investigate System Energy’s capital structure. The APSC, MPSC,
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and City Council intervened in the proceeding, filed an answer expressing support for the complaint, and asked the
FERC to consolidate this proceeding with the proceeding initiated by the complaint of the APSC and MPSC in
January 2017. System Energy answered the LPSC complaint in May 2018 and also filed a motion to dismiss the
complaint. In August 2018 the FERC issued an order dismissing the LPSC’s request to investigate System
Energy’s capital structure and setting for hearing the return on equity complaint, with a refund effective date of
April 27, 2018. The 15-month refund period in connection with the LPSC return on equity complaint expired on
July 26, 2019.
The portion of the LPSC’s complaint dealing with return on equity was subsequently consolidated with the
APSC and MPSC complaint for hearing. The parties addressed an order (issued in a separate FERC proceeding
involving New England transmission owners) that proposed modifying the FERC’s standard methodology for
determining return on equity. In September 2018, System Energy filed a request for rehearing and the LPSC filed a
request for rehearing or reconsideration of the FERC’s August 2018 order. The LPSC’s request referenced an
amended complaint that it filed on the same day raising the same capital structure claim the FERC had earlier
dismissed. The FERC initiated a new proceeding for the amended capital structure complaint, and System Energy
submitted a response in October 2018. In January 2019 the FERC set the amended complaint for settlement and
hearing proceedings. Settlement proceedings in the capital structure proceeding commenced in February 2019. As
noted below, in June 2019, settlement discussions were terminated and the amended capital structure complaint was
consolidated with the ongoing return on equity proceeding. The 15-month refund period in connection with the
capital structure complaint was from September 24, 2018 to December 23, 2019.
In January 2019 the LPSC, the APSC, and the MPSC filed direct testimony in the return on equity
proceeding. For the refund period January 23, 2017 through April 23, 2018, the LPSC argues for an authorized
return on equity for System Energy of 7.81% and the APSC and the MPSC argue for an authorized return on equity
for System Energy of 8.24%. For the refund period April 27, 2018 through July 27, 2019, and for application on a
prospective basis, the LPSC argues for an authorized return on equity for System Energy of 7.97% and the APSC
and the MPSC argue for an authorized return on equity for System Energy of 8.41%. In March 2019, System
Energy submitted answering testimony. For the first refund period, System Energy’s testimony argues for a return
on equity of 10.10% (median) or 10.70% (midpoint). For the second refund period, System Energy’s testimony
shows that the calculated returns on equity for the first period fall within the range of presumptively just and
reasonable returns on equity, and thus the second complaint should be dismissed (and the first period return on
equity used going forward). If the FERC nonetheless were to set a new return on equity for the second period (and
going forward), System Energy argues the return on equity should be either 10.32% (median) or 10.69% (midpoint).
In May 2019 the FERC trial staff filed its direct and answering testimony in the return on equity
proceeding. For the first refund period, the FERC trial staff calculates an authorized return on equity for System
Energy of 9.89% based on the application of FERC’s proposed methodology. The FERC trial staff’s direct and
answering testimony noted that an authorized return on equity of 9.89% for the first refund period was within the
range of presumptively just and reasonable returns on equity for the second refund period, as calculated using a
study period ending January 31, 2019 for the second refund period.
In June 2019, System Energy filed testimony responding to the testimony filed by the FERC trial staff.
Among other things, System Energy’s testimony rebutted arguments raised by the FERC trial staff and provided
updated calculations for the second refund period based on the study period ending May 31, 2019. For that refund
period, System Energy’s testimony shows that strict application of the return on equity methodology proposed by
the FERC staff indicates that the second complaint would not be dismissed, and the new return on equity would be
set at 9.65% (median) or 9.74% (midpoint). System Energy’s testimony argues that these results are insufficient in
light of benchmarks such as state returns on equity and treasury bond yields, and instead proposes that the
calculated returns on equity for the second period should be either 9.91% (median) or 10.3% (midpoint). System
Energy’s testimony also argues that, under application of its proposed modified methodology, the 10.10% return on
equity calculated for the first refund period would fall within the range of presumptively just and reasonable returns
on equity for the second refund period.
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Also in June 2019, the FERC’s Chief ALJ issued an order terminating settlement discussions in the
amended complaint addressing System Energy’s capital structure. The ALJ consolidated the amended capital
structure complaint with the ongoing return on equity proceeding and set new procedural deadlines for the
consolidated hearing.
In August 2019 the LPSC, the APSC, and the MPSC filed rebuttal testimony in the return on equity
proceeding and direct and answering testimony relating to System Energy’s capital structure. The LPSC re-argues
for an authorized return on equity for System Energy of 7.81% for the first refund period and 7.97% for the second
refund period. The APSC and the MPSC argue for an authorized return on equity for System Energy of 8.26% for
the first refund period and 8.32% for the second refund period. With respect to capital structure, the LPSC proposes
that the FERC establish a hypothetical capital structure for System Energy for ratemaking purposes. Specifically,
the LPSC proposes that System Energy’s common equity ratio be set to Entergy Corporation’s equity ratio of 37%
equity and 63% debt. In the alternative, the LPSC argues that the equity ratio should be no higher than 49%, the
composite equity ratio of System Energy and the other Entergy operating companies who purchase under the Unit
Power Sales Agreement. The APSC and the MPSC recommend that 35.98% be set as the common equity ratio for
System Energy. As an alternative, the APSC and the MPSC propose that System Energy’s common equity be set at
46.75% based on the median equity ratio of the proxy group for setting the return on equity.
In September 2019 the FERC trial staff filed its rebuttal testimony in the return on equity proceeding. For
the first refund period, the FERC trial staff calculates an authorized return on equity for System Energy of 9.40%
based on the application of the FERC’s proposed methodology and an updated proxy group. For the second refund
period, based on the study period ending May 31, 2019, the FERC trial staff rebuttal testimony argues for a return
on equity of 9.63%. In September 2019 the FERC trial staff also filed direct and answering testimony relating to
System Energy’s capital structure. The FERC trial staff argues that the average capital structure of the proxy group
used to develop System Energy’s return on equity should be used to establish the capital structure. Using this
approach, the FERC trial staff calculates the average capital structure for its proposed proxy group of 46.74%
common equity, and 53.26% debt.
In October 2019, System Energy filed answering testimony disputing the FERC trial staff’s, the LPSC’s,
and the APSC’s and MPSC’s arguments for the use of a hypothetical capital structure and arguing that the use of
System Energy’s actual capital structure is just and reasonable.
In November 2019, in a proceeding that did not involve System Energy, the FERC issued an order
addressing the methodology for determining the return on equity applicable to transmission owners in MISO.
Thereafter, the procedural schedule in the System Energy proceeding was amended to allow the participants to file
supplemental testimony addressing the order in the MISO transmission owner proceeding (Opinion No. 569).
In February 2020 the LPSC, the MPSC and APSC, and the FERC trial staff filed supplemental testimony
addressing Opinion No. 569 and how it would affect the return on equity evaluation for the two complaint periods
concerning System Energy. For the first refund period, based on their respective interpretations and applications of
the Opinion No. 569 methodology, the LPSC argues for an authorized return on equity for System Energy of 8.44%;
the MPSC and APSC argue for an authorized return on equity of 8.41%; and the FERC trial staff argues for an
authorized return on equity of 9.22%. For the second refund period and on a prospective basis, based on their
respective interpretations and applications of the Opinion No. 569 methodology, the LPSC argues for an authorized
return on equity for System Energy of 7.89%; the MPSC and APSC argue that an authorized return on equity of
8.01% may be appropriate; and the FERC trial staff argues for an authorized return on equity of 8.66%.
In April 2020, System Energy filed supplemental answering testimony addressing Opinion No. 569.
System Energy argues that the Opinion No. 569 methodology is conceptually and analytically defective for
purposes of establishing just and reasonable authorized return on equity determinations and proposes an alternative
approach. As its primary recommendation, System Energy continues to support the return on equity determinations
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in its March 2019 testimony for the first refund period and its June 2019 testimony for the second refund period.
Under the Opinion No. 569 methodology, System Energy calculates a “presumptively just and reasonable range” for
the authorized return on equity for the first refund period of 8.57% to 9.52%, and for the second refund period of
8.28% to 9.11%. System Energy argues that these ranges are not just and reasonable results. Under its proposed
alternative methodology, System Energy calculates an authorized return on equity of 10.26% for the first refund
period, which also falls within the presumptively just and reasonable range calculated for the second refund period
and prospectively.
In May 2020 the FERC issued an order on rehearing of Opinion No. 569 (Opinion No. 569-A). In June
2020 the procedural schedule in the System Energy proceeding was further revised in order to allow parties to
address the Opinion No. 569-A methodology. Pursuant to the revised schedule, in June 2020, the LPSC, MPSC and
APSC, and the FERC trial staff filed supplemental testimony addressing Opinion No. 569-A and how it would
affect the return on equity evaluation for the two complaint periods concerning System Energy. For the first refund
period, based on their respective interpretations and applications of the Opinion No. 569-A methodology, the LPSC
argues for an authorized return on equity for System Energy of 7.97%; the MPSC and APSC argue for an authorized
return on equity of 9.24%; and the FERC trial staff argues for an authorized return on equity of 9.49%. For the
second refund period and on a prospective basis, based on their respective interpretations and applications of the
Opinion No. 569-A methodology, the LPSC argues for an authorized return on equity for System Energy of 7.78%;
the MPSC and APSC argue that an authorized return on equity of 9.15% may be appropriate if the second complaint
is not dismissed; and the FERC trial staff argues for an authorized return on equity of 9.09% if the second complaint
is not dismissed.
Pursuant to the revised procedural schedule, in July 2020, System Energy filed supplemental testimony
addressing Opinion No. 569-A. System Energy argues that strict application of the Opinion No. 569-A
methodology produces results inconsistent with investor requirements and does not provide a sound basis on which
to evaluate System Energy’s authorized return on equity. As its primary recommendation, System Energy argues
for the use of a methodology that incorporates four separate financial models, including the constant growth form of
the discounted cash flow model and the empirical capital asset pricing model. Based on application of its
recommended methodology, System Energy argues for an authorized return on equity of 10.12% for the first refund
period, which also falls within the presumptively just and reasonable range calculated for the second refund period
and prospectively. Under the Opinion No. 569-A methodology, System Energy calculates an authorized return on
equity of 9.44% for the first refund period, which also falls within the presumptively just and reasonable range
calculated for the second refund period and prospectively.
The parties and FERC trial staff filed final rounds of testimony in August 2020. The hearing before a
FERC ALJ occurred in late-September through early-October 2020, post-hearing briefing took place in November
and December 2020.
In March 2021 the FERC ALJ issued an initial decision. With regard to System Energy’s authorized return
on equity, the ALJ determined that the existing return on equity of 10.94% is no longer just and reasonable, and that
the replacement authorized return on equity, based on application of the Opinion No. 569-A methodology, should
be 9.32%. The ALJ further determined that System Energy should pay refunds for a fifteen-month refund period
(January 2017-April 2018) based on the difference between the current return on equity and the replacement
authorized return on equity. The ALJ determined that the April 2018 complaint concerning the authorized return on
equity should be dismissed, and that no refunds for a second fifteen-month refund period should be due. With
regard to System Energy’s capital structure, the ALJ determined that System Energy’s actual equity ratio is
excessive and that the just and reasonable equity ratio is 48.15% equity, based on the average equity ratio of the
proxy group used to evaluate the return on equity for the second complaint. The ALJ further determined that
System Energy should pay refunds for a fifteen-month refund period (September 2018-December 2019) based on
the difference between the actual equity ratio and the 48.15% equity ratio. If the ALJ’s initial decision is upheld,
the estimated refund for this proceeding is approximately $41 million, which includes interest through December
31, 2023, and the estimated resulting annual rate reduction would be approximately $25 million. As a result of the
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Notes to Financial Statements
2022 settlement agreement with the MPSC, both the estimated refund and rate reduction exclude Entergy
Mississippi's portion. See “System Energy Settlement with the MPSC” below for discussion of the settlement.
The estimated refund will continue to accrue interest until a final FERC decision is issued.
The ALJ initial decision is an interim step in the FERC litigation process, and an ALJ’s determinations
made in an initial decision are not controlling on the FERC. In April 2021, System Energy filed its brief on
exceptions, in which it challenged the initial decision’s findings on both the return on equity and capital structure
issues. Also in April 2021 the LPSC, the APSC, the MPSC, the City Council, and the FERC trial staff filed briefs
on exceptions. Reply briefs opposing exceptions were filed in May 2021 by System Energy, the FERC trial staff,
the LPSC, the APSC, the MPSC, and the City Council. Refunds, if any, that might be required will only become
due after the FERC issues its order reviewing the initial decision.
As discussed in “System Energy Settlement with the MPSC” below, beginning with the July 2022
service month, bills issued to Entergy Mississippi under the Unit Power Sales Agreement were adjusted to reflect a
capital structure not to exceed 52% equity.
In August 2022 the D.C. Circuit Court of Appeals issued an order addressing appeals of FERC’s Opinion
No. 569 and 569-A, which established the methodology applied in the ALJ’s initial decision in the proceeding
against System Energy discussed above. The appellate order addressed the methodology for determining the return
on equity applicable to transmission owners in MISO. The D.C. Circuit found the FERC’s use of the Risk Premium
model as part of the methodology to be arbitrary and capricious, and remanded the case back to the FERC. The
remanded case is pending FERC action.
Grand Gulf Sale-leaseback Renewal Complaint and Uncertain Tax Position Rate Base Issue
In May 2018 the LPSC filed a complaint against System Energy and Entergy Services related to System
Energy’s renewal of a sale-leaseback transaction originally entered into in December 1988 for an 11.5% undivided
interest in Grand Gulf Unit 1. The complaint alleges that System Energy violated the filed rate and the FERC’s
ratemaking and accounting requirements when it included in Unit Power Sales Agreement billings the cost of
capital additions associated with the sale-leaseback interest, and that System Energy is double-recovering costs by
including both the lease payments and the capital additions in Unit Power Sales Agreement billings. The complaint
also claims that System Energy was imprudent in entering into the sale-leaseback renewal because the Utility
operating companies that purchase Grand Gulf’s output from System Energy could have obtained cheaper capacity
and energy in the MISO markets. The complaint further alleges that System Energy violated various other reporting
and accounting requirements and should have sought prior FERC approval of the lease renewal. The complaint
seeks various forms of relief from the FERC. The complaint seeks refunds for capital addition costs for all years in
which they were recorded in allegedly non-formula accounts or, alternatively, the disallowance of the return on
equity for the capital additions in those years plus interest. The complaint also asks that the FERC disallow and
refund the lease costs of the sale-leaseback renewal on grounds of imprudence, investigate System Energy’s
treatment of a DOE litigation payment, and impose certain forward-looking procedural protections, including audit
rights for retail regulators of the Unit Power Sales Agreement formula rates. The APSC, the MPSC, and the City
Council intervened in the proceeding.
In June 2018, System Energy and Entergy Services filed a motion to dismiss and an answer to the LPSC
complaint denying that System Energy’s treatment of the sale-leaseback renewal and capital additions violated the
terms of the filed rate or any other FERC ratemaking, accounting, or legal requirements or otherwise constituted
double recovery. The response also argued that the complaint is inconsistent with a FERC-approved settlement to
which the LPSC is a party and that explicitly authorizes System Energy to recover its lease payments. Finally, the
response argued that both the capital additions and the sale-leaseback renewal were prudent investments and the
LPSC complaint fails to justify any disallowance or refunds. The response also offered to submit formula rate
protocols for the Unit Power Sales Agreement similar to the procedures used for reviewing transmission rates under
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the MISO tariff. In September 2018 the FERC issued an order setting the complaint for hearing and settlement
proceedings. The FERC established a refund effective date of May 18, 2018.
In February 2019 the presiding ALJ ruled that the hearing ordered by the FERC includes the issue of
whether specific subcategories of accumulated deferred income tax should be included in, or excluded from, System
Energy’s formula rate. In March 2019 the LPSC, the MPSC, the APSC and the City Council filed direct testimony.
The LPSC testimony sought refunds that include the renewal lease payments (approximately $17.2 million per year
since July 2015), rate base reductions for accumulated deferred income tax associated with uncertain tax positions,
and the cost of capital additions associated with the sale-leaseback interest, as well as interest on those amounts.
In June 2019 System Energy filed answering testimony arguing that the FERC should reject all claims for
refunds. Among other things, System Energy argued that claims for refunds of the costs of lease renewal payments
and capital additions should be rejected because those costs were recovered consistent with the Unit Power Sales
Agreement formula rate, System Energy was not over or double recovering any costs, and ratepayers will save costs
over the initial and renewal terms of the leases. System Energy argued that claims for refunds associated with
liabilities arising from uncertain tax positions should be rejected because the liabilities do not provide cost-free
capital, the repayment timing of the liabilities is uncertain, and the outcome of the underlying tax positions is
uncertain. System Energy’s testimony also challenged the refund calculations supplied by the other parties.
In August 2019 the FERC trial staff filed direct and answering testimony seeking refunds for rate base
reductions for liabilities associated with uncertain tax positions. The FERC trial staff also argued that System
Energy recovered $32 million more than it should have in depreciation expense for capital additions. In September
2019, System Energy filed cross-answering testimony disputing the FERC trial staff’s arguments for refunds, stating
that the FERC trial staff’s position regarding depreciation rates for capital additions is not unreasonable, but
explaining that any change in depreciation expense is only one element of a Unit Power Sales Agreement re-billing
calculation. Adjustments to depreciation expense in any re-billing under the Unit Power Sales Agreement formula
rate will also involve changes to accumulated depreciation, accumulated deferred income taxes, and other formula
elements as needed. In October 2019 the LPSC filed rebuttal testimony increasing the amount of refunds sought for
liabilities associated with uncertain tax positions. The LPSC seeks approximately $512 million plus interest, which
is approximately $310 million through December 31, 2023. The FERC trial staff also filed rebuttal testimony in
which it seeks refunds of a similar amount as the LPSC for the liabilities associated with uncertain tax positions.
The LPSC testimony also argued that adjustments to depreciation rates should affect rate base on a prospective basis
only.
A hearing was held before a FERC ALJ in November 2019. In April 2020 the ALJ issued the initial
decision. Among other things, the ALJ determined that refunds were due on three main issues. First, with regard to
the lease renewal payments, the ALJ determined that System Energy is recovering an unjust acquisition premium
through the lease renewal payments, and that System Energy’s recovery from customers through rates should be
limited to the cost of service based on the remaining net book value of the leased assets, which is approximately
$70 million. The ALJ found that the remedy for this issue should be the refund of lease payments (approximately
$17.2 million per year since July 2015) with interest determined at the FERC quarterly interest rate, which would be
offset by the addition of the net book value of the leased assets in the cost of service. The ALJ did not calculate a
value for the refund expected as a result of this remedy. In addition, System Energy would no longer recover the
lease payments in rates prospectively. Second, with regard to the liabilities associated with uncertain tax positions,
the ALJ determined that the liabilities are accumulated deferred income taxes and that System Energy’s rate base
should have been reduced for those liabilities. The ALJ also found that System Energy should include liabilities
associated with uncertain tax positions as a rate base reduction going forward. Third, with regard to the
depreciation expense adjustments, the ALJ found that System Energy should correct for the error in re-billings
retroactively and prospectively, but that System Energy should not be permitted to recover interest on any
retroactive return on enhanced rate base resulting from such corrections.
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In June 2020, System Energy, the LPSC, and the FERC trial staff filed briefs on exceptions, challenging
several of the initial decision’s findings. System Energy’s brief on exceptions challenged the initial decision’s
limitations on recovery of the lease renewal payments, its proposed rate base refund for the liabilities associated
with uncertain tax positions, and its proposal to asymmetrically treat interest on bill corrections for depreciation
expense adjustments. The LPSC’s and the FERC trial staff’s briefs on exceptions each challenged the initial
decision’s allowance for recovery of the cost of service associated with the lease renewal based on the remaining net
book value of the leased assets, its calculation of the remaining net book value of the leased assets, and the amount
of the initial decision’s proposed rate base refund for the liabilities associated with uncertain tax positions. The
LPSC’s brief on exceptions also challenged the initial decision’s proposal that depreciation expense adjustments
include retroactive adjustments to rate base and its finding that section 203 of the Federal Power Act did not apply
to the lease renewal. The FERC trial staff’s brief on exceptions also challenged the initial decision’s finding that the
FERC need not institute a formal investigation into System Energy’s tariff. In October 2020, System Energy, the
LPSC, the MPSC, the APSC, and the City Council filed briefs opposing exceptions. System Energy opposed the
exceptions filed by the LPSC and the FERC trial staff. The LPSC, the MPSC, the APSC, the City Council, and the
FERC trial staff opposed the exceptions filed by System Energy. Also in October 2020 the MPSC, the APSC, and
the City Council filed briefs adopting the exceptions of the LPSC and the FERC trial staff.
In addition, in September 2020, the IRS issued a Notice of Proposed Adjustment (NOPA) and Entergy
executed it. The NOPA memorializes the IRS’s decision to adjust the 2015 consolidated federal income tax return
of Entergy Corporation and certain of its subsidiaries, including System Energy, with regard to the uncertain
decommissioning tax position. Pursuant to the audit resolution documented in the NOPA, the IRS allowed System
Energy’s inclusion of $102 million of future nuclear decommissioning costs in System Energy’s cost of goods sold
for the 2015 tax year, roughly 10% of the requested deduction, but disallowed the balance of the position. In
September 2020, System Energy filed a motion to lodge the NOPA into the record in the FERC proceeding. In
October 2020 the LPSC, the APSC, the MPSC, the City Council, and the FERC trial staff filed oppositions to
System Energy’s motion. As a result of the NOPA issued by the IRS in September 2020, System Energy filed, in
October 2020, a new Federal Power Act section 205 filing at FERC to establish an ongoing rate base credit for the
accumulated deferred income taxes resulting from the decommissioning uncertain tax position. On a prospective
basis beginning with the October 2020 bill, System Energy proposes to include the accumulated deferred income
taxes arising from the successful portion of the decommissioning uncertain tax position as a credit to rate base under
the Unit Power Sales Agreement. In November 2020 the LPSC, the APSC, the MPSC, and the City Council filed a
protest to the filing, and System Energy responded.
In November 2020 the IRS issued a Revenue Agent’s Report (RAR) for the 2014/2015 tax year and in
December 2020 Entergy executed it. The RAR contained the same adjustment to the uncertain nuclear
decommissioning tax position as that which the IRS had announced in the NOPA. In December 2020, System
Energy filed a motion to lodge the RAR into the record in the FERC proceeding addressing the uncertain tax
position rate base issue. In January 2021 the LPSC, the APSC, the MPSC, and the City Council filed a protest to
the motion.
As a result of the RAR, in December 2020, System Energy filed amendments to its new Federal Power Act
section 205 filings to establish an ongoing rate base credit for the accumulated deferred income taxes resulting from
the decommissioning uncertain tax position and to credit excess accumulated deferred income taxes arising from the
successful portion of the decommissioning uncertain tax position. The amendments both propose the inclusion of
the RAR as support for the filings. In December 2020 the LPSC, the APSC, and the City Council filed a protest in
response to the amendments, reiterating their prior objections to the filings. In February 2021 the FERC issued an
order accepting System Energy’s Federal Power Act section 205 filings subject to refund, setting them for hearing,
and holding the hearing in abeyance.
In December 2020, System Energy filed a new Federal Power Act section 205 filing to provide a one-time,
historical credit of $25.2 million for the accumulated deferred income taxes that would have been created by the
decommissioning uncertain tax position if the IRS’s decision had been known in 2016. In January 2021 the LPSC,
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APSC, MPSC, and City Council filed a protest to the filing. In February 2021 the FERC issued an order accepting
System Energy’s Federal Power Act section 205 filing subject to refund, setting it for hearing, and holding the
hearing in abeyance. The one-time credit was made during the first quarter 2021.
In December 2022 the FERC issued an order on the ALJ’s initial decision, which affirmed it in part and
modified it in part. The FERC’s order directed System Energy to calculate refunds on three issues, and to provide a
compliance report detailing the calculations. The FERC’s order also disallows the future recovery of sale-leaseback
renewal costs, which is estimated at approximately $11.5 million annually for purchases from Entergy Arkansas,
Entergy Louisiana, and Entergy New Orleans through July 2036. The three refund issues are rental expenses related
to the renewal of the sale-leaseback arrangements; refunds, if any, for the revenue requirement impact of including
accumulated deferred income taxes resulting from the decommissioning uncertain tax positions from 2004 through
the present; and refunds for the net effect of correcting the depreciation inputs for capital additions attributable to
the portion of plant subject to the sale-leaseback.
As a result of the FERC order’s directives regarding the recovery of the sale-leaseback transaction, in
December 2022 System Energy reduced the Grand Gulf sale-leaseback regulatory liability by $56 million, reduced
the related accumulated deferred income tax asset by $94 million, and reduced the Grand Gulf sale-leaseback
accumulated deferred income tax regulatory liability by $25 million, resulting in an increase in income tax expense
of $13 million. In addition, the FERC determined that System Energy recognized excess depreciation expense
related to property subject to the sale-leaseback. As a result, in December 2022, System Energy recorded a
reduction in depreciation expense and the related accumulated depreciation of $33 million.
In January 2023, System Energy filed its compliance report with the FERC. With respect to the sale-
leaseback renewal costs, System Energy calculated a refund of $89.8 million, which represented all of the sale-
leaseback renewal rental costs that System Energy recovered in rates, with interest. With respect to the
decommissioning uncertain tax position issue, System Energy calculated that no additional refunds are owed
because it had already provided a one-time historical credit (for the period January 2016 through September 2020)
of $25.2 million based on the accumulated deferred income taxes that resulted from the IRS’s partial acceptance of
the decommissioning tax position, and because it has been providing an ongoing rate base credit for the
accumulated deferred income taxes that resulted from the IRS’s partial acceptance of the decommissioning tax
position since October 2020. With respect to the depreciation refund, System Energy calculated a refund of
$13.7 million, which is the net total of a refund to customers for excess depreciation expense previously collected,
plus interest, offset by the additional return on rate base that System Energy previously did not collect, without
interest. See “System Energy Settlement with the MPSC” below for discussion of the regulatory charge and
corresponding regulatory liability recorded in June 2022 related to these proceedings. The $103.5 million in total
refunds calculated in the compliance filing were reclassified from long-term other regulatory liabilities to a current
regulatory liability as of December 31, 2022. In January 2023, System Energy paid the refunds of $103.5 million,
which included refunds of $41.7 million to Entergy Arkansas, $27.8 million to Entergy Louisiana, and $34 million
to Entergy New Orleans.
In February 2023 the LPSC, the APSC, and the City Council filed protests to System Energy’s January
2023 compliance report, in which they challenged System Energy’s calculation of the refunds associated with the
decommissioning tax position but did not protest the other components of the compliance report. Each of them
argued that System Energy should have paid additional refunds for the decommissioning tax position issue, and the
City Council estimated the total additional refunds owed to customers of Entergy Louisiana, Entergy New Orleans,
and Entergy Arkansas for that issue as $493 million, including interest (and without factoring in the $25.2 million
refund that System Energy already paid in 2021).
In January 2023, System Energy filed a request for rehearing of the FERC’s determinations in the
December 2022 order on sale-leaseback refund issues and future lease cost disallowances, the FERC’s prospective
policy on uncertain tax positions, and the proper accounting of System Energy’s accumulated deferred income taxes
adjustment for the Tax Cuts and Jobs Act of 2017; and a motion for confirmation of its interpretation of the
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December 2022 order’s remedy concerning the decommissioning tax position. In January 2023 the retail regulators
filed a motion for confirmation of their interpretation of the refund requirement in the December 2022 FERC order
and a provisional request for rehearing. In February 2023 the FERC issued a notice that the rehearing requests have
been deemed denied by operation of law. The deemed denial of the rehearing request initiates a sixty-day period in
which aggrieved parties may petition for federal appellate court review of the underlying FERC orders; however,
the FERC may issue a substantive order on rehearing as long as it continues to have jurisdiction over the case. In
March 2023, System Energy filed in the United States Court of Appeals for the Fifth Circuit a petition for review of
the December 2022 order. In March 2023, System Energy also filed an unopposed motion to stay the proceeding in
the Fifth Circuit pending the FERC’s disposition of the pending motions, and the court granted the motion to stay.
In February 2023, System Energy submitted a tariff compliance filing with the FERC to clarify that,
consistent with the releases provided in the MPSC settlement, Entergy Mississippi will continue to be charged for
its allocation of the sale-leaseback renewal costs under the Unit Power Sales Agreement. See “System Energy
Settlement with the MPSC” below for discussion of the settlement. In March 2023 the MPSC filed a protest to
System Energy’s tariff compliance filing. The MPSC argues that the settlement did not specifically address post-
settlement sale-leaseback renewal costs and that the sale-leaseback renewal costs may not be recovered under the
Unit Power Sales Agreement. Entergy Mississippi’s allocated sale-leaseback renewal costs are estimated at
$5.7 million annually for the remaining term of the sale-leaseback renewal.
In August 2023 the FERC issued an order addressing arguments raised on rehearing and partially setting
aside the prior order (rehearing order). The rehearing order addresses rehearing requests that were filed in January
2023 separately by System Energy and the LPSC, the APSC, and the City Council.
In the rehearing order, the FERC directs System Energy to recalculate refunds for two issues: (1) refunds of
rental expenses related to the renewal of the sale-leaseback arrangements and (2) refunds for the net effect of
correcting the depreciation inputs for capital additions associated with the sale-leaseback. With regard to the sale-
leaseback renewal rental expenses, the rehearing order allows System Energy to recover an implied return of and on
the depreciated cost of the portion of the plant subject to the sale-leaseback as of the expiration of the initial lease
term. With regard to the depreciation input issue, the rehearing order allows System Energy to offset refunds so that
System Energy may collect interest on the rate base recalculations that were part of the overall depreciation rate
recalculations. The rehearing order further directs System Energy to submit within 60 days of the date of the
rehearing order an additional compliance filing to revise the total refunds for these two issues. As discussed above,
System Energy’s January 2023 compliance filing calculated $103.5 million in total refunds, and the refunds were
paid in January 2023. In October 2023, System Energy filed its compliance report with the FERC as directed in the
August 2023 rehearing order. The October 2023 compliance report reflected recalculated refunds totaling
$35.7 million for the two issues resulting in $67.8 million in refunds that could be recouped by System Energy. As
discussed below in “System Energy Settlement with the APSC,” System Energy reached a settlement in principle
with the APSC to resolve several pending cases under the FERC’s jurisdiction, including this one, pursuant to
which it has agreed not to recoup the $27.3 million calculated for Entergy Arkansas in the compliance filing. As a
result of the FERC’s rulings on the sale-leaseback and depreciation input issues in the August 2023 rehearing order,
in third quarter 2023, System Energy recorded a regulatory asset and corresponding regulatory credit of $40 million
to reflect the portion of the January 2023 refunds to be recouped from Entergy Louisiana and Entergy New Orleans.
Consistent with the compliance filing, in October 2023, Entergy Louisiana and Entergy New Orleans paid
recoupment amounts of $18.2 million and $22.3 million, respectively, to System Energy.
On the third refund issue identified in the rehearing requests, concerning the decommissioning uncertain tax
positions, the rehearing order denied all rehearing requests, re-affirmed the remedy contained in the December 2022
order, and did not direct System Energy to recalculate refunds or to submit an additional compliance filing. On this
issue, as reflected in its January 2023 compliance filing, System Energy believes it has already paid the refunds due
under the remedy that the FERC outlined for the uncertain tax positions issue in its December 2022 order. In
August 2023 the LPSC issued a media release in which it stated that it disagrees with System Energy’s
determination that the rehearing order requires no further refunds to be made on this issue.
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In September 2023, System Energy filed a protective appeal of the rehearing order with the United States
Court of Appeals for the Fifth Circuit. The appeal was consolidated with System Energy’s prior appeal of the
December 2022 order.
In September 2023 the LPSC filed with the FERC a request for rehearing and clarification of the rehearing
order. The LPSC requests that the FERC reverse its determination in the rehearing order that System Energy may
collect an implied return of and on the depreciated cost of the portion of the plant subject to the sale-leaseback, as of
the expiration of the initial lease term, as well as its determination in the rehearing order that System Energy may
offset the refunds for the depreciation rate input issue and collect interest on the rate base recalculations that were
part of the overall depreciation rate recalculations. In addition, the LPSC requests that the FERC either confirm the
LPSC’s interpretation of the refund associated with the decommissioning uncertain tax positions or explain why it is
not doing so. In October 2023 the FERC issued a notice that the rehearing request has been deemed denied by
operation of law. In November 2023 the FERC issued a further notice stating that it would not issue any further
order addressing the rehearing request. Also in November 2023 the LPSC filed with the United States Court of
Appeals for the Fifth Circuit a petition for review of the FERC’s August 2023 rehearing order and denials of the
September 2023 rehearing request.
In December 2023 the United States Court of Appeals for the Fifth Circuit lifted the abeyance on the
consolidated System Energy appeals and it also consolidated the LPSC’s appeal with the System Energy appeals. In
February 2024 the parties filed a proposed briefing schedule under which briefing will occur from March 2024
through July 2024.
LPSC Additional Complaints
In May 2020 the LPSC authorized its staff to file additional complaints at the FERC related to the rates
charged by System Energy for Grand Gulf energy and capacity supplied to Entergy Louisiana under the Unit Power
Sales Agreement. The LPSC directive noted that the initial decision issued by the presiding ALJ in the Grand Gulf
sale-leaseback complaint proceeding did not address, for procedural reasons, certain rate issues raised by the LPSC
and declined to order further investigation of rates charged by System Energy. The LPSC directive authorized its
staff to file complaints at the FERC “necessary to address these rate issues, to request a full investigation into the
rates charged by System Energy for Grand Gulf power, and to seek rate refund, rate reduction, and such other
remedies as may be necessary and appropriate to protect Louisiana ratepayers.” The LPSC directive further stated
that the LPSC has seen “information suggesting that the Grand Gulf plant has been significantly underperforming
compared to other nuclear plants in the United States, has had several extended and unexplained outages, and has
been plagued with serious safety concerns.” The LPSC expressed concern that the costs paid by Entergy
Louisiana's retail customers may have been detrimentally impacted, and authorized “the filing of a FERC complaint
to address these performance issues and to seek appropriate refund, rate reduction, and other remedies as may be
appropriate.”
Unit Power Sales Agreement Complaint
The first of the additional complaints was filed by the LPSC, the APSC, the MPSC, and the City Council in
September 2020. The first complaint raises two sets of rate allegations: violations of the filed rate and a
corresponding request for refunds for prior periods; and elements of the Unit Power Sales Agreement are unjust and
unreasonable and a corresponding request for refunds for the 15-month refund period and changes to the Unit Power
Sales Agreement prospectively. Several of the filed rate allegations overlap with the previous complaints. The filed
rate allegations not previously raised are that System Energy: failed to provide a rate base credit to customers for the
“time value” of sale-leaseback lease payments collected from customers in advance of the time those payments were
due to the owner-lessors; improperly included certain sale-leaseback transaction costs in rate base as prepayments;
improperly included nuclear refueling outage costs in rate base; wrongly included categories of accumulated
deferred income taxes as increases to rate base; charged customers based on a higher equity ratio than would be
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appropriate due to excessive retained earnings; and did not correctly reflect money pool investments and
imprudently invested cash into the money pool. The elements of the Unit Power Sales Agreement that the
complaint alleges are unjust and unreasonable include: the current cash working capital allowance of zero, uncapped
recovery of incentive and executive compensation, lack of an equity re-opener, and recovery of lobbying and private
airplane travel expenses. The complaint also requests a rate investigation into the Unit Power Sales Agreement and
System Energy’s billing practices pursuant to section 206 of the Federal Power Act, including any issue relevant to
the Unit Power Sales Agreement and its inputs. System Energy filed its answer opposing the complaint in
November 2020. In its answer, System Energy argued that all of the claims raised in the complaint should be
dismissed and agreed that bill adjustment with respect to two discrete issues were justified. System Energy argued
that dismissal is warranted because all claims fall into one or more of the following categories: the claims have been
raised and are being litigated in another proceeding; the claims do not present a prima facie case and do not satisfy
the threshold burden to establish a complaint proceeding; the claims are premised on a theory or request relief that is
incompatible with federal law or FERC policy; the claims request relief that is inconsistent with the filed rate; the
claims are barred or waived by the legal doctrine of laches; and/or the claims have been fully addressed and do not
warrant further litigation. In December 2020, System Energy filed a bill adjustment report indicating that
$3.4 million had been credited to customers in connection with the two discrete issues concerning the inclusion of
certain accumulated deferred income taxes balances in rates. In January 2021 the complainants filed a response to
System Energy’s November 2020 answer, and in February 2021, System Energy filed a response to the
complainant’s response.
In May 2021 the FERC issued an order addressing the complaint, establishing a refund effective date of
September 21, 2020, establishing hearing procedures, and holding those procedures in abeyance pending the
FERC’s review of the initial decision in the Grand Gulf sale-leaseback renewal complaint discussed above. System
Energy agreed that the hearing should be held in abeyance but sought rehearing of FERC’s decision as related to
matters set for hearing that were beyond the scope of FERC’s jurisdiction or authority. The complainants sought
rehearing of FERC’s decision to hold the hearing in abeyance and filed a motion to proceed, which motion System
Energy subsequently opposed. In June 2021, System Energy’s request for rehearing was denied by operation of
law, and System Energy filed an appeal of FERC’s orders in the Court of Appeals for the Fifth Circuit. The appeal
was initially stayed for a period of 90 days, but the stay expired. In November 2021 the Fifth Circuit dismissed the
appeal as premature.
In August 2021 the FERC issued an order addressing System Energy’s and the complainants’ rehearing
requests. The FERC dismissed part of the complaint seeking an equity re-opener, maintained the abeyance for
issues related to the proceeding addressing the sale-leaseback renewal and uncertain tax positions, lifted the
abeyance for issues unrelated to that proceeding, and clarified the scope of the hearing.
In November 2021 the LPSC, the APSC, and the City Council filed direct testimony and requested the
FERC to order refunds for prior periods and prospective amendments to the Unit Power Sales Agreement. The
LPSC’s refund claims include, among other things, allegations that: (1) System Energy should not have included
certain sale-leaseback transaction costs in prepayments; (2) System Energy should have credited rate base to reflect
the time value of money associated with the advance collection of lease payments; (3) System Energy incorrectly
included refueling outage costs that were recorded in account 174 in rate base; and (4) System Energy should have
excluded several accumulated deferred income tax balances in account 190 from rate base. The LPSC is also
seeking a retroactive adjustment to retained earnings and capital structure in conjunction with the implementation of
its proposed refunds. In addition, the LPSC seeks amendments to the Unit Power Sales Agreement going forward
to address below-the-line costs, incentive compensation, the working capital allowance, litigation expenses, and the
2019 termination of the capital funds agreement. The APSC argues that: (1) System Energy should have included
borrowings from the Entergy system money pool in its determination of short-term debt in its cost of capital; and (2)
System Energy should credit customers with System Energy’s allocation of earnings on money pool investments.
