Entergy Corporation

Good morning. My name is Greg and I will be your conference operator today. At this time, I would like to welcome everyone to the InterG Corporation First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you. I will now turn the call over to Liz Hunter, Vice President of Investor Relations for InterG Corporation. Liz, you have the floor.

Thank you, Greg. And thanks to everyone for joining this morning. 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. Reconciliations 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. Good morning, everyone. We had a very productive start to the year with progress on activities that support our near and long-term objectives. Important updates to facilitate customer growth include new customer announcements, regulatory outcomes, and new legislation. Starting with our financial results for the first quarter, today we are reporting adjusted earnings per share of 82 cents. We're on track for 2025 guidance and we remain well positioned to obtain our greater than 8% adjusted earnings per share compound annual growth rate, for the outlook period. Kimberly will discuss our financial results in more detail. As you've heard us say, we aim to create value for all our stakeholders, customers, employees, communities, and owners. And customers are listed first because everything starts there. The opportunities driving our industrial sales growth continue to be robust. There is increasing visibility into our growth, including three announcements from large customers since our last call. In March, Hyundai Motor Group announced a $5.8 billion investment in Hyundai Steel, a manufacturing facility and an engine for economic growth in Ascension Parish, Louisiana. Then, in early April, CF Industries announced that it reached its final investment decision on its $4 billion investment in a low-carbon blue ammonia facility, which will be located near Hyundai Steel. This project was first announced in 2022. And just today, Woodside announced that they have reached FID on their $17.5 billion LNG facility, bringing jobs and investment to Coastal Louisiana. These projects are expected to come online in 2028 and into 2029 and were in our outlooks last quarter. These customers diversify our industrial mix. They also provide important benefits to the nearby communities through substantial local investment, significant growth, and workforce development. We've demonstrated a long history of powering industrial growth as businesses establish and expand operations in the Gulf South region. Hyundai Steel, CF Industries, and Woodside LNG are examples of this trend continuing. As more companies consider investment in the U.S., the Gulf South remains a very attractive option with low power costs, robust energy and transportation infrastructure, access to diverse energy sources, a business-friendly environment, a proven workforce, and welcoming communities. Data centers are a more recent addition to our large customer portfolio, and we remain in productive discussions for many potential projects. We continue to receive strong interest and optimism from hyperscale developers about the incredible opportunity before them, and our data center pipeline remains in the 5 to 10 gigawatt range. We are executing on our capital plan to support that strong customer growth, as well as improve reliability and resilience. We continue to make progress in the Orange County Advanced Power Station. The project is approximately 70% complete, with more than 1 million man-hours of work with no safety incidents. The project remains on schedule and on budget with a projected end service date by summer of next year. Delta Blue's Advanced Power Station in Mississippi is in earlier phases of construction and is also on schedule and on budget. At the same time, we're exploring the potential to increase the capacity of our existing combined cycle natural gas facilities by nearly 500 megawatts. For nuclear, we completed the spring refueling outage at River Bend on schedule. During the outage, we conducted extensive work on the main generator to support long-term reliable operations. The Waterford 3 refueling outage is now underway. Planned work includes replacement of low-pressure turbine rotors that will improve efficiency and pave the way to increase the capacity of the plant by an estimated 40 megawatts in the fall of 2026. We continue to assess potential capacity upgrades at our other nuclear plants that could total approximately 275 megawatts. As we mentioned before, we have an NRC early site permit for a potential new nuclear facility at Grand Gulf, which expires in April 2027. We intend to renew the permit for another 20 years to maintain a viable option for new nuclear. We are in discussions with customers, potential partners, and other stakeholders regarding that opportunity. As you can see, our operations and project management development teams are doing a great job keeping us on track to support our customers' needs. In addition to our efforts and operations, we are working with our regulators and other stakeholders on important dockets that address infrastructure needs to support growth, reliability, and resilience. Efficient review processes are critical to stay on track to meet our customers' expectations. Entergy Louisiana received approval from its public service commission to place the capital investment from Hurricane Francine into rates subject to a future prudence review. This means our recovery started less than two months from filing and six months after the storm. A faster recovery reduces carrying costs and supports Entergy Louisiana's credit, both of which keep costs low for customers. The LPSC also approved the -billion-dollar West Bank 230KV transmission project that will support customer growth and economic development. In addition, we have a major 500KV transmission project in Louisiana that is pending commission review. Separately, we received the final approval needed for Entergy Louisiana's gas LDC sale from the East Baton Rouge Parish Council. We are targeting to close the sale of both Entergy Louisiana and Entergy New Orleans gas businesses in July. Entergy Louisiana's filing to support its hyperscale data center customer continues to move forward. Parties have filed testimony and the hearing is in October. For Entergy Louisiana's 3 gigawatt solar RFP, the first round of procurement is complete and we're moving forward two proposals for owned assets, a total 400 megawatts. Proposals in the second quarter were received in mid-April and we are targeting selections later this quarter. In Texas, the PUCT approved placing 137 million dollars of transmission investment into rates. We have also requested a certificate of convenience and necessity for a large transmission project in Texas known as CTEX. The hearing is scheduled for May and we are targeting a commission decision by the end of August. Entergy Texas' requests for generation CCNs are continuing as expected. Hearings for legend and Lone Star dispatchable