Entergy Corporation

Good morning. My name is Aaron and I will be your conference operator for today. At this time, I would like to welcome everyone to InterG's fourth quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star, followed by the number one again. Please also note that we ask that you limit yourself to an initial question followed with a follow-up question when you are given the opportunity to speak. Thank you. And with that, I'd like to now turn the call over to Liz Hunter, vice president of investor relations for InterG corporation.

Good morning and thank you for joining us. We will begin today with comments from InterG's chair and CEO, Drew Marsh, and then Kimberly Fontan, our CFO, will review results in an effort to accommodate everyone who has questions. We request that each person ask no more than two questions. In today's call management will make certain forward looking statements. Actual results could differ materially from these forward looking statements due to a number of factors, which are set forth in our earnings release, our slide presentation, and our SEC filings. InterG does not assume any obligation to update these forward looking statements. Management will also discuss non-GAAP financial information. Reconciliation to the applicable GAAP measures are included in today's press release and slide presentation, both of which can be found on the investor relations section of our website. And now I will turn the call over to Drew.

Thank you, Liz. And good morning, everyone. 2024 was a transformational year for InterG. We had strong financial performance while also making meaningful progress to grow and de-risk our business. For financial results, we are reporting 2024 adjusted EPS of $3.65, which is in the top half of our guidance range. In addition, we are raising our capital outlook beyond 2025. Because growth in most years is now greater than our previous range of 8 to 9%, and we see additional growth opportunities, we are simplifying our disclosure by removing the top end of the range. To that end, we're now simply noting our long-term growth rate through 2028 as greater than 8%. Kimberly will review the details. Our achievements in 2024 position us well to capture the growth opportunities we have on the horizon. Starting with the customer, we continue to see strong growth in our industrial segment. Industrial sales were up 8% for the year and 15% for the fourth quarter. We have seen strong growth from the natural advantages of the Gulf South for many years, and we added two large hyperscale data centers to our outlooks in 2024. This growth brings important value to our stakeholders, particularly the communities we serve and our existing customer base. Today, we are announcing a new electric service agreement with a large customer in Mississippi. The customer has not announced their project, so we can't provide additional details at this time. In addition, we anticipate signing an ESA with Meta to expand their capacity needs as detailed in supplemental testimony submitted by InterG Louisiana last week. For the combined utility, we see industrial sales compound annual growth at 12 to 13% from 2024 through 2028. When working with very large potential customers, we aim to find ways to deliver what those companies need when they need it. At the same time, we include protections for existing customers through tools such as minimum bills, contributions, and aid of construction and credit terms. These new customers also provide community enhancements through significant ad-vorm taxes and direct investments, such as workforce development and infrastructure improvements. Through this work, we continue to have a robust and diverse pipeline for potential growth above our current plan. Data centers remain the largest growth category, and we continue to have five to 10 gigawatts of data center opportunity within our larger pipeline. We also remain well positioned to capture additional projects as a one stop shop. We have extensive experience bringing large customers online. Our vertically integrated model allows us to provide complete technical solutions. Our local relationships help our new customers connect with critical stakeholders and our strong partnerships with vendors support additional growth potential. Regarding our relationships with stakeholders, our focus on stakeholder engagement has helped us move forward with our ongoing journey to be the premier utility. This starts with putting the customer first and making sure our stakeholders fully understand their potential value. In the last year, we successfully concluded several regulatory processes through this approach. Those include final approvals of the series settlements, first phase approvals of more than $2 billion of resilience investment in Louisiana, Texas, and New Orleans, LPSC and New Orleans city council approval of the gas LDC sale, several rate actions across multiple jurisdictions, including the Louisiana formula rate plan renewal and the recent regulatory approvals to divest InterG Louisiana's 16% of grand Gulf capacity and energy to InterG Mississippi. Looking at 2025, our regulatory calendar is busy, but with more customary items. We have several formula rate plan filings. In addition, we can file transmission distribution riders in Texas. If needed, we anticipate decisions on new customer driven generation and transmission investments, including utilization of Louisiana's accelerated review process for renewables. We also expect to clarify cost recovery for 2020 for the 2024 storms and lay the groundwork in Louisiana and New