The City Council alleges that System Energy has maintained excess cash on hand in the money pool and that
retention of excess cash was imprudent. Based on this allegation, the City Council’s witness recommends a refund
of approximately $98.8 million for the period 2004-September 2021 or other alternative relief. The City Council
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Notes to Financial Statements
further recommends that the FERC impose a hypothetical equity ratio such as 48.15% equity to capital on a
prospective basis.
In January 2022, System Energy filed answering testimony arguing that the FERC should not order refunds
for prior periods or any prospective amendments to the Unit Power Sales Agreement. In response to the LPSC’s
refund claims, System Energy argues, among other things, that: (1) the inclusion of sale-leaseback transaction costs
in prepayments was correct; (2) that the filed rate doctrine bars the request for a retroactive credit to rate base for the
time value of money associated with the advance collection of lease payments; (3) that an accounting
misclassification for deferred refueling outage costs has been corrected, caused no harm to customers, and requires
no refunds; and (4) that its accounting and ratemaking treatment of specified accumulated deferred income tax
balances in account 190 has been correct. System Energy further responds that no retroactive adjustment to retained
earnings or capital structure should be ordered because there is no general policy requiring such a remedy, and there
was no showing that the retained earnings element of the capital structure was incorrectly implemented. Further,
System Energy presented evidence that all of the costs that are being challenged were long known to the retail
regulators and were approved by them for inclusion in retail rates, and the attempt to retroactively challenge these
costs, some of which have been included in rates for decades, is unjust and unreasonable. In response to the LPSC’s
proposed going-forward adjustments, System Energy presents evidence to show that none of the proposed
adjustments are needed. On the issue of below-the-line expenses, during discovery procedures System Energy
identified a historical allocation error in certain months and agreed to provide a bill credit to customers to correct
the error. In response to the APSC’s claims, System Energy argues that the Unit Power Sales Agreement does not
include System Energy’s borrowings from the Entergy system money pool or earnings on deposits to the Entergy
system money pool in the determination of the cost of capital; and accordingly, no refunds are appropriate on those
issues. In response to the City Council’s claims, System Energy argues that it has reasonably managed its cash and
that the City Council’s theory of cash management is defective because it fails to adequately consider the relevant
cash needs of System Energy and it makes faulty presumptions about the operation of the Entergy system money
pool. System Energy further points out that the issue of its capital structure is already subject to pending FERC
litigation.
In March 2022 the FERC trial staff filed direct and answering testimony in response to the LPSC, the
APSC, and the City Council’s direct testimony. In its testimony, the FERC trial staff recommends refunds for two
primary reasons: (1) it concluded that System Energy should have excluded specified accumulated deferred income
tax balances in account 190 associated with rate refunds; and (2) it concluded that System Energy should have
excluded specified accumulated deferred income tax balances in account 190 associated with a deemed contract
satisfaction and reissuance that occurred in 2005. The FERC trial staff recommends refunds of $84.1 million,
exclusive of any tax gross-up or FERC interest. In addition, the FERC trial staff recommends the following
prospective modifications to the Unit Power Sales Agreement: (1) inclusion of a rate base credit to recognize the
time value of money associated with the advance collection of lease payments; (2) exclusion of executive incentive
compensation costs for members of the Office of the Chief Executive and long-term performance unit costs where
awards are based solely or primarily on financial metrics; and (3) exclusion of unvested, accrued amounts for stock
options, performance units, and restricted stock awards. With respect to issues that ultimately concern the
reasonableness of System Energy’s rate of return, the FERC trial staff states that it is unnecessary to consider such
issues in this proceeding, in light of the pending case concerning System Energy’s return on equity and capital
structure. On all other material issues raised by the LPSC, the APSC, and the City Council, the FERC trial staff
recommends either no refunds or no modification to the Unit Power Sales Agreement.
In April 2022, System Energy filed cross-answering testimony in response to the FERC trial staff’s
recommendations of refunds for the accumulated deferred income taxes issues and proposed modifications to the
Unit Power Sales Agreement for the executive incentive compensation issues. In June 2022 the FERC trial staff
submitted revised answering testimony, in which it recommended additional refunds associated with the
accumulated deferred income tax balances in account 190 associated with a deemed contract satisfaction and
reissuance that occurred in 2005. Based on the testimony revisions, the FERC trial staff’s recommended refunds
total $106.6 million, exclusive of any tax gross-up or FERC awarded interest. Also in June 2022, System Energy
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filed revised and supplemental cross-answering testimony to respond to the FERC trial staff’s testimony and oppose
its revised recommendation.
In May 2022 the LPSC, the APSC, and the City Council filed rebuttal testimony. The LPSC’s testimony
asserts new claims, including that: (1) certain of the sale-leaseback transaction costs may have been imprudently
incurred; (2) accumulated deferred income taxes associated with sale-leaseback transaction costs should have been
included in rate base; (3) accumulated deferred income taxes associated with federal investment tax credits should
have been excluded from rate base; (4) monthly net operating loss accumulated deferred income taxes should have
been excluded from rate base; and (5) several categories of proposed rate changes, including executive incentive
compensation, air travel, industry dues, and legal costs, also warrant historical refunds. The LPSC’s rebuttal
testimony argues that refunds for the alleged tariff violations and other claims must be calculated by rerunning the
Unit Power Sales Agreement formula rate; however, it includes estimates of refunds associated with some, but not
all, of its claims, totaling $286 million without interest. The City Council’s rebuttal testimony also proposes a new,
alternate theory and claim for relief regarding System Energy’s participation in the Entergy system money pool,
under which it calculates estimated refunds of approximately $51.7 million. The APSC’s rebuttal testimony agrees
with the LPSC’s direct testimony that retained earnings should be adjusted in a comprehensive refund calculation.
The testimony quantifies the estimated impacts of three issues: (1) a $1.5 million reduction in the revenue
requirement under the Unit Power Sales Agreement if System Energy’s borrowings from the money pool are
included in short-term debt; (2) a $1.9 million reduction in the revenue requirement if System Energy’s allocated
share of money pool earnings are credited through the Unit Power Sales Agreement; and (3) a $1.9 million
reduction in the revenue requirement for every $50 million of refunds ordered in a given year, without interest. In
total, excluding the settled issues noted below, the claims seek more than $700 million in refunds and interest, based
on charges to all Unit Power Sales Agreement purchasers including Entergy Mississippi.
In June 2022 a new procedural schedule was adopted, providing for additional rounds of testimony and for
the hearing to begin in September 2022. The hearing concluded in December 2022.
In November 2022, System Energy filed a partial settlement agreement with the APSC, the City Council,
and the LPSC that resolved the following issues raised in the Unit Power Sales Agreement complaint: advance
collection of lease payments, aircraft costs, executive incentive compensation, money pool borrowings, advertising
expenses, deferred nuclear refueling outage costs, industry association dues, and termination of the capital funds
agreement. The settlement provided that System Energy would provide a black-box refund of $18 million
(inclusive of interest), plus additional refund amounts with interest to be calculated for certain issues to be
distributed to Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans as the Utility operating companies
other than Entergy Mississippi purchasing under the Unit Power Sales Agreement. The settlement further provided
that if the APSC, the City Council, or the LPSC agrees to the global settlement System Energy entered into with the
MPSC (discussed below), and such global settlement includes a black-box refund amount, then the black-box
refund for this settlement agreement shall not be incremental or in addition to the global black-box refund amount.
The settlement agreement addressed other matters as well, including adjustments to rate base beginning in October
2022, exclusion of certain other costs, and inclusion of money pool borrowings, if any, in short-term debt within the
cost of capital calculation used in the Unit Power Sales Agreement. In April 2023 the FERC approved the
settlement agreement. The refund provided for in the settlement agreement was included in the May 2023 service
month bills under the Unit Power Sales Agreement.
In May 2023 the presiding ALJ issued an initial decision finding that System Energy should have excluded
multiple identified categories of accumulated deferred income taxes from rate base when calculating Unit Power
Sales Agreement bills. Based on this finding, the initial decision recommended refunds; System Energy estimates
that those refunds for Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans would total approximately
$116 million plus $152 million of interest through December 31, 2023. The initial decision also finds that the Unit
Power Sales Agreement should be modified such that a cash working capital allowance of negative $36.4 million is
applied prospectively. If the FERC ultimately orders these modifications to cash working capital be implemented,
the estimated annual revenue requirement impact is expected to be immaterial. On the other non-settled issues for
109 Entergy Corporation and Subsidiaries
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which the complainants sought refunds or changes to the Unit Power Sales Agreement, the initial decision ruled
against the complainants.
The initial decision is an interim step in the FERC litigation process, and an ALJ’s determination made in
an initial decision is not controlling on the FERC. System Energy disagrees with the ALJ’s findings concerning the
accumulated deferred income taxes issues and cash working capital. In July 2023, System Energy filed a brief on
exceptions to the initial decision’s accumulated deferred income taxes findings. Also in July 2023, the APSC, the
LPSC, the City Council, and the FERC trial staff filed separate briefs on exceptions. The APSC’s brief on
exceptions challenges the ALJ’s determinations on the money pool interest and retained earnings issues. The
LPSC’s brief on exceptions challenges the ALJ’s determinations regarding the sale-leaseback transaction costs,
legal fees, and retained earnings issues. The City Council’s brief on exceptions challenges the ALJ’s determinations
on the money pool and cash management issues. The FERC trial staff’s brief on exceptions challenges the ALJ’s
determinations on the cash working capital issue as well as certain of the accumulated deferred income taxes issues.
In August 2023 all parties filed separate briefs opposing exceptions. System Energy filed a brief opposing the
exceptions of the APSC, the LPSC, and the City Council. The APSC, the LPSC, and the City Council filed separate
briefs opposing the exceptions raised by System Energy and the FERC trial staff. The FERC trial staff filed its own
brief opposing certain exceptions raised by System Energy, the APSC, the LPSC, and the City Council. The case is
now pending a decision by the FERC. Refunds, if any, that might be required will become due only after the FERC
issues its order reviewing the initial decision.
Grand Gulf Prudence Complaint
The second of the additional complaints was filed at the FERC in March 2021 by the LPSC, the APSC, and
the City Council against System Energy, Entergy Services, Entergy Operations, and Entergy Corporation. The
second complaint contains two primary allegations. First, it alleges that, based on the plant’s capacity factor and
alleged safety performance, System Energy and the other respondents imprudently operated Grand Gulf during the
period 2016-2020, and it seeks refunds of at least $360 million in alleged replacement energy costs, in addition to
other costs, including those that can only be identified upon further investigation. Second, it alleges that the
performance and/or management of the 2012 extended power uprate of Grand Gulf was imprudent, and it seeks
refunds of all costs of the 2012 uprate that are determined to result from imprudent planning or management of the
project. In addition to the requested refunds, the complaint asks that the FERC modify the Unit Power Sales
Agreement to provide for full cost recovery only if certain performance indicators are met and to require pre-
authorization of capital improvement projects in excess of $125 million before related costs may be passed through
to customers in rates. In April 2021, System Energy and the other respondents filed their motion to dismiss and
answer to the complaint. System Energy requested that the FERC dismiss the claims within the complaint. With
respect to the claim concerning operations, System Energy argues that the complaint does not meet its legal burden
because, among other reasons, it fails to allege any specific imprudent conduct. With respect to the claim
concerning the uprate, System Energy argues that the complaint fails because, among other reasons, the
complainants’ own conduct prevents them from raising a serious doubt as to the prudence of the uprate. System
Energy also requests that the FERC dismiss other elements of the complaint, including the proposed modifications
to the Unit Power Sales Agreement, because they are not warranted. Additional responsive pleadings were filed by
the complainants and System Energy during the period from March through July 2021. In November 2022 the
FERC issued an order setting the complaint for settlement and hearing procedures. In February 2023 the FERC
issued an order denying rehearing and thereby affirming its order setting the complaint for settlement and hearing
procedures. In July 2023 the FERC chief ALJ terminated settlement procedures and appointed a presiding ALJ to
oversee hearing procedures. In September 2023 a procedural schedule for hearing procedures was established.
Pursuant to that schedule, the complainant’s testimony was filed in December 2023. System Energy’s answering
testimony is due April 2024, and additional rounds of testimony are due through October 2024. The hearing is
scheduled to begin in January 2025, with the presiding ALJ’s initial decision due in July 2025.
In September 2023 the LPSC authorized its staff to file an additional complaint concerning the prudence of
System Energy’s operation and management of Grand Gulf in the year 2022. In October 2023 the LPSC, the
110 Entergy Corporation and Subsidiaries
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APSC, and the City Council filed what they styled as an amended and supplemental complaint with the FERC
against System Energy, Entergy Services, and Entergy Operations. As discussed below in “System Energy
Settlement with the APSC”, the APSC has settled all of its claims related to this proceeding. The amended
complaint states that it is being filed for three primary purposes: (1) to include System Energy’s performance in
2021-2022 in the scope of the hearing; (2) to explicitly allege that System Energy’s inadequate performance,
excessive costs, unplanned outages, and costs attributable to safety violations violate the contractual obligation to
maintain and operate the plant in accordance with “good utility practice”; and (3) to provide and substantiate
allegations concerning the damages attributable to the alleged breach of contractual obligations. The amended
complaint alleges that potentially more than $1 billion in damages may be due. In November 2023, System Energy
and the other Entergy respondents filed an answer and motion to dismiss the amended and supplemental complaint.
System Energy Settlement with the MPSC
In June 2022, System Energy, Entergy Mississippi, and additional named Entergy parties involved in
thirteen docketed proceedings before the FERC filed with the FERC a partial settlement agreement and offer of
settlement. The settlement memorializes the Entergy parties’ agreement with the MPSC to globally resolve all
actual and potential claims between the Entergy parties and the MPSC associated with those FERC proceedings and
with System Energy’s past implementation of the Unit Power Sales Agreement. The Unit Power Sales Agreement
is a FERC-jurisdictional formula rate tariff for sales of energy and capacity from System Energy’s owned and
leased share of Grand Gulf to Entergy Mississippi, Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans.
Entergy Mississippi purchases the greatest single amount, nearly 40% of System Energy’s share of Grand Gulf,
after its additional purchases from affiliates are considered. The settlement therefore limits System Energy’s overall
refund exposure associated with the identified proceedings because they will be resolved completely as between the
Entergy parties and the MPSC.
The settlement provided for a black-box refund of $235 million from System Energy to Entergy
Mississippi, which was to be paid within 120 days of the settlement’s effective date (either the date of the FERC
approval of the settlement without material modification, or the date that all settling parties agree to accept
modifications or otherwise modify the settlement in response to a proposed material modification by the FERC). In
addition, beginning with the July 2022 service month, the settlement provided for Entergy Mississippi’s bills from
System Energy to be adjusted to reflect: an authorized rate of return on equity of 9.65%, a capital structure not to
exceed 52% equity, a rate base reduction for the advance collection of sale-leaseback rental costs, and the exclusion
of certain long-term incentive plan performance unit costs from rates. The settlement was approved by the MPSC
in June 2022 and the FERC in November 2022.
System Energy previously recorded a provision and associated liability of $37 million for elements of the
applicable litigation. In June 2022, System Energy recorded a regulatory charge of $551 million ($413 million net-
of-tax), increasing the regulatory liability to $588 million, which consisted of $235 million for the settlement with
the MPSC and $353 million for potential future refunds to Entergy Arkansas, Entergy Louisiana, and Entergy New
Orleans. System Energy paid the black-box refund of $235 million to Entergy Mississippi in November 2022. See
“System Energy Regulatory Liability for Pending Complaints” below for discussion of the regulatory liability
related to complaints against System Energy as of December 31, 2023.
System Energy Settlement with the APSC
In October 2023, System Energy, Entergy Arkansas, and additional named Entergy parties involved in
multiple docketed proceedings pending before the FERC reached a settlement in principle with the APSC to
globally resolve all of their actual and potential claims in those dockets and with System Energy’s past
implementation of the Unit Power Sales Agreement. The settlement also covers the amended and supplemental
complaint, discussed above in “Grand Gulf Prudence Complaint,” filed at the FERC in October 2023. System
Energy, Entergy Arkansas, additional Entergy parties, and the APSC filed the settlement agreement and supporting
materials with the FERC in November 2023. The Unit Power Sales Agreement is a FERC-jurisdictional formula
111 Entergy Corporation and Subsidiaries
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rate tariff for sales of energy and capacity from System Energy’s owned and leased share of Grand Gulf to Entergy
Mississippi, Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans. As discussed above in “System
Energy Settlement with the MPSC,” System Energy previously settled with the MPSC with respect to these
complaints before the FERC. Entergy Mississippi has nearly 40% of System Energy’s share of Grand Gulf’s
output, after its additional purchases from affiliates are considered. The settlements with both the APSC and the
MPSC represent almost 65% of System Energy’s share of the output of Grand Gulf.
The terms of the settlement with the APSC align with the $588 million global black box settlement reached
between System Energy and the MPSC in June 2022 and provide for Entergy Arkansas to receive a black box
refund of $142 million from System Energy, inclusive of $49.5 million already received by Entergy Arkansas from
System Energy. In November 2022 the FERC approved the System Energy settlement with the MPSC and stated
that the settlement “appears to be fair and reasonable and in the public interest.”
In addition to the black box refund of $142 million described above, beginning with the November 2023
service month, the settlement provides for Entergy Arkansas’s bills from System Energy to be adjusted to reflect an
authorized rate of return on equity of 9.65% and a capital structure not to exceed 52% equity.
In December 2023 the FERC trial staff and the LPSC filed comments. The FERC trial staff commented
that it “believes that the settlement is fair, and in the public interest,” and neither it nor the LPSC oppose the
settlement. In December 2023 the $93 million black box refund to Entergy Arkansas was reclassified from long-
term other regulatory liabilities to accounts payable - associated companies on System Energy’s balance sheet. If
the FERC approves the filed settlement in accordance with its terms, it will become binding upon the Entergy
parties and the APSC.
System Energy Regulatory Liability for Pending Complaints
Prior to June 2022, System Energy recorded a provision and associated liability of $37 million for elements
of the complaints against System Energy. In June 2022, as discussed in “System Energy Settlement with the
MPSC” above, System Energy recorded a regulatory charge of $551 million ($413 million net-of-tax), increasing
System Energy’s regulatory liability to $588 million, which consisted of $235 million for the settlement with the
MPSC and $353 million for potential future refunds to Entergy Arkansas, Entergy New Orleans, and Entergy
Louisiana. The $142 million of refunds for Entergy Arkansas, discussed above in “System Energy Settlement
with the APSC” is covered within the $353 million previously recorded. System Energy paid the black-box refund
of $235 million to Entergy Mississippi in November 2022. As discussed above in “Grand Gulf Sale-leaseback
Renewal Complaint and Uncertain Tax Position Rate Base Issue,” in January 2023 System Energy paid refunds
of $103.5 million as a result of the FERC’s order in December 2022 in that proceeding and recouped $40.5 million
of the $103.5 million from Entergy Louisiana and Entergy New Orleans in October 2023. In addition, as discussed
above in “Unit Power Sales Agreement Complaint,” a black-box refund of $18 million was made by System Energy
in 2023 in connection with a partial settlement in that proceeding.
Based on analysis of the pending complaints against System Energy and potential future settlement
negotiations with the LPSC and the City Council, in third quarter 2023, System Energy recorded a regulatory charge
of $40 million to increase System Energy’s regulatory liability related to complaints against System Energy. As
discussed above, in December 2023 the $93 million black box refund to Entergy Arkansas was reclassified from the
regulatory liability to accounts payable - associated companies on System Energy’s balance sheet. System Energy’s
remaining regulatory liability related to complaints against System Energy as of December 31, 2023 is $178 million.
This regulatory liability is consistent with the settlement agreements reached with the MPSC and the APSC, as
described above, taking into account amounts already or expected to be refunded.
112 Entergy Corporation and Subsidiaries
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Unit Power Sales Agreement
System Energy Formula Rate Annual Protocols Formal Challenge Concerning 2020 Calendar Year Bills
System Energy’s Unit Power Sales Agreement includes formula rate protocols that provide for the
disclosure of cost inputs, an opportunity for informal discovery procedures, and a challenge process. In February
2022, pursuant to the protocols procedures, the LPSC, the APSC, the MPSC, the City Council, and the Mississippi
Public Utilities Staff filed with the FERC a formal challenge to System Energy’s implementation of the formula rate
during calendar year 2020. The formal challenge alleges: (1) that it was imprudent for System Energy to accept the
IRS’s partial acceptance of a previously uncertain tax position; (2) that System Energy should have delayed
recording the result of the IRS’s partial acceptance of the previously uncertain tax position until after internal tax
allocation payments were made; (3) that the equity ratio charged in rates was excessive; (4) that sale-leaseback
rental payments should have been excluded from rates; and (5) that all issues in the ongoing Unit Power Sales
Agreement complaint proceeding should also be reflected in calendar year 2020 bills. While System Energy
disagrees that any refunds are owed for the 2020 calendar year bills, the formal challenge estimates that the
financial impact of the first through fourth allegations is approximately $53 million; it does not provide an estimate
of the financial impact of the fifth allegation. However, $17 million of the $53 million is attributable to the sale-
leaseback rental payments. These were refunded to Entergy Arkansas, Entergy Louisiana, and Entergy New
Orleans in January 2023 as a result of the FERC order received in the Grand Gulf sale-leaseback renewal complaint
and uncertain tax position rate base issue. Entergy Mississippi’s portion of the refund was included within the
settlement with the MPSC, as discussed below.
In March 2022, System Energy filed an answer to the formal challenge in which it requested that the FERC
deny the formal challenge as a matter of law, or else hold the proceeding in abeyance pending the resolution of
related dockets.
System Energy Formula Rate Annual Protocols Formal Challenge Concerning 2021 Calendar Year Bills
In March 2023, pursuant to the protocols procedures discussed above, the LPSC, the APSC, and the City
Council filed with the FERC a formal challenge to System Energy’s implementation of the formula rate during
calendar year 2021. The formal challenge alleges: (1) that it was imprudent for System Energy to accept the IRS’s
partial acceptance of a previously uncertain tax position; (2) that System Energy used incorrect inputs for retained
earnings that are used to determine the capital structure; (3) that the equity ratio charged in rates was excessive; and
(4) that all issues in the ongoing Unit Power Sales Agreement complaint proceeding should also be reflected in
calendar year 2021 bills. The first, third, and fourth allegations are identical to issues that were raised in the formal
challenge to the calendar year 2020 bills. The formal challenge to the calendar year 2021 bills states that the impact
of the first allegation is “tens of millions of dollars,” but it does not provide an estimate of the financial impact of
the remaining allegations.
In May 2023, System Energy filed an answer to the formal challenge in which it requested that the FERC
deny the formal challenge as a matter of law, or else hold the proceeding in abeyance pending the resolution of
related dockets.
Depreciation Amendment Proceeding
In December 2021, System Energy submitted to the FERC proposed amendments to the Unit Power Sales
Agreement to adopt updated rates for use in calculating Grand Gulf plant depreciation and amortization expenses.
The proposed amendments would result in higher charges to the Utility operating companies that buy capacity and
energy from System Energy under the Unit Power Sales Agreement. In February 2022 the FERC accepted System
Energy’s proposed increased depreciation rates with an effective date of March 1, 2022, subject to refund pending
the outcome of the settlement and/or hearing procedures. In June 2023 System Energy filed with the FERC an
unopposed offer of settlement that it had negotiated with intervenors to the proceeding. In August 2023 the FERC
113 Entergy Corporation and Subsidiaries
Notes to Financial Statements
approved the settlement, which resolves the proceeding. In third quarter 2023, System Energy recorded a reduction
in depreciation expense of $41 million representing the cumulative difference in depreciation expense resulting
from the depreciation rates used from March 2022 through June 2023 and the depreciation rates included in the
settlement filing approved by the FERC. In October 2023, System Energy filed a refund report with the FERC.
The refund provided for in the refund report was included in the September 2023 service month bills under the Unit
Power Sales Agreement. No comments or protests to the refund report were filed.
Pension Costs Amendment Proceeding
In October 2021, System Energy submitted to the FERC proposed amendments to the Unit Power Sales
Agreement to include in rate base the prepaid and accrued pension costs associated with System Energy’s qualified
pension plans. Based on data ending in 2020, the increased annual revenue requirement associated with the filing is
approximately $8.9 million. In March 2022 the FERC accepted System Energy’s proposed amendments with an
effective date of December 1, 2021, subject to refund pending the outcome of the settlement and/or hearing
procedures. In August 2023 the FERC chief ALJ terminated settlement procedures and designated a presiding ALJ
to oversee hearing procedures. In October 2023, System Energy filed direct testimony in support of its proposed
amendments. Under the procedural schedule, testimony will be filed through April 2024, and the hearing is
scheduled to begin in May 2024. The presiding ALJ’s initial decision is expected to be due in September 2024.
Storm Cost Recovery Filings with Retail Regulators
Entergy Louisiana
Hurricane Laura, Hurricane Delta, Hurricane Zeta, Winter Storm Uri, and Hurricane Ida
In August 2020 and October 2020, Hurricane Laura, Hurricane Delta, and Hurricane Zeta caused significant
damage to portions of Entergy Louisiana’s service area. The storms resulted in widespread outages, significant
damage to distribution and transmission infrastructure, and the loss of sales during the outages. Additionally, as a
result of Hurricane Laura’s extensive damage to the grid infrastructure serving the impacted area, large portions of
the underlying transmission system required nearly a complete rebuild.
In October 2020, Entergy Louisiana filed an application at the LPSC seeking approval of certain ratemaking
adjustments in connection with the issuance of shorter-term mortgage bonds to provide interim financing for
restoration costs associated with Hurricane Laura, Hurricane Delta, and Hurricane Zeta. Subsequently, Entergy
Louisiana and the LPSC staff filed a joint motion seeking approval to exclude from the derivation of Entergy
Louisiana’s capital structure and cost rate of debt for ratemaking purposes, including the allowance for funds used
during construction, shorter-term debt up to $1.1 billion issued by Entergy Louisiana to fund costs associated with
Hurricane Laura, Hurricane Delta, and Hurricane Zeta costs on an interim basis. In November 2020 the LPSC
issued an order approving the joint motion, and Entergy Louisiana issued $1.1 billion of 0.62% Series mortgage
bonds due November 2023. Also in November 2020, Entergy Louisiana withdrew $257 million from its funded
storm reserves.
In February 2021 two winter storms (collectively, Winter Storm Uri) brought freezing rain and ice to
Louisiana. Ice accumulation sagged or downed trees, limbs, and power lines, causing damage to Entergy
Louisiana’s transmission and distribution systems. The additional weight of ice caused trees and limbs to fall into
power lines and other electric equipment. When the ice melted, it affected vegetation and electrical equipment,
causing additional outages. As discussed above in “Fuel and purchased power cost recovery,” Entergy Louisiana
recovered the incremental fuel costs associated with Winter Storm Uri over a five-month period from April 2021
through August 2021.
In April 2021, Entergy Louisiana filed an application with the LPSC relating to Hurricane Laura, Hurricane
Delta, Hurricane Zeta, and Winter Storm Uri restoration costs and in July 2021, Entergy Louisiana made a
114 Entergy Corporation and Subsidiaries
Notes to Financial Statements
supplemental filing updating the total restoration costs. Total restoration costs for the repair and/or replacement of
Entergy Louisiana’s electric facilities damaged by these storms were estimated to be approximately $2.06 billion,
including approximately $1.68 billion in capital costs and approximately $380 million in non-capital costs.
Including carrying costs through January 2022, Entergy Louisiana sought an LPSC determination that $2.11 billion
was prudently incurred and, therefore, was eligible for recovery from customers. Additionally, Entergy Louisiana
requested that the LPSC determine that re-establishment of a storm escrow account to the previously authorized
amount of $290 million was appropriate. In July 2021, Entergy Louisiana supplemented the application with a
request regarding the financing and recovery of the recoverable storm restoration costs. Specifically, Entergy
Louisiana requested approval to securitize its restoration costs pursuant to Louisiana Act 55 financing, as
supplemented by Act 293 of the Louisiana Legislature’s Regular Session of 2021.
In August 2021, Hurricane Ida caused extensive damage to Entergy Louisiana’s distribution and, to a lesser
extent, transmission systems resulting in widespread power outages. In September 2021, Entergy Louisiana filed an
application at the LPSC seeking approval of certain ratemaking adjustments in connection with the issuance of
approximately $1 billion of shorter-term mortgage bonds to provide interim financing for restoration costs
associated with Hurricane Ida, which bonds were issued in October 2021. Also in September 2021, Entergy
Louisiana sought approval for the creation and funding of a $1 billion restricted escrow account for Hurricane Ida
related restoration costs, subject to a subsequent prudence review.
After filing of testimony by the LPSC staff and intervenors, which generally supported or did not oppose
Entergy Louisiana’s requests in regard to Hurricane Laura, Hurricane Delta, Hurricane Zeta, Winter Storm Uri, and
Hurricane Ida, the parties negotiated and executed an uncontested stipulated settlement which was filed with the
LPSC in February 2022. The settlement agreement contained the following key terms: $2.1 billion of restoration
costs from Hurricane Laura, Hurricane Delta, Hurricane Zeta, and Winter Storm Uri were prudently incurred and
eligible for recovery; carrying costs of $51 million were recoverable; a $290 million cash storm reserve should be
re-established; a $1 billion reserve should be established to partially pay for Hurricane Ida restoration costs; and
Entergy Louisiana was authorized to finance $3.186 billion utilizing the securitization process authorized by Act 55,
as supplemented by Act 293. The LPSC issued an order approving the settlement in March 2022. As a result of the
financing order, Entergy Louisiana reclassified $1.942 billion from utility plant to other regulatory assets.
In May 2022 the securitization financing closed, resulting in the issuance of $3.194 billion principal amount
of bonds by Louisiana Local Government Environmental Facilities and Community Development Authority
(LCDA), a political subdivision of the State of Louisiana. The securitization was authorized pursuant to the
Louisiana Utilities Restoration Corporation Act, Part VIII of Chapter 9 of Title 45 of the Louisiana Revised
Statutes, as supplemented by Act 293 of the Louisiana legislature approved in 2021. The LCDA loaned the
proceeds to the LURC. Pursuant to Act 293, the LURC contributed the net bond proceeds to a State legislatively
authorized and LURC-sponsored trust, Restoration Law Trust I (the storm trust I).
Pursuant to Act 293, the net proceeds of the bonds were used by the storm trust I to purchase
31,635,718.7221 Class A preferred, non-voting membership interest units (the preferred membership interests)
issued by Entergy Finance Company. Entergy Finance Company is required to make annual distributions
(dividends) commencing on December 15, 2022 on the preferred membership interests issued to the storm trust I.
These annual dividends received by the storm trust I will be distributed to Entergy Louisiana and the LURC, as
beneficiaries of the storm trust I. Specifically, 1% of the annual dividends received by the storm trust I will be
distributed to the LURC, for the benefit of customers, and 99% will be distributed to Entergy Louisiana, net of
storm trust expenses. The preferred membership interests have a stated annual cumulative cash dividend rate of 7%
and a liquidation price of $100 per unit. The terms of the preferred membership interests include certain financial
covenants to which Entergy Finance Company is subject. Semi-annual redemptions of the preferred membership
interests, subject to certain conditions, are expected to occur over the next 15 years.
Entergy and Entergy Louisiana do not report the bonds issued by the LCDA on their balance sheets because
the bonds are the obligation of the LCDA. The bonds are secured by system restoration property, which is the right
115 Entergy Corporation and Subsidiaries
Notes to Financial Statements
granted by law to the LURC to collect a system restoration charge from customers. The system restoration charge is
adjusted at least semi-annually to ensure that it is sufficient to service the bonds. Entergy Louisiana collects the
system restoration charge on behalf of the LURC and remits the collections to the bond indenture trustee. Entergy
Louisiana began collecting the system restoration charge effective with the first billing cycle of June 2022 and the
system restoration charge is expected to remain in place for up to 15 years. Entergy and Entergy Louisiana do not
report the collections as revenue because Entergy Louisiana is merely acting as a billing and collection agent for the
LCDA and the LURC. In the remote possibility that the system restoration charge, as well as any funds in the
excess subaccount and funds in the debt service reserve account, are insufficient to service the bonds resulting in a
payment default, the storm trust I is required to liquidate Entergy Finance Company preferred membership interests
in an amount equal to what would be required to cure the default. The estimated value of this indirect guarantee is
immaterial.
From the proceeds from the issuance of the preferred membership interests, Entergy Finance Company
distributed $1.4 billion to its parent, Entergy Holdings Company, LLC, a company wholly-owned and consolidated
by Entergy. Subsequently, Entergy Holdings Company liquidated, distributing the $1.4 billion it received from
Entergy Finance Company to Entergy Louisiana as holder of 6,843,780.24 units of Class A, 4,126,940.15 units of
Class B, and 2,935,152.69 units of Class C preferred membership interests. Entergy Louisiana had acquired these
preferred membership interests with proceeds from previous securitizations of storm restoration costs. Entergy
Finance Company loaned the remaining $1.7 billion from the preferred membership interests proceeds to Entergy
which used the cash to redeem $650 million of 4.00% Series senior notes due July 2022 and indirectly contributed
$1 billion to Entergy Louisiana as a capital contribution.
Entergy Louisiana used the $1 billion capital contribution to fund its Hurricane Ida escrow account and
subsequently withdrew the $1 billion from the escrow account. With a portion of the $1 billion withdrawn from the
escrow account and the $1.4 billion from the Entergy Holdings Company liquidation, Entergy Louisiana deposited
$290 million in a restricted escrow account as a storm damage reserve for future storms, used $1.2 billion to repay
its unsecured term loan due June 2023, and used $435 million to redeem a portion of its 0.62% Series mortgage
bonds due November 2023.
As discussed in Note 3 to the financial statements, the securitization resulted in recognition of a reduction of
income tax expense of approximately $290 million by Entergy Louisiana. Entergy’s recognition of reduced income
tax expense was partially offset by other tax charges resulting in a net reduction of income tax expense of
$283 million. In recognition of obligations described in an LPSC ancillary order issued as part of the securitization
regulatory proceeding, Entergy Louisiana recorded a $224 million ($165 million net-of-tax) regulatory charge and a
corresponding regulatory liability to reflect its obligation to provide credits to its customers.
As discussed in Note 17 to the financial statements, Entergy Louisiana consolidates the storm trust I as a
variable interest entity and the LURC’s 1% beneficial interest is presented as noncontrolling interest in the financial
statements. In second quarter 2022, Entergy Louisiana recorded a charge of $31.6 million in other income to reflect
the LURC’s beneficial interest in the storm trust I.
In April 2022, Entergy Louisiana filed an application with the LPSC relating to Hurricane Ida restoration
costs. Total restoration costs for the repair and/or replacement of Entergy Louisiana’s electric facilities damaged by
Hurricane Ida were estimated to be approximately $2.54 billion, including approximately $1.96 billion in capital
costs and approximately $586 million in non-capital costs. Including carrying costs of $57 million through
December 2022, Entergy Louisiana was seeking an LPSC determination that $2.60 billion was prudently incurred
and, therefore, eligible for recovery from customers. As part of this filing, Entergy Louisiana also was seeking an
LPSC determination that an additional $32 million in costs associated with the restoration of Entergy Louisiana’s
electric facilities damaged by Hurricane Laura, Hurricane Delta, and Hurricane Zeta as well as Winter Storm Uri
was prudently incurred. This amount was exclusive of the requested $3 million in carrying costs through December
2022. In total, Entergy Louisiana was requesting an LPSC determination that $2.64 billion was prudently incurred
and, therefore, eligible for recovery from customers. As discussed above, in March 2022 the LPSC approved
116 Entergy Corporation and Subsidiaries
Notes to Financial Statements
financing of a $1 billion storm escrow account from which funds were withdrawn to finance costs associated with
Hurricane Ida restoration. In June 2022, Entergy Louisiana supplemented the application with a request regarding
the financing and recovery of the recoverable storm restoration costs. Specifically, Entergy Louisiana requested
approval to securitize its restoration costs pursuant to Louisiana Act 55 financing, as supplemented by Act 293 of
the Louisiana Legislature’s Regular Session of 2021. In October 2022 the LPSC staff recommended a finding that
the requested storm restoration costs of $2.64 billion, including associated carrying costs of $59.1 million, were
prudently incurred and eligible for recovery from customers. The LPSC staff further recommended approval of
Entergy Louisiana’s plans to securitize these costs, net of the $1 billion in funds withdrawn from the storm escrow
account described above. The parties negotiated and executed an uncontested stipulated settlement which was filed
with the LPSC in December 2022. The settlement agreement contains the following key terms: $2.57 billion of
restoration costs from Hurricane Ida, Hurricane Laura, Hurricane Delta, Hurricane Zeta, and Winter Storm Uri were
prudently incurred and eligible for recovery; carrying costs of $59.2 million were recoverable; and Entergy
Louisiana was authorized to finance $1.657 billion utilizing the securitization process authorized by Act 55, as
supplemented by Act 293. A procedural motion to consider the uncontested settlement at the December 2022 LPSC
meeting did not pass and the settlement was not voted on. In January 2023 an ALJ with the LPSC conducted a
settlement hearing to receive the uncontested settlement and supporting testimony into evidence and issued a report
of proceedings, which allows the LPSC to consider the uncontested settlement without the procedural motion that
did not pass in December. In January 2023, the LPSC approved the stipulated settlement subject to certain
modifications. These modifications include the recognition of accumulated deferred income tax benefits related to
damaged assets and system restoration costs as a reduction of the amount authorized to be financed utilizing the
securitization process authorized by Act 55, as supplemented by Act 293, from $1.657 billion to $1.491 billion.
These modifications did not affect the LPSC’s conclusion that all system restoration costs sought by Entergy
Louisiana were reasonable and prudent. In February 2023 the Louisiana Bond Commission voted to authorize the
LCDA to issue the bonds authorized in the LPSC’s financing order.
In March 2023 the Hurricane Ida securitization financing closed, resulting in the issuance of approximately
$1.491 billion principal amount of bonds by the LCDA and a remaining regulatory asset of $180 million to be
recovered through the exclusion of the accumulated deferred income taxes related to damaged assets and system
restoration costs from the determination of future rates. The securitization was authorized pursuant to the Louisiana
Utilities Restoration Corporation Act, Part VIII of Chapter 9 of Title 45 of the Louisiana Revised Statutes, as
supplemented by Act 293 of the Louisiana Legislature’s Regular Session of 2021. The LCDA loaned the proceeds
to the LURC. Pursuant to Act 293, the LURC contributed the net bond proceeds to a State legislatively authorized
and LURC-sponsored trust, Restoration Law Trust II (the storm trust II).
Pursuant to Act 293, the net proceeds of the bonds were used by the storm trust II to purchase
14,576,757.48 Class B preferred, non-voting membership interest units (the preferred membership interests) issued
by Entergy Finance Company. Entergy Finance Company is required to make annual distributions (dividends)
commencing on December 15, 2023 on the preferred membership interests issued to the storm trust II. These
annual dividends received by the storm trust II will be distributed to Entergy Louisiana and the LURC, as
beneficiaries of the storm trust II. Specifically, 1% of the annual dividends received by the storm trust II will be
distributed to the LURC for the benefit of customers, and 99% will be distributed to Entergy Louisiana, net of storm
trust expenses. The preferred membership interests have a stated annual cumulative cash dividend rate of 7.5% and
a liquidation price of $100 per unit. The terms of the preferred membership interests include certain financial
covenants to which Entergy Finance Company is subject. Semi-annual redemptions of the preferred membership
interests, subject to certain conditions, are expected to occur over the next 15 years.