generation projects as well as renewable resources are complete. Briefings have begun and no parties have disputed the need for new generation to meet growing demand. We are targeting decisions in the third quarter. In Arkansas, the APSC issued a certificate of environmental compatibility and public need for Lake Catherine Unit 5. This plan is important to support Arkansas' customer demand. Entergy Mississippi received approval to build a combined cycle gas plant in Ridglin County. This facility will serve the growing demand in our Mississippi service area. And Entergy Mississippi also filed its annual formula rate plan with no rate change requested. We expect the commission to take this up over the next few months. Turning to legislative matters, Arkansas recently completed its session, setting the stage for future growth in the state. Act 373 signed into law by the governor supports economic development and growth and will benefit our customers and communities. Specifically, the legislation allows recovery for new generation capacity and certain transmission investments outside of the formula rate plan's 4% cap. It also streamlines and simplifies the process for certification of public need to allow for faster response to economic development while maintaining regulatory oversight. Additionally, the new law allows utilities to recover carrying costs on construction work and process during construction, thus lowering costs for customers. Texas is also in a legislative session. One of the bills of interest for us will accelerate the regulatory review and approval for storm securitization to 150 days, significantly faster than previous reviews. More timely reviews benefit customers through lower carrying costs and improved credit. The Texas legislative session continues through June 2nd. Turning to tariffs, we know tariffs are certainly a topic that we know you're interested in. It's top of mind for us as well and we are actively engaged in monitoring as the landscape evolves. There are several considerations and the bottom line is that we believe tariffs impacts are manageable. The current tariffs would primarily impact capital expenditures and we estimate that the impact to be approximately 1% of our $37 billion 4-year capital plan. The vast majority of the dollar impact is in the back end of our forecast period. It provides time to continue to reduce those effects through additional supply sources. To mitigate potential impacts, we are working with our suppliers to develop alternative supply sourcing strategies. In addition, our ongoing cost management efforts as well as contingencies in our spending plans will help us manage our costs. For example, in analyst day last summer, we talked about our discipline capital prioritization and review processes to drive customer value. To date, we've identified greater than $1 billion of capital that was redeployed into other projects to benefit customers. We're making every effort to reduce the effects of tariffs for our customers for working hard to make ends meet and competing in a global marketplace. To that point, we're also actively monitoring what this means for our customers' businesses. Our large industrial customers are highly competitive in domestic and global markets. Commodity spreads continue to be supportive in part due to the structural advantage of low cost natural gas. I'd like to highlight a few specific examples. LNG exports are likely to increase due to the natural gas advantage, which would help bridge the trade deficit. And I just mentioned the Woodside announcement as a case in point. Ammonia has a strong competitive position due to low natural gas prices in the U.S. and companies are moving forward to investment in clean energy technologies, as the CF industry's example illustrates. The petrochemical sector also enjoys structural advantages from low cost natural gas liquid feedstocks and potential decreases in global production would likely come from the European Union. Beyond the price advantages of natural gas, companies seeking domestically produced materials to manage tariffs could cause sectors such as steel that are not currently running at full capacity to ramp up production. Overall, commodity fundamentals still favor U.S. manufacturing. As a result, our service area remains well positioned to capture new on-shoring and industrial development with the Gulf Coast advantages that we've talked about for some time and that I mentioned earlier. These foundational elements can facilitate even further expansion of the broad industrial manufacturing base supporting services in our region. As I said, we believe tariff impacts are manageable and with everything we know today, we remain confident in the guidance and outlook initiated on last quarter's call. Before I wrap up, tomorrow our COO, Pete Norgio, is retiring. Over his 10 plus years in energy, Pete transformed our power generation team, closed out our exit from the merchant power business. In the last couple years as COO, he re-centered us on public safety while preparing us to manage the large capital investments responding to customer demands. Pete is also a good friend. We will miss him and we wish him well in the next chapter. Moving into the COO role is Kimberly Cook Nelson who has been driving our steadily improving nuclear operations over the last few years. A leader in the nuclear industry should bring the wealth of leadership experience operational discipline and project management skills to the COO role, which has served us well for the growth investment road ahead. Finally, John Dinelli is taking over as chief nuclear officer. He is a long-time energy employee, having started here when we purchased Indian Point. He has held many leadership roles within the nuclear organization and recently he has served as our nuclear COO helping lead the cultural changes needed to continue our relentless pursuit of improvement in nuclear operations. While we are sad to see Pete go, we're excited about the new opportunities that will come from the leadership of Kimberly and John. And finally, we're saddened to learn of the passing of Alexis Herman over the weekend. From her beginnings in Alabama along the Gulf Coast, she attended Xavier University right here in New Orleans and then went on to become Secretary of Labor among many other accomplishments. Of course, we know her from her 20 years of service on our board of directors. Beyond her outstanding wisdom and insight, she was a friend, a mentor, and an inspiration to all of us and we will miss her dearly. Although we are sad, Alexis would be our great start to the year. We are on the path to meet our stakeholder's expectations in 2025 with solid progress across key customer operational, legislative, and regulatory fronts. We are executing on our plan to realize the opportunity in front of us and we're confident we can be successful. As we continue to put our customers first, we will deliver premium value to each of our key stakeholders. I'll now turn the call over to Kimberly.