Orleans for more timely storm cost recovery, which will benefit customers. In addition to the regulatory calendar, we are engaging in the legislative processes in both Texas and Arkansas. It's very early in those sessions and we are looking at options to support investment needed for new growth opportunities to help us create significant value for our communities and to create space for more risk management investments in resilience to benefit customers. Our regulatory calendar supports a strong capital plan to serve customer growth in our region and improve the resilience and reliability of our system for the benefit of customers. We plan to invest $37 billion over the next four years, 2025 through 2028. Driven by our customer requests, we'll continue to expand our renewables portfolio. We have active requests for proposals for new renewables in Arkansas and Louisiana. In addition to the plan, 1500 megawatts associated with the Meta project. Our plans include investment in several new modern and efficient gas plants. This includes the Orange County advanced power station in Texas and the Delta blues facility in Mississippi that already under construction. We also have pending regulatory approval requests for a combustion turbine in Arkansas, three combined cycle facilities in Louisiana, and one of each in Texas. We have a strong track record for building highly efficient combined cycle projects, despite external challenges. This gives us confidence in our ability to successfully complete the projects we are undertaking today to serve our customers demands. We have secured critical long lead time equipment with Mitsubishi Power Americas and Siemens Energy. Through these partnerships, we have clear line of sight to acquire additional equipment for subsequent projects beyond our current plan. We also have long standing relationships with our EPC partners that can support additional projects. Each of our combined cycle plants will be configured to enable future carbon capture and sequestration. Our current capital plan does not include dollars for CCS, but we are actively working on developing projects, including customer supported investment and third party ownership options. We have a feed study underway at the Lake Charles power station, but an expectation to move towards a decision this year. We're also exploring expansion of our nuclear footprint. Including upgrades at each of our nuclear stations and incremental 20 year license extensions. In addition, we continue to evaluate potential new nuclear options with customers and partners. So we've stated previously, these opportunities are not in our base plan. We will carefully manage financial risk with any new nuclear investment. While we have been working hard to meet customers capacity and energy needs, we have also been actively reducing other risks facing stakeholders. Our transmission plans have grown supporting growth and improving reliability and resilience. Our current plan includes investment from the most recent M-TEP 10 year plan approved in December, which included 49 projects and $1.8 billion of investment to support reliability. Additionally, we have proposed project totaling 3.7 billion and M-TEP 25 to meet NERC's reliability standards as we grow. In addition, work authorized by the accelerated resilience approvals is underway. In 2024, we completed seven projects in Louisiana, one of which was in New Orleans. We expect the number of completed projects will grow exponentially in 2025. We plan to seek approvals for subsequent phases on a timeline that would seamlessly ensure ongoing progress. As you know, we experienced two hurricanes in 2024 and our teams performed admirably, providing safe and efficient restoration. For Francine, we leveraged learning from previous storm responses, including barrel, enabling our crews to restore 90% of our customers within three days. Entergy's workers also assisted other utilities in the restoration efforts following desist dating storms in the Southeast, lending over 900 people to support Helene and more than 1100 to support Milton. And as many of you have heard, we experienced a winter weather event, Enzo, in January, which brought extremely low temperatures. Our operations performed well throughout the event as our system and four of our five operating companies set new winter peak records. Another risk that we actively manage is financial health, and specifically credit. We continue to make positive progress on our credit metrics in 2024, which provides financial flexibility, as well as long-term customer benefits through lower cost of capital. Our work in 2024 benefited our stakeholders, including our customers, communities, and all of you as owners. None of this could happen without also benefiting the other critical stakeholder, our innovative, hardworking and dedicated employees. Our employees have embraced the opportunities ahead of us. We are building a culture that supports rapid growth and change. I thank each and every employee for all they do to make Entergy successful. This is an exciting time to continue our journey to be the premier utility. We have a very strong outlook that includes double digit industrial sales growth and adjusted EPS CAGR well above 8%, a strong balance sheet and an approving risk profile for all stakeholders. And we continue to talk to potential customers that could bring incremental growth and additional benefits for our stakeholders. Our employees and our partners are excited about our plan and they are ready to meet the opportunities ahead. I'll now turn the call over to Kimberly.