Entergy and Entergy Louisiana do not report the bonds issued by the LCDA on their balance sheets because
the bonds are the obligation of the LCDA. The bonds are secured by system restoration property, which is the right
granted by law to the LURC to collect a system restoration charge from customers. The system restoration charge is
adjusted at least semi-annually to ensure that it is sufficient to service the bonds. Entergy Louisiana collects the
system restoration charge on behalf of the LURC and remits the collections to the bond indenture trustee. Entergy
Louisiana began collecting the system restoration charge effective with the first billing cycle of April 2023 and the
117 Entergy Corporation and Subsidiaries
Notes to Financial Statements
system restoration charge is expected to remain in place for up to 15 years. Entergy and Entergy Louisiana do not
report the collections as revenue because Entergy Louisiana is merely acting as a billing and collection agent for the
LCDA and the LURC. In the remote possibility that the system restoration charge, as well as any funds in the
excess subaccount and funds in the debt service reserve account, are insufficient to service the bonds resulting in a
payment default, the storm trust II is required to liquidate Entergy Finance Company preferred membership interests
in an amount equal to what would be required to cure the default. The estimated value of this indirect guarantee is
immaterial.
From the proceeds from the issuance of the preferred membership interests, Entergy Finance Company
loaned approximately $1.5 billion to Entergy, which was indirectly contributed to Entergy Louisiana as a capital
contribution.
As discussed in Note 3 to the financial statements, the securitization resulted in recognition of a net
reduction of income tax expense of approximately $133 million, after taking into account a provision for uncertain
tax positions, by Entergy Louisiana. Entergy’s recognition of reduced income tax expense was offset by other tax
charges resulting in a net reduction of income tax expense of $129 million, after taking into account a provision for
uncertain tax positions. In recognition of its obligations described in an LPSC ancillary order issued as part of the
securitization regulatory proceeding, Entergy Louisiana recorded in first quarter 2023 a $103 million ($76 million
net-of-tax) regulatory charge and a corresponding regulatory liability to reflect its obligation to provide credits to its
customers.
As discussed in Note 6 and Note 17 to the financial statements, Entergy Louisiana consolidates the storm
trust II as a variable interest entity and the LURC’s 1% beneficial interest is presented as noncontrolling interest in
the financial statements. In first quarter 2023, Entergy Louisiana recorded a charge of $14.6 million in other
income to reflect the LURC’s beneficial interest in the storm trust II.
Hurricane Isaac
In August 2012, Hurricane Isaac caused extensive damage to Entergy Louisiana’s service area. In June
2014 the LPSC authorized Entergy Louisiana to utilize Louisiana Act 55 financing for Hurricane Isaac system
restoration costs. Entergy Louisiana committed to pass on to customers a minimum of $30.8 million of customer
benefits through annual customer credits of approximately $6.2 million for five years. Approvals for the Act 55
financings were obtained from the LURC and the Louisiana State Bond Commission.
In August 2014 the LCDA issued $314.85 million in bonds under Louisiana Act 55. From the $309 million
of bond proceeds loaned by the LCDA to the LURC, the LURC deposited $16 million in a restricted escrow account
as a storm damage reserve for Entergy Louisiana and transferred $293 million directly to Entergy
Louisiana. Entergy Louisiana used the $293 million received from the LURC to acquire 2,935,152.69 Class C
preferred, non-voting, membership interest units of Entergy Holdings Company that carry a 7.5% annual
distribution rate. Distributions were payable quarterly commencing on September 15, 2014, and the membership
interests had a liquidation price of $100 per unit. The preferred membership interests were callable at the option of
Entergy Holdings Company after ten years under the terms of the LLC agreement. The terms of the membership
interests included certain financial covenants to which Entergy Holdings Company was subject, including the
requirement to maintain a net worth of at least $1.75 billion. As discussed above in “Hurricane Laura, Hurricane
Delta, Hurricane Zeta, Winter Storm Uri, and Hurricane Ida”, in May 2022, Entergy Holdings Company liquidated
and distributed cash to Entergy Louisiana as holder of the 2,935,152.69 units of Class C preferred membership
interests.
Entergy and Entergy Louisiana do not report the bonds issued by the LCDA on their balance sheets because
the bonds are the obligation of the LCDA and there is no recourse against Entergy or Entergy Louisiana in the event
of a bond default. To service the bonds, Entergy Louisiana collects a system restoration charge on behalf of the
118 Entergy Corporation and Subsidiaries
Notes to Financial Statements
LURC and remits the collections to the bond indenture trustee. Entergy and Entergy Louisiana do not report the
collections as revenue because Entergy Louisiana is merely acting as the billing and collection agent for the state.
Hurricane Gustav and Hurricane Ike
In September 2008, Hurricane Gustav and Hurricane Ike caused catastrophic damage to Entergy
Louisiana’s service territory. In December 2009, Entergy Louisiana entered into a stipulation agreement with the
LPSC staff regarding its storm costs. In March and April 2010, Entergy Louisiana and other parties to the
proceeding filed with the LPSC an uncontested stipulated settlement that included Entergy Louisiana’s proposal to
utilize Act 55 financing, which included a commitment to pass on to customers a minimum of $43.3 million of
customer benefits through a prospective annual rate reduction of $8.7 million for five years. In April 2010 the
LPSC approved the settlement and subsequently issued financing orders and a ratemaking order intended to
facilitate the implementation of the Act 55 financings. In June 2010 the Louisiana State Bond Commission
approved the Act 55 financing. The settlement agreement allowed for an adjustment to the credits if there was a
change in the applicable federal or state income tax rate. As a result of the enactment of the Tax Cuts and Jobs Act,
in December 2017, and the lowering of the federal corporate income tax rate from 35% to 21%, the Louisiana Act
55 financing savings obligation regulatory liability related to Hurricane Gustav and Hurricane Ike was reduced by
$2.7 million, with a corresponding increase to Other regulatory credits on the income statement. The effects of the
Tax Cuts and Jobs Act are discussed further in Note 3 to the financial statements.
In July 2010 the LCDA issued two series of bonds totaling $713.0 million under Act 55. From the
$702.7 million of bond proceeds loaned by the LCDA to the LURC, the LURC deposited $290 million in a
restricted escrow account as a storm damage reserve for Entergy Louisiana and transferred $412.7 million directly
to Entergy Louisiana. From the bond proceeds received by Entergy Louisiana from the LURC, Entergy Louisiana
used $412.7 million to acquire 4,126,940.15 Class B preferred, non-voting, membership interest units of Entergy
Holdings Company that carry a 9% annual distribution rate. Distributions were payable quarterly commencing on
September 15, 2010, and the membership interests had a liquidation price of $100 per unit. The preferred
membership interests were callable at the option of Entergy Holdings Company after ten years under the terms of
the LLC agreement. The terms of the membership interests included certain financial covenants to which Entergy
Holdings Company was subject, including the requirement to maintain a net worth of at least $1 billion. As
discussed above in “Hurricane Laura, Hurricane Delta, Hurricane Zeta, Winter Storm Uri, and Hurricane Ida”, in
May 2022, Entergy Holdings Company liquidated and distributed cash to Entergy Louisiana as holder of the
4,126,940.15 units of Class B preferred membership interests.
The bonds were repaid in 2022. Entergy and Entergy Louisiana did not report the bonds issued by the
LCDA on their balance sheets because the bonds were the obligation of the LCDA, and there was no recourse
against Entergy or Entergy Louisiana in the event of a bond default. To service the bonds, Entergy Louisiana
collected a system restoration charge on behalf of the LURC and remitted the collections to the bond indenture
trustee. Entergy and Entergy Louisiana do not report the collections as revenue because Entergy Louisiana is
merely acting as the billing and collection agent for the state.
Hurricane Katrina and Hurricane Rita
In August and September 2005, Hurricanes Katrina and Rita caused catastrophic damage to Entergy
Louisiana’s service territory. In March 2008, Entergy Louisiana and the LURC filed at the LPSC an application
requesting that the LPSC grant a financing order authorizing the financing of Entergy Louisiana storm costs, storm
reserves, and issuance costs pursuant to Louisiana Act 55. Entergy Louisiana also filed an application requesting
LPSC approval for ancillary issues including the mechanism to flow charges and savings to customers via a storm
cost offset rider. In April 2008 the Louisiana Public Facilities Authority (LPFA), which is the issuer of the bonds
pursuant to the Act 55 financing, approved requests for the Act 55 financing. Also in April 2008, Entergy
Louisiana and the LPSC staff filed with the LPSC an uncontested stipulated settlement that included Entergy
Louisiana’s proposal under the Act 55 financing, which included a commitment to pass on to customers a minimum
119 Entergy Corporation and Subsidiaries
Notes to Financial Statements
of $40 million of customer benefits through a prospective annual rate reduction of $8 million for five years. The
LPSC subsequently approved the settlement and issued two financing orders and one ratemaking order intended to
facilitate implementation of the Act 55 financing. In May 2008 the Louisiana State Bond Commission granted final
approval of the Act 55 financing. The settlement agreement allowed for an adjustment to the credits if there was a
change in the applicable federal or state income tax rate. As a result of the enactment of the Tax Cuts and Jobs Act,
in December 2017, and the lowering of the federal corporate income tax rate from 35% to 21%, the Louisiana Act
55 financing savings obligation regulatory liability related to Hurricanes Katrina and Rita was reduced by
$22.3 million, with a corresponding increase to Other regulatory credits on the income statement. The effects of the
Tax Cuts and Jobs Act are discussed further in Note 3 to the financial statements.
In July 2008 the LPFA issued $687.7 million in bonds under the aforementioned Act 55. From the
$679 million of bond proceeds loaned by the LPFA to the LURC, the LURC deposited $152 million in a restricted
escrow account as a storm damage reserve for Entergy Louisiana and transferred $527 million directly to Entergy
Louisiana. From the bond proceeds received by Entergy Louisiana from the LURC, Entergy Louisiana invested
$545 million, including $17.8 million that was withdrawn from the restricted escrow account as approved by the
April 16, 2008 LPSC orders, in exchange for 5,449,861.85 Class A preferred, non-voting, membership interest units
of Entergy Holdings Company that carry a 10% annual distribution rate. In August 2008 the LPFA issued
$278.4 million in bonds under the aforementioned Act 55. From the $274.7 million of bond proceeds loaned by the
LPFA to the LURC, the LURC deposited $87 million in a restricted escrow account as a storm damage reserve for
Entergy Louisiana and transferred $187.7 million directly to Entergy Louisiana. From the bond proceeds received
by Entergy Louisiana from the LURC, Entergy Louisiana invested $189.4 million, including $1.7 million that was
withdrawn from the restricted escrow account as approved by the April 16, 2008 LPSC orders, in exchange for
1,893,918.39 Class A preferred, non-voting, membership interest units of Entergy Holdings Company that carry a
10% annual distribution rate. Distributions were payable quarterly commencing on September 15, 2008 and had a
liquidation price of $100 per unit. The preferred membership interests were callable at the option of Entergy
Holdings Company after ten years under the terms of the LLC agreement. The terms of the membership interests
included certain financial covenants to which Entergy Holdings Company was subject, including the requirement to
maintain a net worth of at least $1 billion. In February 2012, Entergy Louisiana sold 500,000 of its Class A
preferred membership units in Entergy Holdings Company to a third party. Those preferred membership units were
subsequently repurchased by Entergy Holdings Company in March 2019. As discussed above in “Hurricane Laura,
Hurricane Delta, Hurricane Zeta, Winter Storm Uri, and Hurricane Ida”, in May 2022, Entergy Holdings Company
liquidated and distributed cash to Entergy Louisiana as holder of the remaining 6,843,780.24 units of Class A
preferred membership interests.
The bonds were repaid in 2018. Entergy and Entergy Louisiana did not report the bonds issued by the
LPFA on their balance sheets because the bonds were the obligation of the LPFA, and there was no recourse against
Entergy or Entergy Louisiana in the event of a bond default. To service the bonds, Entergy Louisiana collected a
system restoration charge on behalf of the LURC and remitted the collections to the bond indenture trustee. Entergy
and Entergy Louisiana did not report the collections as revenue because Entergy Louisiana was merely acting as the
billing and collection agent for the state.
Entergy Mississippi
Entergy Mississippi has approval from the MPSC to collect a storm damage provision of $1.75 million per
month. If Entergy Mississippi’s accumulated storm damage provision balance exceeds $15 million, the collection
of the storm damage provision ceases until such time that the accumulated storm damage provision becomes less
than $10 million. Entergy Mississippi’s storm damage provision balance has been less than $10 million since May
2019, and Entergy Mississippi has been billing the monthly storm damage provision since July 2019.
In December 2023 Entergy Mississippi filed a Notice of Storm Escrow Disbursement and Request for
Interim Relief notifying the MPSC that Entergy Mississippi had requested disbursement of approximately
$34.5 million of storm escrow funds from its restricted storm escrow account. The filing also requested
120 Entergy Corporation and Subsidiaries
Notes to Financial Statements
authorization from the MPSC, on a temporary basis, that the $34.5 million of storm escrow funds be credited to
Entergy Mississippi’s storm damage provision, pending the MPSC’s review of Entergy Mississippi’s storm-related
costs, and that Entergy Mississippi continue to bill its monthly storm damage provision without suspension in the
event the storm damage provision balance exceeds $15 million, in anticipation of a subsequent filing by Entergy
Mississippi in this proceeding. The storm damage reserve exceeded $15 million upon receipt of the storm escrow
funds. Because the MPSC had not entered an order on Entergy Mississippi’s filing on the requested relief to
continue billing this provision, Entergy Mississippi suspended billing the monthly storm damage provision effective
with February 2024 bills.
Entergy New Orleans
Hurricane Zeta
In October 2020, Hurricane Zeta caused significant damage to Entergy New Orleans’s service area. The
storm resulted in widespread power outages, significant damage to distribution and transmission infrastructure, and
the loss of sales during the power outages. In March 2021, Entergy New Orleans withdrew $44 million from its
funded storm reserves. In May 2021, Entergy New Orleans filed an application with the City Council requesting
approval and certification that its system restoration costs associated with Hurricane Zeta of approximately
$36 million, which included $7 million in estimated costs, were reasonable and necessary to enable Entergy New
Orleans to restore electric service to its customers and Entergy New Orleans’s electric utility infrastructure. In May
2022 the City Council advisors issued a report recommending that the City Council find that Entergy New Orleans
acted prudently in restoring service following Hurricane Zeta and approximately $33 million in storm restoration
costs were prudently incurred and recoverable. Additionally, the advisors concluded that approximately $7 million
of the $44 million withdrawn from its funded storm reserve was in excess of Entergy New Orleans’s costs and
should be considered in Entergy New Orleans’s application for certification of costs related to Hurricane Ida. In
September 2022 the City Council issued a resolution finding that Entergy New Orleans’s system restoration costs
were reasonable and necessary, and that Entergy New Orleans acted prudently in restoring electricity following
Hurricane Zeta. The City Council also found that approximately $33 million in storm costs were recoverable.
Hurricane Ida
In August 2021, Hurricane Ida caused significant damage to Entergy New Orleans’s service area, including
Entergy’s electrical grid. The storm resulted in widespread power outages, including the loss of 100% of Entergy
New Orleans’s load and damage to distribution and transmission infrastructure, including the loss of connectivity to
the eastern interconnection. In September 2021, Entergy New Orleans withdrew $39 million from its funded storm
reserves. In June 2022, Entergy New Orleans filed an application with the City Council requesting approval and
certification that storm restoration costs associated with Hurricane Ida of approximately $170 million, which
included $11 million in estimated costs, were reasonable, necessary, and prudently incurred to enable Entergy New
Orleans to restore electric service to its customers and to repair Entergy New Orleans’s electric utility infrastructure.
In addition, estimated carrying costs through December 2022 related to Hurricane Ida restoration costs were
$9 million. Also, Entergy New Orleans is requesting approval that the $39 million withdrawal from its funded
storm reserve in September 2021 and $7 million in excess storm reserve escrow withdrawals related to Hurricane
Zeta and prior miscellaneous storms are properly applied to Hurricane Ida storm restoration costs, the application of
which reduces the amount to be recovered from Entergy New Orleans customers by $46 million.
Additionally, in February 2022, Entergy New Orleans and the LURC filed with the City Council a
securitization application requesting that the City Council review Entergy New Orleans’s storm reserve and increase
the storm reserve funding level to $150 million, to be funded through securitization. In August 2022 the City
Council’s advisors recommended that the City Council authorize a single securitization bond issuance to fund
Entergy New Orleans’s storm recovery reserves to an amount sufficient to: (1) allow recovery of all of Entergy New
Orleans’s unrecovered storm recovery costs following Hurricane Ida, subject to City Council review and
certification; (2) provide initial funding of storm recovery reserves for future storms to a level of $75 million; and
121 Entergy Corporation and Subsidiaries
Notes to Financial Statements
(3) fund the storm recovery bonds’ upfront financing costs. In September 2022, Entergy New Orleans and the City
Council’s advisors entered into an agreement in principle, which was approved by the City Council along with a
financing order in October 2022, authorizing Entergy New Orleans and the LURC to proceed with a single
securitization bond issuance of approximately $206 million (subject to further adjustment and review pursuant to
the Final Issuance Advice Letter process set forth in the financing order), with $125 million of that total to be used
for interim recovery, subject to City Council review and certification, to be allocated to unrecovered Hurricane Ida
storm recovery costs; $75 million of that total to provide for a storm recovery reserve for future storms; and the
remainder to fund the recovery of the storm recovery bonds’ upfront financing costs.
In December 2022, Entergy New Orleans and the LURC filed with the City Council the Final Issuance
Advice Letter for a securitization bond issuance in the amount of $209.3 million, the final structuring, terms, and
pricing of which were approved by the City Council in accordance with the financing order. Also in December
2022 the LCDA issued $209.3 million in bonds pursuant to the Louisiana Electric Utility Storm Recovery
Securitization Act, Part V-B of Chapter 9 of Title 45 of the Louisiana Revised Statutes, as supplemented by Act 293
of the Louisiana Regular Session of 2021. The LCDA loaned $201.8 million of bond proceeds, net of certain debt
service and issuance costs, to the LURC. The LURC used the proceeds to purchase from Entergy New Orleans the
storm recovery property, which is the right to collect storm recovery charges sufficient to pay the storm recovery
bonds and associated financing costs, and Entergy New Orleans deposited $200 million in a restricted storm reserve
escrow account as a storm damage reserve for Entergy New Orleans and received directly $1.8 million in estimated
upfront financing costs. Subsequently, Entergy New Orleans withdrew $125 million from the newly securitized
storm reserve to cover Hurricane Ida storm recovery costs, subject to a final determination from the City Council
regarding the prudency of the storm recovery costs.
Entergy and Entergy New Orleans do not report the bonds issued by the LCDA on their balance sheets
because the bonds are the obligation of the LCDA, and there is no recourse against Entergy or Entergy New Orleans
in the event of a bond default. To service the bonds, Entergy New Orleans collects a storm recovery charge on
behalf of the LURC and remits the collections to the bond indenture trustee. Entergy and Entergy New Orleans do
not report the collections as revenue because Entergy New Orleans is merely acting as the billing and collection
agent for the LURC.
In August 2023 the City Council advisors issued a report recommending that the City Council find that
Entergy New Orleans prudently incurred approximately $164.1 million in storm restoration costs and $7.5 million
in carrying charges and that such costs have already been properly recovered by Entergy New Orleans through
withdrawals from the storm reserve escrow account. The City Council advisors also recommended that the City
Council find that approximately $1.2 million in storm restoration costs had already been recovered through Entergy
New Orleans’s base rates and that approximately $0.9 million in unused credits be applied against future storm
costs. In August 2023 the City Council hearing officer certified the evidentiary record. In December 2023 the City
Council approved a resolution adopting the advisors’ report and recommendations.
Entergy Texas
Hurricane Laura, Hurricane Delta, and Winter Storm Uri
In August 2020 and October 2020, Hurricane Laura and Hurricane Delta caused extensive damage to
Entergy Texas’s service area. In February 2021, Winter Storm Uri also caused damage to Entergy Texas’s service
area. The storms resulted in widespread power outages, significant damage primarily to distribution and
transmission infrastructure, and the loss of sales during the power outages. In April 2021, Entergy Texas filed an
application with the PUCT requesting a determination that approximately $250 million of system restoration costs
associated with Hurricane Laura, Hurricane Delta, and Winter Storm Uri, including approximately $200 million in
capital costs and approximately $50 million in non-capital costs, were reasonable and necessary to enable Entergy
Texas to restore electric service to its customers and Entergy Texas’s electric utility infrastructure. The filing also
included the projected balance of approximately $13 million of a regulatory asset containing previously approved
122 Entergy Corporation and Subsidiaries
Notes to Financial Statements
system restoration costs related to Hurricane Harvey. In September 2021 the parties filed an unopposed settlement
agreement, pursuant to which Entergy Texas removed from the amount to be securitized approximately $4.3 million
that will instead be charged to its storm reserve, $5 million related to no particular issue, of which Entergy Texas
would be permitted to seek recovery in a future proceeding, and approximately $300 thousand related to attestation
costs. In December 2021 the PUCT issued an order approving the unopposed settlement and determining system
restoration costs of $243 million related to Hurricane Laura, Hurricane Delta, and Winter Storm Uri and the
$13 million projected remaining balance of the Hurricane Harvey system restoration costs were eligible for
securitization. The order also determines that Entergy Texas can recover carrying costs on the system restoration
costs related to Hurricane Laura, Hurricane Delta, and Winter Storm Uri.
In July 2021, Entergy Texas filed with the PUCT an application for a financing order to approve the
securitization of the system restoration costs that are the subject of the April 2021 application. In November 2021
the parties filed an unopposed settlement agreement supporting the issuance of a financing order consistent with
Entergy Texas’s application and with minor adjustments to certain upfront and ongoing costs to be incurred to
facilitate the issuance and serving of system restoration bonds. In January 2022 the PUCT issued a financing order
consistent with the unopposed settlement. As a result of the financing order, Entergy Texas reclassified
$153 million from utility plant to other regulatory assets.
In April 2022, Entergy Texas Restoration Funding II, LLC, a company wholly-owned and consolidated by
Entergy Texas, issued $290.85 million of senior secured system restoration bonds (securitization bonds). With the
proceeds, Entergy Texas Restoration Funding II purchased from Entergy Texas the transition property, which is the
right to recover from customers through a system restoration charge amounts sufficient to service the securitization
bonds. Entergy Texas began cost recovery through the system restoration charge effective with the first billing
cycle of May 2022 and the system restoration charge is expected to remain in place up to 15 years. See Note 5 to
the financial statements for a discussion of the April 2022 issuance of the securitization bonds.
NOTE 3. INCOME TAXES
Income taxes for Entergy for 2023, 2022, and 2021 consist of the following:
Current:
Federal
State
Total
Deferred and non-current - net
Investment tax credits - net
Income taxes
2023
2022
(In Thousands)
2021
$60,639
23,014
83,653
(768,941)
(5,247)
($690,535)
$32,387
(3,091)
29,296
(67,520)
(754)
($38,978)
($5,003)
(8,995)
(13,998)
205,891
(519)
$191,374
123
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Total income taxes for Entergy differ from the amounts computed by applying the statutory income tax rate
to income before income taxes. The reasons for the differences for the years 2023, 2022, and 2021 are:
Net income attributable to Entergy Corporation
Preferred dividend requirements of subsidiaries and
$2,356,536
2023
2022
(In Thousands)
$1,103,166
2021
$1,118,492
noncontrolling interests
Consolidated net income
Income taxes
Income before income taxes
Income taxes computed at statutory rate (21%)
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect
Regulatory differences - utility plant items
Equity component of AFUDC
Amortization of investment tax credits
Flow-through / permanent differences
Amortization of excess ADIT (a)
Arkansas and Louisiana rate changes (b)
IRS audit resolution (c)
Reversal of regulatory liability for Hurricane Isaac (d)
Entergy Louisiana securitization (e)
System Energy sale-leaseback order (f)
Provision for uncertain tax positions
Valuation allowance
Other - net
Total income taxes as reported
Effective Income Tax Rate
5,774
2,362,310
(690,535)
$1,671,775
(6,028)
1,097,138
(38,978)
$1,058,160
227
1,118,719
191,374
$1,310,093
$351,073
$222,214
$275,120
70,144
(27,901)
(20,172)
(7,978)
(1,374)
9,102
—
(842,769)
(105,649)
(129,034)
—
18,884
(8,697)
3,836
($690,535)
61,368
(32,143)
(14,156)
(7,740)
1,011
(34,899)
—
—
—
(282,620)
12,662
34,423
(2,754)
3,656
($38,978)
(41.3%)
(3.7%)
79,273
(57,556)
(14,799)
(7,695)
(5,585)
(66,478)
(27,108)
—
—
—
—
16,533
(2,600)
2,269
$191,374
14.6%
(a)
(b)
(c)
(d)
(e)
(f)
See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess
accumulated deferred income taxes (ADIT) in 2023, 2022, and 2021 and the tax legislation enactment in
2017.
See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for
details.
See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018
IRS audit in 2023.
See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory
liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts
and Jobs Act.
See “Other Tax Matters – Act 293 Securitizations” below for discussion of the Entergy Louisiana May
2022 and March 2023 storm cost securitizations.
See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the
Grand Gulf sale-leaseback renewal complaint.
124
Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation
and Subsidiaries as of December 31, 2023 and 2022 are as follows:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Deferred tax liabilities:
Plant basis differences - net
Regulatory assets
Nuclear decommissioning trusts/receivables
Pension, net regulatory asset
Combined unitary state taxes
Power purchase agreements
Accumulated storm damage provision
Deferred fuel
Other
Total
Deferred tax assets:
Nuclear and other decommissioning liabilities
Regulatory liabilities
Pension and other post-employment benefits
Compensation
Accumulated deferred investment tax credit
Provision for allowances and contingencies
Unbilled/deferred revenues
Net operating loss carryforwards
Capital losses and miscellaneous tax credits
Valuation allowance
Other
Total
Non-current accrued taxes (including unrecognized tax benefits)
Accumulated deferred income taxes and taxes accrued
2023
2022
(In Thousands)
($6,192,156) ($5,270,010)
(937,554)
(318,570)
(336,496)
(10,335)
(3,993)
(35,213)
(181,222)
(333,421)
(7,426,814)
(989,405)
(467,267)
(363,829)
(8,783)
(75,612)
(2,474)
(69,436)
(251,107)
(8,420,069)
147,011
1,247,530
116,222
81,226
55,928
149,479
2,418
2,857,908
107,009
(372,119)
220,055
4,612,667
(422,213)
173,201
1,108,075
141,399
76,317
57,501
97,545
21,905
2,065,149
28,876
(372,017)
245,236
3,643,187
(951,110)
($4,229,615) ($4,734,737)
Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as
follows:
Carryover Description
Federal net operating losses before 1/1/2018
Federal net operating losses - 1/1/2018 forward
State net operating losses
State net operating losses with no expiration
Other federal and state carryforwards
Miscellaneous federal and state credits
Carryover Amount
$4.2 billion
$13.8 billion
$3.9 billion
$11.1 billion
$523.6 million
$124.9 million
Year(s) of expiration
2028-2037
N/A
2028-2042
N/A
2024-2037
2024-2043
As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in
the financial statements is less than the amount of the tax effect of the federal and state net operating loss
carryovers, tax credit carryovers, and other tax attributes generated and reflected on income tax returns. Entergy
evaluates the available positive and negative evidence to estimate whether sufficient future taxable income of the
appropriate character will be generated to realize the benefits of existing deferred tax assets. When the evaluation
125
Entergy Corporation and Subsidiaries
Notes to Financial Statements
indicates that Entergy will not be able to realize the existing benefits, a valuation allowance is recorded to reduce
deferred tax assets to the realizable amount.
Because it is more likely than not that the benefits from certain state net operating losses and other deferred
tax assets will not be utilized, valuation allowances totaling $372 million as of December 31, 2023 and $372 million
as of December 31, 2022 have been provided on the deferred tax assets related to federal and state jurisdictions in
which Entergy does not currently expect to be able to utilize certain separate company tax return attributes,
preventing realization of such deferred tax assets. Certain accelerated tax deductions which generated taxable losses
in various taxing jurisdictions, and which have a limited term carryover period, have resulted in the impairment of
the realizability of such carryovers and are reflected in the valuation allowance disclosed above.
Unrecognized tax benefits
Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax
benefit can be recognized in the financial statements. If a tax deduction is taken on a tax return but does not meet
the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax
return, is required to be recorded. A reconciliation of Entergy’s beginning and ending amount of unrecognized tax
benefits is as follows:
Gross balance at January 1
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions for tax positions of prior years (a)
Settlements (a)
Gross balance at December 31
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers
Cash paid to taxing authorities
Unrecognized tax benefits net of unused tax attributes and payments (b)
2021
2023
2022
(In Thousands)
$5,759,968
792,134
37,259
(195,762)
—
6,393,599
$6,393,599
332,884
194,894
(1,300,381)
(3,181,086)
2,439,910
$5,699,339
101,623
33,419
(74,413)
—
5,759,968
(2,160,484) (5,566,212) (4,987,799)
(60,000)
$712,169
—
$279,426
$745,387
(82,000)
(a)
(b)
Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income
Tax Audits - 2016-2018 IRS Audit” below.
Potential tax liability above what is payable on tax returns.
The balances of unrecognized tax benefits include $1,899 million, $3,254 million, and $2,256 million as of
December 31, 2023, 2022, and 2021, respectively, which, if recognized, would lower the effective income tax
rates. Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of
$541 million, $3,140 million, and $3,504 million as of December 31, 2023, 2022, and 2021, respectively, if
disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the
taxing authority to an earlier period.
Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax
expense. Entergy’s December 31, 2023, 2022, and 2021 accrued balance for the possible payment of interest is
approximately $39 million, $50 million, and $52 million, respectively. Interest (net-of-tax) of ($11) million,
$8 million, and ($4) million was recorded in 2023, 2022, and 2021, respectively.
126
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Income Tax Audits
Entergy and its subsidiaries file U.S. federal and various state income tax returns. IRS examinations are
complete for years before 2019. All state taxing authorities’ examinations are complete for years before 2014.
Entergy regularly defends its positions and works with the IRS to resolve audits. The resolution of audit issues
could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.
2016-2018 IRS Audit
The IRS completed its examination of the 2016 through 2018 tax years and issued a Revenue Agent Report
(RAR) for each federal filer under audit in November 2023. Entergy agreed to all adjustments contained in the
RARs. Entergy recorded all the material effects resulting from the RARs in the fourth quarter of 2023.
Utility Restructurings
In 2017, Entergy New Orleans undertook an internal restructuring, and in 2018, Entergy Arkansas and
Entergy Mississippi also participated in internal restructurings under which these three Utility operating companies
joined Entergy Louisiana as wholly-owned subsidiaries of Entergy Utility Holding Company, LLC. The change in
ownership required Entergy to recognize Entergy Arkansas’s nuclear decommissioning liabilities for income tax
purposes, which resulted in recognition of a gain for income tax purposes and a corresponding increase in the tax
basis of assets, in accordance with the Internal Revenue Code and Treasury Regulations. Entergy determined that
there was uncertainty regarding the treatment of certain aspects of the restructurings and recorded provisions for
uncertain tax positions which are now considered to be effectively settled in accordance with accounting standards.
The reversal of such provisions for uncertain tax positions results in a reduction of income tax expense of
$156 million for Entergy Arkansas, $1 million for Entergy Mississippi, and $6 million for Entergy New Orleans.
The IRS also required Entergy New Orleans to reverse a tax gain associated with the 2017 restructuring that
had been previously recognized, allowing Entergy New Orleans to reduce its tax expense by $39 million.
After the restructuring, Entergy Arkansas adopted a new method of accounting for income tax purposes in
which its nuclear decommissioning costs are treated as production costs of electricity includable in cost of goods
sold, which resulted in a $1.8 billion reduction in taxable income on its 2018 tax return that was treated as an
unrecognized tax benefit. In conjunction with the audit, Entergy agreed with the IRS adjustments concerning the
nuclear decommissioning tax position allowing Entergy Arkansas to include $102 million of its decommissioning
liability in cost of goods sold.
Mark-to-Market Method of Accounting
In 2016, Entergy Louisiana elected mark-to-market income tax treatment for various wholesale electric
power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia
hydroelectric facility and from System Energy under the Unit Power Sales Agreement as well as other intercompany
power purchase agreements. The election resulted in a $2 billion deductible temporary difference. The IRS
allowed the mark-to-market tax method of accounting associated with the Vidalia contract and various other third-
party and intercompany wholesale electric power purchase and sale agreements. The IRS disallowed the net
deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The
net allowance resulted in a reversal of a provision for uncertain tax positions of $132 million and a corresponding
reduction of income tax expense primarily associated with the effect of the Tax Cuts and Jobs Act rate reduction
discussed below.
In 2017, Entergy New Orleans also elected mark-to-market income tax treatment for the Unit Power Sales
Agreement and various intercompany wholesale electric contracts which resulted in a $1 billion deductible
temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with various
127 Entergy Corporation and Subsidiaries
Notes to Financial Statements
intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with
the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a
reversal of a provision for uncertain tax positions of $139 million and a corresponding reduction of income tax
expense.
In 2018, Entergy Arkansas and Entergy Mississippi each accrued approximately $2 billion in deductible
temporary differences related to mark-to-market tax accounting for the Unit Power Sales Agreement and various
wholesale electric contracts. The IRS allowed the mark-to-market tax method of accounting associated with various
intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with
the Unit Power Sales Agreement, which did not have an effect on net tax expense. The effective settlement of the
mark-to-market tax position for Entergy Arkansas resulted in the accrual of an increase to tax expense of
$40 million, which was offset by approximately $5 million of miscellaneous excess ADIT recognized as a result of
the 2016-2018 IRS audit resolution. The net increase to tax expense is deferred as a regulatory asset, as discussed
within the “Regulatory and Other Matters” section below.
Restructuring of Entergy’s Non-Utility Operations Business
During the 2016 to 2018 audit period, the ownership of certain of Entergy’s non-utility operations business
nuclear power plants (previously reported as part of Entergy Wholesale Commodities) was restructured. Such
restructuring transactions required Entergy to recognize the plants’ nuclear decommissioning liabilities for income
tax purposes. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for
income tax purposes, a significant portion of which resulted in an increase in the tax basis of the assets. Because
certain aspects of the restructuring transactions involved uncertainty, Entergy recorded a provision for uncertain tax
positions. The IRS did not propose adjustments to the tax treatment of the restructuring transactions resulting in a
net decrease to income tax expense of $288 million from the reversal of the provision for uncertain tax positions in
fourth quarter 2023.
Reduction of Net Operating Loss Carryovers
The IRS audit reduced Entergy’s net operating loss carryover by $8 billion. A portion of Entergy’s audit
adjustments were not offset by losses which resulted in a tax liability of $79 million, which was fully offset by prior
deposits made by Entergy. Entergy received an assessment of interest in excess of prior deposits of $13 million in
December 2023, and such interest was paid in January 2024.
Net operating loss carryovers were reduced by $4 billion for Entergy Arkansas, $1 billion for Entergy
Louisiana, $2 billion for Entergy Mississippi, $1 billion for Entergy New Orleans, and $40 million for System
Energy. The IRS audit adjustments were also factored into the settle-up required under Entergy’s intercompany
income tax allocation agreement, and such amounts were settled in the fourth quarter of 2023.
Regulatory and Other Matters
Additional customer credits related to the audit outcome may be due in accordance with prior regulatory
agreements associated with the Entergy Louisiana and Entergy Gulf States Louisiana business combination and
Entergy New Orleans restructuring and general rate-making principles. A regulatory liability and associated
regulatory charge of $38 million and $60 million ($28 million and $44 million net-of-tax) were recorded for
Entergy Louisiana and Entergy New Orleans, respectively. The inclusion of the effects of the audit on customer
rates is subject to the review and approval of the retail regulators. Additionally, a regulatory asset for income tax
associated with deficient ADIT of $35 million, $2 million, and $3 million, was recorded for Entergy Arkansas,
Entergy Louisiana, and Entergy Mississippi, respectively. See Note 2 to the financial statements for discussion of
128 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Entergy Arkansas’s regulatory activity related to the Tax Cuts and Jobs Act and for discussion of the settlement of
Entergy Arkansas’s 2023 formula rate plan.
As noted above, Entergy accrues interest expense related to unrecognized tax benefits in income tax
expense. As a result of the IRS audit resolution, Entergy reversed approximately $24 million of interest related to
the allowance of previously unrecognized tax benefits.
Reversal of net deferred credits associated with the accounting for income taxes upon the resolution of the
IRS audit resulted in a reduction/(increase) of income tax expense of $9 million, $42 million, ($2) million,
$2 million, $2 million, and $1 million for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New
Orleans, Entergy Texas, and System Energy, respectively.
Included in the effect of the IRS audit on the results of operations was the measurement of deferred tax
assets and liabilities influenced by the 2017 enactment of the Tax Cuts and Jobs Act income tax rate change
discussed below. With the conclusion of the audit, there are no remaining federal unrecognized tax benefits
affected by the rate differential which could impact income tax expense and the regulatory liability for income taxes
in future periods.
State Income Tax Audits
As a result of income tax audit adjustments proposed by the Arkansas Department of Finance and
Administration, an Entergy subsidiary in the non-utility operations business recorded a provision in third quarter
2022 for uncertain tax positions of approximately $21 million, which includes interest expense.
Other Tax Matters
Tax Cuts and Jobs Act (TCJA)
The most significant effect of the TCJA for Entergy was the change in the federal corporate income tax rate
from 35% to 21%, effective January 1, 2018. Entergy had remaining regulatory liabilities of $1.0 billion and $1.3
billion as of December 31, 2023 and December 31, 2022, respectively, mainly associated with the re-measurement
of deferred tax assets and liabilities from the income tax rate change, subsequent amortization of excess ADIT, and
payments to customers since the enactment of the TCJA. In addition to the protected and unprotected excess ADIT
amounts, the net regulatory liability for income taxes includes other regulatory assets and liabilities for income taxes
mainly for AFUDC, which is described in Note 1 to the financial statements.
Entergy’s regulatory liability for income taxes includes a gross-up at the applicable tax rate because of the
effect that excess ADIT has on the ratemaking formula. The regulatory liability for income taxes includes the effect
of (1) the reduction of the net deferred tax liability resulting in excess ADIT, and (2) the tax gross-up of excess
ADIT.