Kimberly Thank you, Drew. Good morning, everyone. Today, I will review our financial results as well as our guidance and outlooks. I'll also talk about tax credits and their potential financial impacts. Starting with earnings, our adjusted earnings per share for the quarter was 82 cents. This result keeps us firmly on track for our adjusted EPS guidance for the year. The quarter's adjusted EPS drivers are shown on slide four. Key highlights include higher retail sales volume, including the effects of weather, effects from regulatory actions, including recovery of investments to benefit customers, and lower other O&M than first quarter last year. These favorable effects were partially offset by higher interest expense and depreciation as a result of investments. First quarter weather adjusted retail sales growth was strong at 5.2%. The industrial sales increase was the biggest driver at 9.3%, reflecting increases in usage from customer additions over the course of 2024, as well as continued ramp of new and expansion customers. Slide five provides our credit ratings and affirms that our credit metric outlooks remain better than agency thresholds. Our ongoing focus on credit has created flexibility to manage volatility and headwinds. Availability and transferability of renewable tax credits continue to be a topic of interest. Nuclear production tax credits, or PTCs, became effective in 2024. The Treasury Department has not issued guidance on how to determine gross receipts for purposes of calculating the amount of nuclear PTCs generated. We are evaluating our position with respect to these credits and will finalize our position prior to our 2024 corporate tax filings. As a reminder, cash benefits from nuclear PTCs are not included in our outlooks, so any nuclear PTCs that are realized would be positive to our plan. Slide six. Our 2027 and 2028 outlooks include tax credits of approximately $170 million and $350 million respectively, on more than $5 billion of renewable investments through 2028. If the transferability rules change, we would expect to monetize the credits using tax equity. We continue to safe harbor as many projects as possible in the event that the credits phase out sooner than the current rules provide. However, even if we were to lose all the renewable tax credits assumed in our guidance, our credit metrics would still exceed rating agency thresholds. Turning to slide six, our equity needs are unchanged since our last update. During the quarter, we executed an approximately $1.5 billion block equity forward, including the $2.5 billion equity forward. Prior to the equity block, we contracted roughly $230 million using ATM forwards. With these transactions, we have successfully secured our equity needs into 2027 and we've contracted approximately two-thirds of our needs through 2028, ensuring access to capital needed to execute on our capital plan. No forwards were settled during the quarter. As shown on slide seven, we are affirming our adjusted EPS guidance and outlooks. For 2025, we're firmly on track. Weather and other updates in the first quarter create flexibility to manage the business in response to potential volatility and other headwinds. Looking ahead to the second quarter, we expect other O&M to be roughly a nickel higher than last year, primarily due to planned power generation spending, including the timing of outages and timing of vegetation management expenses. We have confidence in our plan and our ability to deliver on our guidance and outlooks. We've had a strong start to the year and have a solid plan to support our growing customer base. We are excited about the opportunities before us and remain well positioned to execute and deliver successful outcomes. And now the Entry G team is available for questions.