Thank you, Drew. Good morning, everyone. As Drew said, 2024 was a very exciting year. I'll provide some additional detail on the financial picture. We'll start by reviewing 2024 results and then I'll provide an overview for 2025 and our longer term outlooks. As a reminder, Entergy executed a two for one stock split in December, which doubled our share count. The share and per share data throughout our materials reflects this change. Starting on slide five, Entergy adjusted EPS for 2024 was $3.65. Our results reflected the investments we made to benefit our current customers and to support new customers and projects. This included regulatory actions across all our operating companies, as well as higher depreciation and interest expense. Other income increase mainly from higher AFUDC due to construction work in progress. Weather adjusted retail sales grew approximately 4% driven by strong industrial growth of more than 8% consistent with our original expectations. Large customers drove this growth primarily in the petroleum refining, chloralcholi and technology segments. Moving to slide six, we closed 2024 with solid credit metrics. Our book FFO to adjusted debt was 14.7%. We estimate that Moody's and S&P's comparable metrics will be well above their thresholds. Both rating agencies will ultimately perform and publish their own calculations. In December, in response to FARC's approval of the LPSC settlement, S&P upgraded series issuer credit rating one notch from triple B minus to triple B minus from double B plus. Higher ratings should result in relatively lower borrowing costs, which benefits our customers. Given the investment needed to support customer growth, maintaining healthy credit metrics continues to be a key focus. Our current forecast outperforms the rating agency's thresholds growing towards a sustainable 15% FFO to debt. As Drew mentioned, we have a four year, $37 billion capital plan, which is $2.7 billion higher than what we provided at EEI. The increase is primarily in Mississippi and Louisiana. It includes dispatchable and renewable generation capacity to support growth and reliability and customer demand for green attributes. The incremental capital also includes distribution investments to support reliability and resilience. With the higher capital plan, we increased our equity needs by $300 million in 2026. As you can see on slide seven, using our ATM program, we've already secured $1.4 billion of equity, which we plan to exercise in 2025 and 2026. That leaves $3.3 billion to be sourced, 75% of which is not expected to be needed until 2027 and 2028. Slide eight summarizes our adjusted earnings per share guidance and outlooks. 2025 remains unchanged from EEI. As Drew mentioned, with our higher capital plan, we are raising our longer term outlooks, driving our growth rate through 2028 now well above 8%. As you can see on slide nine, our adjusted EPS guidance range for 2025 is $3.75 to $3.95. We expect our weather adjusted retail sales growth in 2025 to be 6%. The largest driver is industrial, which is expected to be very strong at 11 to 12% driven by several large customers, including primary metals and data centers. Our guidance also reflects the effects of customer centric investments. This includes AFUDC during construction and earnings on our investments in rate space after assets are placed in service, as well as the associated depreciation expense, interest expense, and taxes other than income tax. Utility O&M is forecasted to be lower for the year as we flexed cost up in 2024. For the first quarter, we expect our O&M to be roughly flat to first quarter last year. Additional information on specific drivers for the year, as well as detailed quarterly considerations and earnings sensitivities are included in the appendix of the webcast presentation. Gulf Coast advantages have driven growth for many years, and we expect that to continue. Now we also have large data centers in our forecast, which has further diversified our customer mix. As Drew said, InterG Louisiana expects to update its agreement with Meta to increase the capacity requirement of the existing contract. As noted in the filing, we can serve this load without constructing any additional generation at this time. The increased load will require additional transmission facilities, which are anticipated to be paid for by the customer. The incremental volume would not have a significant effect on sales in our forecast period. As a reminder, with these very large customers, we take a conservative approach for financial planning. We do not add large customers to our forecast until we have a signed agreement. And our financial planning assumptions are at the minimum bill level for these customers. We're very proud of what we have accomplished in 2024 and we look forward to another successful year in 2025. We continue to prioritize the needs of our customers, create value for all of our key stakeholders. We have a unique growth opportunity and we're excited about what the future holds. And now the InterG team is available to answer questions.

Thank you, Kimberly. And ladies and gentlemen, at this time, if you would like to ask a question, remember it is star followed by the number one on your telephone keypad to withdraw your question at star followed by the number one again. Please also remember that we are asking you to limit yourself to a total of two questions when you're given the opportunity to speak. Our first question for today comes from the line of Shar Porresa with Guggenheim Partners. Your line is live. Hey

guys. Good morning.

Good

morning, Shar.

Good morning, Drew. Drew, just to elaborate on the core drivers of the $3 billion capex update, it's skewed to generation and renewables. So does that kind of imply you're starting to trend towards the high end of that load growth, especially as we think about the ramp up for something like hub eight, which I think is up to a $12 billion site.

Thanks. Thanks, Shar. And good morning. As you said in the, in the capital plan, it is largely a generation for both the fashionable and renewables, but it also does have some distribution investment and there's some incremental nuclear investments to support the reliability of those as well. All of that is baked into the outlooks that we have here. And, and as you noted, we increase the outlooks as we go out into the back end of that period, reflecting those investments and the earnings on those investments.