Excess ADIT is generally classified into two categories: (1) the portion that is subject to the normalization
requirements of the TCJA, referred to as “protected”, and (2) the portion that is not subject to such normalization
provisions, referred to as “unprotected”. See Note 2 to the financial statements for discussion of Entergy
Louisiana’s $106 million reversal of a regulatory liability, associated with the Hurricane Isaac securitization,
recognized in 2017 as a result of the TCJA, recorded in fourth quarter 2023. The majority of the remaining
unamortized Excess ADIT as of December 31, 2023 is classified as protected. The TCJA provides that the
normalization method of accounting for income taxes is required for excess ADIT associated with public utility
property. The TCJA provides for the use of the average rate assumption method (ARAM) for the determination of
the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced
over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life
129 Entergy Corporation and Subsidiaries
Notes to Financial Statements
of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess
ADIT in conformity with the normalization requirements.
During the second quarter 2018, the Registrant Subsidiaries began returning unprotected excess
accumulated deferred income taxes, associated with the effects of the TCJA, to their customers through rate riders
and other means approved by their respective regulatory authorities. Return of the unprotected excess accumulated
deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding
reduction in income tax expense. This manner of regulatory accounting affects the effective tax rate for the period
as compared to the statutory tax rate. There was no return of unprotected excess accumulated deferred income taxes
for Entergy for the year ended December 31, 2023. For the year ended December 31, 2022, the return of
unprotected excess accumulated deferred income taxes reduced the regulatory liability for income taxes by
$53 million for Entergy.
Inflation Reduction Act of 2022
The Inflation Reduction Act of 2022, signed into law on August 16, 2022, significantly expanded federal
tax incentives for clean energy production, including the extension of production tax credits to solar projects and
certain qualified nuclear power plants. Additionally, the Inflation Reduction Act of 2022 enacted a 1% excise tax
on the buyback of public company stock and a new corporate alternative minimum tax. There are no effects on the
financial statements of Entergy as of and for the years ended December 31, 2023 and 2022 related to the enactment
of the law. See the “Income Tax Legislation and Regulation” section of Entergy Corporation and Subsidiaries
Management’s Financial Discussion and Analysis for additional discussion of the effects of the Inflation Reduction
Act of 2022.
Restructuring of Entergy’s Non-Utility Operations Business in 2020
In the fourth quarter 2020, Entergy’s ownership of Palisades was restructured. The restructuring required
Entergy to recognize Palisades’ nuclear decommissioning liability for income tax purposes resulting in a tax
accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by
$9.2 million. The accrual of the nuclear decommissioning liability also required Entergy to recognize a gain for
income tax purposes, a portion of which resulted in an increase in the tax basis of the assets. Recognition of the
gain and the increase in the tax basis of the assets represents a tax accounting temporary difference.
Tax Accounting Methods
Certain Entergy subsidiaries have elected to apply the mark-to-market method of accounting for income tax
return purposes to wholesale power purchase agreements as appropriate under the Internal Revenue Code and U.S.
Treasury Regulations. The mark-to-market tax gain or loss computed each year is based on an estimated fair market
valuation which includes analyses of market prices and conditions.
In 2020, Entergy Texas elected mark-to-market income tax treatment for wholesale electric power purchase
and sale agreements which resulted in a $2.5 billion deductible temporary difference.
Arkansas and Louisiana Corporate Income Tax Rate Changes
Since 2019, the State of Arkansas has enacted corporate income tax law changes that phased in rate
reductions from the former rate of 6.5% to 6.2% in 2021, 5.9% in 2022, 5.1% in 2023, and 4.8% in 2024.
Legislation in 2022 accelerated the rate reduction to 5.3% for tax years beginning on or after January 1, 2023,
accelerating the rate reductions that were originally scheduled to take effect in the 2025 tax year. As a result of the
rate reductions, Entergy Arkansas has recorded regulatory liabilities for income taxes of approximately $26 million,
$15 million, $11 million, and $21 million in 2023, 2022, 2021, and 2020, respectively. The regulatory liabilities
include a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and
130 Entergy Corporation and Subsidiaries
Notes to Financial Statements
have been or are scheduled to be included in the approved rate mechanisms. The Arkansas tax law enactment also
phases in an increase to the net operating loss carryover period from five to ten years.
Pursuant to legislation enacted in 2021 and approved by Louisiana citizens by amendment to the state
constitution, beginning January 1, 2022, federal income taxes paid are no longer deductible for state income tax
purposes, and the top Louisiana corporate income tax rate has been reduced from 8% to 7.5%. As a result of this
change in Louisiana tax law, the Louisiana applicable tax rate increased by 0.85%. Accordingly, deferred tax assets
and liabilities were adjusted to reflect the new applicable federal and state rates. In fourth quarter 2021, Entergy
recorded a net increase to its deferred tax asset of $27 million. Entergy Louisiana and Entergy New Orleans
recorded net increases to their deferred tax liabilities before consideration of the tax gross-up of $77 million and
$8 million, respectively, which were offset by regulatory assets for income taxes. Therefore, these increases had no
effect on tax expense. However, the increase of deferred tax assets associated with certain assets reduced tax
expense for Entergy Louisiana and Entergy New Orleans by $6 million and $2 million, respectively. The legislation
enacted in 2021 also provided that Louisiana net operating losses generally have an indefinite carryover period.
Act 293 Securitizations
As described in Note 2 to the financial statements, Entergy Louisiana has implemented two separate
securitization transactions authorized under Act 293 of the Louisiana Legislature’s Regular Session of 2021. The
first transaction occurred in May of 2022 and the second occurred in March of 2023. Act 293 provides that the
LURC contribute the net bond proceeds to a LURC-sponsored trust. Over the 15-year term of the Act 293 bonds,
the respective storm trusts will make distributions to Entergy Louisiana, a beneficiary of the storm trusts, that will
not be taxable to Entergy Louisiana. Additionally, Entergy Louisiana will not include the receipt of the system
restoration charges in taxable income because the right to receive the system restoration charges has been granted
directly to the LURC, and Entergy Louisiana only acts as an agent to collect those charges on behalf of the LURC.
Accordingly, the securitizations provided for a tax accounting permanent difference resulting in net
reductions of income tax expense for Entergy Louisiana of approximately $133 million in March 2023 and
$290 million in May 2022, both after taking into account a provision for uncertain tax positions. Entergy’s
recognition of reduced income tax expense was offset by other tax changes resulting in a net reduction of income
tax expense for Entergy of approximately $129 million in March 2023 and $283 million in May 2022, both after
taking into account a provision for uncertain tax positions.
In recognition of its obligations described in LPSC ancillary orders issued as part of the securitization
regulatory proceedings, Entergy Louisiana recorded regulatory liabilities of $103 million ($76 million net-of-tax) in
first quarter 2023 and $224 million ($165 million net-of-tax) in second quarter 2022 to reflect its obligation to
provide credits to its customers. See Note 2 to the financial statements for further discussion of the Entergy
Louisiana March 2023 and May 2022 storm cost securitizations.
NOTE 4.
BORROWINGS
REVOLVING CREDIT FACILITIES, LINES OF CREDIT, AND SHORT-TERM
Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in
June 2028. The facility includes fronting commitments for the issuance of letters of credit against $20 million of the
total borrowing capacity of the credit facility. The commitment fee is currently 0.225% of the undrawn
commitment amount. Commitment fees and interest rates on loans under the credit facility can fluctuate depending
on the senior unsecured debt ratings of Entergy Corporation. The weighted-average interest rate for the year ended
131 Entergy Corporation and Subsidiaries
Notes to Financial Statements
December 31, 2023 was 6.52% on the drawn portion of the facility. The following is a summary of the amounts
outstanding and capacity available under the credit facility as of December 31, 2023:
Capacity
Borrowings
Letters of
Credit
Capacity
Available
$3,500
$—
$3
$3,497
(In Millions)
Entergy Corporation’s credit facility includes a covenant requiring Entergy to maintain a consolidated debt
ratio, as defined, of 65% or less of its total capitalization. Entergy is in compliance with this covenant. If Entergy
fails to meet this ratio, or if Entergy Corporation or one of the Registrant Subsidiaries (except Entergy New Orleans
and System Energy) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of
the Entergy Corporation credit facility’s maturity date may occur.
Entergy Corporation has a commercial paper program with a Board-approved program limit of
$2 billion. As of December 31, 2023, Entergy Corporation had $1,138.1 million of commercial paper
outstanding. The weighted-average interest rate for the year ended December 31, 2023 was 5.44%.
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each
had credit facilities available as of December 31, 2023 as follows:
Company
Entergy Arkansas
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
Expiration
Date
April 2024
June 2028
June 2028
July 2025
June 2024
June 2028
Amount of
Facility
$25 million (b)
$150 million (c)
$350 million (c)
$150 million
$25 million (c)
$150 million (c)
Interest
Rate
(a)
7.29%
6.58%
6.71%
6.58%
7.08%
6.71%
Amount Drawn
as of
December 31, 2023
—
—
—
—
—
—
Letters of Credit
Outstanding as of
December 31, 2023
—
—
—
—
—
$1.1 million
(a)
(b)
(c)
The interest rate is the estimated interest rate as of December 31, 2023 that would have been applied to
outstanding borrowings under the facility.
Borrowings under this Entergy Arkansas credit facility may be secured by a security interest in its accounts
receivable at Entergy Arkansas’s option.
The credit facility includes fronting commitments for the issuance of letters of credit against a portion of the
borrowing capacity of the facility as follows: $5 million for Entergy Arkansas; $15 million for Entergy
Louisiana; $10 million for Entergy New Orleans; and $30 million for Entergy Texas.
The commitment fees on the credit facilities range from 0.075% to 0.375% of the undrawn commitment amount for
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy Texas, and of the entire facility amount for
Entergy New Orleans. Each of the credit facilities requires the Registrant Subsidiary borrower to maintain a debt
ratio, as defined, of 65% or less of its total capitalization. Each Registrant Subsidiary is in compliance with this
covenant.
In addition, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy
Texas each has an uncommitted standby letter of credit facility as a means to post collateral to support its
132 obligations to MISO and for other purposes. The following is a summary of the uncommitted standby letter of
credit facilities as of December 31, 2023:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Company
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
Amount of
Uncommitted
Facility
$25 million
$125 million
$65 million
$15 million
$80 million
Letter of
Credit Fee
0.78%
0.78%
0.78%
1.625%
1.250%
Letters of Credit
Issued as of
December 31, 2023
(a) (b)
$5.8 million
$17.1 million
$20 million
$0.5 million
$76.5 million
(a)
(b)
As of December 31, 2023, letters of credit posted with MISO covered financial transmission rights exposure
of $1.2 million for Entergy Arkansas, $0.5 million for Entergy Louisiana, $0.3 million for Entergy
Mississippi, and $0.1 million for Entergy Texas. See Note 15 to the financial statements for discussion of
financial transmission rights.
As of December 31, 2023, in addition to the $20 million MISO letters of credit, Entergy Mississippi had
$1 million in a non-MISO letter of credit outstanding under this facility.
The short-term borrowings of the Registrant Subsidiaries are limited to amounts authorized by the FERC.
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas have FERC-
authorized short-term borrowing limits effective through April 2025. The FERC-authorized short-term borrowing
limit for System Energy is effective through March 2025. In addition to borrowings from commercial banks, these
companies may also borrow from the Entergy system money pool and from other internal short-term borrowing
arrangements. The money pool is an intercompany cash management program that makes possible intercompany
borrowing and lending arrangements, and the money pool and the other internal borrowing arrangements are
designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings. Borrowings from
internal and external short-term borrowings combined may not exceed the FERC-authorized limits. The following
are the FERC-authorized limits for short-term borrowings and the outstanding short-term borrowings as of
December 31, 2023 (aggregating both internal and external short-term borrowings) for the Registrant Subsidiaries:
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
System Energy
Authorized
Borrowings
(In Millions)
$250
$450
$200
$150
$200
$200
$145
$156
$74
$22
$—
$12
Vermont Yankee Credit Facility (Entergy Corporation)
In January 2019, Entergy Nuclear Vermont Yankee was transferred to NorthStar and its credit facility was
assumed by Entergy Assets Management Operations, LLC (formerly Vermont Yankee Asset Retirement, LLC),
Entergy Nuclear Vermont Yankee’s parent company that remains an Entergy subsidiary after the transfer. The
credit facility has a borrowing capacity of $139 million and expires in December 2024. The commitment fee is
currently 0.20% of the undrawn commitment amount. As of December 31, 2023, $139 million in cash borrowings
were outstanding under the credit facility. The weighted-average interest rate for the year ended December 31,
2023 was 6.61% on the drawn portion of the facility.
133
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Variable Interest Entities (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)
See Note 17 to the financial statements for a discussion of the consolidation of the nuclear fuel company
variable interest entities (VIEs). To finance the acquisition and ownership of nuclear fuel, the nuclear fuel company
VIEs have credit facilities and three of the four VIEs also issue commercial paper, details of which follow as of
December 31, 2023:
Company
Expiration Date
Amount
of
Facility
Weighted-
Average Interest
Rate on
Borrowings (a)
(Dollars in Millions)
Amount
Outstanding as of
December 31, 2023
Entergy Arkansas VIE
Entergy Louisiana River Bend VIE
Entergy Louisiana Waterford VIE
System Energy VIE
June 2025
June 2025
June 2025
June 2025
$80
$105
$105
$120
6.10%
6.17%
6.07%
5.91%
$70.2
$46.6
$29.5
$21.5
(a)
Includes letter of credit fees and bank fronting fees on commercial paper issuances by the nuclear fuel
company VIEs for Entergy Arkansas, Entergy Louisiana, and System Energy. The nuclear fuel company
VIE for Entergy Louisiana River Bend does not issue commercial paper, but borrows directly on its bank
credit facility.
The commitment fees on the credit facilities are 0.100% of the undrawn commitment amount for the
Entergy Arkansas, Entergy Louisiana, and System Energy VIEs. Each credit facility requires the respective lessee
of nuclear fuel (Entergy Arkansas, Entergy Louisiana, or Entergy Corporation as guarantor for System Energy) to
maintain a consolidated debt ratio, as defined, of 70% or less of its total capitalization. Each lessee is in compliance
with this covenant.
The nuclear fuel company VIEs had notes payable that were included in debt on Entergy’s consolidated
balance sheets as of December 31, 2023 as follows:
Company
Description
Entergy Arkansas VIE
Entergy Louisiana River Bend VIE
Entergy Louisiana Waterford VIE
System Energy VIE
1.84% Series N due July 2026
2.51% Series V due June 2027
5.94% Series J due September 2026
2.05% Series K due September 2027
Amount
$90 million
$70 million
$70 million
$90 million
In accordance with regulatory treatment, interest on the nuclear fuel company VIEs’ credit facilities,
commercial paper, and long-term notes payable is reported in fuel expense.
As of December 31, 2023, Entergy Arkansas and Entergy Louisiana each has obtained financing
authorization from the FERC that extends through April 2025 for issuances by its nuclear fuel company VIEs.
System Energy has obtained financing authorization from the FERC that extends through March 2025 for issuances
by its nuclear fuel company VIEs.
134
NOTE 5. LONG - TERM DEBT
Long-term debt for Entergy as of December 31, 2023 and 2022 consisted of:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Type of Debt and Maturity
Mortgage Bonds
2023-2027
2028-2032
2033-2041
2044-2066
Governmental Bonds (a)
2023-2044
Securitization Bonds
2023-2036
Variable Interest Entities Notes Payable
(Note 4)
2023-2027
Entergy Corporation Notes
due September 2025
due September 2026
due June 2028
due June 2030
due June 2031
due June 2050
Entergy New Orleans Unsecured Term Loan
due May 2023
Entergy New Orleans Unsecured Term Loan
due June 2024
Entergy Mississippi Unsecured Term Loan
due December 2023
System Energy Term Loan due November
2023 (b)
5 Year Credit Facility (Note 4)
Entergy Louisiana Credit Facility (Note 4)
Vermont Yankee Credit Facility (Note 4)
Entergy Arkansas VIE Credit Facility (Note 4)
Entergy Louisiana River Bend VIE Credit
Facility (Note 4)
Entergy Louisiana Waterford VIE Credit
Facility (Note 4)
System Energy VIE Credit Facility (Note 4)
Long-term DOE Obligation (c)
Grand Gulf Sale-Leaseback Obligation
Unamortized Premium and Discount - Net
Unamortized Debt Issuance Costs
Other
Total Long-Term Debt
Less Amount Due Within One Year
Long-Term Debt Excluding Amount Due
Within One Year
Fair Value of Long-Term Debt
Weighted-
Average
Interest
Rate
December
31, 2023
Interest Rate Ranges at
December 31,
Outstanding at
December 31,
2023
2022
2023
2022
(In Thousands)
3.05%
2.88%
4.12%
4.22%
0.95% - 5.40% 0.62% - 5.59% $4,668,000
3,590,000
1.60%- 6.00% 1.60% - 4.19%
3,122,000
2.55% - 5.30% 2.55% - 4.52%
8,355,000
2.65% - 5.80% 2.65% - 5.50%
$6,808,000
3,265,000
2,097,000
8,005,000
2.43%
2.0% - 2.5%
2.0% - 2.5%
282,375
282,375
3.61%
2.67% - 3.697% 2.67% - 3.697%
267,003
297,363
2.85%
1.84% - 5.94% 1.84% - 3.22%
320,000
310,000
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
—
n/a
0.9%
2.95%
1.9%
2.80%
2.40%
3.75%
—
6.25%
—
—
—
—
6.61%
6.10%
6.17%
6.07%
5.91%
—
—
0.9%
2.95%
1.9%
2.80%
2.40%
3.75%
2.5%
—
4.082%
3.721%
2.97%
7.75%
3.19%
2.62%
2.17%
2.74%
2.77%
—
—
800,000
750,000
650,000
600,000
650,000
600,000
800,000
750,000
650,000
600,000
650,000
600,000
—
70,000
85,000
—
—
150,000
—
—
—
139,000
70,200
50,000
150,000
50,000
139,000
—
46,600
13,100
29,500
21,500
205,151
34,260
(11,638)
(171,475)
5,420
25,107,896
2,099,057
60,800
72,600
195,044
34,297
960
(173,464)
5,474
25,932,549
2,309,037
$23,008,839
$22,489,174
$23,623,512
$22,573,837
(a)
Consists of pollution control revenue bonds and environmental revenue bonds, some of which are secured
by collateral mortgage bonds.
135
Entergy Corporation and Subsidiaries
Notes to Financial Statements
(b)
(c)
The debt is secured by a series of collateral mortgage bonds.
Pursuant to the Nuclear Waste Policy Act of 1982, Entergy’s nuclear owner/licensee subsidiaries have
contracts with the DOE for spent nuclear fuel disposal service. The contracts include a one-time fee for
generation prior to April 7, 1983. Entergy Arkansas is the only Entergy company that generated electric
power with nuclear fuel prior to that date and includes the one-time fee, plus accrued interest, in long-term
debt.
The annual long-term debt maturities (excluding lease obligations and long-term DOE obligations) for debt
outstanding as of December 31, 2023, for the next five years are as follows:
Amount
(In Thousands)
$2,100,275
$1,546,940
$2,375,720
$916,965
$2,195,627
2024
2025
2026
2027
2028
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas have
obtained long-term financing authorizations from the FERC that extend through April 2025. The FERC-authorized
long-term borrowing limit for System Energy is effective through March 2025. Entergy New Orleans has obtained
long-term financing authorization from the City Council that extends through December 2025. Entergy Arkansas
has also obtained first mortgage bond/secured financing authorization from the APSC that extends through
December 2025.
Securitization Bonds
Entergy Louisiana Securitization Bonds – Little Gypsy
In August 2011 the LPSC issued a financing order authorizing the issuance of bonds to recover Entergy
Louisiana’s investment recovery costs associated with the canceled Little Gypsy repowering project. In September
2011, Entergy Louisiana Investment Recovery Funding I, L.L.C., a company wholly-owned and consolidated by
Entergy Louisiana, issued $207.2 million of senior secured investment recovery bonds. The bonds had an interest
rate of 2.04%. Although the principal amount was not due until September 2023, Entergy Louisiana Investment
Recovery Funding made principal payments on the bonds in the amount of $11 million in 2021, after which the
bonds were fully repaid.
Entergy New Orleans Securitization Bonds - Hurricane Isaac
In May 2015 the City Council issued a financing order authorizing the issuance of securitization bonds to
recover Entergy New Orleans’s Hurricane Isaac storm restoration costs of $31.8 million, including carrying costs,
the costs of funding and replenishing the storm recovery reserve in the amount of $63.9 million, and approximately
$3 million of up-front financing costs associated with the securitization. In July 2015, Entergy New Orleans Storm
Recovery Funding I, L.L.C., a company wholly owned and consolidated by Entergy New Orleans, issued
$98.7 million of storm cost recovery bonds. The bonds have a coupon of 2.67%. Although the principal amount is
not due until June 2027, Entergy New Orleans Storm Recovery Funding expects to make principal payments on the
bonds in 2024 in the amount of $6.2 million, after which the bonds will be fully repaid. With the proceeds, Entergy
New Orleans Storm Recovery Funding purchased from Entergy New Orleans the storm recovery property, which is
the right to recover from customers through a storm recovery charge amounts sufficient to service the securitization
bonds. The storm recovery property is reflected as a regulatory asset on the consolidated balance sheets. The
creditors of Entergy New Orleans do not have recourse to the assets or revenues of Entergy New Orleans Storm
Recovery Funding, including the storm recovery property, and the creditors of Entergy New Orleans Storm
136
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Recovery Funding do not have recourse to the assets or revenues of Entergy New Orleans. Entergy New Orleans
has no payment obligations to Entergy New Orleans Storm Recovery Funding except to remit storm recovery
charge collections.
Entergy Texas Securitization Bonds - Hurricane Rita
In April 2007 the PUCT issued a financing order authorizing the issuance of securitization bonds to recover
$353 million of Entergy Texas’s Hurricane Rita reconstruction costs and up to $6 million of transaction costs, offset
by $32 million of related deferred income tax benefits. In June 2007, Entergy Gulf States Reconstruction Funding I,
LLC, a company that is now wholly-owned and consolidated by Entergy Texas, issued $329.5 million of senior
secured transition bonds (securitization bonds). Although the principal amount was not due until June 2022,
Entergy Gulf States Reconstruction Funding made principal payments on the bonds in the amount of $17.5 million
in 2021, after which the bonds were fully repaid.
Entergy Texas Securitization Bonds - Hurricane Ike and Hurricane Gustav
In September 2009 the PUCT authorized the issuance of securitization bonds to recover $566.4 million of
Entergy Texas’s Hurricane Ike and Hurricane Gustav restoration costs, plus carrying costs and transaction costs,
offset by insurance proceeds. In November 2009, Entergy Texas Restoration Funding, LLC (Entergy Texas
Restoration Funding), a company wholly-owned and consolidated by Entergy Texas, issued $545.9 million of senior
secured transition bonds (securitization bonds). Although the principal amount was not due until November 2023,
Entergy Texas Restoration Funding made principal payments on the bonds in the amount of $54.3 million in 2022,
after which the bonds were fully repaid.
Entergy Texas Securitization Bonds - Hurricane Laura, Hurricane Delta, and Winter Storm Uri
In January 2022 the PUCT authorized the issuance of securitization bonds to recover $242.9 million of
Entergy Texas’s Hurricane Laura, Hurricane Delta, and Winter Storm Uri restoration costs, plus carrying costs, plus
approximately $13.3 million relating to a system restoration regulatory asset related to Hurricane Harvey, plus up-
front qualified costs. In April 2022, Entergy Texas Restoration Funding II, LLC, a company wholly-owned and
consolidated by Entergy Texas, issued $290.85 million of senior secured system restoration bonds (securitization
bonds), as follows:
Senior Secured System Restoration Bonds:
Tranche A-1 (3.051%) due December 2028
Tranche A-2 (3.697%) due December 2036
Total senior secured system restoration bonds
Amount
(In Thousands)
$100,000
190,850
$290,850
Although the principal amount of each tranche is not due until the dates given above, Entergy Texas
Restoration Funding II expects to make principal payments on the securitization bonds over the next four years in
the amounts of $18.3 million for 2024, $18.8 million for 2025, $19.4 million for 2026, and $13.4 million for 2027
for Tranche A-1, after which Tranche A-1 will be fully repaid. Entergy Texas Restoration Funding II expects to
begin principal payments for Tranche A-2 in 2027 with payments of $6.6 million in 2027 and $20.5 million in 2028.
With the proceeds, Entergy Texas Restoration Funding II purchased from Entergy Texas the transition
property, which is the right to recover from customers through a system restoration charge amounts sufficient to
service the securitization bonds. Entergy Texas expects to use the proceeds to reduce its outstanding debt. The
creditors of Entergy Texas do not have recourse to the assets or revenues of Entergy Texas Restoration Funding II,
including the transition property, and the creditors of Entergy Texas Restoration Funding II do not have recourse to
137
Entergy Corporation and Subsidiaries
Notes to Financial Statements
the assets or revenues of Entergy Texas. Entergy Texas has no payment obligations to Entergy Texas Restoration
Funding II except to remit system restoration charge collections.
Grand Gulf Sale-Leaseback Transactions
In 1988, in two separate but substantially identical transactions, System Energy sold and leased back
undivided ownership interests in Grand Gulf for the aggregate sum of $500 million. The initial term of the leases
expired in July 2015. System Energy renewed the leases in December 2013 for fair market value with renewal
terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option to repurchase
the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not
renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of
Grand Gulf’s capacity and energy.
System Energy is required to report the sale-leaseback as a financing transaction in its financial
statements. As such, it has recognized debt for the lease obligation and retained the portion of the plant subject to
the sale-leaseback on its balance sheet. For financial reporting purposes, System Energy has recognized interest
expense on the debt balance and depreciation on the applicable plant balance. The lease payments are recognized as
principal and interest payments on the debt balance.
As of December 31, 2023, System Energy, in connection with the Grand Gulf sale and leaseback
transactions, had future minimum lease payments that are recorded as long-term debt, as follows, which reflects the
effect of the December 2013 renewal:
2024
2025
2026
2027
2028
Years thereafter
Total
Less: Amount representing interest
Present value of net minimum lease payments
Amount
(In Thousands)
$17,188
17,188
17,188
17,188
17,188
137,500
223,440
189,180
$34,260
NOTE 6. PREFERRED EQUITY AND NONCONTROLLING INTERESTS
In May 2021, Entergy’s certificate of incorporation was amended and restated to provide authority to issue
up to 1,000,000 shares of preferred stock, no par value per share, and to decrease from 500,000,000 to 499,000,000
the number of shares of common stock, par value of $0.01 per share, authorized for issuance. As of December 31,
2023 and 2022, no preferred stock has been issued.
138
Entergy Corporation and Subsidiaries
Notes to Financial Statements
The number of shares and units authorized and outstanding and dollar value of preferred stock, preferred
membership interests, and noncontrolling interests for Entergy Corporation subsidiaries as of December 31, 2023
and 2022 are presented below.
Shares/Units
Authorized
Shares/Units
Outstanding
2023
2022
2023
2022
2023
2022
(Dollars in Thousands)
Preferred stock or preferred membership
interests without sinking fund presented
between liabilities and equity:
Entergy Utility Holding Company, LLC,
7.5% Series (a)
Entergy Utility Holding Company, LLC,
6.25% Series (b)
Entergy Utility Holding Company, LLC,
6.75% Series (c)
110,000
110,000
110,000
110,000
$107,425
$107,425
15,000
15,000
15,000
15,000
14,366
14,366
Entergy Finance Holding, Inc. 8.75% (d)
250,000
250,000
250,000
250,000
75,000
75,000
75,000
75,000
73,370
24,249
73,370
24,249
Total preferred stock or preferred
membership interests without sinking
fund presented between liabilities and
equity
Preferred stock without sinking fund and
noncontrolling interests presented as
equity:
450,000
450,000
450,000
450,000
219,410
219,410
Entergy Texas, 5.375% Series (e)
1,400,000
1,400,000
1,400,000
1,400,000
35,000
35,000
Entergy Texas, 5.10% Series (f)
Entergy Arkansas Noncontrolling Interest
(g)
Entergy Louisiana Noncontrolling Interests
(h)
Entergy Mississippi Noncontrolling Interest
(i)
Total preferred stock without sinking fund
and noncontrolling interests presented as
equity
Total subsidiaries’ preferred stock or
preferred membership interests without
sinking fund and noncontrolling interests
150,000
150,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
21,599
27,825
45,107
31,735
18,753
3,347
1,550,000
1,550,000
1,400,000
1,400,000
120,459
97,907
2,000,000
2,000,000
1,850,000
1,850,000
$339,869
$317,317
(a)
(b)
(c)
In October 2015, Entergy Utility Holding Company, LLC issued 110,000 units of $1,000 liquidation value
7.5% Series A Preferred Membership Interests, all of which are outstanding as of December 31, 2023. The
distributions are cumulative and payable quarterly. These units are redeemable on or after January 1, 2036,
at Entergy Utility Holding Company, LLC’s option, at the fixed redemption price of $1,000 per unit. Dollar
amount outstanding is net of $2,575 thousand of preferred stock issuance costs.
In November 2017, Entergy Utility Holding Company, LLC issued 15,000 units of $1,000 liquidation value
6.25% Series B Preferred Membership Interests, all of which are outstanding as of December 31, 2023. The
distributions are cumulative and payable quarterly. These units are redeemable on or after February 28,
2038, at Entergy Utility Holding Company, LLC’s option, at the fixed redemption price of $1,000 per unit.
Dollar amount outstanding is net of $634 thousand of preferred stock issuance costs.
In November 2018, Entergy Utility Holding Company, LLC issued 75,000 units of $1,000 liquidation value
6.75% Series C Preferred Membership Interests, all of which are outstanding as of December 31, 2023. The
distributions are cumulative and payable quarterly. These units are redeemable on or after February 28,
139
Entergy Corporation and Subsidiaries
Notes to Financial Statements
(d)
(e)
(f)
(g)
(h)
(i)
2039, at Entergy Utility Holding Company, LLC’s option, at the fixed redemption price of $1,000 per unit.
Dollar amount outstanding is net of $1,630 thousand of preferred stock issuance costs.
In December 2013, Entergy Finance Holding, Inc. issued 250,000 shares of $100 par value 8.75% Series
Preferred Stock, all of which are outstanding as of December 31, 2023. The dividends are cumulative and
payable quarterly. The preferred stock is redeemable on or after December 16, 2023, at Entergy Finance
Holding, Inc.’s option, at the fixed redemption price of $100 per share. Dollar amount outstanding is net of
$751 thousand of preferred stock issuance costs.
In September 2019, Entergy Texas issued $35 million of 5.375% Series A Preferred Stock, a total of
1,400,000 shares with a liquidation value of $25 per share, all of which are outstanding as of December 31,
2023. The dividends are cumulative and payable quarterly. The preferred stock is redeemable on or after
October 15, 2024 at Entergy Texas’s option, at a fixed redemption price of $25 per share.
In November 2021, Entergy Texas issued $3.75 million of 5.10% Series B Preferred Stock, a total of
150,000 shares with a liquidation value of $25 per share, all of which are outstanding and held by Entergy
Corporation as of December 31, 2023. The dividends are cumulative and payable quarterly. The preferred
stock is redeemable at Entergy Texas’s option at a fixed redemption price of $25.50 per share prior to
November 1, 2026 and at a fixed redemption price of $25 per share on or after November 1, 2026.
Currently, all shares are held by Entergy Corporation.
AR Searcy Partnership, LLC is a tax equity partnership between Entergy Arkansas and a tax equity investor
which was formed to acquire and own the Searcy Solar facility. Entergy Arkansas, as the managing
member, consolidates AR Searcy Partnership, LLC and the tax equity investor’s interest is presented as
noncontrolling interest in the financial statements. Entergy Arkansas uses the HLBV method of accounting
for income or loss allocation to the tax equity investor’s noncontrolling interest. See Note 1 to the financial
statements for further discussion on the presentation of the tax equity investor’s noncontrolling interest and
the HLBV method of accounting.
Entergy Louisiana’s noncontrolling interests include the LURC’s 1% beneficial interest in both Restoration
Law Trust I and Restoration Law Trust II. Restoration Law Trust I (the storm trust I) was established in
2022 as part of the Act 293 securitization of Entergy Louisiana’s Hurricane Laura, Hurricane Delta,
Hurricane Zeta, and Winter Storm Uri restoration costs, as well as to establish a storm reserve to fund a
portion of Hurricane Ida storm restoration costs. The storm trust I holds preferred membership interests
issued by Entergy Finance Company, and Entergy Finance Company is required to make annual
distributions (dividends) on the preferred membership interests. These annual dividends paid on the
Entergy Finance Company preferred membership interests are distributed 1% to the LURC and 99% to
Entergy Louisiana. Entergy Louisiana, as the primary beneficiary, consolidates the storm trust I and the
LURC’s 1% beneficial interest is presented as noncontrolling interest in the consolidated financial
statements for Entergy. See Note 2 to the financial statements for a discussion of the Entergy Louisiana
May 2022 storm cost securitization. Restoration Law Trust II (the storm trust II) was established in 2023 as
part of the Act 293 securitization of Entergy Louisiana’s remaining Hurricane Ida storm restoration costs.
The storm trust II holds preferred membership interests issued by Entergy Finance Company, and Entergy
Finance Company is required to make annual distributions (dividends) on the preferred membership
interests. These annual dividends paid on the Entergy Finance Company preferred membership interests are
distributed 1% to the LURC and 99% to Entergy Louisiana. Entergy Louisiana, as the primary beneficiary,
consolidates the storm trust II and the LURC’s 1% beneficial interest is presented as noncontrolling interest
in the consolidated financial statements for Entergy. See Note 2 to the financial statements for a discussion
of the Entergy Louisiana March 2023 storm cost securitization.
MS Sunflower Partnership, LLC is a tax equity partnership between Entergy Mississippi and a tax equity
investor which was formed to acquire and own the Sunflower Solar facility. Entergy Mississippi, as the
managing member, consolidates MS Sunflower Partnership, LLC and the tax equity investor’s interest is
presented as noncontrolling interest in the consolidated financial statements for Entergy. Entergy
Mississippi uses the HLBV method of accounting for income or loss allocation to the tax equity investor’s
noncontrolling interest. See Note 1 to the financial statements for further discussion on the presentation of
the tax equity investor’s noncontrolling interest and the HLBV method of accounting.
140 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Dividends and distributions paid on all of Entergy Corporation’s subsidiaries’ preferred stock and
membership interests series may be eligible for the dividends received deduction.
Presentation of Preferred Stock without Sinking Fund
Accounting standards regarding noncontrolling interests and the classification and measurement of
redeemable securities require the classification of preferred securities between liabilities and shareholders’ equity on
the balance sheet if the holders of those securities have protective rights that allow them to gain control of the board
of directors in certain circumstances. These rights would have the effect of giving the holders the ability to
potentially redeem their securities, even if the likelihood of occurrence of these circumstances is considered
remote. The outstanding preferred stock of Entergy Texas has protective rights with respect to unpaid dividends but
provides for the election of board members that would not constitute a majority of the board, and the preferred stock
of Entergy Texas is therefore classified as a component of equity.
The outstanding preferred securities of Entergy Utility Holding Company, LLC (a Utility subsidiary) and
Entergy Finance Holding, Inc. (an Entergy subsidiary in the non-utility operations business), whose preferred
holders have protective rights, are presented between liabilities and equity on Entergy’s consolidated balance
sheets. The preferred dividends or distributions paid by all subsidiaries are reflected for all periods presented
outside of consolidated net income.
NOTE 7. COMMON EQUITY
Common Stock
Common stock and treasury stock shares activity for Entergy for 2023, 2022, and 2021 is as follows:
2023
2022
2021
Common
Shares
Issued
Treasury
Shares
Common
Shares
Issued
Treasury
Shares
Common
Shares
Issued
Treasury
Shares
279,653,929
68,477,429
271,965,510
69,312,326
270,035,180
69,790,346
1,321,419
—
7,688,419
—
1,930,330
—
—
—
(336,621)
(14,030)
—
—
(818,366)
(16,531)
—
—
(461,903)
(16,117)
280,975,348
68,126,778
279,653,929
68,477,429
271,965,510
69,312,326
Beginning Balance,
January 1
Issuances:
Equity Distribution
Program
Employee Stock-
Based Compensation
Plans
Directors’ Plan
Ending Balance,
December 31
Entergy Corporation reissues treasury shares to meet the requirements of the Stock Plan for Outside
Directors (Directors’ Plan), the three equity plans of Entergy Corporation and Subsidiaries, and certain other stock
benefit plans. The Directors’ Plan awards to non-employee directors a portion of their compensation in the form of
a fixed dollar value of shares of Entergy Corporation common stock.
In October 2010 the Board granted authority for a $500 million share repurchase program. As of
December 31, 2023, $350 million of authority remains under the $500 million share repurchase program.
Dividends declared per common share were $4.34 in 2023, $4.10 in 2022, and $3.86 in 2021.
141
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Equity Distribution Program
In January 2021, Entergy Corporation entered into an equity distribution sales agreement with several
counterparties establishing an at the market equity distribution program, pursuant to which Entergy Corporation
may offer and sell from time to time shares of its common stock. The sales agreement provides that, in addition to
the issuance and sale of shares of Entergy Corporation common stock, Entergy Corporation may enter into forward
sale agreements for the sale of its common stock. The aggregate number of shares of common stock sold under this
sales agreement and under any forward sale agreement may not exceed an aggregate gross sales price of $2 billion.
As of December 31, 2023, an aggregate gross sales price of approximately $1.5 billion has been sold under the at
market equity distribution program.
During the year ended December 31, 2021, Entergy Corporation issued 1,930,330 shares of common stock
under the at the market equity distribution program. The net sales proceeds from these shares totaled
$200.8 million, which includes the gross sales price of $204.2 million received by Entergy Corporation less
$1.4 million of general issuance costs and $2.0 million of aggregate compensation to the agents with respect to such
sales. During the years ended December 31, 2023 and 2022, there were no shares of common stock issued under
the at the market equity distribution program.
In June, August, and October 2021, Entergy Corporation entered into forward sale agreements for 416,853
shares, 1,692,555 shares, and 250,743 shares of common stock, respectively. No amounts were recorded on
Entergy’s balance sheet with respect to the equity offerings until settlements of the equity forward sale agreements
occurred in November 2022. The forward sale agreements required Entergy Corporation to, at its election prior to
September 29, 2023, either (i) physically settle the transactions by issuing the total of 416,853 shares, 1,692,555
shares, and 250,743 shares, respectively, of its common stock to the forward counterparties in exchange for net
proceeds at the then-applicable forward sale price specified by the agreements (initially approximately $106.87,
$111.16, and $100.35 per share, respectively) or (ii) net settle the transactions in whole or in part through the
delivery or receipt of cash or shares. Each forward sale price was subject to adjustment on a daily basis based on a
floating interest rate factor and decreased by other fixed amounts specified in the agreements. In connection with
the forward sale agreements, the forward seller, or its affiliates, borrowed from third parties and sold 416,853
shares, 1,692,555 shares, and 250,743 shares, respectively, of Entergy Corporation’s common stock. The gross
sales price of these shares totaled approximately $45 million, $190.1 million, and $25.4 million, respectively. In
connection with the sales of these shares, Entergy Corporation paid to the forward sellers fees of approximately
$0.5 million, $1.9 million, and $0.3 million, respectively, which have not been deducted from the gross sales prices.
Entergy Corporation did not receive any proceeds from such sales of borrowed shares.