Thank you. And at this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. Once again, star one. And as Liz mentioned earlier, in the interest of time, we ask that you please limit yourself to two questions. Thanks. And we will pause just a moment to compile the Q&A roster. And it looks like our first question today comes from the line of Shar Perez with Guggenheim Partners. Shar, your line is open.

Hi, good morning team, Congrats on great quarter. It's actually Constantine here for Shar.

Hey, good morning.

Just as we're thinking about the Arkansas generation bill, do you feel the state is now fully competitive on the data center front in terms of providing turnkey interconnection? And have there been any inbounds thus far, or do you need any further rate design improvement?

Now, I think Shar is Drew, sorry, Constantine, this is Drew. We feel that they are fully competitive at this point. And we are talking to potential customers of the state of Arkansas. We have a lot of interest there. And so we are working down that path right now.

Excellent. And then maybe in terms of the financing updates, just last quarter, the guidance was for 75% of the equity to be after 2026. And it looks like that might be accelerating slightly. Does that imply an acceleration of credit metric improvement or any other moving pieces you want to highlight?

Yeah, there hasn't been a substantial change in the timing of the equity needed. We contracted forward into 2027. And our credit metrics through 2028 continue to build towards and up to 15%. So we see strong flexibility in credit, but I assume a whole lot of shift in the equity needs and the timing of the equity in that period.

Anything that drove such a big forward volume in 1Q relative to last quarter, or is that just optimization?

Yeah, it really was taking risk off the table. We had an opportunity to execute on that forward. And given volatility and the equity that we needed, that we believed could continue to satisfy with the ATM, but we had an opportunity to close some of that out. And so we took advantage of that and set ourselves up to be able to manage volatility over the next couple of years.

Excellent. Appreciate that. Thanks for taking the questions. I'll jump back in queue. Thank you.

Thanks, Constantine. And our next question comes from the line of Jeremy Tone with JP Morgan. Jeremy, your line is open.

Hi, good morning. Good morning, Jeremy. Just want to look at the sales a little bit here. I think that your residential customer count might have been up just under 1% quarter over quarter. And your weather, normally sales, if I'm seeing this right, for residential went up about four and a half percent. I was wondering if you could talk a bit more about drivers there?

Yeah, good morning, Jeremy. It's Kimberly. You know, I wouldn't look too much at the specifics on the quarter. Over quarter, you're going to see some volatility in the counts. What we expect are residential sales to be about 1% for the full year, and our sales overall to be about five and a half percent. So still strong sales over the year, but you're going to see some volatility in a given quarter on a quarter of a quarter basis.

Got it. That's helpful. Thanks. And just moving to industrial sales, and as you said, it'd be volatile any given quarter, but it seems like there's a degree of macro uncertainty out there that might be weighing on industrial activity a bit. Just wondering if you could provide any thoughts from your viewpoint on your service territory?

Yeah, when we think about our industrial customers, you know, we have had more than 5% growth for over 15 years, and that's included a number of periods where there were various economic factors happening in those periods. And I think the three industrial customers that Drew referenced in his comments coming in just this quarter or over the last couple months underscores the opportunity that we have for our traditional customers, and then we continue to have significant opportunity in the data center space. So, you know, our customers are making 30-year decisions. There's our short-term volatility that they may have to manage through, but we see those decisions coming through, and we continue to see a lot of opportunity through our pipeline as we go forward.

And I'll just point to the rule of thumb that we have in our materials for industrial sales is, you know, 1% change in a given year is only about a penny of impact. So it's a pretty -de-risk because of the high level of demand charges that we have in the industrial customer space.

Got it. That's helpful. And just one last one, if I could, just as far as winning these new packages here and increasing the pipeline of big activity, I wonder if you could provide more color what it looks like, I guess, on conversations with data center or other large industrial users, you know, how you see that, I guess, coming together in this environment? Has anything changed?