Got it. Perfect. And then, and then true, you're not, you're not the only CEO that's talking about new nuclear. I'm just kind of curious if you just hone in on just specifically what you mean by new nuclear, because one of your commissioners in Louisiana kind of highlighted large scale. And so I'm not sure if there's an appetite for SMRs in the state and he seemed to focus a little bit on the larger scale side. So is there room for large scale reactors if there's ample risk sharing, either on as a federal backstop, et cetera, or when you mean new nuclear, are you really specific to SMRs?

Thanks. Thanks, Sean. That's a good question. We actually are looking at all forms of new nuclear, the large scale like, like an AP 1000, which as you all know, there are some that exist now in our country and several under construction around the world and several more that are planned. So that is, you know, in some sense of a viable supply chain for new nuclear today. And so certainly we would be looking at that because in a lot of ways that could be risk entry into the new nuclear space. But we were also looking at SMRs. You know, we have MOU with a whole tech to investigate their new technology. And of course we're looking at others like GE's technology and some of the other ones that are around. So we're not exclusive to any particular new nuclear technology at this point. We are primarily looking at what's going to give our stakeholders the best risk profile and the best value. Those are going to be the driving components for us.

And is there just, just to follow up on that one, is there a conversations at the federal level or is there any sort of data points we should be kind of monitoring around that? Thanks.

I mean, I think it's a, most of our conversations are at the state level internally. Certainly we're working with NEI on the federal level to facilitate continued conversations. And as you know, at the federal level, things are evolving pretty quickly right now. But there is a lot of bipartisan interest in new nuclear. So I imagine that those conversations will continue and there'll be opportunities going forward in the new nuclear space.

Okay. Perfect. Thanks guys. Big congrats on the execution. That's obviously very evident. Congrats.

Thanks Jar.

Thanks for your questions. Our next question is from the line of Nicholas Campanella with Barclays. Your line is live.

Hey, good morning. And thanks for taking my questions. What an update. Hey, yeah. So I guess just, you know, you signed a few more customers, the growth rates now, you know, uncapped per se. And, you know, when I think about kind of this five to 10 gigawatts in the pipeline, you know, how would you kind of simplistically frame, you know, every one gigawatt affecting growth? Is it, you know, if you, if you've got another gig into the plan with similar frameworks that you just got in Mississippi and Louisiana, could that add another hundred basis points to the CAGR or what's kind of the simple way to frame it here? Since you're, you're kind of, you know, letting people dream about work and go, thanks.

Good morning, Nick. I don't know that you can do a one for one map. I would think about it as what investment is needed to support customers or to support the system overall. And the investment is really driving the growth in this case. You know, we had 2.7 billion that covered a variety of, of investment types. So I think each, each new customer would be unique and we'd have to look at what that means relative to the investments and then relative to the overall CAGR.

And it also depends on the, the business model of these data centers. You know, certainly the customers that we've been dealing with like Amazon and Metta that we've announced previously, you know, those are very large trillion plus dollar companies that, you know, have a clear expectation for their utilization of those facilities. There are others in the subscription model format that would be very different and have a very different profile. We are starting to see a little bit of interest in that particular space where we hadn't seen that previously. And so that would be, you know, a little bit different rule of thumb perhaps. So as there are different models within the data center space, it could give you different outcomes as well.

Okay. That's great. I appreciate it. And then I just wanted to address, you know, you have a lot of organic opportunities in the growth plan today. I just wanted to acknowledge that there's an adjacent service territory. That's also kind of running a sale process. And can you just address what your comp, what your appetite is for anything inorganic at this point, given everything that's in front of you?

We certainly don't comment on specific, you know, potential opportunities. But you know, we have the sales gas business going through, and that is an example of how a transaction met our gating criteria of, you know, it doesn't distract, it creates value and it's executable. So certainly if something meets that criteria, we would look at it. But again, we wouldn't address specific opportunities until something met those criteria.

Thank

you.

Thank you for your questions. Our next question is from the line of David Arcaro with Morgan Stanley. Your line is live.

Oh, hey, thanks. Good morning. Good morning. I was wondering, would you be able to frame kind of the time to market that you're able to offer for new data center customers as you look at that pipeline? You know, do you have, is there a certain amount of available capacity, whether it's transmission or generation on your system? Or is most of this going to take, you know, incremental new infrastructure to enable in terms of future customers?