In March, June, and September 2022, Entergy Corporation entered into forward sale agreements for
1,538,010 shares, 2,124,086 shares, and 1,666,172 shares of common stock, respectively. No amounts were
recorded on Entergy’s balance sheet with respect to the equity offerings until settlements of the equity forward sale
agreements occurred in November 2022. The forward sale agreements required Entergy Corporation to, at its
election prior to September 29, 2023 for the March 2022 agreements and prior to December 29, 2023 for the June
and September 2022 agreements, either (i) physically settle the transactions by issuing the total of 1,538,010 shares,
2,124,086 shares, and 1,666,172 shares, respectively, of its common stock to the forward counterparties in exchange
for net proceeds at the then-applicable forward sale price specified by the agreements (initially approximately
$108.12, $116.94, and $115.46 per share, respectively) or (ii) net settle the transactions in whole or in part through
the delivery or receipt of cash or shares. Each forward sale price was subject to adjustment on a daily basis based
on a floating interest rate factor and decreased by other fixed amounts specified in the agreements. In connection
with the forward sale agreements, the forward seller, or its affiliates, borrowed from third parties and sold 1,538,010
shares, 2,124,086 shares, and 1,666,172 shares, respectively, of Entergy Corporation’s common stock. The gross
sales price of these shares totaled approximately $168 million, $250.9 million, and $194.2 million, respectively. In
connection with the sales of these shares, Entergy Corporation paid the forward sellers fees of approximately
142 Entergy Corporation and Subsidiaries
Notes to Financial Statements
$1.7 million, $2.5 million, and $1.9 million, respectively, which have not been deducted from the gross sales prices.
Entergy Corporation did not receive any proceeds from such sales of borrowed shares.
In November 2022, Entergy Corporation physically settled its obligations under the then-outstanding
forward sale agreements by delivering 7,688,419 shares of common stock in exchange for cash proceeds of
$853.3 million. The forward sale price used to determine the cash proceeds received by Entergy Corporation was
calculated based on the initial forward sale price of $112.50 per share as adjusted in accordance with the forward
sale agreements. Entergy Corporation incurred an aggregate amount of approximately $0.7 million of general
issuance costs with the settlement. Entergy Corporation used the net proceeds for general corporate purposes,
which included repayment of commercial paper, outstanding loans under Entergy Corporation’s revolving credit
facility, and other debt.
In June 2023, Entergy Corporation entered into forward sale agreements for 102,995 shares and 365,307
shares of common stock, and in November 2023, Entergy Corporation entered into a forward sale agreement for
853,117 shares of common stock. No amounts were recorded on Entergy’s balance sheet with respect to the equity
offerings until settlements of the equity forward sale agreements occurred in November and December 2023. The
forward sale agreements required Entergy Corporation to, at its election prior to May 31, 2024 and June 28, 2024,
respectively, for the June 2023 agreements and prior to August 11, 2024 for the November 2023 agreement, either
(i) physically settle the transactions by issuing the total of 102,995 shares, 365,307 shares, and 853,117 shares,
respectively, of its common stock to the forward counterparties in exchange for net proceeds at the then-applicable
forward sale price specified by the agreements (initially approximately $101.36, $101.39, and $97.48 per share,
respectively) or (ii) net settle the transactions in whole or in part through the delivery or receipt of cash or shares.
Each forward sale price was subject to adjustment on a daily basis based on a floating interest rate factor and
decreased by other fixed amounts specified in the agreements. In connection with the forward sale agreements, the
forward seller, or its affiliates, borrowed from third parties and sold 102,995 shares, 365,307 shares, and 853,117
shares, respectively, of Entergy Corporation’s common stock. The gross sales price of these shares totaled
approximately $10.5 million, $37.4 million, and $84 million, respectively. In connection with the sales of these
shares, Entergy Corporation paid the forward sellers fees of approximately $0.1 million, $0.4 million, and
$0.8 million, respectively, which have not been deducted from the gross sales prices. Entergy Corporation did not
receive any proceeds from such sales of borrowed shares.
In November 2023, Entergy Corporation physically settled its obligations under the June 2023 forward sale
agreements, and in December 2023, Entergy Corporation physically settled its obligations under the November
2023 forward sale agreement, by delivering 468,302 shares and 853,117 shares of common stock, respectively, in
exchange for cash proceeds of $47.8 million and $83.3 million, respectively. The forward sale price used to
determine the cash proceeds received by Entergy was calculated based on the initial forward sale price of $101.38
and $97.48 per share, respectively, as adjusted in accordance with the forward sale agreements. Entergy
Corporation incurred an aggregate amount of approximately $0.4 million of general issuance costs with the
settlements. Entergy Corporation used the net proceeds for general corporate purposes, which included repayment
of commercial paper, outstanding loans under Entergy Corporation’s revolving credit facility, and other debt.
In December 2023, Entergy Corporation entered into a forward sale agreement for 2,753,246 shares of
common stock. No amounts have been or will be recorded on Entergy’s balance sheet with respect to the equity
offering until settlement of the equity forward sale agreement occurs. The forward sale agreement requires Entergy
Corporation to, at its election prior to May 30, 2025, either (i) physically settle the transaction by issuing the total of
2,753,246 shares of its common stock to the forward counterparty in exchange for net proceeds at the then-
applicable forward sale price specified by the agreement (initially approximately $101.11 per share) or (ii) net settle
the transaction in whole or in part through the delivery or receipt of cash or shares. The forward sale price is subject
to adjustment on a daily basis based on a floating interest rate factor and will decrease by other fixed amounts
specified in the agreement. In connection with the forward sale agreement, the forward seller, or its affiliates,
borrowed from third parties and sold 2,753,246 shares of Entergy Corporation’s common stock. The gross sales
price of these shares totaled approximately $280.5 million. In connection with the sale of these shares, Entergy
143 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Corporation paid the forward sellers fees of approximately $2.8 million which have not been deducted from the
gross sales price. Entergy Corporation did not receive any proceeds from such sales of borrowed shares.
Until settlement of the forward sale agreements, earnings per share dilution resulting from the agreements,
if any, were determined under the treasury stock method. Share dilution occurs when the average market price of
Entergy Corporation’s common stock is higher than the average forward sales price. At December 31, 2023,
1,762,709 shares under the forward sale agreement were not included in the calculation of diluted earnings per share
because their effect would have been antidilutive, and at December 31, 2021, 1,158,917 shares under the then-
outstanding forward sale agreements were not included in the calculation of diluted earnings per share because their
effect would have been antidilutive. At December 31, 2022, there were no forward share agreements outstanding.
Retained Earnings and Dividends
Entergy Corporation received dividend payments and distributions from subsidiaries totaling $189 million
in 2023, $301 million in 2022, and $136 million in 2021.
Comprehensive Income
Accumulated other comprehensive income (loss) is included in the equity section of the balance sheets of
Entergy. The following table presents changes in accumulated other comprehensive income (loss) for Entergy for
the year ended December 31, 2023:
Beginning balance, January 1, 2023
Other comprehensive income (loss) before
reclassifications
Amounts reclassified from accumulated other
comprehensive income (loss)
Net other comprehensive income (loss) for the
period
Ending balance, December 31, 2023
Pension and Other
Postretirement
Liabilities
(In Thousands)
($191,754)
36,404
(7,110)
29,294
($162,460)
144
The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the
year ended December 31, 2022 by component:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Cash flow
hedges
net
unrealized
gain (loss)
Pension
and
other
postretirement
liabilities
Net
unrealized
investment
gain (loss)
Total
Accumulated
Other
Comprehensive
Income (Loss)
Beginning balance, January 1, 2022
Other comprehensive income (loss)
before reclassifications
Amounts reclassified from
accumulated other comprehensive
income (loss)
Net other comprehensive income
(loss) for the period
Ending balance, December 31, 2022
(In Thousands)
($1,035)
($338,647)
$7,154
($332,528)
908
112,944
(12,997)
100,855
127
1,035
$—
33,949
5,843
39,919
146,893
($191,754)
(7,154)
$—
140,774
($191,754)
Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) for Entergy for the
years ended December 31, 2023 and 2022 are as follows:
Cash flow hedges net unrealized loss
Interest rate swaps
Total realized loss on cash flow hedges
Income taxes
Total realized loss on cash flow hedges (net of tax)
Pension and other postretirement liabilities
Amortization of prior-service costs
Amortization of net gain (loss)
Settlement loss
Total amortization and settlement loss
Income taxes
Total amortization and settlement loss (net of tax)
Net unrealized investment gain (loss)
Realized loss
Income taxes
Total realized investment loss (net of tax)
Amounts reclassified
from AOCI
2023
2022
(In Thousands)
Income Statement
Location
$—
—
—
$—
($161) Miscellaneous - net
(161)
34
($127)
Income taxes
$13,586
6,590
(10,848)
9,328
(2,218)
$7,110
$15,337
(a)
(33,859) (a)
(25,321) (a)
(43,843)
9,894
($33,949)
Income taxes
$—
—
$—
($9,245)
3,402
($5,843)
Interest and investment
income
Income taxes
Total reclassifications for the period (net of tax)
$7,110
($39,919)
(a) These accumulated other comprehensive income (loss) components are included in the computation of net
periodic pension and other postretirement cost. See Note 11 to the financial statements for additional details.
145
Entergy Corporation and Subsidiaries
Notes to Financial Statements
NOTE 8. COMMITMENTS AND CONTINGENCIES
Entergy and the Registrant Subsidiaries are involved in a number of legal, regulatory, and tax proceedings
before various courts, regulatory authorities, and governmental agencies in the ordinary course of business. While
management is unable to predict with certainty the outcome of such proceedings, management does not believe that
the ultimate resolution of these matters will have a material adverse effect on Entergy’s results of operations, cash
flows, or financial condition. Entergy discusses regulatory proceedings in Note 2 to the financial statements and
discusses tax proceedings in Note 3 to the financial statements.
Vidalia Purchased Power Agreement
Entergy Louisiana has an agreement extending through the year 2031 to purchase energy generated by a
hydroelectric facility known as the Vidalia project. Entergy Louisiana made payments under the contract of
approximately $100.4 million in 2023, $117.2 million in 2022, and $128.5 million in 2021. If the maximum
percentage (94%) of the energy is made available to Entergy Louisiana, current production projections would
require estimated payments of approximately $137.4 million in 2024 and a total of $958.8 million for the years
2025 through 2031. Entergy Louisiana currently recovers the costs of the purchased energy through its fuel
adjustment clause.
In an LPSC-approved settlement related to tax benefits from the tax treatment of the Vidalia contract,
Entergy Louisiana agreed to credit rates by $11 million each year for up to 10 years, beginning in October 2002. In
October 2011 the LPSC approved a settlement under which Entergy Louisiana agreed to provide credits to
customers by crediting billings an additional $20.235 million per year for 15 years beginning January
2012. Entergy Louisiana recorded a regulatory charge and a corresponding regulatory liability to reflect this
obligation. The settlement agreement allowed for an adjustment to the credits if, among other things, there was a
change in the applicable federal or state income tax rate. As a result of the enactment of the Tax Cuts and Jobs Act,
in December 2017, and the lowering of the federal corporate income tax rate from 35% to 21%, the Vidalia
purchased power regulatory liability was reduced by $30.5 million, with a corresponding increase to Other
regulatory credits on the income statement. See Note 3 to the financial statements for discussion of the effects of
the Tax Cuts and Jobs Act and discussion of the resolution of the 2016-2018 IRS audit, which included the tax
treatment of the Vidalia contract.
ANO Damage, Outage, and NRC Reviews
In March 2013, during a scheduled refueling outage at ANO 1, a contractor-owned and operated heavy-
lifting apparatus collapsed while moving the generator stator out of the turbine building. The collapse resulted in
the death of an ironworker and injuries to several other contract workers, caused ANO 2 to shut down, and damaged
the ANO turbine building. The total cost of assessment, restoration of off-site power, site restoration, debris
removal, and replacement of damaged property and equipment was approximately $95 million. Entergy Arkansas
pursued its options for recovering damages that resulted from the stator drop, including its insurance coverage and
legal action. Entergy Arkansas collected $50 million in 2014 from Nuclear Electric Insurance Limited (NEIL), a
mutual insurance company that provides property damage coverage to the members’ nuclear generating plants.
Entergy Arkansas also collected a total of $21 million in 2018 as a result of stator-related settlements.
In addition, Entergy Arkansas incurred replacement power costs for ANO 2 power during its outage and
incurred incremental replacement power costs for ANO 1 power because the outage extended beyond the originally-
planned duration of the refueling outage. In February 2014 the APSC authorized Entergy Arkansas to retain the
$65.9 million in its deferred fuel balance with recovery to be reviewed in a later period after more information
regarding various claims associated with the ANO stator incident was available.
In March 2015, after several NRC inspections and regulatory conferences, arising from the stator incident,
the NRC placed ANO into the “multiple/repetitive degraded cornerstone column,” or Column 4, of the NRC’s
146 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Reactor Oversight Process Action Matrix. Entergy Arkansas incurred incremental costs of approximately
$53 million in 2015 to prepare for the NRC inspections that began in early 2016 in order to address the issues
required to move ANO back to “licensee response” or Column 1 of the NRC’s Reactor Oversight Process Action
Matrix. Excluding remediation and response costs that resulted from the additional NRC inspection activities,
Entergy Arkansas incurred approximately $44 million in 2016 and $7 million in 2017 in support of NRC inspection
activities and to implement Entergy Arkansas’s performance improvement initiatives developed in 2015. In June
2018 the NRC moved ANO 1 and 2 into the “licensee response column,” or Column 1, of the NRC’s Reactor
Oversight Process Action Matrix.
In July 2017, Entergy Arkansas filed for a change in rates pursuant to its formula rate plan rider. In that
proceeding, the APSC approved a settlement agreement agreed upon by the parties, including a provision that
requires Entergy Arkansas to initiate a regulatory proceeding for the purpose of recovering funds currently withheld
from rates and related to the stator incident, including the $65.9 million of deferred fuel and purchased energy costs
and costs related to the incremental oversight previously noted, subject to certain timelines and conditions set forth
in the settlement agreement.
In October 2023, Entergy Arkansas made a commitment to the APSC to make a filing to forgo its
opportunity to seek recovery of the identified costs resulting from the ANO stator incident, specifically all
incremental fuel and purchased energy expense, capital and incremental non-fuel operations and maintenance costs,
and costs of any judgment that may be rendered against Entergy Arkansas in civil litigation that is not covered by
insurance. As a result, in third quarter 2023, Entergy Arkansas recorded write-offs of its regulatory asset for
deferred fuel of $68.9 million, which includes interest, and the undepreciated balance of $9.5 million in capital costs
related to the ANO stator incident. Consistent with its October 2023 commitment, Entergy Arkansas filed a motion
to forgo recovery in November 2023, and the motion was approved by the APSC in December 2023.
Spent Nuclear Fuel Litigation
Under the Nuclear Waste Policy Act of 1982, the DOE is required, for a specified fee, to construct storage
facilities for, and to dispose of, all spent nuclear fuel and other high-level radioactive waste generated by domestic
nuclear power reactors. Entergy’s nuclear owner/licensee subsidiaries have been charged fees for the estimated
future disposal costs of spent nuclear fuel in accordance with the Nuclear Waste Policy Act of 1982. The affected
Entergy companies entered into contracts with the DOE, whereby the DOE is to furnish disposal services at a cost
of one mill per net kWh generated and sold after April 7, 1983, plus a one-time fee for generation prior to that
date. Entergy considers all costs incurred for the disposal of spent nuclear fuel, except accrued interest, to be proper
components of nuclear fuel expense. Provisions to recover such costs have been or will be made in applications to
regulatory authorities for the Utility plants. Following the defunding of the Yucca Mountain spent fuel repository
program, the National Association of Regulatory Utility Commissioners and others sued the government seeking
cessation of collection of the one mill per net kWh generated and sold after April 7, 1983 fee. In November 2013
the D.C. Circuit Court of Appeals ordered the DOE to submit a proposal to Congress to reset the fee to zero until the
DOE complies with the Nuclear Waste Policy Act or Congress enacts an alternative waste disposal plan. In January
2014 the DOE submitted the proposal to Congress under protest, and also filed a petition for rehearing with the D.C.
Circuit. The petition for rehearing was denied. The zero spent fuel fee went into effect prospectively in May 2014.
Because the DOE has not begun accepting spent fuel, it is in non-compliance with the Nuclear Waste Policy
Act of 1982 and is in partial breach of its spent fuel disposal contracts. As a result of the DOE’s failure to begin
disposal of spent nuclear fuel in 1998 pursuant to the Nuclear Waste Policy Act of 1982 and the spent fuel disposal
contracts, Entergy’s nuclear owner/licensee subsidiaries have incurred and will continue to incur damages.
Beginning in November 2003 these subsidiaries have pursued litigation to recover the damages caused by the
DOE’s delay in performance. Following are details of final judgments recorded by Entergy in 2021, 2022, and
2023 related to Entergy’s nuclear owner/licensee subsidiaries’ litigation with the DOE.
147 Entergy Corporation and Subsidiaries
Notes to Financial Statements
In January 2021 the U.S. Court of Federal Claims issued a final judgment in the amount of $23 million in
favor of Entergy Nuclear Palisades and against the DOE in the second round Palisades damages case. Entergy
received payment from the U.S. Treasury in February 2021. The effects of recording the judgment were reductions
to plant, other operation and maintenance expenses, and taxes other than income taxes. The Palisades damages
awarded included $16 million related to costs previously recorded as plant and $7 million related to costs previously
recorded as other operation and maintenance expenses. Of the $16 million previously capitalized, Entergy recorded
$9 million as a reduction to previously-recorded depreciation expense.
In August 2021 the U.S. Court of Federal Claims issued a final judgment in the amount of $37.6 million in
favor of Holtec Pilgrim, LLC against the DOE in the third round Pilgrim damages case. Holtec Pilgrim, LLC
received the payment from the U.S. Treasury in September 2021. The judgment proceeds were subsequently
transferred to Entergy pursuant to the terms of the Pilgrim sale. The receipt of the proceeds was recorded as a
deferred credit because Entergy has an indemnity obligation to Holtec related to pre-sale DOE litigation involving
Pilgrim that remains outstanding.
In August 2021 the U.S. Court of Federal Claims issued a final judgment in the amount of $21 million in
favor of Entergy Louisiana against the DOE in the third round River Bend damages case. Entergy Louisiana
received the payment from the U.S. Treasury in September 2021. The effects of recording the judgment were
reductions to plant, nuclear fuel expense, and other operation and maintenance expenses. The River Bend damages
awarded included $9 million in costs previously recorded as plant, $8 million related to costs previously recorded as
nuclear fuel expense, and $4 million related to costs previously recorded as other operation and maintenance
expenses.
In October 2021 the U.S. Court of Federal Claims issued a final judgment in the amount of $83 million in
favor of Entergy Nuclear Indian Point 2, LLC and Entergy Nuclear Indian Point 3, LLC against the DOE in the
Indian Point 2 third round and Indian Point 3 second round combined damages case. Entergy received payment
from the U.S. Treasury in January 2022. The effect in 2021 of recording the judgment was a reduction to asset
write-offs, impairments, and related charges (credits). The damages awarded included $32 million related to costs
previously recorded as plant, $47 million related to costs previously recorded as other operation and maintenance
expenses, and $4 million related to costs previously recorded as taxes other than income taxes.
In March 2023 the DOE submitted an offer of judgment to resolve claims in the fourth round ANO damages
case. The $41 million offer was accepted by Entergy Arkansas, and the U.S. Court of Federal Claims issued a
judgment in that amount in favor of Entergy Arkansas and against the DOE. Entergy Arkansas received payment
from the U.S. Treasury in April 2023. The effects of recording the judgment were reductions to plant, nuclear fuel
expense, other operation and maintenance expenses, materials and supplies, and taxes other than income taxes. The
ANO damages awarded included $18 million related to costs previously recorded as plant, $10 million related to
costs previously recorded as other operation and maintenance expenses, $8 million related to costs previously
recorded as nuclear fuel expense, $3 million related to costs previously recorded as materials and supplies, and
$2 million related to costs previously recorded as taxes other than income taxes.
In July 2023 the DOE submitted an offer of judgment to resolve claims in the Indian Point 2 fourth round
and Indian Point 3 third round combined damages case. The $59 million offer was accepted by Entergy and Holtec
International, as the current owner. The U.S. Court of Federal Claims issued a final judgment in that amount in
favor of Holtec Indian Point 2, LLC and Holtec Indian Point 3, LLC (previously Entergy Nuclear Indian Point 2,
LLC and Entergy Nuclear Indian Point 3, LLC) and against the DOE. Holtec received payment from the U.S.
Treasury in July 2023. Consistent with certain terms agreed upon in connection with the sale of Indian Point
Energy Center in May 2021, Holtec transferred $40 million to Entergy for its pro-rata share of the litigation
proceeds in August 2023. The remainder of the judgment was retained by Holtec. The effect of recording
Entergy’s pro-rata share of the judgment was a reduction to asset write-offs, impairments, and related charges
(credits). Entergy’s pro-rata share of the damages awarded included $18 million related to costs previously
recorded as spending on the asset retirement obligation, $15 million related to costs previously recorded as other
148 Entergy Corporation and Subsidiaries
Notes to Financial Statements
operation and maintenance expenses, $6 million related to costs previously recorded as plant, and $1 million related
to costs previously recorded as taxes other than income taxes.
Management cannot predict the timing or amount of any potential recoveries on other claims filed by
Entergy subsidiaries and cannot predict the timing of any eventual receipt from the DOE of the U.S. Court of
Federal Claims damage awards.
Nuclear Insurance
Third Party Liability Insurance
The Price-Anderson Act requires that reactor licensees purchase insurance and participate in a secondary
insurance pool that provides insurance coverage for the public in the event of a nuclear power plant accident. The
costs of this insurance are borne by the nuclear power industry. Congress amended and renewed the Price-
Anderson Act in 2005 for a term through 2025. The Price-Anderson Act requires nuclear power plants to show
evidence of financial protection in the event of a nuclear accident. This protection must consist of two layers of
coverage:
1. The primary level is private insurance underwritten by American Nuclear Insurers (ANI) and provides
public liability insurance coverage of $500 million, as of January 1, 2024, for each operating reactor. If this
amount is not sufficient to cover claims arising from an accident, the second level, Secondary Financial
Protection, applies.
2. Secondary Financial Protection: Currently, 95 nuclear reactors participate in the Secondary Financial
Protection program, which provides approximately $15.8 billion in secondary layer insurance coverage to
compensate the public in the event of a nuclear power reactor accident. The Price-Anderson Act provides
that all potential liability for a nuclear accident is limited to the amounts of insurance coverage available
under the primary and secondary layers.
Within the Secondary Financial Protection program, each nuclear reactor has a contingent obligation to pay
a retrospective premium, equal to its proportionate share of the loss in excess of the primary level,
regardless of proximity to the incident or fault, up to a maximum of approximately $165.9 million per
reactor per incident (Entergy’s maximum total contingent obligation per incident is $829.6 million). This
retrospective premium is assessable at approximately $24.7 million per year per incident per nuclear power
reactor.
3. Total insurance coverage available is approximately $16.3 billion, among the primary ANI coverage and the
Secondary Financial Protection program, to respond to a nuclear power plant accident that causes third-
party damages (e.g., off-site property and environmental damage, off-site bodily injury, and on-site third-
party bodily injury (i.e., contractors)). These coverages also respond to an accident caused by terrorism.
Entergy Arkansas and Entergy Louisiana each have two licensed reactors. System Energy has one licensed
reactor (10% of Grand Gulf is owned by a non-affiliated company (Cooperative Energy) that would share on a pro-
rata basis in any retrospective premium assessment to System Energy under the Price-Anderson Act).
Property Insurance
Entergy’s nuclear owner/licensee subsidiaries are members of NEIL, a mutual insurance company that
provides property damage coverage, including decontamination and reactor stabilization, to the members’ nuclear
generating plants. The property damage insurance limits procured by Entergy for its Utility plants are in
149 Entergy Corporation and Subsidiaries
Notes to Financial Statements
compliance with the financial protection requirements of the NRC. These coverage limits, deductibles, and weekly
indemnity periods are subject to change based on results of NEIL loss control inspections.
The Utility plants’ (ANO 1 and 2, Grand Gulf, River Bend, and Waterford 3) property damage insurance
limits are $1.06 billion per occurrence at each plant. The property deductible is $20 million per site at the Utility
plants, except for earth movement, flood, and windstorm. Property damage from earth movement is excluded from
the first $500 million in coverage for all Utility plants. Property damage from flood is excluded from the first
$500 million in coverage at ANO 1 and 2 and Grand Gulf. Property damage from flood for Waterford 3 and River
Bend includes a deductible of $10 million plus an additional 10% of the amount of the loss in excess of $10 million,
up to a maximum deductible of $50 million. Property damage from a windstorm for all of the Utility nuclear plants
includes a deductible of $10 million plus an additional 10% of the amount of the loss in excess of $10 million, up to
a total maximum deductible of $50 million.
In addition, Waterford 3 and Grand Gulf are also covered under NEIL’s Accidental Outage Coverage
program. Accidental outage coverage provides indemnification for the actual cost incurred in the event of an
unplanned outage resulting from property damage covered under the NEIL Primary Property Insurance policy,
subject to a deductible period. The indemnification for the actual cost incurred is based on market power prices at
the time of the loss. After the deductible period has passed, weekly indemnities for an unplanned nuclear outage,
covered under NEIL’s Accidental Outage Coverage program, would be paid according to the amounts listed below:
•
•
•
100% of the weekly indemnity for each week for the first payment period of 52 weeks (nuclear and non-
nuclear loss); then
80% of the weekly indemnity for each week for the second payment period of 52 weeks (nuclear and non-
nuclear loss); and thereafter
80% of the weekly indemnity for an additional 58 weeks for the third and final payment period (nuclear loss
only).
Under the property damage and accidental outage insurance programs, all NEIL insured plants could be
subject to assessments should losses exceed the accumulated funds available from NEIL. Effective April 1, 2023,
the maximum amounts of such possible assessments per occurrence were as follows:
Utility:
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
System Energy
Assessments
(In Millions)
$19.4
$36.6
$0.1
$0.1
N/A
$14.3
NRC regulations provide that the proceeds of this insurance must be used, first, to render the reactor safe
and stable, and second, to complete decontamination operations. Only after proceeds are dedicated for such use and
regulatory approval is secured would any remaining proceeds be made available for the benefit of plant owners or
their creditors.
In the event that one or more acts of terrorism causes property damage from a nuclear event under one or
more or all nuclear insurance policies issued by NEIL (including, but not limited to, those described above) within
12 months from the date the first property damage occurs, the maximum recovery under all such nuclear insurance
policies shall be an aggregate not exceeding $3.24 billion plus the additional amounts recovered for such losses
from reinsurance, indemnity, and any other sources applicable to such losses.
150
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Non-Nuclear Property Insurance
Entergy’s non-nuclear property insurance program provides coverage on a system-wide basis for Entergy’s
non-nuclear assets. The insurance program provides coverage for property damage up to $400 million per
occurrence in excess of a $20 million self-insured retention except for property damage caused by the following:
earthquake shock, flood, and named windstorm, including associated storm surge. For earthquake shock and flood,
the insurance program provides coverage up to $400 million on an annual aggregate basis in excess of a $40 million
self-insured retention. For named windstorm and associated storm surge, the insurance program provides coverage
up to $125 million on an annual aggregate basis in excess of a $40 million self-insured retention. The coverage
provided by the insurance program for the Entergy New Orleans gas distribution system is limited to $50 million
per occurrence and is subject to the same annual aggregate limits and retentions listed above for earthquake shock,
flood, and named windstorm, including associated storm surge.
Covered property generally includes power plants, substations, facilities, inventories, and gas distribution-
related properties. Excluded property generally includes transmission and distribution lines, poles, and towers. For
substations valued at $5 million or less, coverage for named windstorm and associated storm surge is
excluded. This coverage is in place for Entergy Corporation, the Registrant Subsidiaries, and certain other Entergy
subsidiaries. Entergy also purchases $400 million in terrorism insurance coverage for its conventional property.
Employment and Labor-related Proceedings
The Registrant Subsidiaries and other Entergy subsidiaries and related entities are responding to various
lawsuits in both state and federal courts and to other labor-related proceedings filed by current and former
employees, recognized bargaining representatives, and certain third parties. Generally, the amount of damages
being sought is not specified in these proceedings. These actions may include, but are not limited to, allegations of
wrongful employment actions; wage disputes and other claims under the Fair Labor Standards Act or its state
counterparts; claims of race, gender, age, and disability discrimination; disputes arising under collective bargaining
agreements; unfair labor practice proceedings and other administrative proceedings before the National Labor
Relations Board or concerning the National Labor Relations Act; claims of retaliation; claims of harassment and
hostile work environment; and claims for or regarding benefits under various Entergy Corporation-sponsored
employee benefit plans. Entergy and the Registrant Subsidiaries and related entities are responding to these
lawsuits and proceedings and deny liability to the claimants. Management believes that loss exposure has been and
will continue to be handled so that the ultimate resolution of these matters will not be material, in the aggregate, to
the financial position, results of operation, or cash flows of Entergy or the Registrant Subsidiaries.
NOTE 9. ASSET RETIREMENT OBLIGATIONS
Accounting standards require companies to record liabilities for all legal obligations associated with the
retirement of long-lived assets that result from the normal operation of the assets. For Entergy, substantially all of
its asset retirement obligations consist of its liability for decommissioning its nuclear power plants. In addition, an
insignificant amount of removal costs associated with non-nuclear power plants is also included in the
decommissioning and asset retirement costs line item on the balance sheets.
These liabilities are recorded at their fair values (which are the present values of the estimated future cash
outflows) in the period in which they are incurred, with an accompanying addition to the recorded cost of the long-
lived asset. The asset retirement obligation is accreted each year through a charge to expense, to reflect the time
value of money for this present value obligation. The accretion will continue through the completion of the asset
retirement activity. The amounts added to the carrying amounts of the long-lived assets will be depreciated over the
useful lives of the assets. The application of accounting standards related to asset retirement obligations is earnings
neutral to the rate-regulated business of the Registrant Subsidiaries.
151 Entergy Corporation and Subsidiaries
Notes to Financial Statements
In accordance with ratemaking treatment and as required by regulatory accounting standards, the
depreciation provisions for the Registrant Subsidiaries include a component for removal costs that are not asset
retirement obligations under accounting standards. In accordance with regulatory accounting principles, the
Registrant Subsidiaries have recorded regulatory assets (liabilities) in the following amounts to reflect their
estimates of the difference between estimated incurred removal costs and estimated removal costs expected to be
recovered in rates:
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
System Energy
December 31,
2023
2022
(In Millions)
$319.7
$262.3
$188.0
$61.1
$77.5
$102.1
$267.1
$418.8
$159.4
$56.3
$62.9
$94.4
As of December 31, 2023 and 2022, the regulatory asset for removal costs for the Utility operating companies
includes amounts related to storm restoration costs. See Note 2 to the financial statements for further discussion of
storm restoration costs and requested recovery.
The cumulative decommissioning and retirement cost liabilities and expenses recorded in 2023 and 2022 by
Entergy were as follows:
Liabilities as of
December 31,
2022
Accretion
Change in
Cash Flow
Estimate
Liabilities as of
December 31,
2023
(In Millions)
Entergy
$4,271.5
$219.4
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
System Energy
$1,472.7
$1,736.8
$7.8
$—
$11.1
$1,042.5
$87.4
$88.6
$0.4
$0.5
$0.6
$41.7
$14.9
$—
$10.8
$—
$4.1
$—
$—
$4,505.8
$1,560.1
$1,836.2
$8.2
$4.6
$11.7
$1,084.2
152
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Liabilities as
of December 31,
2021
Change in
Cash Flow
Estimate
Accretion
Spending Dispositions
Liabilities as
of December 31,
2022
$4,757.1
$236.0
($0.5)
($13.3)
($707.8)
$4,271.5
(In Millions)
Entergy
Utility
Entergy Arkansas
Entergy Louisiana
Entergy Mississippi
Entergy New Orleans
Entergy Texas
System Energy
$1,390.4
$1,653.2
$10.3
$4.0
$8.5
$82.3
$84.1
$0.6
$0.1
$0.5
$—
$2.8
$—
$—
$2.1
$1,007.6
$40.2
($5.4)
$—
($3.3)
($3.1)
($4.1)
$—
$—
$—
$—
$—
$—
$—
$—
$1,472.7
$1,736.8
$7.8
$—
$11.1
$1,042.5
Non-Utility Operations
Big Rock Point
Palisades
Other (a)
$42.0
$640.4
$0.6
$2.0
$31.0
$—
$—
$—
$—
($1.2)
($1.6)
$—
($42.8) (b)
($669.8) (b)
$—
$—
$—
$0.6
(a)
(b)
See “Coal Combustion Residuals” below for additional discussion regarding the asset retirement
obligations related to coal combustion residuals management.
See Note 14 to the financial statements for discussion of the sale of the Big Rock Point Site and Palisades in
June 2022.
Nuclear Plant Decommissioning
Entergy periodically reviews and updates estimated decommissioning costs. The actual decommissioning
costs may vary from the estimates because of the timing of plant decommissioning, regulatory requirements,
changes in technology, and increased costs of labor, materials, and equipment.
In third quarter 2023, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability
for River Bend as a result of a revised decommissioning cost study. The revised estimate resulted in a $10.8 million
increase in its decommissioning cost liability, along with a corresponding increase in the related asset retirement
cost asset that will be depreciated over the remaining useful life of the unit.
In the third quarter 2022, System Energy recorded a revision to its estimated decommissioning cost liability
for Grand Gulf as a result of a revised decommissioning cost study. The revised estimate resulted in a $5.4 million
reduction in its decommissioning cost liability, along with a corresponding reduction in the related asset retirement
obligation cost asset that will be depreciated over the remaining life of the unit.
NRC Filings Regarding Trust Funding Levels
Plant owners are required to provide the NRC with a biennial report (annually for units that have shut down
or will shut down within five years), based on values as of December 31, addressing the owners’ ability to meet the
NRC minimum funding levels. Depending on the value of the trust funds, plant owners may be required to take
steps, such as providing financial guarantees through letters of credit or parent company guarantees or making
additional contributions to the trusts, to ensure that the trusts are adequately funded and that NRC minimum funding
requirements are met.
153
Entergy Corporation and Subsidiaries
Notes to Financial Statements
As nuclear plants individually approach and begin decommissioning, filings will be submitted to the NRC
for planned shutdown activities. These filings with the NRC also determine whether financial assurance may be
required in addition to the nuclear decommissioning trust fund.
Coal Combustion Residuals
In April 2015 the EPA published the final coal combustion residuals (CCR) rule regulating CCRs destined
for disposal in landfills or surface impoundments as non-hazardous wastes regulated under Resource Conservation
and Recovery Act Subtitle D. The final regulations create new compliance requirements including modified
storage, new notification and reporting practices, product disposal considerations, and CCR unit closure criteria, but
excluded CCRs that are beneficially reused in certain processes. Entergy believes that on-site disposal options will
be available at its facilities, to the extent needed.
In the third quarter 2022, revisions to the Big Cajun 2 CCR asset retirement obligations were made as a
result of revised closure and post-closure cost estimates. The revised estimates resulted in increases of $2.8 million
at Entergy Louisiana and $2.1 million at Entergy Texas in decommissioning cost liabilities, along with
corresponding increases in related asset retirement obligations cost assets that will be depreciated over the
remaining useful life of the unit.
NOTE 10. LEASES
As of December 31, 2023 and 2022, Entergy held operating and finance leases for fleet vehicles used in
operations, real estate, and aircraft. Excluded are power purchase agreements not meeting the definition of a lease,
nuclear fuel leases, and the Grand Gulf sale-leaseback which were determined not to be leases under the accounting
standards.
Leases have remaining terms of one year to 57 years. Real estate leases generally include at least one five-
year renewal option; however, renewal is not typically considered reasonably certain unless Entergy makes
significant leasehold improvements or other modifications that would hinder its ability to easily move. In certain of
the lease agreements for fleet vehicles used in operations, Entergy provides residual value guarantees to the lessor.
Due to the nature of the agreements and Entergy’s continuing relationship with the lessor, however, Entergy expects
to renegotiate or refinance the leases prior to conclusion of the lease. As such, Entergy does not believe it is
probable that they will be required to pay anything pertaining to the residual value guarantee, and the lease
liabilities and right-of-use assets are measured accordingly.
Entergy incurred the following total lease costs for the years ended December 31, 2023 and 2022:
Operating lease cost
Finance lease cost:
Amortization of right-of-use
assets
Interest on lease liabilities
2023
2022
(In Thousands)
$68,136
$65,463
$15,193
$3,639
$13,493
$2,702
Of the lease costs disclosed above, Entergy had $5.0 million and $5.4 million in short-term leases costs for
the years ended December 31, 2023 and 2022, respectively.
The lease costs for the years ended December 31, 2023 and 2022 disclosed above materially approximate
the cash flows used by Entergy for leases with all costs included within operating activities on Entergy’sStatements
of Cash Flows, except for the finance lease costs which are included in financing activities.
154
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Entergy has elected to account for short-term leases in accordance with policy options provided by
accounting guidance; therefore, there are no related lease liabilities or right-of-use assets for the costs recognized
above by Entergy in the table below.
Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheets at December 31,
2023 and 2022 are $207 million and $191 million related to operating leases, respectively, and $84 million and
$64 million related to finance leases, respectively.
The following lease-related liabilities are recorded within the respective Other lines on Entergy’s
consolidated balance sheets as of December 31, 2023 and 2022:
Current liabilities:
Operating leases
Finance leases
Non-current liabilities:
Operating leases
Finance leases
2023
2022
(In Thousands)
$60,789
$16,671
$146,627
$72,215
$56,566
$13,824
$134,886
$54,875
The following information contains the weighted-average remaining lease term in years and the weighted-
average discount rate for the operating and finance leases of Entergy at December 31, 2023 and 2022:
Weighted-average remaining lease terms:
Operating leases
Finance leases
Weighted-average discount rate:
Operating leases
Finance leases
2023
2022
4.46
8.61
4.10%
4.64%
4.32
5.63
3.61%
3.95%
Maturity of the lease liabilities for Entergy as of December 31, 2023 are as follows:
2024
2025
2026
2027
2028
Years thereafter
Minimum lease payments
Less: amount representing interest
Present value of net minimum lease payments
Operating
Leases
Finance
Leases
(In Thousands)
$67,411
53,183
44,744
32,552
14,038
14,105
226,033
18,617
$207,416
$19,937
18,243
16,392
13,920
11,342
33,409
113,243
24,357
$88,886
In allocating consideration in lease contracts to the lease and non-lease components, Entergy has made the
accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations
and to allocate the contract consideration to both lease and non-lease components for real estate leases.
155
Entergy Corporation and Subsidiaries
Notes to Financial Statements
NOTE 11. RETIREMENT, OTHER POSTRETIREMENT BENEFITS, AND DEFINED CONTRIBUTION
PLANS
Qualified Pension Plans
Entergy has defined benefit qualified pension plans, including the Entergy Corporation Retirement Plan for
Non-Bargaining Employees (Non-Bargaining Plan I), the Entergy Corporation Retirement Plan for Bargaining
Employees (Bargaining Plan I), the Entergy Corporation Retirement Plan II for Non-Bargaining Employees (Non-
Bargaining Plan II), the Entergy Corporation Retirement Plan II for Bargaining Employees (Bargaining Plan II), the
Entergy Corporation Retirement Plan III (Plan III), the Entergy Corporation Retirement Plan IV for Bargaining
Employees, and the Entergy Corporation Cash Balance Plan for Bargaining Employees (Bargaining Cash Balance
Plan). The Entergy Corporation Cash Balance Plan for Non-Bargaining Employees (Non-Bargaining Cash Balance
Plan) was merged with and into Non-Bargaining Plan I effective January 1, 2022. Effective January 1, 2024, Non-
Bargaining Plan I was amended to spin-off predominately inactive participants into a new qualified pension plan,
Entergy Corporation Retirement Plan VI for Non-Bargaining Employees (Non-Bargaining Plan VI). The Registrant
Subsidiaries participate in these plans: Non-Bargaining Plan I, Bargaining Plan I, Plan III, Non-Bargaining Plan VI,
and Bargaining Cash Balance Plan. Non-bargaining and bargaining employees whose most recent date of hire was
prior to June 30, 2014 (or such later date provided for in their applicable collective bargaining agreement)
participate in a noncontributory final average pay formula that provides pension benefits based on the employee’s
credited service and compensation during employment. Non-bargaining and bargaining employees whose most
recent date of hire is after June 30, 2014 and before January 1, 2021 (or such later date provided for in their
applicable collective bargaining agreement) do not participate in a final average pay formula, but instead participate
in a cash balance formula. Effective January 1, 2021, the Non-Bargaining Cash Balance Plan and Bargaining Cash
Balance Plan were amended to close participation in each plan to those employees whose most recent hire date is
after December 31, 2020 (or such later date provided for in their applicable collective bargaining agreement).
Employees hired after this date instead may be eligible to participate in and receive a discretionary employer
contribution under an Entergy sponsored tax-qualified defined contribution plan that includes a 401(k) feature.
The assets of the defined benefit qualified pension plans are held in a master trust established by Entergy.
Each pension plan has an undivided beneficial interest in each of the investment accounts in the master trust that is
maintained by a trustee. Use of the master trust permits the commingling of the trust assets of the pension plans of
Entergy Corporation and its Registrant Subsidiaries for investment and administrative purposes. Although assets in
the master trust are commingled, the trustee maintains supporting records for the purpose of allocating the trust level
equity in net earnings (loss) and the administrative expenses of the investment accounts in the trust to the various
participating pension plans in the trust. The fair value of the trust’s assets is determined by the trustee and certain
investment managers. The trustee calculates a daily earnings factor, including realized and unrealized gains or
losses, collected and accrued income, and administrative expenses, and allocates earnings to each plan in the master
trust on a pro rata basis.
Within each pension plan, the record of each Registrant Subsidiary’s beneficial interest in the plan assets is
maintained by the plan’s actuary and is updated quarterly. Assets for each Registrant Subsidiary are increased for
investment net income and contributions and are decreased for benefit payments. A plan’s investment net income/
loss (i.e., interest and dividends, realized and unrealized gains and losses and expenses) is allocated to the Registrant
Subsidiaries participating in that plan based on the value of assets for each Registrant Subsidiary at the beginning of
the quarter adjusted for contributions and benefit payments made during the quarter.
Entergy Corporation and its subsidiaries fund pension plans in an amount not less than the minimum
required contribution under the Employee Retirement Income Security Act of 1974, as amended, and the Internal
Revenue Code of 1986, as amended. The assets of the plans include common and preferred stocks, fixed-income
156 Entergy Corporation and Subsidiaries
Notes to Financial Statements
securities, interest in a money market fund, and insurance contracts. The Registrant Subsidiaries’ pension costs are
recovered from customers as a component of cost of service in each of their respective jurisdictions.
Components of Qualified Net Pension Cost and Other Amounts Recognized as a Regulatory Asset and/or
Accumulated Other Comprehensive Income (AOCI)
Entergy Corporation and its subsidiaries’ total 2023, 2022, and 2021 qualified pension costs and amounts
recognized as a regulatory asset and/or other comprehensive income, including amounts capitalized, included the
following components:
Net periodic pension cost:
Service cost - benefits earned during the period
Interest cost on projected benefit obligation
Expected return on assets
Recognized net loss
Settlement charges
Net pension cost
Other changes in plan assets and benefit obligations recognized
as a regulatory asset and/or AOCI (before tax)
Arising this period:
Net (gain)/loss
Amounts reclassified from regulatory asset and/or AOCI to net
periodic pension cost in the current year:
Amortization of net loss
Settlement charge
Total
2023
2022
(In Thousands)
2021
$101,182
298,281
(388,030)
81,919
160,387
$253,739
$138,085
235,805
(402,504)
188,683
230,389
$390,458
$165,278
191,107
(424,572)
334,124
205,878
$471,815
($213,636)
$6,113
($448,532)
(81,919)
(160,387)
($455,942)
(188,683)
(230,389)
($412,959)
(334,124)
(205,878)
($988,534)
Total recognized as net periodic pension cost, regulatory asset,
and/or AOCI (before tax)
($202,203)
($22,501)
($516,719)
157
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Qualified Pension Obligations, Plan Assets, Funded Status, and Amounts Recognized in the Balance Sheet
Qualified pension obligations, plan assets, funded status, and amounts recognized in the Consolidated
Balance Sheets for Entergy Corporation and its Subsidiaries as of December 31, 2023 and 2022 are as follows:
Change in Projected Benefit Obligation (PBO)
Balance at January 1
Service cost
Interest cost
Actuarial (gain)/loss
Benefits paid (including settlement lump sum benefit payments of ($410,110) in
2023 and ($604,753) in 2022)
Balance at December 31
Change in Plan Assets
Fair value of assets at January 1
Actual return on plan assets
Employer contributions
Benefits paid (including settlement lump sum benefit payments of ($410,110) in
2023 and ($604,753) in 2022)
Fair value of assets at December 31
Funded status
Amount recognized in the balance sheet (funded status)
Non-current liabilities
Amount recognized as a regulatory asset
Net loss
Amount recognized as AOCI (before tax)
Net loss
2023
2022
(In Thousands)
$6,166,106
101,182
298,281
123,237
$8,409,620
138,085
235,805
(1,660,463)
(773,402)
$5,915,404
(956,941)
$6,166,106
$5,242,098
724,903
267,002
$6,993,110
(1,264,071)
470,000
(773,402)
$5,460,601
($454,803)
(956,941)
$5,242,098
($924,008)
($454,803)
($924,008)
$1,447,978
$1,842,348
$347,268
$408,839
The qualified pension plans incurred net actuarial gains during 2023 primarily due to asset gains resulting from an
actual return on assets much higher than the expected return on assets, offset by liability losses due to a decline in
bond yields that resulted in decreases to the discount rates used to develop the benefit obligations. The qualified
pension plans incurred a small net actuarial loss during 2022 primarily due to asset losses resulting from an actual
return on assets much lower than the expected return on assets, substantially offset by liability gains due to a rise in
bond yields that resulted in increases to the discount rates used to develop the benefit obligations.
Accumulated Pension Benefit Obligation
The accumulated benefit obligation for Entergy’s qualified pension plans was $5.6 billion and $5.7 billion
at December 31, 2023 and 2022, respectively.
Other Postretirement Benefits
Entergy also currently offers retiree medical, dental, vision, and life insurance benefits (other postretirement
benefits) for eligible retired employees. Employees who commenced employment before July 1, 2014 and who
satisfy certain eligibility requirements (including retiring from Entergy after a certain age and/or years of service
with Entergy and immediately commencing their Entergy pension benefit), may become eligible for other
postretirement benefits.
158
Entergy Corporation and Subsidiaries
Notes to Financial Statements
In March 2020, Entergy announced changes to its other postretirement benefits. Effective January 1, 2021,
certain retired, former non-bargaining employees age 65 and older who are eligible for Entergy-sponsored retiree
welfare benefits, and their eligible spouses who are age 65 and older (collectively, Medicare-eligible participants),
are eligible to participate in an Entergy-sponsored retiree health plan, and are no longer eligible for retiree coverage
under the Entergy Corporation Companies’ Benefits Plus Medical, Dental and Vision Plans. Under the Entergy-
sponsored retiree health plan, Medicare-eligible participants are eligible to participate in a health reimbursement
arrangement which they may use towards the purchase of various types of qualified insurance offered through a
Medicare exchange provider and for other qualified medical expenses. The changes affecting active bargaining unit
employees were negotiated with the unions prior to implementation, where necessary, and to the extent required by
law.
Effective January 1, 1993, Entergy adopted an accounting standard requiring a change from a cash method
to an accrual method of accounting for postretirement benefits other than pensions. Entergy Arkansas, Entergy
Mississippi, Entergy New Orleans, and Entergy Texas have received regulatory approval to recover accrued other
postretirement benefits costs through rates. The LPSC ordered Entergy Louisiana to continue the use of the pay-as-
you-go method for ratemaking purposes for postretirement benefits other than pensions. However, the LPSC retains
the flexibility to examine individual companies’ accounting for other postretirement benefits to determine if special
exceptions to this order are warranted. Pursuant to regulatory directives, Entergy Arkansas, Entergy Mississippi,
Entergy New Orleans, Entergy Texas, and System Energy contribute the other postretirement benefits costs
collected in rates into external trusts. System Energy is funding, on behalf of Entergy Operations, other
postretirement benefits associated with employees who work or worked at Grand Gulf.
Trust assets contributed by participating Registrant Subsidiaries are in master trusts, established by Entergy
Corporation and maintained by a trustee. Each participating Registrant Subsidiary holds a beneficial interest in the
trusts’ assets. The assets in the master trusts are commingled for investment and administrative purposes. Although
assets are commingled, supporting records are maintained for the purpose of allocating the beneficial interest in net
earnings/(losses) and the administrative expenses of the investment accounts to the various participating plans and
participating Registrant Subsidiaries. Beneficial interest in an investment account’s net income/(loss) is comprised
of interest and dividends, realized and unrealized gains and losses, and expenses. Beneficial interest from these
investments is allocated to the plans and participating Registrant Subsidiary based on their portion of net assets in
the pooled accounts.
159 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Components of Net Other Postretirement Benefits Cost and Other Amounts Recognized as a Regulatory
Asset and/or AOCI
Entergy Corporation’s and its subsidiaries’ total 2023, 2022, and 2021 other postretirement benefits costs,
including amounts capitalized and amounts recognized as a regulatory asset and/or other comprehensive income,
included the following components:
Other postretirement costs:
Service cost - benefits earned during the period
Interest cost on accumulated postretirement benefits obligation
(APBO)
Expected return on assets
Amortization of prior service credit
Recognized net (gain)/loss
Net other postretirement benefits income
Other changes in plan assets and benefit obligations recognized
as a regulatory asset and/or AOCI (before tax)
Arising this period:
Prior service credit for the period
Net (gain)/loss
Amounts reclassified from regulatory asset and/or AOCI to net
periodic benefit cost in the current year:
Amortization of prior service credit
Amortization of net gain/(loss)
Total
2023
2022
(In Thousands)
2021
$14,654
$24,734
$26,578
42,272
(36,732)
(22,558)
(11,446)
($13,810)
27,306
(43,420)
(25,550)
4,333
($12,597)
21,278
(43,220)
(33,069)
2,853
($25,580)
($4,434)
(44,441)
($858)
(131,524)
($3,168)
6,210
22,558
11,446
($14,871)
25,550
(4,333)
($111,165)
33,069
(2,853)
$33,258
Total recognized as net periodic other postretirement (income)/
cost, regulatory asset, and/or AOCI (before tax)
($28,681)
($123,762)
$7,678
160
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Other Postretirement Benefits Obligations, Plan Assets, Funded Status, and Amounts Not Yet Recognized
and Recognized in the Balance Sheet
Other postretirement benefits obligations, plan assets, funded status, and amounts not yet recognized and
recognized in the Consolidated Balance Sheets of Entergy Corporation and its Subsidiaries as of December 31, 2023
and 2022 are as follows:
Change in APBO
Balance at January 1
Service cost
Interest cost
Plan amendments
Plan participant contributions
Actuarial gain
Benefits paid
Medicare Part D subsidy received
Balance at December 31
Change in Plan Assets
Fair value of assets at January 1
Actual return on plan assets
Employer contributions
Plan participant contributions
Benefits paid
Fair value of assets at December 31
Funded status
Amounts recognized in the balance sheet
Current liabilities
Non-current liabilities
Total funded status
Amounts recognized as a regulatory asset
Prior service credit
Net (gain)/loss
Amounts recognized as AOCI (before tax)
Prior service credit
Net gain
2023
2022
(In Thousands)
$865,854
14,654
42,272
(4,434)
18,669
(4,303)
(95,348)
280
$837,644
$1,189,682
24,734
27,306
(858)
22,486
(297,128)
(100,632)
264
$865,854
$623,824
76,870
49,126
18,669
(95,348)
$673,141
($164,503)
$771,319
(122,184)
52,835
22,486
(100,632)
$623,824
($242,030)
($45,706)
(118,797)
($164,503)
($42,484)
(199,546)
($242,030)
($21,465)
(33,617)
($55,082)
($29,323)
16,956
($12,367)
($34,899)
(116,078)
($150,977)
($45,167)
(133,656)
($178,823)
The other postretirement plans incurred net actuarial gains during 2023 primarily due to updated demographic
assumptions and census data coupled with an actual return on assets much higher than the expected return on assets,
partially offset by liability losses due to a decline in bond yields that resulted in decreases to the discount rates used
to develop the benefit obligations. The other postretirement plans incurred net actuarial gains during 2022 primarily
due to a rise in bond yields that resulted in increases to the discount rates used to develop the benefit obligations,
partially offset by asset losses due to an actual return on assets much lower than the expected return on assets during
2022.
161
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Non-Qualified Pension Plans
Entergy also sponsors non-qualified, non-contributory defined benefit pension plans that provide benefits to
certain key employees. Entergy recognized net periodic pension cost related to these plans of $43.8 million in 2023,
$30.9 million in 2022, and $28.6 million in 2021. In 2023, 2022, and 2021, Entergy recognized $27.9 million,
$12.2 million, and $10.9 million, respectively, in settlement charges related to the payment of lump sum benefits out
of the plan that is included in the non-qualified pension plan cost above.
The projected benefit obligation was $88.6 million as of December 31, 2023 of which $13.8 million was a
current liability and $74.8 million was a non-current liability. The projected benefit obligation was $152.4 million
as of December 31, 2022 of which $62.4 million was a current liability and $90 million was a non-current
liability. The accumulated benefit obligation was $77.9 million and $140 million as of December 31, 2023 and
2022, respectively. The unamortized prior service cost and net loss are recognized in regulatory assets
($29.7 million at December 31, 2023 and $56.8 million at December 31, 2022) and accumulated other
comprehensive income before taxes ($3.9 million at December 31, 2023 and $8.7 million at December 31, 2022).
A Rabbi Trust was established for the benefit of certain participants in Entergy’s non-qualified, non-
contributory defined benefit pension plans. The Rabbi Trust assets were invested in money-market funds which
were recorded at fair value with all gains and losses recognized immediately in income. All of the investments were
classified as Level 1 investments for purposes of Fair Value Measurements. At December 31, 2022, the fair value
of the assets held in the Rabbi Trust was $35 million. In August 2023 the Rabbi Trust assets were used to pay
benefits due under the non-qualified pension plans.
The non-qualified pension plans incurred a small actuarial loss during 2023 primarily as a result of liability
losses due to differences in recent retirement and lump sum experience relative to actuarial assumptions. The non-
qualified pension plans incurred a small actuarial gain during 2022 primarily due to a rise in bond yields that
resulted in increases to the discount rates used to develop the benefit obligations, partially offset by differences in
recent retirement and lump sum experience relative to actuarial assumptions.
Reclassification out of Accumulated Other Comprehensive Income (Loss)
Entergy reclassified the following costs out of accumulated other comprehensive income (loss) (before
taxes and including amounts capitalized) as of December 31, 2023:
Entergy
Amortization of prior service cost
Amortization of gain (loss)
Settlement loss
Qualified
Pension
Costs
Other
Postretirement
Costs
Non-Qualified
Pension Costs
Total
(In Thousands)
$—
(4,407)
(7,844)
($12,251)
$14,038
11,590
—
$25,628
($452)
(593)
(3,004)
($4,049)
$13,586
6,590
(10,848)
$9,328
162
Entergy reclassified the following costs out of accumulated other comprehensive income (loss) (before
taxes and including amounts capitalized) as of December 31, 2022:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Entergy
Amortization of prior service cost
Amortization of loss
Settlement loss
Qualified
Pension
Costs
Other
Postretirement
Costs
Non-Qualified
Pension Costs
Total
(In Thousands)
$—
(30,147)
(23,636)
($53,783)
$16,052
(2,381)
—
$13,671
($715)
(1,331)
(1,685)
($3,731)
$15,337
(33,859)
(25,321)
($43,843)
Accounting for Pension and Other Postretirement Benefits
Accounting standards require an employer to recognize in its balance sheet the funded status of its benefit
plans. This is measured as the difference between plan assets at fair value and the benefit obligation. Entergy uses
a December 31 measurement date for its pension and other postretirement plans. Employers are to record
previously unrecognized gains and losses, prior service costs, and any remaining transition asset or obligation (that
resulted from adopting prior pension and other postretirement benefits accounting standards) as comprehensive
income and/or as a regulatory asset reflective of the recovery mechanism for pension and other postretirement
benefits costs in the Registrant Subsidiaries’ respective regulatory jurisdictions. For the portion of Entergy
Louisiana that is not regulated, the unrecognized prior service cost, gains and losses, and transition asset/obligation
for its pension and other postretirement benefits obligations are recorded as other comprehensive income. Entergy
Louisiana recovers other postretirement benefits costs on a pay-as-you-go basis and records the unrecognized prior
service cost, gains and losses, and transition obligation for its other postretirement benefits obligation as other
comprehensive income. Accounting standards also require that changes in the funded status be recorded as other
comprehensive income and/or a regulatory asset in the period in which the changes occur.
With regard to pension and other postretirement costs, Entergy calculates the expected return on pension
and other postretirement benefits plan assets by multiplying the long-term expected rate of return on assets by the
market-related value (MRV) of plan assets. Entergy determines the MRV of its pension plan assets, except for the
long duration fixed income assets, by calculating a value that uses a 20-quarter phase-in of the difference between
actual and expected returns. For the long duration fixed income assets in the pension trust and for its other
postretirement benefits plan assets Entergy uses fair value as the MRV.
In accordance with ASU No. 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the
Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”, the other components of
net benefit cost are required to be presented in the income statement separately from the service cost component and
outside a subtotal of income from operations and are presented by Entergy in miscellaneous - net in other income.
Qualified Pension Settlement Cost
Year-to-date lump sum benefit payments from Non-Bargaining Plan I, Bargaining Plan I, Non-Bargaining
Plan II, and Bargaining Plan II exceeded the sum of the Plans’ service and interest cost, resulting in settlement costs
during 2023, 2022, and 2021. In accordance with accounting standards, settlement accounting requires immediate
recognition of the portion of previously unrecognized losses associated with the settled portion of the plans’ pension
liability. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and
System Energy participate in one or both of Non-Bargaining Plan I and Bargaining Plan I and incurred settlement
costs. Similar to other pension costs, the settlement costs were included with employee labor costs and charged to
expense and capital in the same manner that labor costs were charged. Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans received regulatory approval to defer the expense portion of
163
Entergy Corporation and Subsidiaries
Notes to Financial Statements
settlement costs, with future amortization of the deferred settlement expense over the period in which the expense
otherwise would be recorded had the immediate recognition not occurred.
Entergy Texas Reserve
In September 2020, Entergy Texas elected to establish a reserve, in accordance with PUCT regulations, to
track the surplus or deficit in the annual amount of actuarially determined pension and other postretirement benefits
chargeable to Entergy Texas’s expense. The reserve amounts recorded for 2020 and 2021 were included in the base
rate case that was filed with the PUCT in July 2022, and amortization of that amount began in 2023 when interim
rates became effective. The reserve amounts recorded for 2022 and through December 2023 will be evaluated in
the next rate case filed by Entergy Texas, and an amortization period will be determined at that time. At December
31, 2023, the balance in this reserve was approximately $32.7 million.
Qualified Pension and Other Postretirement Plans’ Assets
The Plan Administrator’s trust asset investment strategy is to invest the assets in a manner whereby long-
term earnings on the assets (plus cash contributions) provide adequate funding for retiree benefit payments. The
mix of assets is based on an optimization study that identifies asset allocation targets in order to achieve the
maximum return for an acceptable level of risk, while minimizing the expected contributions and pension and
postretirement expense.
In the optimization studies, the Plan Administrator formulates assumptions about characteristics, such as
expected asset class investment returns, volatility (risk), and correlation coefficients among the various asset
classes. The future market assumptions used in the optimization study are determined by examining historical
market characteristics of the various asset classes and making adjustments to reflect future conditions expected to
prevail over the study period.
The target asset allocation for pension adjusts dynamically based on the funded status of each plan within
the trust. The current targets are shown below. The expectation is that the allocation to fixed income securities will
increase as the pension plans’ funded status increases. The following ranges were established to produce an
acceptable, economically efficient plan to manage around the targets.
For postretirement assets the target and range asset allocations (as shown below) reflect recommendations
made in the latest optimization study. The target asset allocations for postretirement assets adjust dynamically
based on the funded status of each sub-account within each trust. The current weighted-average targets shown
below represent the aggregate of all targets for all sub-accounts within all trusts.
Entergy’s qualified pension and postretirement weighted-average asset allocations by asset category at
December 31, 2023 and 2022 and the target asset allocation and ranges for 2023 are as follows:
Pension Asset Allocation
Domestic Equity Securities
International Equity Securities
Intermediate Fixed Income Securities
Long Duration Fixed Income Securities
Other
Range
Target
26% to
32%
14% to
17%
7% to
8%
43%
39% to
—% —% to
38%
20%
9%
47%
10%
Actual 2023 Actual 2022
33%
18%
9%
40%
—%
42%
22%
11%
22%
3%
164 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Postretirement Asset Allocation
Domestic Equity Securities
International Equity Securities
Fixed Income Securities
Other
Target
20% to
25%
12% to
17%
53% to
58%
—% —% to
Non-Taxable and Taxable
Range
Actual 2023 Actual 2022
30%
22%
63%
5%
28%
17%
55%
—%
25%
18%
57%
—%
In determining its expected long-term rate of return on plan assets used in the calculation of benefit plan
costs, Entergy reviews past performance, current and expected future asset allocations, and capital market
assumptions of its investment consultant and some investment managers.
The expected long-term rate of return for the qualified pension plans’ assets is based primarily on the
geometric average of the historical annual performance of a representative portfolio weighted by the target asset
allocation defined in the table above, along with other indications of expected return on assets. The time period
reflected is a long-dated period spanning several decades.
The expected long-term rate of return for the non-taxable postretirement trust assets is determined using the
same methodology described above for pension assets, but the aggregate asset allocation specific to the non-taxable
postretirement assets is used.
For the taxable postretirement trust assets, the investment allocation includes tax-exempt fixed income
securities. This asset allocation, in combination with the same methodology employed to determine the expected
return for other postretirement assets (as described above), and with a modification to reflect applicable taxes, is
used to produce the expected long-term rate of return for taxable postretirement trust assets.
Concentrations of Credit Risk
Entergy’s investment guidelines mandate the avoidance of risk concentrations. Types of concentrations
specified to be avoided include, but are not limited to, investment concentrations in a single entity, type of industry,
foreign country, geographic area, and individual security issuance. As of December 31, 2023, all investment
managers and assets were materially in compliance with the approved investment guidelines, therefore there were
no significant concentrations (defined as greater than 10 percent of plan assets) of credit risk in Entergy’s pension
and other postretirement benefits plan assets.
Fair Value Measurements
Accounting standards provide the framework for measuring fair value. That framework provides a fair
value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The three levels of the fair value hierarchy are described below:
•
•
Level 1 - Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets that
the Plan has the ability to access at the measurement date. Active markets are those in which transactions
for the asset or liability occur in sufficient frequency and volume to provide pricing information on an
ongoing basis.
Level 2 - Level 2 inputs are inputs other than quoted prices included in Level 1 that are, either directly or
indirectly, observable for the asset or liability at the measurement date. Assets are valued based on prices
derived by an independent party that uses inputs such as benchmark yields, reported trades, broker/dealer
165
Entergy Corporation and Subsidiaries
Notes to Financial Statements
quotes, and issuer spreads. Prices are reviewed and can be challenged with the independent parties and/or
overridden if it is believed such would be more reflective of fair value. Level 2 inputs include the
following:
- quoted prices for similar assets or liabilities in active markets;
- quoted prices for identical assets or liabilities in inactive markets;
- inputs other than quoted prices that are observable for the asset or liability; or
-
inputs that are derived principally from or corroborated by observable market data by correlation or
other means.
If an asset or liability has a specified (contractual) term, the Level 2 input must be observable for
substantially the full term of the asset or liability.
•
Level 3 - Level 3 refers to securities valued based on significant unobservable inputs.
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to
the fair value measurement. The following tables set forth by level within the fair value hierarchy, measured at fair
value on a recurring basis at December 31, 2023, and December 31, 2022, a summary of the investments held in the
master trusts for Entergy’s qualified pension and other postretirement plans in which the Registrant Subsidiaries
participate.
166 Qualified Defined Benefit Pension Plan Trusts
2023
Level 1
Level 2
Level 3
Total
(In Thousands)
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Equity securities:
Corporate stocks:
Preferred
Common
Common collective trusts (c)
Fixed income securities:
$10,827 (b)
715,452 (b)
$—
—
U.S. Government securities
Corporate debt instruments
Registered investment companies (e)
Other
—
—
34,364 (d)
774 (f)
1,085,231 (a)
924,904 (a)
2,718 (d)
78,883 (f)
Other:
Insurance company general account
(unallocated contracts)
Total investments
Cash
Other pending transactions
Less: Other postretirement assets included
in total investments
Total fair value of qualified pension
assets
—
$761,417
5,899 (g)
$2,097,635
$—
—
—
—
—
—
—
$—
$10,827
715,452
2,066,247
1,085,231
924,904
657,691
79,657
5,899
$5,545,908
1,488
(22,404)
(64,391)
$5,460,601
2022
Level 1
Level 2
Level 3
Total
(In Thousands)
Equity securities:
Corporate stocks:
Preferred
Common
Common collective trusts (c)
Fixed income securities:
$12,178 (b)
807,437 (b)
$—
—
U.S. Government securities
Corporate debt instruments
Registered investment companies (e)
Other
—
—
221,582 (d)
—
673,348 (a)
525,184 (a)
2,595 (d)
15,395 (f)
Other:
Insurance company general account
(unallocated contracts)
Total investments
Cash
Other pending transactions
Less: Other postretirement assets included
in total investments
Total fair value of qualified pension
assets
—
$1,041,197
5,911 (g)
$1,222,433
$—
—
—
—
—
—
—
$—
$12,178
807,437
2,516,688
673,348
525,184
750,454
15,395
5,911
$5,306,595
10,601
(13,813)
(61,285)
$5,242,098
167
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Other Postretirement Trusts
2023
Level 1
Level 2
Level 3
Total
(In Thousands)
Equity securities:
Common collective trust (c)
Fixed income securities:
U.S. Government securities
Corporate debt instruments
Registered investment companies
Other
Total investments
Other pending transactions
Plus: Other postretirement assets included
in the investments of the qualified
pension trust
Total fair value of other postretirement
assets
$80,219
(b)
—
548
(d)
—
$80,767
$84,521
106,523
(a)
(a)
—
57,511
$248,555
(f)
$—
—
—
—
$—
$276,560
164,740
106,523
548
57,511
$605,882
2,868
64,391
$673,141
2022
Level 1
Level 2
Level 3
Total
(In Thousands)
Equity securities:
Common collective trust (c)
Fixed income securities:
U.S. Government securities
Corporate debt instruments
Registered investment companies
Other
Total investments
Other pending transactions
Plus: Other postretirement assets included
in the investments of the qualified
pension trust
Total fair value of other postretirement
assets
$69,503
(b)
—
3,016
(d)
—
$72,519
$78,436
113,273
(a)
(a)
—
56,149
$247,858
(f)
$—
—
—
—
$—
$241,676
147,939
113,273
3,016
56,149
$562,053
486
61,285
$623,824
(a)
(b)
(c)
Certain fixed income debt securities (corporate, government, and securitized) are stated at fair value as
determined by broker quotes.
Common stocks, preferred stocks, and certain fixed income debt securities (government) are stated at fair
value determined by quoted market prices.
The common collective trusts hold investments in accordance with stated objectives. The investment
strategy of the trusts is to capture the growth potential of equity markets by replicating the performance of a
specified index. The issuer of these funds allows daily trading at the net asset value and trades settle at a
later date, with no other trading restrictions. Net asset value per share of common collective trusts estimate
fair value. Common collective trusts are not publicly quoted and are valued by the fund administrators
using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair
value table, but are included in the total.
168
Entergy Corporation and Subsidiaries
Notes to Financial Statements
(d)
(e)
(f)
(g)
Registered investment companies are money market mutual funds with a stable net asset value of one dollar
per share. Registered investment companies may hold investments in domestic and international bond
markets or domestic equities valued at the daily closing price as reported by the fund. These funds are
required to publish their daily net asset value and to transact at that price. The money market mutual funds
held by the trusts are deemed to be actively traded. Certain registered investment companies are recorded at
contract value, which approximates fair value.
Certain of these registered investment companies are not publicly quoted and are valued by the fund
administrators using net asset value as a practical expedient. The issuer of these funds allows daily trading
at the net asset value and trades settle at a later date, with no other trading restrictions. Accordingly, these
funds are not assigned a level in the fair value table, but are included in the total.
The other remaining assets are U.S. municipal and foreign government bonds stated at fair value as
determined by broker quotes.
The unallocated insurance contract investments are recorded at contract value, which approximates fair
value. The contract value represents contributions made under the contract, plus interest, less funds used to
pay benefits and contract expenses, and less distributions to the master trust.
Estimated Future Benefit Payments
Based upon the assumptions used to measure Entergy’s qualified pension and other postretirement benefits
obligations at December 31, 2023, and including pension and other postretirement benefits attributable to estimated
future employee service, Entergy expects that benefits to be paid over the next ten years for Entergy Corporation
and its subsidiaries will be as follows:
Qualified
Pension
Estimated Future Benefits Payments
Non-Qualified
Pension
(In Thousands)
Other
Postretirement
Year(s)
2024
2025
2026
2027
2028
2029 - 2033
$463,557
$449,803
$450,945
$449,510
$450,827
$2,222,959
$13,802
$10,894
$8,507
$14,374
$9,325
$36,584
$74,649
$70,720
$67,105
$63,949
$61,234
$283,477
Contributions
Entergy currently expects to contribute approximately $270 million to its qualified pension plans and
approximately $45.9 million to other postretirement plans in 2024. The 2024 required pension contributions will be
known with more certainty when the January 1, 2024 valuations are completed, which is expected by April 1, 2024.
169
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Actuarial Assumptions
The significant actuarial assumptions used in determining the pension PBO and the other postretirement
benefits APBO as of December 31, 2023 and 2022 were as follows:
Weighted-average discount rate:
Qualified pension
Other postretirement
Non-qualified pension
Weighted-average rate of increase in future compensation levels
Interest crediting rate
Assumed health care trend rate:
2023
2022
5.02% - 5.10%
Blended 5.06%
5.01%
4.68%
3.98% - 4.40%
4.00%
5.21% - 5.27%
Blended 5.24%
5.20%
4.98%
3.98% - 4.40%
4.00%
Pre-65
Post-65
Ultimate health care cost trend rate
Year ultimate health care cost trend rate is reached and
beyond:
Pre-65
Post-65
6.95%
7.88%
4.75%
2032
2032
6.65%
7.50%
4.75%
2032
2032
170
The significant actuarial assumptions used in determining the net periodic pension and other postretirement
benefits costs for 2023, 2022, and 2021 were as follows:
2023
2022
2021
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Weighted-average discount rate:
Qualified pension:
Service cost
Interest cost
Other postretirement:
Service cost
Interest cost
Non-qualified pension:
Service cost
Interest cost
Weighted-average rate of increase in future
compensation levels
Expected long-term rate of return on plan assets:
Pension assets
Other postretirement non-taxable assets
Other postretirement taxable assets
Assumed health care trend rate:
Pre-65
Post-65
Ultimate health care cost trend rate
Year ultimate health care cost trend rate is
reached and beyond:
Pre-65
Post-65
5.26%
5.16%
5.00%
5.09%
5.31%
5.30%
3.07%
2.49%
3.20%
2.31%
4.94%
5.03%
2.81%
2.08%
2.98%
1.86%
1.48%
2.14%
3.98% - 4.40%
3.98% - 4.40%
3.98% - 4.40%
7.00%
6.00% - 7.00%
5.25%
6.75%
5.75% - 6.75%
4.75%
6.75%
6.00% - 6.75%
5.00%
6.65%
7.50%
4.75%
2032
2032
5.65%
5.90%
4.75%
2032
2032
5.87%
6.31%
4.75%
2030
2028
With respect to the mortality assumptions, Entergy used the Pri-2012 Employee and Healthy Annuitant
Table, projected generationally using Scale MP-2021 with Aon’s Endemic Adjustment, in determining its
December 31, 2023 pension plans’ PBOs and the Pri.H 2012 (headcount weighted) Employee and Healthy
Annuitant Table, projected generationally using Scale MP-2021 with Aon’s Endemic Adjustment, in determining its
December 31, 2023 other postretirement benefits APBO. With respect to the mortality assumptions, Entergy used
the Pri-2012 Employee and Healthy Annuitant Tables with a fully generational MP-2020 projection scale, in
determining its December 31, 2022 pension plans’ PBOs and the Pri.H 2012 (headcount weighted) Employee and
Healthy Annuitant Tables with a fully generational MP-2020 projection scale, in determining its December 31, 2022
other postretirement benefits APBO.
Defined Contribution Plans
Entergy sponsors the Savings Plan of Entergy Corporation and Subsidiaries (System Savings Plan). The
System Savings Plan is a defined contribution plan covering eligible employees of Entergy and certain of its
subsidiaries. The participating Entergy subsidiary makes matching contributions to the System Savings Plan for all
eligible participating employees in an amount equal to either 70% or 100% of the participants’ basic contributions,
up to 6% of their eligible earnings per pay period. The matching contribution is allocated to investments as directed
by the employee.
Entergy also sponsors the Savings Plan of Entergy Corporation and Subsidiaries VI (Savings Plan VI)
(established in April 2007) and the Savings Plan of Entergy Corporation and Subsidiaries VII (Savings Plan VII)
171
Entergy Corporation and Subsidiaries
Notes to Financial Statements
(established in April 2007) to which matching contributions are also made. The plans are defined contribution plans
that cover eligible employees, as defined by each plan, of Entergy and certain of its subsidiaries. Effective
December 31, 2023, employees participating in Savings Plan VI and Savings Plan VII were transferred into the
System Savings Plan when Savings Plan VI and Savings Plan VII merged into the System Savings Plan.
Entergy also sponsors the Savings Plan of Entergy Corporation and Subsidiaries VIII (established January
2021) and the Savings Plan of Entergy Corporation and Subsidiaries IX (established January 2021) to which
company contributions are made. The participating Entergy subsidiary makes matching contributions to these
defined contribution plans for all eligible participating employees in an amount equal to 100% of the participants’
basic contributions, up to 5% of their eligible earnings per pay period. Eligible participants may also receive a
discretionary annual company contribution up to 4% of the participant’s eligible earnings (subject to vesting).
Entergy’s subsidiaries’ contributions to defined contribution plans collectively were $65.1 million in 2023,
$62.1 million in 2022, and $62.3 million in 2021. The majority of the contributions were to the System Savings
Plan.
NOTE 12. STOCK-BASED COMPENSATION
Entergy grants stock options, restricted stock, performance units, and restricted stock units to key
employees of the Entergy subsidiaries under its equity plans which are shareholder-approved stock-based
compensation plans. Effective May 3, 2019, Entergy’s shareholders approved the 2019 Omnibus Incentive Plan
(2019 Plan). The maximum number of common shares that can be issued from the 2019 Plan for stock-based
awards is 12,200,000 all of which are available for incentive stock option grants. The 2019 Plan applies to awards
granted on or after May 3, 2019 and awards expire ten years from the date of grant. As of December 31, 2023, there
were 7,546,825 authorized shares remaining for stock-based awards.
Stock Options
Stock options are granted at exercise prices that equal the closing market price of Entergy Corporation
common stock on the date of grant. Generally, stock options granted will become exercisable in equal amounts on
each of the first three anniversaries of the date of grant. Unless they are forfeited previously under the terms of the
grant, options expire 10 years after the date of the grant if they are not exercised.
The following table includes financial information for stock options for each of the years presented:
Compensation expense included in Entergy’s consolidated net income
Tax benefit recognized in Entergy’s consolidated net income
Compensation cost capitalized as part of fixed assets and materials and
supplies
2023
$4.1
$1.1
$1.9
2022
(In Millions)
$4.2
$1.1
$1.7
2021
$4.2
$1.1
$1.5
172
Entergy determines the fair value of the stock option grants by considering factors such as lack of
marketability, stock retention requirements, and regulatory restrictions on exercisability in accordance with
accounting standards. The stock option weighted-average assumptions used in determining the fair values are as
follows:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Stock price volatility
Expected term in years
Risk-free interest rate
Dividend yield
Dividend payment per share
2023
24.89%
6.89
3.51%
4.00%
$4.34
2022
24.27%
6.92
1.77%
4.00%
$4.10
2021
23.93%
6.93
0.74%
4.00%
$3.86
Stock price volatility is calculated based upon the daily public stock price volatility of Entergy Corporation common
stock over a period equal to the expected term of the award. The expected term of the options is based upon
historical option exercises and the weighted-average life of options when exercised and the estimated weighted-
average life of all vested but unexercised options. In 2008, Entergy implemented stock ownership guidelines for its
senior executive officers. These guidelines require an executive officer to own shares of Entergy Corporation
common stock equal to a specified multiple of his or her salary. Until an executive officer achieves this ownership
position the executive officer is required to retain 75% of the net-of-tax net profit upon exercise of the option to be
held in Entergy Corporation common stock. The reduction in fair value of the stock options due to this restriction is
based upon an estimate of the call option value of the reinvested gain discounted to present value over the
applicable reinvestment period.