Thanks, David. Similar to Nick's question, I think it's going to depend on where the customer locates and what's needed. We have been working with our customers and with a number of stakeholders to work through that timeline, whatever is needed. And we do have strong partnerships on availability of equipment, as well as availability of vendors and contractors to help support the bill process. I think we talked about an analyst day, the ability in Mississippi last year to shrink that time relative to working with the legislature and decreasing the time to bill, but it's going to be unique depending on the specific customer needs.

Got it. Okay. Understood. And then you gave a little bit more color, I think on the gas turbine landscape and some of the partnerships you have. I was just wondering if there's any other color you would be able to provide on the availability of production slots for gas turbines and how the pricing has trended, just as you're looking out, even further in your generation planning here.

That's a good question, David. So we know something that we've been engaged in for quite a while at this point, thinking about those turbine slots and managing them carefully. As I said earlier, we have turbines and transformers and other critical equipment, as well as labor, to do the work lined up for everything that we've announced. And then we have some capacity beyond what we've announced today already lined up. And we're continuing to work on additional capacity beyond that because there are, there, we believe there are more opportunities. And so we're trying to be prepared for those opportunities should they materialize. It is a much different space than it was 18 months ago, for sure. And so we are clearly aware of that. You know, pricing is getting tougher. In some cases, costs are getting more expensive just for the slots. And so we're mindful of that. But at this point, we haven't seen anything that materially changes our expectations about where we are and what we might be able to accomplish.

OK, great. Appreciate

the

color. Thank you.

Thank you.

Thanks for your question. Our next question is from the line of Jeremy Tont with JP Morgan. Your line is live.

Hi, good morning.

Good morning.

Thanks for all the details this morning. Want to pivot towards Arkansas, if I could. And just want to any thoughts on the economic development working group and efforts to expand existing, I guess, data center incentives there and specifically DC Ward, C&I customers taking notice of the potential in the state.

There is a lot of interest in the state for some of these large customers. And so certainly we're we're working with them there and we're working with all the stakeholders as well to facilitate the ability for customers like hyperscale data centers and others to come together to to facilitate economic development. We've done this before in Arkansas. You know, we have a thriving steel industry on the east northeast corner of the state. At this point, there are other opportunities and lithium mining and other areas that we're paying close attention to. But, you know, clearly the data centers is is something that has. On people's attention in Arkansas, and so we're working with all the stakeholders there to to help make that a potential reality. So that their communities can also benefit from this investment in growth.

Got it makes sense. And then just want to pivot towards the financing side, if I could just wondering if you could walk us through a little bit more how you're able to finance three billion of incremental catbacks with only three hundred million of incremental equity here. And just wondering if more of your growth projects hit, how should we think about, I guess, the any rules of thumb for equity funding going forward?

Thanks, Jeremy. We've talked about a run rate of 10 to 15 percent. I think that's valid over our full forecast period. You know, when we look at how to finance these, we start with operating cash flow and and making sure we're optimizing that, whether that is looking at managing against our caps or using mechanisms that we have like cash on CWEP or or matching timing of closings. But making sure we're optimizing in that space. We've also had some help from our pension, which is largely fully funded, which reduces or gives us additional opportunity there in the credit space. And then what the large customers we talk about as part of our framework, then paying their fair share. And that really means that even during the RAM periods, they are supporting us, whether that is kayak or minimum bills or those types of things. And all of that together then helps us manage that equity need at the level that we have added here.

Got it. Very helpful. I'll leave it there.

Thanks. Thanks for your question. Our next question is from the line of Michael Lungen with Everclear, ISE, Evercore, ISE. Excuse me. Your line is live.

Hi, good morning. Thanks for taking my question. Morning. Resiliency program, phase two, you know, total is greater than two billion approved and underway. You know, you talked about the timing of phase one, phase two request plan, when and where can we expect them and what is included in your capital plan versus what could be incremental?

All right, I'll answer the first part and I'll turn the second part over to Kimberly. But in terms of the timing, you know, we are working through the first phase right now and we have a number of projects that are ramping up. Our overall program is ramping up right now quite rapidly. We expect to be in a position by the end of the year to begin to seek the next phase. So it could be just before the end of the year or just after the end of the year at this point. But the teams are already starting to gear up to think about what that looks like and prepare for that with a goal of making sure that we can continue our programs and we don't have to ramp down our work teams and then ramp them back up at some point. Be much more efficient to just keep that effort moving along much more productive. So that's kind of what we're thinking about right now. Be sometime near the end of the year, little before, perhaps a little after. And I'll turn it over to Kimberly for the second part.