A summary of stock option activity for the year ended December 31, 2023 and changes during the year are
presented below:
Options outstanding as of January 1, 2023
Options granted
Options exercised
Options forfeited/expired
Options outstanding as of December 31, 2023
Options exercisable as of December 31, 2023
Weighted-average grant-date fair value of
options granted during 2023
Weighted-
Average
Exercise
Price
$96.30
$108.47
$85.69
$110.40
$97.66
$94.94
Number
of Options
2,776,355
281,874
(111,929)
(47,592)
2,898,708
2,191,916
$20.07
Aggregate
Intrinsic
Value
Weighted-
Average
Contractual
Life
$31,447,529
$30,475,161
5.66
4.83
The weighted-average grant-date fair value of options granted during the year was $16.25 for 2022 and $12.27 for
2021. The total intrinsic value of stock options exercised was $2 million during 2023, $20 million during 2022, and
$2 million during 2021. The intrinsic value, which has no effect on net income, of the outstanding stock options
exercised is calculated by the positive difference between the weighted-average exercise price of the stock options
granted and Entergy Corporation’s common stock price as of December 31, 2023. The aggregate intrinsic value of
the stock options outstanding as of December 31, 2023 was $31.4 million. Stock options outstanding as of
December 31, 2023 includes 1,153,596 out of the money options with an intrinsic value of zero. Entergy recognizes
compensation cost over the vesting period of the options based on their grant-date fair value. The total fair value of
options that vested was approximately $6 million during 2023, $6 million during 2022, and $5 million during 2021.
Cash received from option exercises was $10 million for the year ended December 31, 2023. The tax benefits
realized from options exercised was $0.5 million for the year ended December 31, 2023.
173
Entergy Corporation and Subsidiaries
Notes to Financial Statements
The following table summarizes information about stock options outstanding as of December 31, 2023:
Options Outstanding
Options Exercisable
As of
December 31,
2023
772,974
972,138
685,327
468,269
2,898,708
Weighted-Average
Remaining
Contractual Life-
Yrs.
3.18
5.45
8.48
6.08
5.66
Weighted-
Average
Exercise Price
Number
Exercisable
as of
December 31,
2023
$73.58
$92.30
$109.14
$131.72
$97.66
772,974
814,286
136,387
468,269
2,191,916
Weighted-
Average
Exercise Price
$73.58
$91.61
$109.59
$131.72
$94.94
Range of Exercise
Price
$63.17 - $79.99
$80.00 - $99.99
$100.00 - $119.99
$120.00 - $131.72
$63.17 - $131.72
Stock-based compensation cost related to non-vested stock options outstanding as of December 31, 2023
not yet recognized is approximately $5 million and is expected to be recognized over a weighted-average period of
1.6 years.
Restricted Stock Awards
Entergy grants restricted stock awards earned under its stock benefit plans in the form of stock units. One-
third of the restricted stock awards will vest upon each anniversary of the grant date and are expensed ratably over
the three-year vesting period. Shares of restricted stock have the same dividend and voting rights as other common
stock and are considered issued and outstanding shares of Entergy upon vesting. In January 2023 the Board
approved and Entergy granted 345,983 restricted stock awards under the 2019 Plan. The restricted stock awards
were made effective on January 26, 2023 and were valued at $108.47 per share, which was the closing price of
Entergy Corporation’s common stock on that date.
The following table includes information about the restricted stock awards outstanding as of December 31,
2023:
Outstanding shares at January 1, 2023
Granted
Vested
Forfeited
Outstanding shares at December 31, 2023
Weighted-Average
Grant Date Fair
Value Per Share
$107.55
$108.35
$110.54
$105.64
$106.80
Shares
607,723
373,741
(294,145)
(60,546)
626,773
The following table includes financial information for restricted stock for each of the years presented:
Compensation expense included in Entergy’s consolidated net income
Tax benefit recognized in Entergy’s consolidated net income
Compensation cost capitalized as part of fixed assets and materials and
supplies
2023
$22.2
$5.7
2022
(In Millions)
$23.2
$5.9
2021
$24.7
$6.3
$9.7
$9.2
$9.3
The total fair value of the restricted stock awards granted was $41 million, $39 million, and $40 million for
the years ended December 31, 2023, 2022, and 2021, respectively.
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Notes to Financial Statements
The total fair value of the restricted stock awards vested was $33 million, $34 million, and $32 million for
the years ended December 31, 2023, 2022, and 2021, respectively.
Long-Term Performance Unit Program
Entergy grants long-term incentive awards earned under its stock benefit plans in the form of performance
units, which represents the value of, and are settled with, one share of Entergy Corporation common stock at the end
of the three-year performance period, plus dividends accrued during the performance period on the number of
performance units earned. The Long-Term Performance Unit Program specifies a minimum, target, and maximum
achievement level, the achievement of which will determine the number of performance units that may be earned.
Entergy measures performance by assessing Entergy’s total shareholder return relative to the total shareholder
return of the companies in the Philadelphia Utility Index. To emphasize the importance of strong cash generation
for the long-term health of its business, a credit measure – adjusted funds from operations/debt ratio – was selected
as one of the performance measures for the 2023-2025 performance period. For the 2023-2025 performance period,
performance will be measured based eighty percent on relative total shareholder return and twenty percent on the
credit measure.
In January 2023 the Board approved and Entergy granted 143,212 performance units under the 2019
Plan. The performance units were granted on January 26, 2023, and eighty percent were valued at $130.65 per
share based on various factors, primarily market conditions; and twenty percent were valued at $108.47 per share,
the closing price of Entergy Corporation’s common stock on that date. Performance units have the same dividend
and voting rights as other common stock, are considered issued and outstanding shares of Entergy upon vesting, and
are expensed ratably over the 3-year vesting period, and compensation cost for the portion of the award based on the
selected credit measure will be adjusted based on the number of units that ultimately vest.
The following table includes information about the long-term performance units outstanding at the target
level as of December 31, 2023:
Outstanding shares at January 1, 2023
Granted
Vested
Forfeited
Outstanding shares at December 31, 2023
Weighted-Average
Grant Date Fair
Value Per Share
$129.94
$126.39
$162.14
$145.35
$121.12
Shares
521,838
156,627
(38,150)
(159,314)
481,001
The following table includes financial information for the long-term performance units for each of the years
presented:
Compensation expense included in Entergy’s consolidated net income
Tax benefit recognized in Entergy’s consolidated net income
Compensation cost capitalized as part of fixed assets and materials and
supplies
2023
2022
(In Millions)
$16.0
$4.1
$11.1
$2.8
2021
$14.5
$3.7
$5.2
$6.7
$5.8
The total fair value of the long-term performance units granted was $20 million, $35 million, and
$32 million for the years ended December 31, 2023, 2022, and 2021, respectively.
In January 2023, Entergy issued 38,150 shares of Entergy Corporation common stock at a share price of
$107.59 for awards earned and dividends accrued under the 2020-2022 Long-Term Performance Unit Program. In
175
Entergy Corporation and Subsidiaries
Notes to Financial Statements
January 2022, Entergy issued 224,334 shares of Entergy Corporation common stock at a share price of $110.35 for
awards earned and dividends accrued under the 2019-2021 Long-Term Performance Unit Program. In January
2021, Entergy issued 235,983 shares of Entergy Corporation common stock at a share price of $95.12 for awards
earned and dividends accrued under the 2018-2020 Long-Term Performance Unit Program.
Restricted Stock Unit Awards
Entergy grants restricted stock unit awards earned under its stock benefit plans in the form of stock units
that are subject to time-based restrictions. The restricted stock units may be settled in shares of Entergy Corporation
common stock or the cash value of shares of Entergy Corporation common stock at the time of vesting. The costs
of restricted stock unit awards are charged to income over the restricted period, which varies from grant to
grant. The average vesting period for restricted stock unit awards granted is 38 months. As of December 31, 2023,
there were 139,500 unvested restricted stock units that are expected to vest over an average period of 20 months.
The following table includes information about the restricted stock unit awards outstanding as of
December 31, 2023:
Outstanding shares at January 1, 2023
Granted
Vested
Forfeited
Outstanding shares at December 31, 2023
Weighted-Average
Grant Date Fair
Value Per Share
$105.75
$102.05
$110.33
$103.37
$105.11
Shares
132,407
22,547
(6,142)
(9,312)
139,500
The following table includes financial information for restricted stock unit awards for each of the years
presented:
Compensation expense included in Entergy’s consolidated net income
Tax benefit recognized in Entergy’s consolidated net income
Compensation cost capitalized as part of fixed assets and materials and
supplies
2023
$2.8
$0.7
$1.2
2022
(In Millions)
$2.0
$0.5
$0.8
2021
$1.9
$0.5
$0.7
The total fair value of the restricted stock unit awards granted was $2 million, $8 million, and $4 million for
the years ended December 31, 2023, 2022, and 2021, respectively.
The total fair value of the restricted stock unit awards vested was $1 million, $3 million, and $3 million for
the years ended December 31, 2023, 2022, and 2021, respectively.
NOTE 13. BUSINESS SEGMENT INFORMATION
Entergy has a single reportable segment, Utility, which includes the generation, transmission, distribution,
and sale of electric power in portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New
Orleans; and operation of a small natural gas distribution business in portions of Louisiana. The Utility segment
reflects management’s primary basis of organization with a predominant focus on its utility operations in the Gulf
South. Parent & Other includes the parent company, Entergy Corporation, and other business activity, including
Entergy’s non-utility operations business which owns interests in non-nuclear power plants that sell the electric
176
Entergy Corporation and Subsidiaries
Notes to Financial Statements
power produced by those plants to wholesale customers and also provides decommissioning services to nuclear
power plants owned by non-affiliated entities in the United States.
Entergy’s segment financial information was as follows:
2023
Utility
Parent &
Other
Eliminations
Consolidated
(In Thousands)
Operating revenues
Asset write-offs, impairments, and related
charges (credits)
Depreciation, amortization, and
decommissioning
Interest and investment income
Interest expense
Income taxes
Consolidated net income
Total assets
Cash paid for long-lived asset additions
$12,022,944
$124,509
($41) $12,147,412
$79,962
($37,283)
$—
$42,679
$2,045,254
$443,751
$816,643
($374,847)
$2,510,904
$63,887,038
$4,745,918
$6,423
$18,660
$190,468
($315,688)
$150,385
$836,598
$801
$—
($299,685)
($705)
$—
$2,051,677
$162,726
$1,006,406
($690,535)
$2,362,310
($5,020,240) $59,703,396
$4,746,719
($298,979)
$—
2022
Utility
Parent &
Other
Eliminations
Consolidated
(In Thousands)
Operating revenues
Asset write-offs, impairments, and related
charges (credits)
Depreciation, amortization, and
decommissioning
Interest and investment income (loss)
Interest expense
Income taxes
Consolidated net income (loss)
Total assets
Cash paid for long-lived asset additions
$13,420,804
$343,461
($28) $13,764,237
$—
($163,464)
$—
($163,464)
$1,941,653
$145,968
$750,175
($34,263)
$1,398,580
$61,399,243
$5,382,243
$43,446
($35,293)
$162,300
($4,715)
($115,425)
$884,442
$13,884
$—
($186,256)
($238)
$—
$1,985,099
($75,581)
$912,237
($38,978)
$1,097,138
($3,688,494) $58,595,191
$5,396,127
($186,017)
$—
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Entergy Corporation and Subsidiaries
Notes to Financial Statements
2021
Utility
Parent &
Other
Eliminations
Consolidated
(In Thousands)
Operating revenues
Asset write-offs, impairments, and related
charges
Depreciation, amortization, and
decommissioning
Interest and investment income
Interest expense
Income taxes
Consolidated net income (loss)
Total assets
Cash paid for long-lived asset additions
$11,044,674
$698,251
($29) $11,742,896
$—
$263,625
$—
$263,625
$1,823,389
$442,817
$692,004
$264,209
$1,488,487
$59,733,625
$6,409,855
$167,308
$115,273
$142,693
($72,835)
($242,146)
$1,718,638
$12,257
$—
($127,624)
($3)
$—
$1,990,697
$430,466
$834,694
$191,374
$1,118,719
($1,998,021) $59,454,242
$6,422,112
($127,622)
$—
Eliminations are primarily intersegment activity. As of December 31, 2023, all of Entergy’s goodwill is related to
the Utility segment. As of December 31, 2022 and 2021, almost all of Entergy’s goodwill was related to the Utility
segment.
Results of operations for 2023 include: (1) a $568 million reduction, recorded at Utility, and a $275 million
reduction, recorded at Parent & Other, in income tax expense as a result of the resolution of the 2016-2018 IRS
audit, partially offset by $98 million ($72 million net-of-tax) of regulatory charges, recorded at Utility, to reflect
credits expected to be provided to customers by Entergy Louisiana and Entergy New Orleans as a result of the
resolution of the 2016-2018 IRS audit; (2) the reversal of a $106 million regulatory liability, associated with the
Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act, recorded at Utility, as
part of the settlement of Entergy Louisiana’s test year 2017 formula rate plan filing; (3) a $129 million reduction in
income tax expense as a result of the Hurricane Ida securitization in March 2023, which also resulted in a
$103 million ($76 million net-of-tax) regulatory charge, recorded at Utility, to reflect Entergy Louisiana’s
obligation to provide credits to its customers as described in an LPSC ancillary order issued as part of the
securitization regulatory proceeding; and (4) write-offs of $78 million ($59 million net-of-tax), recorded at Utility,
as a result of Entergy Arkansas’s approved motion to forgo recovery of identified costs resulting from the 2013
ANO stator incident. See Note 3 to the financial statements for discussion of the resolution of the 2016-2018 IRS
audit. See Note 2 to the financial statements for discussion of the Entergy Louisiana formula rate plan global
settlement. See Notes 2 and 3 to the financial statements for discussion of the Entergy Louisiana March 2023 storm
cost securitization. See Note 8 to the financial statements for discussion of the ANO stator incident and the
approved motion to forgo recovery.
Results of operations for 2022 include: (1) a regulatory charge of $551 million ($413 million net-of-tax),
recorded at Utility, as a result of System Energy’s partial settlement agreement and offer of settlement related to
pending proceedings before the FERC; (2) a $283 million reduction in income tax expense as a result of the
Hurricane Laura, Hurricane Delta, Hurricane Zeta, Winter Storm Uri, and Hurricane Ida May 2022 securitization
financing, which also resulted in a $224 million ($165 million net-of-tax) regulatory charge, recorded at Utility, to
reflect Entergy Louisiana’s obligation to provide credits to its customers as described in an LPSC ancillary order
issued as part of the securitization regulatory proceeding; and (3) a gain of $166 million ($130 million net-of-tax),
reflected in “Asset write-offs, impairments, and related charges (credits),” as a result of the sale of the Palisades
plant in June 2022. See Note 2 to the financial statements for discussion of the System Energy settlement
agreement with the MPSC. See Notes 2 and 3 to the financial statements for discussion of the Entergy Louisiana
May 2022 storm cost securitization. See Note 14 to the financial statements for discussion of the sale of the
Palisades plant.
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Entergy Corporation and Subsidiaries
Notes to Financial Statements
Results of operations for 2021 include a charge of $340 million ($268 million net-of-tax), reflected in
“Asset write-offs, impairments, and related charges (credits),” as a result of the sale of the Indian Point Energy
Center in May 2021. See Note 14 to the financial statements for discussion of the sale of the Indian Point Energy
Center.
Change in Reportable Segments Effective January 1, 2023
Entergy completed its multi-year strategy to exit the merchant nuclear power business in 2022 and upon
completion of all transition activities, effective January 1, 2023, Entergy Wholesale Commodities is no longer a
reportable segment. Remaining business activity previously reported under Entergy Wholesale Commodities is now
reported under Parent & Other. Historical segment financial information presented herein has been restated for
2022 and 2021 to reflect the change in reportable segments. The change in reportable segments had no effect on
Entergy’s consolidated financial statements or historical segment financial information for the Utility reportable
segment.
The Fitzpatrick plant was sold to Exelon in March 2017. The Vermont Yankee plant was sold to NorthStar
in January 2019. The Pilgrim plant was sold to Holtec International in August 2019. The Indian Point 2 and Indian
Point 3 plants were sold to Holtec International in May 2021. The Palisades plant was sold to Holtec International
in June 2022.
The decisions to shut down these plants and the related transactions resulted in asset impairments; employee
retention and severance expenses and other benefits-related costs; and contracted economic development
contributions. The employee retention and severance expenses and other benefits-related costs and contracted
economic development contributions are included in "Other operation and maintenance" in Entergy’s consolidated
income statements.
As the exit from the merchant nuclear power business was completed in 2022, there were no restructuring
charges recorded in 2023. Total restructuring charges in 2022 and 2021 were comprised of the following:
Employee retention
and severance
expenses and other
benefits-related costs
Contracted
economic
development costs
Total
(In Millions)
$145
12
120
$37
3
40
$—
$14
1
15
$—
—
—
$—
$159
13
135
$37
3
40
$—
Balance as of December 31, 2020
Restructuring costs accrued
Cash paid out
Balance as of December 31, 2021
Restructuring costs accrued
Cash paid out
Balance as of December 31, 2022
In addition, a gain of $166 million was recorded in 2022 as a result of the sale of the Palisades plant and a charge of
$340 million was recorded in 2021 as a result of the sale of the Indian Point Energy Center, both reflected in “Asset
write-offs, impairments, and related charges (credits)” in Entergy’s consolidated income statements. See Note 14 to
the financial statements for discussion of the sale of the Palisades plant and the Indian Point Energy Center.
Geographic Areas
For the years ended December 31, 2023, 2022, and 2021, Entergy derived no revenue from outside of the
United States. As of December 31, 2023 and 2022, Entergy had no long-lived assets located outside of the United
States.
179
Entergy Corporation and Subsidiaries
Notes to Financial Statements
NOTE 14. ACQUISITIONS AND DISPOSITIONS
Acquisitions
Walnut Bend Solar
In June 2020, Entergy Arkansas signed an agreement for the purchase of an approximately 100 MW to-be-
constructed solar photovoltaic energy facility, Walnut Bend Solar facility, to be sited on approximately 1,000 acres
in Lee County, Arkansas. Acquisition of the Walnut Bend Solar facility was initially approved by the APSC in July
2021. The agreement was amended by the parties in February 2023 and the revised agreement was approved by the
APSC in July 2023. In February 2024, Entergy Arkansas made an initial payment of $170 million to acquire the
facility. The project will achieve commercial operation once testing is completed and the project has achieved
substantial completion. Entergy Arkansas currently expects the project to achieve commercial operation in the first
half of 2024, at which time a substantial completion payment of approximately $20 million is expected.
Sunflower Solar
In November 2018, Entergy Mississippi entered into an agreement for the purchase of an approximately 100
MW solar photovoltaic facility to be sited on approximately 1,000 acres in Sunflower County, Mississippi. The
project, Sunflower Solar facility, was being built by Sunflower County Solar Project, LLC, an indirect subsidiary of
Recurrent Energy, LLC. In December 2018, Entergy Mississippi filed a joint petition with Sunflower County Solar
Project with the MPSC for Sunflower County Solar Project to construct and for Entergy Mississippi to acquire and
thereafter own, operate, improve, and maintain the solar facility. In March 2020, Entergy Mississippi filed
supplemental testimony addressing questions and observations raised in August 2019 by consultants retained by the
Mississippi Public Utilities Staff and proposing an alternative structure for the transaction that would reduce its cost.
In April 2020 the MPSC issued an order approving certification of the Sunflower Solar facility, subject to certain
conditions, including: (i) that Entergy Mississippi pursue a tax equity partnership structure through which the
partnership would acquire and own the facility under the build-own-transfer agreement and (ii) that if Entergy
Mississippi does not consummate the partnership structure under the terms of the order, there will be a cap of
$136 million on the level of recoverable costs. In April 2022, Entergy Mississippi confirmed mechanical
completion of the Sunflower Solar facility. Pursuant to the MPSC’s April 2020 order, MS Sunflower Partnership,
LLC was formed for the tax equity partnership with Entergy Mississippi as its managing member. In May 2022
both Entergy Mississippi and the tax equity investor made capital contributions to the tax equity partnership that
were then used to make an initial payment of $105 million for acquisition of the facility. Substantial completion of
the Sunflower Solar facility was accepted by Entergy Mississippi in September 2022. Commercial operation at the
Sunflower Solar facility commenced in September 2022. In April 2023 both Entergy Mississippi and the tax equity
investor made additional capital contributions to the tax equity partnership that were then used to make the
substantial completion payment of $30 million for acquisition of the facility. The final payment of $5 million for
acquisition of the facility was made in October 2023. See Note 1 to the financial statements for further discussion
of the HLBV method of accounting used to account for the investment in MS Sunflower Partnership, LLC.
Searcy Solar
In March 2019, Entergy Arkansas entered into a build-own-transfer agreement for the purchase of an
approximately 100 MW solar energy facility to be sited on approximately 800 acres in White County near Searcy,
Arkansas. The project, Searcy Solar facility, was being constructed by a subsidiary of NextEra Energy Resources.
In April 2020 the APSC issued an order approving Entergy Arkansas’s acquisition of the Searcy Solar facility as
being in the public interest. In May 2021, Entergy Arkansas filed with the APSC an application seeking to amend
its certificate for the Searcy Solar facility to allow for the use of a tax equity partnership to acquire and own the
facility. The tax equity partnership structure is expected to reduce costs and yield incremental net benefits to
customers beyond those expected under the build-own-transfer structure alone. The APSC approved Entergy
Arkansas’s tax equity partnership request in September 2021. AR Searcy Partnership, LLC was formed for the tax
180 Entergy Corporation and Subsidiaries
Notes to Financial Statements
equity partnership with Entergy Arkansas as its managing member. In November 2021 both Entergy Arkansas and
the tax equity investor made capital contributions to the tax equity partnership that were then used to acquire the
facility. Upon substantial completion of the facility in December 2021, the tax equity partnership completed the
purchase of the Searcy Solar facility. The purchase price for the Searcy Solar facility was approximately
$133 million, which included a final payment of $1 million made in 2022. See Note 1 to the financial statements
for further discussion of the HLBV method of accounting used to account for the investment in AR Searcy
Partnership, LLC.
Hardin County Peaking Facility
In June 2021, Entergy Texas purchased the Hardin County Peaking Facility, an existing 147 MW simple-
cycle gas-fired peaking power plant in Kountze, Texas, from East Texas Electric Cooperative, Inc. In addition, also
in June 2021, Entergy Texas sold a 7.56% partial interest in the Montgomery County Power Station to East Texas
Electric Cooperative, Inc. for approximately $68 million. The two interdependent transactions were approved by
the PUCT in April 2021. The purchase price for the Hardin County Peaking Facility was approximately
$37 million.
Dispositions
Palisades
In July 2018, Entergy entered into a purchase and sale agreement with Holtec International to sell to a
Holtec subsidiary 100% of the equity interests in the subsidiary that owns Palisades and the Big Rock Point Site. In
December 2020, Entergy and Holtec submitted a license transfer application to the NRC requesting approval to
transfer the Palisades and Big Rock Point licenses from Entergy to Holtec. The NRC issued an order approving the
application in December 2021. Palisades was shut down in May 2022 and defueled in June 2022. The Palisades
transaction closed in June 2022 for a purchase price of $1,000 (subject to adjustment for net liabilities and other
amounts). The sale included the transfer of the Palisades nuclear decommissioning trust and the asset retirement
obligation for spent fuel management and plant decommissioning. The transaction resulted in a gain of
$166 million ($130 million net-of-tax) in the second quarter 2022. The disposition-date fair value of the nuclear
decommissioning trust fund was approximately $552 million, and the disposition-date fair value of the asset
retirement obligation was approximately $708 million. The transaction also included property, plant, and
equipment with a net book value of zero and materials and supplies.
Indian Point Energy Center
In April 2019, Entergy entered into an agreement to sell, directly or indirectly, 100% of the equity interests
in the subsidiaries that own Indian Point 1, Indian Point 2, and Indian Point 3, after Indian Point 3 had been shut
down and defueled, to a Holtec International subsidiary. In November 2020 the NRC approved the sale of the
plants to Holtec. Indian Point 3 was shut down in April 2021 and defueled in May 2021. In May 2021 the New
York State Public Service Commission approved the sale of the plant to Holtec. The transaction closed in May
2021. The sale included the transfer of the licenses, spent fuel, decommissioning liabilities, and nuclear
decommissioning trusts for the three units. The transaction resulted in a charge of $340 million ($268 million net-
of-tax) in the second quarter of 2021. The disposition-date fair value of the nuclear decommissioning trust funds
was approximately $2,387 million, and the disposition-date fair value of the asset retirement obligations was
$1,996 million. The transaction also included materials and supplies and prepaid assets.
181 Entergy Corporation and Subsidiaries
Notes to Financial Statements
NOTE 15. RISK MANAGEMENT AND FAIR VALUES
Market Risk
In the normal course of business, Entergy is exposed to a number of market risks. Market risk is the
potential loss that Entergy may incur as a result of changes in the market or fair value of a particular commodity or
instrument. All financial and commodity-related instruments, including derivatives, are subject to market risk
including commodity price risk, equity price, and interest rate risk. Entergy uses derivatives primarily to mitigate
commodity price risk, particularly power price and fuel price risk.
The Utility has limited exposure to the effects of market risk because it operates primarily under cost-based
rate regulation. To the extent approved by their retail regulators, the Utility operating companies use derivative
instruments to hedge the exposure to price volatility inherent in their purchased power, fuel, and gas purchased for
resale costs, that are recovered from customers.
Entergy’s non-utility operations’ core business as a wholesale generator was selling energy, measured in
MWh, to its customers. The non-utility operations business entered into forward contracts with its customers and
also sold energy and capacity in the day ahead or spot markets. In addition to its forward physical power and gas
contracts, the non-utility operations business used a combination of financial contracts, including swaps, collars, and
options, to mitigate commodity price risk. When the market price fell, the combination of financial contracts was
expected to settle in gains that offset lower revenue from generation, which resulted in a more predictable cash flow.
As a result of the completion of Entergy’s strategy to exit the merchant nuclear power business, which included the
shut down and sale of all non-utility nuclear plants, the portfolio of derivative instruments held by Entergy’s non-
utility operations business expired in April 2021, which was the settlement date for the last financial derivative
contracts in the non-utility operations business’ portfolio.
Entergy’s exposure to market risk is determined by a number of factors, including the size, term,
composition, and diversification of positions held, as well as market volatility and liquidity. For instruments such as
options, the time period during which the option may be exercised and the relationship between the current market
price of the underlying instrument and the option’s contractual strike or exercise price also affects the level of
market risk. A significant factor influencing the overall level of market risk to which Entergy is exposed is its use
of hedging techniques to mitigate such risk. Hedging instruments and volumes are chosen based on ability to
mitigate risk associated with future energy and capacity prices; however, other considerations are factored into
hedge product and volume decisions including corporate liquidity, corporate credit ratings, counterparty credit risk,
hedging costs, firm settlement risk, and product availability in the marketplace. Entergy manages market risk by
actively monitoring compliance with stated risk management policies as well as monitoring the effectiveness of its
hedging policies and strategies. Entergy’s risk management policies limit the amount of total net exposure and
rolling net exposure during the stated periods. These policies, including related risk limits, are regularly assessed to
ensure their appropriateness given Entergy’s objectives.
Derivatives
Some derivative instruments are classified as cash flow hedges due to their financial settlement provisions
while others are classified as normal purchase/normal sale transactions due to their physical settlement
provisions. Normal purchase/normal sale risk management tools include power purchase and sales agreements, fuel
purchase agreements, capacity contracts, and tolling agreements. Financially-settled cash flow hedges can include
natural gas and electricity swaps and options. Entergy may enter into financially-settled swap and option contracts
to manage market risk that may or may not be designated as hedging instruments.
Entergy entered into derivatives to manage natural risks inherent in its physical or financial assets or
liabilities. Electricity over-the-counter instruments and futures contracts that financially settled against day-ahead
power pool prices were used to manage price exposure for the non-utility operations’ generation.
182 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Entergy manages fuel price volatility for its Louisiana jurisdictions (Entergy Louisiana and Entergy New
Orleans) and Entergy Mississippi through the purchase of natural gas swaps and options that financially settle
against either the average Henry Hub Gas Daily prices or the NYMEX Henry Hub. These swaps and options are
marked-to-market through fuel expense with offsetting regulatory assets or liabilities. All benefits or costs of the
program are recorded in fuel costs. The notional volumes of these swaps are based on a portion of projected annual
exposure to gas price volatility for electric generation at Entergy Louisiana and Entergy Mississippi and projected
winter purchases for gas distribution at Entergy New Orleans. The maximum length of time over which Entergy
has executed natural gas swaps and options as of December 31, 2023 is 3 months for Entergy Louisiana, 10 months
for Entergy Mississippi, and 3 months for Entergy New Orleans. The total volume of natural gas swaps and options
outstanding as of December 31, 2023 is 14,798,500 MMBtu for Entergy, including 1,820,000 MMBtu for Entergy
Louisiana, 12,491,700 MMBtu for Entergy Mississippi, and 486,800 MMBtu for Entergy New Orleans. Credit
support for these natural gas swaps and options is covered by master agreements that do not require Entergy to
provide collateral based on mark-to-market value, but do carry adequate assurance language that may lead to
requests for collateral.
During the second quarter 2023, Entergy participated in the annual financial transmission rights auction
process for the MISO planning year of June 1, 2023 through May 31, 2024. Financial transmission rights are
derivative instruments that represent economic hedges of future congestion charges that will be incurred in serving
Entergy’s customer load. They are not designated as hedging instruments. Entergy initially records financial
transmission rights at their estimated fair value and subsequently adjusts the carrying value to their estimated fair
value at the end of each accounting period prior to settlement. Unrealized gains or losses on financial transmission
rights held by the non-utility operations are included in operating revenues. The Utility operating companies
recognize regulatory liabilities or assets for unrealized gains or losses on financial transmission rights. The total
volume of financial transmission rights outstanding as of December 31, 2023 is 62,809 GWh for Entergy. Credit
support for financial transmission rights held by the Utility operating companies is covered by cash and/or letters of
credit issued by each Utility operating company as required by MISO. Credit support for financial transmission
rights held by the non-utility operations business is covered by cash. No cash or letters of credit were required to be
posted for financial transmission rights exposure for the non-utility operations business as of December 31, 2023
and 2022. Letters of credit posted with MISO covered the financial transmission rights exposure for Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy Texas as of December 31, 2023 and for Entergy
Mississippi, Entergy New Orleans, and Entergy Texas as of December 31, 2022.
The fair values of Entergy’s derivative instruments not designated as hedging instruments on the
consolidated balance sheets as of December 31, 2023 and 2022 are shown in the table below. Certain investments,
including those not designated as hedging instruments, are subject to master netting agreements and are presented in
the balance sheet on a net basis in accordance with accounting guidance for derivatives and hedging.
Instrument
2023
Balance Sheet
Location
Gross Fair
Value (a)
Offsetting
Position (b)
(In Millions)
Net Fair Value
(c) (d)
Assets:
Financial transmission rights
Prepayments and other
$21
Liabilities:
Natural gas swaps and options Other current liabilities
$11
$—
$—
$21
$11
183
Entergy Corporation and Subsidiaries
Notes to Financial Statements
2022
Assets:
Natural gas swaps and options Prepayments and other
Other deferred debits
and other assets
Natural gas swaps and options
Financial transmission rights
Prepayments and other
Liabilities:
Natural gas swaps and options Other current liabilities
$13
$3
$21
$25
$—
$—
($2)
$—
$13
$3
$19
$25
(a)
(b)
(c)
(d)
Represents the gross amounts of recognized assets/liabilities
Represents the netting of fair value balances with the same counterparty
Represents the net amounts of assets/liabilities presented on the Entergy Corporation and Subsidiaries’
Consolidated Balance Sheets
Excludes cash collateral in the amount of $8 million posted as of December 31, 2022. Also excludes letters
of credit in the amount of $2 million posted as of December 31, 2023 and $3 million posted as of December
31, 2022.
As discussed above, the non-utility operations business’ portfolio of derivative instruments expired in April
2021, which was the settlement date for the last financial derivative contract in the portfolio. Prior to the expiration
of the non-utility operations business’ portfolio of derivative instruments, Entergy may have effectively liquidated a
cash flow hedge instrument by entering into a contract offsetting the original hedge, and then de-designating the
original hedge in this situation. Gains or losses accumulated in other comprehensive income prior to de-designation
would have continued to be deferred in other comprehensive income until they were included in income as the
original hedged transaction occurred. From the point of de-designation, the gains or losses on the original hedge
and the offsetting contract were recorded as assets or liabilities on the balance sheet and offset as they flowed
through to earnings. The non-utility operations business recognized a gain of $2 million in other comprehensive
income and reclassified a gain of $40 million, before taxes of $8 million, from accumulated other comprehensive
income into income, each resulting from the effect of Entergy’s derivative instruments designated as cash flow
hedges on the consolidated income statements for the year ended December 31, 2021.
184
The effects of Entergy’s derivative instruments not designated as hedging instruments on the consolidated
income statements for the years ended December 31, 2023, 2022, and 2021 are as follows:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Instrument
Income Statement location
2023
Natural gas swaps and options
Financial transmission rights
for resale
Purchased power expense
Fuel, fuel-related expenses, and gas purchased
2022
Natural gas swaps and option
Financial transmission rights
for resale
Purchased power expense
Fuel, fuel-related expenses, and gas purchased
2021
Fuel, fuel-related expenses, and gas purchased
Natural gas swaps
Purchased power expense
Financial transmission rights
Electricity swaps and options (c) Other operating revenues
for resale
(a)
(b)
(a)
(b)
(a)
(b)
Amount of gain (loss)
recorded in the
income statement
(In Millions)
($54)
$124
$74
$176
$32
$179
($2)
(a)
(b)
(c)
Due to regulatory treatment, the natural gas swaps and options are marked-to-market through fuel, fuel-
related expenses, and gas purchased for resale and then such amounts are simultaneously reversed and
recorded as an offsetting regulatory asset or liability. The gains or losses recorded as fuel expenses when
the swaps and options are settled are recovered or refunded through fuel cost recovery mechanisms.
Due to regulatory treatment, the changes in the estimated fair value of financial transmission rights for the
Utility operating companies are recorded through purchased power expense and then such amounts are
simultaneously reversed and recorded as an offsetting regulatory asset or liability. The gains or losses
recorded as purchased power expense when the financial transmission rights for the Utility operating
companies are settled are recovered or refunded through fuel cost recovery mechanisms.
There were no gains (losses) recognized in accumulated other comprehensive income from electricity swaps
and options prior to the expiration of the non-utility operations business’ portfolio of derivative instruments
in April 2021.
Fair Values
The estimated fair values of Entergy’s financial instruments and derivatives are determined using historical
prices, bid prices, market quotes, and financial modeling. Considerable judgment is required in developing the
estimates of fair value. Therefore, estimates are not necessarily indicative of the amounts that Entergy could realize
in a current market exchange. Gains or losses realized on financial instruments are reflected in future rates and
therefore do not affect net income. Entergy considers the carrying amounts of most financial instruments classified
as current assets and liabilities to be a reasonable estimate of their fair value because of the short maturity of these
instruments.
Accounting standards define fair value as an exit price, or the price that would be received to sell an asset or
the amount that would be paid to transfer a liability in an orderly transaction between knowledgeable market
participants at the date of measurement. Entergy and the Registrant Subsidiaries use assumptions or market input
data that market participants would use in pricing assets or liabilities at fair value. The inputs can be readily
185
Entergy Corporation and Subsidiaries
Notes to Financial Statements
observable, corroborated by market data, or generally unobservable. Entergy and the Registrant Subsidiaries
endeavor to use the best available information to determine fair value.
Accounting standards establish a fair value hierarchy that prioritizes the inputs used to measure fair
value. The hierarchy establishes the highest priority for unadjusted market quotes in an active market for the
identical asset or liability and the lowest priority for unobservable inputs.
The three levels of the fair value hierarchy are:
•
•
Level 1 - Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that
the entity has the ability to access at the measurement date. Active markets are those in which transactions
for the asset or liability occur in sufficient frequency and volume to provide pricing information on an
ongoing basis. Level 1 primarily consists of individually owned common stocks, cash equivalents
(temporary cash investments, securitization recovery trust account, and escrow accounts), debt instruments,
and gas swaps traded on exchanges with active markets. Cash equivalents includes all unrestricted highly
liquid debt instruments with an original or remaining maturity of three months or less at the date of
purchase.
Level 2 - Level 2 inputs are inputs other than quoted prices included in Level 1 that are, either directly or
indirectly, observable for the asset or liability at the measurement date. Assets are valued based on prices
derived by independent third parties that use inputs such as benchmark yields, reported trades, broker/dealer
quotes, and issuer spreads. Prices are reviewed and can be challenged with the independent parties and/or
overridden by Entergy if it is believed such would be more reflective of fair value. Level 2 inputs include
the following:
–
–
–
–
quoted prices for similar assets or liabilities in active markets;
quoted prices for identical assets or liabilities in inactive markets;
inputs other than quoted prices that are observable for the asset or liability; or
inputs that are derived principally from or corroborated by observable market data by correlation or
other means.
Level 2 consists primarily of individually-owned debt instruments and gas swaps and options valued using
observable inputs.
•
Level 3 - Level 3 inputs are pricing inputs that are generally less observable or unobservable from objective
sources. These inputs are used with internally developed methodologies to produce management’s best
estimate of fair value for the asset or liability. Level 3 consists primarily of financial transmission rights.
As a result of the completion of Entergy’s strategy to exit the merchant nuclear power business, which
included the shut down and sale of all non-utility nuclear plants, the portfolio of derivative instruments held by
Entergy’s non-utility operations business expired in April 2021, which was the settlement date for the last financial
derivative contracts in the non-utility operations business’ portfolio.
The values for power contract assets or liabilities prior to expiration in April 2021 were based on both
observable inputs including public market prices and interest rates, and unobservable inputs such as implied
volatilities, unit contingent discounts, expected basis differences, and credit adjusted counterparty interest rates.
They were classified as Level 3 assets and liabilities. The valuations of these assets and liabilities were performed
by the Office of Corporate Risk Oversight and the non-utility operations Accounting group. The primary related
functions of the Office of Corporate Risk Oversight included: gathering, validating, and reporting market data,
providing market risk analyses and valuations in support of the non-utility operations commercial transactions,
developing and administering protocols for the management of market risks, and implementing and maintaining
controls around changes to market data in the energy trading and risk management system. The Office of Corporate
186 Entergy Corporation and Subsidiaries
Notes to Financial Statements
Risk Oversight was also responsible for managing the energy trading and risk management system, forecasting
revenues, forward positions, and analysis. The non-utility operations Accounting group performed functions related
to market and counterparty settlements, revenue reporting and analysis, and financial accounting. The Office of
Corporate Risk Oversight reports to the Vice President and Treasurer while the non-utility operations Accounting
group reports to the Chief Accounting Officer.
The amounts reflected as the fair value of electricity swaps were based on the estimated amount that the
contracts were in-the-money at the balance sheet date (treated as an asset) or out-of-the-money at the balance sheet
date (treated as a liability) and equaled the estimated amount receivable to or payable by Entergy if the contracts
were settled at that date. These derivative contracts included cash flow hedges that swapped fixed for floating cash
flows for sales of the output from the non-utility operations business. The fair values were based on the mark-to-
market comparison between the fixed contract prices and the floating prices determined each period from quoted
forward power market prices. The differences between the fixed price in the swap contract and these market-related
prices multiplied by the volume specified in the contract and discounted at the counterparties’ credit adjusted risk
free rate were recorded as derivative contract assets or liabilities. For contracts that had unit contingent terms, a
further discount was applied based on the historical relationship between contract and market prices for similar
contract terms.