And then from a financing perspective, similar to what we did on phase one, we added that incremental capital once we had clarity through the regulatory process. And so I would think about that the same way. Louisiana set up a mechanism to recover that that's been quite productive. And so we look at that and then look at adding that incremental capital at the appropriate time once it goes through the process.

Great, thanks. And then on the dividend, you've had a target of 6% per year. Is that a firm commitment you have? You have this 5 to 10 gigawatt pipeline, you know, a lot of additional capital could be coming into your plan.

Yeah, we've talked about 6% and that is an expectation. Obviously, we have a lot of growth there. And so what we've talked about before is from a payout ratio that has historically been 60 to 65%. You could see that decline somewhat over the outlook period, but not a change in the dividend percent necessarily.

Great, thank you.

Thank you. Our next question is from the line of Steve Fleishman with Wolf Research. Your line is live.

Yeah, hey, good morning. Thanks. Congrats on the continued strong outlook. I guess first, on the credit metrics, we've been waiting, I think, for the nuclear PTC piece of it for you all. Is that still not included in your metrics? And if they don't define it, when would you include it?

Yeah, that's right, Steve. We have not included that in our metrics. We are still waiting on treasury guidance. You know, I don't know when that will come out. And we do view that as credit positive. We'll have to look at if they don't define it, we'll have to make a decision later this year on how to proceed there. But it is not in our forecast, as you noted.

Okay. Great. And then, Drew, I think you mentioned legislative activity in Texas and Arkansas to support growth. Could you talk to a little bit more what you're either seeing or what you're supporting in those states?

Well, I think the main thing that we're focusing on right now is growth elements, things that can support growth in both states. We had a question earlier about Arkansas in particular. So there is the potential for bills to show up in Arkansas that could help facilitate economic development within the state, and we would hope to be a part of that. In Texas, there's similar activity to support it, but also we're looking at risk opportunities, particularly around the resilience space that could help us. Things like accelerated cost recovery that could benefit customers would be something that we would be hoping to see as a potential bill. Things like managing the recovery of assets that are taken out of service when resilience investments are made, perhaps a little differently than where they are today, to help manage our credit in that scenario. Those are examples of things, but it's still very early in the process. There isn't really anything filed at this point. I think that we expect several thousand bills to be filed ultimately in Texas. I think there's maybe a hundred that are out there at this point, so it's still very early in the

process. Okay, one last clarification. So the updated plan does include this unnamed Mississippi customer and then the expansion at Metta, although some of that might be going beyond 28 in terms of some of the benefits, because the sales growth didn't change that much.

That's right, Steve. The forecast includes both updated customers with the note that, as you noted in the sales volume, the Metta is largely outside this period from a volume perspective.

So you're seeing like ASU-DC and some other things in the EPS?

As you're building the investment for it. Okay, thank you. Appreciate it.

Thank you. Our next question is from the line of Julian Smith with Jeffries. Your line is live.

Hey, good morning, team. Very nicely done. Really kudos to all of you. Maybe to follow up a little bit on the conversation and the cash flows, you all provide a little bit of a slide showing, at least as present, your Moody's and S&P projections and there's a little bit of a downtick in 26. Can you speak a little bit to how you think about earned ROEs as you lean into this ramp and spend? Are you thinking that there could be some pressure on earned returns or do you think when you look at the outlook that you'll be able to manage through the uptick in spending without having an impact on earned returns given some of the dynamics, whether it's legislative or otherwise?

Yeah, thanks, Julian. I'll start with credit and then switch to ROEs. On your note on credit, you can see that it builds towards 15%. There's a couple of one-time items in 26, including the change in the Louisiana state tax rate that drives some adjustments happening in 26 that you noted in that downturn. From an ROE perspective, I would think about what we talked about at Analyst Day that ROEs are improving over the forecast period from 9% to 9.5%. That is still our expectation and we're working that with all of our stakeholders. So I think we continue to expect to see that over this period.

Wow, truly incredible on both fronts. And then maybe there's a little bit of a nuanced follow-up here. You talked about new nuclear earlier. It seems like Texas is really contemplating a new nuclear fund of sorts. Any thoughts about tapping into that? Is that driving some of the accelerated thought process in your mind as you talk about it today?