The amounts reflected as the fair values of electricity options were valued based on a Black Scholes model
and were calculated at the end of each month for accounting purposes. Inputs to the valuation included end of day
forward market prices for the period when the transactions settled, implied volatilities based on market volatilities
provided by a third-party data aggregator, and U.S. Treasury rates for a risk-free return rate. As described further
below, prices and implied volatilities were reviewed and could be adjusted if it was determined that there was a
better representation of fair value.
On a daily basis, the Office of Corporate Risk Oversight calculated the mark-to-market for electricity swaps
and options. The Office of Corporate Risk Oversight also validated forward market prices by comparing them to
other sources of forward market prices or to settlement prices of actual market transactions. Significant differences
were analyzed and potentially adjusted based on these other sources of forward market prices or settlement prices of
actual market transactions. Implied volatilities used to value options were also validated using actual counterparty
quotes for transactions by the non-utility operations business when available and compared with other sources of
market implied volatilities. Moreover, on a quarterly basis, the Office of Corporate Risk Oversight confirmed the
mark-to-market calculations and prepared price scenarios and credit downgrade scenario analysis. The scenario
analysis was communicated to senior management within Entergy. Finally, for all proposed derivative transactions,
an analysis was completed to assess the risk of adding the proposed derivative to the non-utility operations business’
portfolio. In particular, the credit and liquidity effects were calculated for this analysis. This analysis was
communicated to senior management within Entergy.
The values of financial transmission rights are based on unobservable inputs, including estimates of
congestion costs in MISO between applicable generation and load pricing nodes based on the 50th percentile of
historical prices. They are classified as Level 3 assets and liabilities. The valuations of these assets and liabilities
are performed by the Office of Corporate Risk Oversight. The values are calculated internally and verified against
the data published by MISO. Entergy’s Accounting group reviews these valuations for reasonableness, with the
assistance of others within the organization with knowledge of the various inputs and assumptions used in the
valuation. The Office of Corporate Risk Oversight reports to the Vice President and Treasurer. The Accounting
group reports to the Chief Accounting Officer.
The following tables set forth, by level within the fair value hierarchy, Entergy’s assets and liabilities that
are accounted for at fair value on a recurring basis as of December 31, 2023 and December 31, 2022. The
assessment of the significance of a particular input to a fair value measurement requires judgment and may affect
placement within the fair value hierarchy levels.
187 Entergy Corporation and Subsidiaries
Notes to Financial Statements
2023
Level 1
Level 2
Level 3
Total
(In Millions)
$—
$—
$61
Assets:
Temporary cash investments
Decommissioning trust funds (a):
Equity securities
Debt securities
Common trusts (b)
Securitization recovery trust account
Storm reserve escrow accounts
Financial transmission rights
$61
24
611
8
323
—
$1,027
—
1,159
—
—
—
$1,159
Liabilities:
Gas hedge contracts
$11
$—
—
—
—
—
21
$21
$—
24
1,770
3,070
8
323
21
$5,277
$11
2022
Level 1
Level 2
Level 3
Total
(In Millions)
Assets:
Temporary cash investments
Decommissioning trust funds (a):
Equity securities
Debt securities
Common trusts (b)
Securitization recovery trust account
Storm reserve escrow accounts
Gas hedge contracts
Financial transmission rights
Liabilities:
Gas hedge contracts
$109
$—
$—
$109
24
534
13
402
13
—
$1,095
—
1,122
—
—
3
—
$1,125
$25
$—
—
—
—
—
—
19
$19
$—
24
1,656
2,442
13
402
16
19
$4,681
$25
(a)
(b)
The decommissioning trust funds hold equity and fixed income securities. Equity securities are invested to
approximate the returns of major market indices. Fixed income securities are held in various governmental
and corporate securities. See Note 16 to the financial statements for additional information on the
investment portfolios.
Common trust funds are not publicly quoted and are valued by the fund administrators using net asset value
as a practical expedient. Accordingly, these funds are not assigned a level in the fair value table. The fund
administrator of these investments allows daily trading at the net asset value and trades settle at a later date.
188
The following table sets forth a reconciliation of changes in the net assets for the fair value of derivatives
classified as Level 3 in the fair value hierarchy for the years ended December 31, 2023, 2022, and 2021:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
2023
Financial
transmission
rights
2022
Financial
transmission
rights
2021
Power
Contracts
Financial
transmission
rights
Balance as of January 1,
Total gains (losses) for the
period
Included in earnings
Included in other
comprehensive income
Included as a regulatory
liability/asset
Issuances of financial
transmission rights
Settlements
Balance as of December 31,
$19
—
—
84
42
(124)
$21
$4
—
—
175
16
(176)
$19
$38
(2)
2
—
—
(38)
$—
$9
—
—
162
12
(179)
$4
The fair values of the Level 3 financial transmission rights are based on unobservable inputs calculated
internally and verified against historical pricing data published by MISO.
The following table sets forth an analysis of each of the types of unobservable inputs impacting the fair
value of items classified as Level 3 within the fair value hierarchy, and the sensitivity to changes to those inputs:
Significant
Unobservable Input
Transaction Type
Position
Change to Input
Effect on Fair
Value
Unit contingent discount
Electricity swaps
Sell
Increase (Decrease) Decrease (Increase)
NOTE 16. DECOMMISSIONING TRUST FUNDS
The NRC requires certain of the Utility operating companies and System Energy to maintain nuclear
decommissioning trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, and Grand
Gulf. Entergy’s nuclear decommissioning trust funds invest in equity securities, fixed-rate debt securities, and cash
and cash equivalents.
Entergy records decommissioning trust funds on the balance sheet at their fair value. Because of the ability
of the Registrant Subsidiaries to recover decommissioning costs in rates and in accordance with the regulatory
treatment for decommissioning trust funds, for unrealized gains/(losses) on investment securities, the Registrant
Subsidiaries record an offsetting amount in other regulatory liabilities/assets. For the 30% interest in River Bend
formerly owned by Cajun, Entergy Louisiana records an offsetting amount in other deferred credits for the
unrealized trust earnings not currently expected to be needed to decommission the plant. Decommissioning trust
funds for the nuclear plants previously owned by Entergy’s non-utility operations, all of which have been sold as of
June 2022, did not meet the criteria for regulatory accounting treatment. Accordingly, unrealized gains/(losses)
recorded on the equity securities in the trust funds for these plants were recognized in earnings with no offsetting
regulatory liability/asset amount. Unrealized gains/(losses) recorded on the available-for-sale debt securities in the
trust funds were recognized in the accumulated other comprehensive income component of shareholders’ equity.
189
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Generally, Entergy records gains and losses on its debt and equity securities using the specific identification method
to determine the cost basis of its securities.
As discussed in Note 14 to the financial statements, in June 2022, Entergy completed the sale of Palisades
to Holtec. As part of the transaction, Entergy transferred the Palisades decommissioning trust fund to Holtec. The
disposition-date fair value of the decommissioning trust fund was approximately $552 million.
The unrealized gains/(losses) recognized during the year ended December 31, 2023 on equity securities still
held as of December 31, 2023 were $591 million. The equity securities are generally held in funds that are designed
to approximate or somewhat exceed the return of the Standard & Poor’s 500 Index. A relatively small percentage of
the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index or the Russell 3000
Index. The debt securities are generally held in individual government and credit issuances.
The available-for-sale securities held as of December 31, 2023 and 2022 are summarized as follows:
Fair
Value
Total
Unrealized
Gains
(In Millions)
Total
Unrealized
Losses
2023
Debt Securities
$1,770
$19
$134
2022
Debt Securities
$1,655
$4
$201
As of December 31, 2023 and 2022, there were no deferred taxes on unrealized gains/(losses). The
amortized cost of available-for-sale debt securities was $1,885 million as of December 31, 2023 and $1,852 million
as of December 31, 2022. As of December 31, 2023, available-for-sale debt securities had an average coupon rate
of approximately 3.48%, an average duration of approximately 6.36 years, and an average maturity of
approximately 10.82 years.
The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of
time that the securities had been in a continuous loss position, were as follows as of December 31, 2023 and 2022:
December 31, 2023
December 31, 2022
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Less than 12 months
More than 12 months
Total
$134
999
$1,133
(In Millions)
$6
128
$134
$840
666
$1,506
$63
138
$201
190
The fair value of available-for-sale debt securities, summarized by contractual maturities, as of
December 31, 2023 and 2022 are as follows:
Entergy Corporation and Subsidiaries
Notes to Financial Statements
Less than 1 year
1 year - 5 years
5 years - 10 years
10 years - 15 years
15 years - 20 years
20 years+
Total
2023
2022
(In Millions)
$82
517
504
121
179
367
$1,770
$62
520
461
117
161
334
$1,655
During the years ended December 31, 2023, 2022, and 2021, proceeds from the dispositions of available-
for-sale securities amounted to $661 million, $889 million, and $1,465 million, respectively. During the year ended
December 31, 2023, there were gross gains of $1 million and gross losses of $37 million related to available-for-sale
securities reclassified out of other regulatory liabilities/assets into earnings. During the years ended December 31,
2022 and 2021, there were gross gains of $2 million and $29 million, respectively, and gross losses of $46 million
and $17 million, respectively, related to available-for-sale securities reclassified out of other comprehensive income
or other regulatory liabilities/assets into earnings.
NOTE 17. VARIABLE INTEREST ENTITIES
Under applicable authoritative accounting guidance, a variable interest entity (VIE) is an entity that
conducts a business or holds property that possesses any of the following characteristics: an insufficient amount of
equity at risk to finance its activities, equity owners who do not have the power to direct the significant activities of
the entity (or have voting rights that are disproportionate to their ownership interest), or where equity holders do not
receive expected losses or returns. An entity may have an interest in a VIE through ownership or other contractual
rights or obligations, and is required to consolidate a VIE if it is the VIE’s primary beneficiary. The primary
beneficiary of a VIE is the entity that has the power to direct the activities of the VIE that most significantly affect
the VIE’s economic performance and has the obligation to absorb losses or has the right to residual returns that
would potentially be significant to the entity.
Entergy Arkansas, Entergy Louisiana, and System Energy consolidate the respective companies from which
they lease nuclear fuel, usually in a sale and leaseback transaction. This is because Entergy directs the nuclear fuel
companies with respect to nuclear fuel purchases, assists the nuclear fuel companies in obtaining financing, and, if
financing cannot be arranged, the lessee (Entergy Arkansas, Entergy Louisiana, or System Energy) is required to
pay advance rent (Entergy Arkansas VIE, Entergy Louisiana Waterford VIE, and System Energy VIE) or special
payments (Entergy Louisiana River Bend VIE) to allow the nuclear fuel company (the VIE) to meet its obligations.
During the term of the arrangements, none of the Entergy operating companies have been required to provide
financial support apart from their scheduled lease payments. See Note 4 to the financial statements for details of the
nuclear fuel companies’ credit facility and commercial paper borrowings and long-term debt that are reported by
Entergy, Entergy Arkansas, Entergy Louisiana, and System Energy. These amounts also represent Entergy’s and
the respective Registrant Subsidiary’s maximum exposure to losses associated with their respective interests in the
nuclear fuel companies.
Entergy Texas Restoration Funding, LLC and Entergy Texas Restoration Funding II, LLC, companies
wholly-owned and consolidated by Entergy Texas, are VIEs and Entergy Texas is the primary beneficiary. In
November 2009, Entergy Texas Restoration Funding issued senior secured transition bonds (securitization bonds) to
finance Entergy Texas’s Hurricane Ike and Hurricane Gustav restoration costs. Although the principal amount was
191
Entergy Corporation and Subsidiaries
Notes to Financial Statements
not due until November 2023, Entergy Texas Restoration Funding made principal payments on the bonds in 2022,
after which the bonds were fully repaid. In April 2022, Entergy Texas Restoration Funding II issued senior secured
system restoration bonds (securitization bonds) to finance Entergy Texas’s Hurricane Laura, Hurricane Delta, and
Winter Storm Uri restoration costs. With the proceeds, the VIEs purchased from Entergy Texas the transition
property, which is the right to recover from customers through a system restoration charge amounts sufficient to
service the securitization bonds. The transition property is reflected as a regulatory asset on the consolidated
balance sheets. The creditors of Entergy Texas do not have recourse to the assets or revenues of the VIEs, including
the transition property, and the creditors of the VIEs do not have recourse to the assets or revenues of Entergy
Texas. Entergy Texas has no payment obligations to the VIEs except to remit system restoration charge collections.
See Note 5 to the financial statements for additional details regarding the securitization bonds.
Entergy Louisiana Investment Recovery Funding I, L.L.C., a company wholly-owned and consolidated by
Entergy Louisiana, is a VIE and Entergy Louisiana is the primary beneficiary. In September 2011, Entergy
Louisiana Investment Recovery Funding issued investment recovery bonds to recover Entergy Louisiana’s
investment recovery costs associated with the canceled Little Gypsy repowering project. With the proceeds,
Entergy Louisiana Investment Recovery Funding purchased from Entergy Louisiana the investment recovery
property, which is the right to recover from customers through an investment recovery charge amounts sufficient to
service the bonds. Although the principal amount was not due until September 2023, Entergy Louisiana Investment
Recovery Funding made principal payments on the bonds in 2021, after which the bonds were fully repaid. See
Note 5 to the financial statements for additional details regarding the investment recovery bonds.
Entergy New Orleans Storm Recovery Funding I, L.L.C., a company wholly-owned and consolidated by
Entergy New Orleans, is a VIE and Entergy New Orleans is the primary beneficiary. In July 2015, Entergy New
Orleans Storm Recovery Funding issued storm cost recovery bonds to recover Entergy New Orleans’s Hurricane
Isaac storm restoration costs, including carrying costs, the costs of funding and replenishing the storm recovery
reserve, and up-front financing costs associated with the securitization. With the proceeds, Entergy New Orleans
Storm Recovery Funding purchased from Entergy New Orleans the storm recovery property, which is the right to
recover from customers through a storm recovery charge amounts sufficient to service the securitization bonds. The
storm recovery property is reflected as a regulatory asset on the consolidated balance sheets. The creditors of
Entergy New Orleans do not have recourse to the assets or revenues of Entergy New Orleans Storm Recovery
Funding, including the storm recovery property, and the creditors of Entergy New Orleans Storm Recovery Funding
do not have recourse to the assets or revenues of Entergy New Orleans. Entergy New Orleans has no payment
obligations to Entergy New Orleans Storm Recovery Funding except to remit storm recovery charge collections.
See Note 5 to the financial statements for additional details regarding the securitization bonds.
Restoration Law Trust I (the storm trust I), a trust consolidated by Entergy Louisiana, is a VIE and Entergy
Louisiana is the primary beneficiary. The storm trust I was established as part of the Act 293 securitization of
Entergy Louisiana’s Hurricane Laura, Hurricane Delta, Hurricane Zeta, and Winter Storm Uri restoration costs, as
well as to establish a storm reserve to fund a portion of Hurricane Ida storm restoration costs. Entergy Louisiana is
the primary beneficiary of the storm trust I because it was created to facilitate the financing of Entergy Louisiana’s
storm restoration costs and Entergy Louisiana is entitled to receive a majority of the proceeds received by the storm
trust I. As of December 31, 2023 and 2022, the primary asset held by the storm trust I was $3 billion and
$3.2 billion, respectively, of outstanding Entergy Finance Company preferred membership interests, which is
reflected as an investment in affiliate preferred membership interests on the consolidated balance sheets of Entergy
Louisiana. The storm trust I’s investment in affiliate preferred membership interests was purchased with the net
bond proceeds of the securitization bonds issued by the LCDA. After the securitization bonds were issued, the
LCDA loaned the net bond proceeds to the LURC, and pursuant to Act 293, the LURC contributed the net bond
proceeds to the storm trust I. The holders of the securitization bonds do not have recourse to the assets or revenues
of the trust or to any Entergy affiliate and the bonds are not reflected in the consolidated balance sheets of Entergy.
The LURC’s 1% beneficial interest in the storm trust I is presented as noncontrolling interest on the consolidated
balance sheets of Entergy, with balances of $30.5 million and $31.7 million as of December 31, 2023 and 2022,
192 Entergy Corporation and Subsidiaries
Notes to Financial Statements
respectively. See Note 2 to the financial statements for additional discussion of the securitization bonds and the
preferred membership interests.
Restoration Law Trust II (the storm trust II), a trust consolidated by Entergy Louisiana, is a VIE and
Entergy Louisiana is the primary beneficiary. The storm trust II was established as part of the March 2023 Act 293
securitization of Entergy Louisiana’s Hurricane Ida restoration costs, less Hurricane Ida amounts previously
financed in May 2022 in a prior securitization transaction. Entergy Louisiana is the primary beneficiary of the
storm trust II because it was created to facilitate the financing of Entergy Louisiana’s storm restoration costs and
Entergy Louisiana is entitled to receive a majority of the proceeds received by the storm trust II. As of December
31, 2023, the primary asset held by the storm trust II is the $1.5 billion of outstanding Entergy Finance Company
preferred membership interests, which is reflected as an investment in affiliate preferred membership interests on
the consolidated balance sheets of Entergy Louisiana. The storm trust II’s investment in affiliate preferred
membership interests was purchased with the net bond proceeds of the securitization bonds issued by the LCDA.
After the securitization bonds were issued, the LCDA loaned the net bond proceeds to the LURC, and pursuant to
Act 293, the LURC contributed the net bond proceeds to the storm trust II. The holders of the securitization bonds
do not have recourse to the assets or revenues of the storm trust II or to any Entergy affiliate and the bonds are not
reflected in the consolidated balance sheets of Entergy. The LURC’s 1% beneficial interest in the storm trust II is
presented as noncontrolling interest on the consolidated balance sheets of Entergy, with a balance of $14.6 million
as of December 31, 2023. See Note 2 to the financial statements herein for additional discussion of the
securitization bonds and the preferred membership interests.
System Energy is considered to hold a variable interest in the lessor from which it leases an undivided
interest in the Grand Gulf nuclear plant. System Energy is the lessee under this arrangement, which is described in
more detail in Note 5 to the financial statements. System Energy made payments under this arrangement, including
interest, of $17.2 million in 2023, $17.2 million in 2022, and $17.2 million in 2021. The lessor is a bank acting in
the capacity of owner trustee for the benefit of equity investors in the transaction pursuant to trust agreement entered
solely for the purpose of facilitating the lease transaction. It is possible that System Energy may be considered as
the primary beneficiary of the lessor, but it is unable to apply the authoritative accounting guidance with respect to
this VIE because the lessor is not required to, and could not, provide the necessary financial information to
consolidate the lessor. Because System Energy accounts for this leasing arrangement as a capital financing,
however, System Energy believes that consolidating the lessor would not materially affect the financial
statements. In the event of default under a lease, remedies available to the lessor include payment by the lessee of
the fair value of the undivided interest in the plant, payment of the present value of the basic rent payments, or
payment of a predetermined casualty value. System Energy believes, however, that the obligations recorded on the
balance sheet materially represent its potential exposure to loss.
AR Searcy Partnership, LLC, is a tax equity partnership that qualifies as a VIE, which Entergy Arkansas is
required to consolidate as it is the primary beneficiary. See Note 14 to the financial statements for additional
discussion on the establishment of AR Searcy Partnership, LLC and the acquisition of the Searcy Solar facility. The
entity is a VIE because the holders of the membership interests, as a group, lack the characteristics of a controlling
financial interest, including substantive kick out rights. Entergy Arkansas is the primary beneficiary of the
partnership because, as the managing member, it has the right to direct the operations and receive a majority of the
operating income of the partnership. See Note 1 to the financial statements for discussion of the presentation of the
third party tax equity partner’s noncontrolling interest and the HLBV method of accounting used to account for
Entergy Arkansas’s investment in AR Searcy Partnership, LLC. As of December 31, 2023, AR Searcy Partnership,
LLC recorded assets equal to $134 million, primarily consisting of property, plant, and equipment, and the carrying
value of Entergy Arkansas’s ownership interest in the partnership was approximately $111.2 million. As of
December 31, 2022, AR Searcy Partnership, LLC recorded assets equal to $138.3 million, primarily consisting of
property, plant, and equipment, and the carrying value of Entergy Arkansas’s ownership interest in the partnership
was approximately $109 million. The tax equity investor’s ownership interest is recorded as noncontrolling interest.
193 Entergy Corporation and Subsidiaries
Notes to Financial Statements
MS Sunflower Partnership, LLC, is a tax equity partnership that qualifies as a VIE, which Entergy
Mississippi is required to consolidate as it is the primary beneficiary. See Note 14 to the financial statements for
additional discussion on the establishment of MS Sunflower Partnership, LLC and the acquisition of the Sunflower
Solar facility. The entity is a VIE because the holders of the membership interests, as a group, lack the
characteristics of a controlling financial interest, including substantive kick out rights. Entergy Mississippi is the
primary beneficiary of the partnership because, as the managing member, it has the right to direct the operations and
receive a majority of the operating income of the partnership. See Note 1 to the financial statements for discussion
of the presentation of the third party tax equity partner’s noncontrolling interest and the HLBV method of
accounting used to account for Entergy Mississippi’s investment in MS Sunflower Partnership, LLC. As of
December 31, 2023, MS Sunflower Partnership, LLC recorded assets equal to $163.2 million, primarily consisting
of property, plant, and equipment, and the carrying value of Entergy Mississippi’s ownership interest in the
partnership was approximately $128.4 million. As of December 31, 2022, MS Sunflower Partnership, LLC
recorded assets equal to $154.5 million, primarily consisting of property, plant, and equipment, and the carrying
value of Entergy Mississippi’s ownership interest in the partnership was approximately $117.2 million. The tax
equity investor’s ownership interest is recorded as noncontrolling interest.
Entergy has also reviewed various lease arrangements, power purchase agreements, including agreements
for renewable power, and other agreements that represent variable interests in other legal entities which have been
determined to be VIEs. In these cases, Entergy has determined that it is not the primary beneficiary of the related
VIE because it does not have the power to direct the activities of the VIE that most significantly affect the VIE’s
economic performance, or it does not have the obligation to absorb losses or the right to residual returns that would
potentially be significant to the entity, or both.
NOTE 18. REVENUE
Revenues from electric service and the sale of natural gas are recognized when services are transferred to
the customer in an amount equal to what Entergy has the right to bill the customer because this amount represents
the value of services provided to customers. Entergy’s total revenues for the years ended December 31, 2023, 2022
and 2021 are as follows:
Utility:
Residential
Commercial
Industrial
Governmental
Total billed retail
Sales for resale (a)
Other electric revenues (b)
Revenues from contracts with customers
Other Utility revenues (c)
Electric revenues
Natural gas revenues
Other revenues (d)
2023
2022
(In Thousands)
2021
$4,552,804
2,997,888
3,170,090
270,640
10,991,422
366,348
352,056
11,709,826
132,628
11,842,454
180,490
124,468
$4,640,039
3,087,675
3,716,058
286,605
11,730,377
858,743
481,256
13,070,376
116,469
13,186,845
233,920
343,472
$3,981,846
2,610,207
2,942,370
245,685
9,780,108
601,895
375,312
10,757,315
116,680
10,873,995
170,610
698,291
Total operating revenues
$12,147,412
$13,764,237
$11,742,896
194
Entergy Corporation and Subsidiaries
Notes to Financial Statements
(a)
(b)
(c)
(d)
Sales for resale includes day-ahead sales of energy in a market administered by an ISO. These sales
represent financially binding commitments for the sale of physical energy the next day. These sales are
adjusted to actual power generated and delivered in the real time market. Given the short duration of these
transactions, Entergy does not consider them to be derivatives subject to fair value adjustments and includes
them as part of customer revenues.
Other electric revenues consist primarily of transmission and ancillary services provided to participants of
an ISO-administered market, unbilled revenue, and certain customer credits as directed by regulators.
Other Utility revenues include the equity component of carrying costs related to securitization, settlement of
financial hedges, occasional sales of inventory, alternative revenue programs, provisions for revenue subject
to refund, and late fees.
Other revenues include the sale of electric power and capacity to wholesale customers, day-ahead sales of
energy in a market administered by an ISO, operation and management services fees, and amortization of a
below-market power purchase agreement.
Electric Revenues
Entergy’s primary source of revenue is from retail electric sales sold under tariff rates approved by
regulators in its various jurisdictions. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New
Orleans, and Entergy Texas generate, transmit, and distribute electric power primarily to retail customers in
Arkansas, Louisiana, Mississippi, and Texas. Entergy’s Utility operating companies provide power to customers on
demand throughout the month, measured by a meter located at the customer’s property. Approved rates vary by
customer class due to differing requirements of the customers and market factors involved in fulfilling those
requirements. Entergy issues monthly bills to customers at rates approved by regulators for power and related
services provided during the previous billing cycle.
To the extent that deliveries have occurred, but a bill has not been issued, Entergy’s Utility operating
companies record an estimate for energy delivered since the latest billings. The Utility operating companies
calculate the estimate based upon several factors including billings through the last billing cycle in a month, actual
generation in the month, historical line loss factors, and market prices of power in the respective jurisdiction. The
inputs are revised as needed to approximate actual usage and cost. Each month, estimated unbilled amounts are
recorded as unbilled revenue and accounts receivable, and the prior month’s estimate is reversed. Price and volume
differences resulting from factors such as weather affect the calculation of unbilled revenues from one period to the
other.
Entergy may record revenue based on rates that are subject to refund. Such revenues are reduced by
estimated refund amounts when Entergy believes refunds are probable based on the status of rate proceedings as of
the date financial statements are prepared. Because these refunds will be made through a reduction in future rates,
and not as a reduction in bills previously issued, they are presented as other revenues in the table above.
System Energy’s only source of revenue is the sale of electric power and capacity generated from its 90%
interest in the Grand Gulf nuclear plant to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans. System Energy issues monthly bills to its affiliated customers equal to its actual operating costs plus
a return on common equity approved by the FERC.
Entergy’s Utility operating companies also sell excess power not needed for their own customers, primarily
through transactions with MISO, a regional transmission organization that maintains functional control over the
combined transmission systems of its members and manages one of the largest energy markets in the U.S. In the
MISO market, Entergy offers its generation and bids its load into the market. MISO settles these offers and bids
based on locational marginal prices. These represent pricing for energy at a given location based on a market
clearing price that takes into account physical limitations on the transmission system, generation, and demand
throughout the MISO region. MISO evaluates each market participant’s energy offers and demand bids to
195 Entergy Corporation and Subsidiaries
Notes to Financial Statements
economically and reliably dispatch the entire MISO system. Entergy nets purchases and sales within the MISO
market and reports in operating revenues when in a net selling position and in operating expenses when in a net
purchasing position.
Natural Gas
Entergy Louisiana and Entergy New Orleans also distribute natural gas to retail customers in and around
Baton Rouge, Louisiana, and New Orleans, Louisiana, respectively. Gas transferred to customers is measured by a
meter at the customer’s property. Entergy issues monthly invoices to customers at rates approved by regulators for
the volume of gas transferred to date.
Other Revenues
Entergy’s revenues from its non-utility operations include the sale of electric power and capacity to
wholesale customers, day-ahead sales of energy in a market administered by an ISO, operation and management
services fees, and amortization of a below-market PPA. In 2022 and 2021, the majority of revenues were from the
Palisades nuclear power plant located in Michigan, which was shut down in May 2022 and subsequently sold in
June 2022. Almost all of the Palisades nuclear plant output was sold under a 15-year PPA with Consumers Energy,
which was executed as part of the acquisition of the plant in 2007 and expired in April 2022. Prices under the
original PPA ranged from $43.50/MWh in 2007 to $61.50/MWh in 2022, and the average price under the PPA was
$51/MWh. Entergy executed an additional PPA to cover the period from the expiration of the original PPA through
final shutdown in May 2022 at a price of $24.14/MWh. Entergy issued monthly invoices to Consumers Energy for
electric sales based on the actual output of electricity and related services provided during the previous month at the
contract price. The PPA was at below-market prices at the time of the acquisition and Entergy amortized a liability
to revenue over the life of the agreement. The amount amortized each period was based upon the present value,
calculated at the date of acquisition, of each year’s difference between revenue under the agreement and revenue
based on estimated market prices. Amounts amortized to revenue were $5 million in 2022 and $12 million in 2021.
See Note 14 to the financial statements for discussion of the sale of the Palisades plant.
Practical Expedients and Exceptions
Entergy has elected not to disclose the value of unsatisfied performance obligations for contracts with an
original expected term of one year or less, or for revenue recognized in an amount equal to what Entergy has the
right to bill the customer for services performed.
Most of Entergy’s contracts, except in a few cases where there are defined minimums or stated terms, are on
demand. This results in customer bills that vary each month based on an approved tariff and usage. Entergy
imposes monthly or annual minimum requirements on some customers primarily as credit and cost recovery
guarantees and not as pricing for unsatisfied performance obligations. These minimums typically expire after the
initial term or when specified costs have been recovered. The minimum amounts are part of each month’s bill and
recognized as revenue accordingly. Some Entergy subsidiaries in the non-utility operations business have services
contracts that have fixed components and terms longer than one year. The total fixed consideration related to these
unsatisfied performance obligations, however, is not material to Entergy revenues.
Recovery of Fuel Costs
Entergy’s Utility operating companies’ rate schedules include either fuel adjustment clauses or fixed fuel
factors, which allow either current recovery in billings to customers or deferral of fuel costs until the costs are billed
to customers. Where the fuel component of revenues is based on a pre-determined fuel cost (fixed fuel factor), the
fuel factor remains in effect until changed as part of a general rate case, fuel reconciliation, or fixed fuel factor
filing. System Energy’s operating revenues are intended to recover from Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans operating expenses and capital costs attributable to Grand Gulf. The
196 Entergy Corporation and Subsidiaries
Notes to Financial Statements
capital costs are based on System Energy’s common equity funds allocable to its net investment in Grand Gulf, plus
System Energy’s effective interest cost for its debt allocable to its investment in Grand Gulf.
Taxes Imposed on Revenue-Producing Transactions
Governmental authorities assess taxes that are both imposed on and concurrent with a specific revenue-
producing transaction between a seller and a customer, including, but not limited to, sales, use, value added, and
some excise taxes. Entergy presents these taxes on a net basis, excluding them from revenues.
Allowance for Doubtful Accounts
The allowance for doubtful accounts reflects Entergy’s best estimate of expected losses on its accounts
receivable balances. Due to the essential nature of utility services, Entergy has historically experienced a low rate
of default on its accounts receivables. The following tables set forth a reconciliation of changes in the allowance for
doubtful accounts for the years ended December 31, 2023 and 2022.
Entergy
Entergy
Arkansas
Entergy
Louisiana
Entergy
Mississippi
Entergy
New
Orleans
Entergy
Texas
Balance as of December 31, 2022
Provisions
Write-offs
Recoveries
Balance as of December 31, 2023
$30.9
38.7
(83.1)
39.4
$25.9
$6.5
9.4
(20.6)
11.9
$7.2
(In Millions)
$7.6
13.9
(31.3)
15.9
$6.1
$2.5
7.3
(10.4)
3.9
$3.3
$11.9
3.4
(10.7)
3.2
$7.8
$2.4
4.7
(10.1)
4.5
$1.5
Entergy
Entergy
Arkansas
Entergy
Louisiana
Entergy
Mississippi
Entergy
New
Orleans
Entergy
Texas
Balance as of December 31, 2021
Provisions (a)
Write-offs
Recoveries
Balance as of December 31, 2022
$68.6
40.6
(112.5)
34.2
$30.9
$13.1
14.9
(31.2)
9.7
$6.5
(In Millions)
$29.2
10.7
(45.1)
12.8
$7.6
$7.2
3.2
(12.1)
4.2
$2.5
$13.3
7.7
(13.5)
4.4
$11.9
$5.8
4.1
(10.6)
3.1
$2.4
(a)
Provisions include estimated incremental bad debt expenses, and revisions to those estimates, resulting from
the COVID-19 pandemic of ($6.4) million for Entergy, $6.4 million for Entergy Arkansas, ($8.5) million
for Entergy Louisiana, ($3.0) million for Entergy New Orleans, and ($1.3) million for Entergy Texas that
have been deferred as regulatory assets. See Note 2 to the financial statements for information on
regulatory assets recorded as a result of the COVID-19 pandemic and orders issued by retail regulators.
The allowance is calculated as the historical rate of customer write-offs multiplied by the current accounts
receivable balance, taking into account the length of time the receivable balances have been outstanding. The rate
of customer write-offs has historically experienced minimal variation, although general economic conditions, such
as the COVID-19 pandemic or other economic hardships, can affect the rate of customer write-offs. Management
monitors the current condition of individual customer accounts to manage collections and ensure bad debt expense
is recorded in a timely manner.
197
BOARD OF DIRECTORS (as of March 22, 2024)
GINA F. ADAMS
Corporate Vice President
FedEx Corporation
Washington, DC
An Entergy director since 2023. Age 65
JOHN H. BLACK
Retired Audi Partner
Deloitte & Touche LLP
Atlanta, Georgia
An Entergy director since 2023. Age 64
JOHN R. BURBANK
Independent Strategic Advisor and Entrepreneur
Groton, Connecticut
An Entergy director since 2018. Age 60
PATRICK J. CONDON
Retired Audit Partner,
Deloitte & Touche LLP
Frankfort, Illinois
An Entergy director since 2015*. Age 75
KIRKLAND H. DONALD
Chairman of the Board,
Huntington Ingalls Industries, Inc.
Mount Pleasant, South Carolina
An Entergy director since 2013. Age 70
BRIAN W. ELLIS
Senior Vice President and General Counsel,
Danaher Corporation
Bethesda, Maryland
An Entergy director since 2020. Age 58
PHILIP L. FREDERICKSON
Former Executive Vice President,
ConocoPhillips
Arden, North Carolina
An Entergy director since 2015. Age 67
M. ELISE HYLAND
Former Chief Operating Officer,
EQT Midstream Services, LLC
Pittsburg, Pennsylvania
An Entergy director since 2019. Age 64
STUART L. LEVENICK
Lead Director
Former Group President,
Caterpillar Inc.
Naples, Florida
An Entergy director since 2005. Age 71
BLANCHE L. LINCOLN
Founder and Principal,
Lincoln Policy Group
Little Rock, Arkansas
An Entergy director since 2011. Age 63
ANDREW S. MARSH
Chairman and CEO
Entergy Corporation
New Orleans, Louisiana
An Entergy director since 2022. Age 52
KAREN A. PUCKETT
Former President and Chief Executive Officer,
Harte Hanks, Inc.
Houston, Texas
An Entergy director since 2015. Age 63
* Retiring from the Board of Directors at the
2024 Annual Meeting of Shareholders
198
EXECUTIVE OFFICERS (as of March 22, 2024)
MARCUS V. BROWN
Executive Vice President and
General Counsel
Joined Entergy in 1995. Age 62
REGINALD T. JACKSON
Senior Vice President and
Chief Accounting Officer
Joined Entergy in 1996. Age 57
JASON M. CHAPMAN
Senior Vice President, Chief Technology and
Business Services Officer
Joined Entergy in 2019. Age 54
ANDREW S. MARSH
Chair of the Board and Chief Executive Officer
Joined Entergy in 1998. Age 52
KATHRYN A. COLLINS
Senior Vice President and
Chief Human Resources Officer
Joined Entergy in 2020. Age 60
KIMBERLY S. COOK-NELSON
Executive Vice President, Nuclear Operations
and Chief Nuclear Officer
Joined Entergy in 1996. Age 52
KIMBERLY A. FONTAN
Executive Vice President and
Chief Financial Officer
Joined Entergy in 1996. Age 51
ANASTASIA E. MINOR
Chief Transformation Officer
Joined Entergy in 2017. Age 54
PETER S. NORGEOT, JR.
Executive Vice President and Chief Operating
Officer
Joined Entergy in 2014. Age 59
RODERICK K. WEST
Group President, Utility Operations
Joined Entergy in 1999. Age 55
199
INVESTOR INFORMATION
Shareholder Materials
Visit our investor relations website at www.entergy.com/investors for earnings reports, financial releases,
SEC filings and other investor information, including Entergy’s Corporate Governance Guidelines; Board
Committee Charters for the Audit, Corporate Governance, and Talent and Compensation Committees;
Entergy’s Code of Entegrity; and Entergy’s Code of Business Conduct and Ethics. Printed copies of the
above are available without charge by emailing investorrelations@entergy.com or writing to:
Entergy Corporation
Investor Relations
P.O. Box 61000
New Orleans, LA 70161
Individual Investor Inquiries
Individual shareholders may contact Shareholder Services at sharsrvtm@entergy.com.
Institutional Investor Inquiries
Securities analysts and representatives of financial institutions may contact Investor Relations at
investorrelations@entergy.com.
Shareholder Account Information
EQ Shareowner Services is Entergy’s transfer agent, registrar, dividend disbursing agent and dividend
reinvestment and stock purchase plan agent. Shareholders of record with questions about lost certificates,
lost or missing dividend checks, or notifications of change of address should contact:
EQ Shareowner Services
P.O. Box 64874
St. Paul, MN 55164-0874
Phone: 1-855-854-1360
Internet: www.shareowneronline.com
Common Stock Information
The company’s common stock is listed on the New York and Chicago exchanges under the symbol “ETR.”
The Entergy share price is reported daily in the financial press under “Entergy” in most listings of New
York Stock Exchange securities. Entergy common stock is a component of the following indices: S&P 500,
S&P Utilities Index, Philadelphia Utility Index and the NYSE Composite Index, among others.
As of January 31, 2024, there were 213,237,552 shares of Entergy common stock outstanding. Shareholders
of record totaled 19,887 and 543,984 investors holding Entergy stock in “street name” through a broker.
Certifications
In May 2023, Entergy’s chief executive officer certified to the New York Stock Exchange that he was not
aware of any violation of the NYSE corporate governance listing standards. Also, Entergy filed
certifications regarding the quality of the company’s public disclosure, required by Section 302 of the
Sarbanes-Oxley Act of 2002, as exhibits to our Annual Report on Form 10-K for the fiscal year ended Dec.
31, 2023.
200
INVESTOR INFORMATION (concluded)
Dividend Payments
All of Entergy’s 2023 distributions were taxable as dividend distributions. The board of directors declares
dividends quarterly and sets the record and payment dates. Subject to board discretion, those dates for 2024
are:
Declaration Date
January 26
April 8
July 26
October 25
Record Date
February 9
May 2
August 13
November 13
Payment Date
March 1
June 3
September 3
December 2
Quarterly Dividend Payments (in cents-per-share):
2023
Quarter
107
1
107
2
107
3
113
4
2024
113
2022
101
101
101
107
2021
95
95
95
101
2020
93
93
93
95
Dividend Reinvestment/Stock Purchase
Entergy offers an automatic Dividend Reinvestment and Stock Purchase Plan administered by EQ
Shareowner Services. The plan is designed to provide Entergy shareholders and other investors with a
convenient and economical method to purchase shares of the company’s common stock. The plan also
accommodates payments of up to $10,000 per month for the purchase of Entergy common shares. First
time investors may make an initial minimum purchase of $250. Contact EQ Shareowner Services by
telephone or internet for information and an enrollment form.
Direct Registration System
Entergy has elected to participate in a Direct Registration System that provides investors with an alternative
method for holding shares. DRS will permit investors to move shares between the company’s records and
the broker/dealer of their choice.
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