Certainly, if they actually created a fund for new nuclear, it's something that we would look at as another tool in the toolkit to help manage risk. So that is interesting to us. We'll see how that materializes if that comes out of legislation or however it goes. But our focus is going to be on risk management and anything that's available out there to help us with that at the state, the federal level with customers, with vendors, or with a consortium of owners, maybe other utilities. There's lots of different opportunities out there to help manage the risk, diversify the risks that are out there, such that it's something that we could manage within our frameworks. So that would be an interesting tool, but it's just one of many ways for us to manage the overall effort.

Yep, I appreciate the risk emphasis. Thank you guys very much. All the best.

Thanks, Julian. Thank you. Ladies and gentlemen, once again, if you would like to ask a question today, remember it's star followed by the number one in your touchtone keypad. Our next question is from the line of Paul Patterson with Glenrock. Your line is live.

Hey, congratulations, guys. Just, I know you guys are focused on, and I apologize if I missed this, I know you guys are focused on affordability and you mentioned these large customers paying for themselves. Could you, with this update, give us a flavor where you see rates kind of going through this forecast period?

Yeah, Paul, we do focus heavily on affordability. We do have a forward curve on gas in our forecast, which is going to drive some increase. I think at Analyst Day, we had talked about a curve without fuel of about three and a half percent, and we are in that range, slightly above that range here. What you're seeing is increase in investments. And then, as Steve noted, the sales come in after that. And so you'll see some moderation of that when the sales come in.

Okay. And then just on the new nuke, when do you think we might see a potential announcement? What's the earliest that we could maybe hear something on that?

I don't think there's, there's no, let me just say there's nothing imminent around new nuclear. We are working on it. We're thinking about it, but it will take us a while to put that framework together. But it is something that we are working on and we are interested in, and our customers are interested in. So we are having ongoing conversations, but I wouldn't in terms of an announcement.

Awesome. Thanks so much.

Thank

you. Thank you for your question. We have a final question from today from the line of Travis Miller with Morningstar. Your line is live.

Thank you. Good morning. Good morning. A quick one here. The Amazon facility, wonder if you had any update on progress there, filings, et cetera, the Mississippi?

Yeah. So, you know, their work is under construction and it's ongoing right now. We have constructed our first substation and it is live and serving them. And so it's, it's underway. And, you know, we hope that that's the first phase of a lot of growth for Amazon in the state of Mississippi.

Great. Okay. And then higher level, when you're going out there and talking with not just data centers, but any of the large customers, who's the competition? You know, what other services are they looking at? Is it onsite? Is it some other provider? Just wondering kind of very high level, the large load customers, who you're competing against essentially for these large contracts?

Well, I think I would say we're competing against everybody. I mean, these data centers can, can locate anywhere in the world, quite literally. And so, you know, we, I think that means that everybody could compete with us. You know, we offer what we believe is a great value proposition around our ability to serve large load customers. We have a lot of experience with that. You know, we have, since we're a vertically integrated utility, you know, we can provide a complete technical solution. It means that we can provide a transmission element. We can provide generation elements that includes green attributes. You know, we can interface with the RTO. We can provide the retail access. We can do everything that they need from a, from a technical perspective. And then, of course, since we are a regulated utility, you know, in vertically integrated, we have tremendous relationships within the communities that we operate in, which means that we can make introductions to all the key stakeholders, critical stakeholders that would be part of a large economic development project. And we've done that for a long time. That's not actually a new thing. It goes with kind of the first bullet, but it is, you know, an emphasis of ours around stakeholder engagement to be able to do that. And so, you know, those things, we believe, create a very competitive offering for us relative to other folks, literally around the world. Yeah. Okay. Well, very good. That's helpful.

Thank you. Thank you.

Thanks for your questions. And ladies and gentlemen, that will conclude our Q&A session for today. Liz, I'd like to turn the call back over to you.

Thank you, Aaron. And thanks everyone for participating this morning. Our annual report on Form 10-K is due to the SEC on March 3rd and provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10-K filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected in our financial statements in accordance with generally accepted accounting principles. Also, as a reminder, we maintain a webpage as part of Entergy's Investor Relations website called Regulatory and Other Information, which provides key updates of regulatory proceedings and important milestones on our strategic execution. While some of this information may be considered material information, you should not rely exclusively on this page for all relevant company information. And this concludes our call. Thank you very much.