Yeah, Jeremy, the Drew reference that we had 5 to 10 gigawatts in our data center discussions, those are still strong and ongoing discussions. Our pipeline in our other customers hasn't really changed from the last time that we gave that level of detail. We continue to have strong conversations. You know, our pipeline is in our forecast, is on a weighted probability basis, and Drew referenced that these customers were in our forecast, but certainly they are hitting at a faster and higher success rate that enables us to continue to serve them. But if that rate continues, we'll have to look at incremental capital to support continued growth.

Yeah, that's a good point. I mean, outside of data centers, you know, we probability weight everything, and the three announcements that we gave you were in our forecast, but they were probability weighted. And so now the sales expectation for them are much higher than what we were originally anticipating. And taking up the space that the other probability weighted customers might have been taking up. So there could be additional capital needed should those customers come in, and we do expect some of them to come.

Got it. That's helpful. I'll leave it there.

Thanks. Thanks, Jeremy. And our next question comes from the line of David Arcaro with Morgan Stanley. David, please go ahead.

Hey, thanks so much. Good morning. Good morning. I was wondering if you could maybe just give maybe an update or a profile of your system. You know, as you're looking at some of these large load customers in the pipeline, how quickly can you offer them, you know, service to connect in? You know, time to power has been a focus among that cohort. So curious just what the latest is in terms of how quickly you can accommodate new large load customers.

Yeah, this is Drew. And then I'll see if Kimberly wants to add anything. But the we do have positions and cues in order to create, you know, provide generation to potential customers. You know, as you all know, those cues are full. But our positions, we believe, would allow us to continue to offer up opportunities for customers. At this point, it's near the back end of our period, because there's just, you know, a lot to do to make room for all this. And as you know, that the three that we customers that we were talking about today are all in the 2028 moving and ramping into 2029 kind of time frame. So that's kind of where we are in terms of potential opportunity. And so it doesn't really matter which kind of customers we're talking about.

That's it. Got it. Yeah, that makes sense. Appreciate that color. Maybe just a quick clarification on the tariff exposure. Would you consider, I guess, do you think of the tariff exposure as being earnings exposure? You know, is this kind of already approved projects that now need to, that are going to be more expensive or this is out in the future, you know, will get worked through regulatory processes over time? I know you're trying to offset it, but how do you consider a kind of earnings exposure, if any, from that?

Yeah, Dave, and most of that exposure, as you noted, is in 27 and 28. And most of it is also tied to new generation specific components to help build those facilities. So we think that gives us time to find additional suppliers and mitigate that. So we don't see that being a real earnings effect. And Drew mentioned some of the things we're doing to mitigate that, but we think that that is manageable within the forecast period.

Okay, got it. Understood. I appreciate it. Thanks so much. Thank you.

Thanks, David. And our next question comes from the line of Nick Campanella with Barclays. Nick, your line is

up. Hey, good morning. Thanks for all the updates. Hey, good morning, Nick. Morning. Hey, I just wanted to ask on 25, it just seems like you're off to a good start. You know, are you trending higher in the fiscal 25 plan, just given the weather tailwinds or other headwinds to kind of consider for later this year?

Yeah, we did have a good start to the year, but as with any year, we use that to manage through the course of the business. Uncertainty, we obviously have the summer coming. It could be, we could have a super hot summer, we could have a mild summer, and so we need to see how that plays out. But we'll use that flexibility to help us manage, but we're comfortable that we'll deliver our outlooks at the end of the year.

Okay, great. Thanks. And then just on this new customer generation transmission filing, I know that we're kind of approaching hearings here as kind of a midterm data point. Just, is there any potential or effort by the parties to want to settle issues in the proceeding, or do you kind of see that going straight through into the October order? Thanks.

Yeah, this is true. You know, there is always the potential to settle, and so we will look at that. If those opportunities arrive, certainly we'd always prefer to settle rather than go to hearing if we could. But, you know, we have a good schedule, and there's a lot of support for this investment in the state and among the stakeholders. So we are, you know, we're confident that we will manage through the process and get the outcome that will benefit customers and communities.

Thanks

a lot.

Thank you.

Thanks, Nick. And our next question comes from the line of Paul Fremont with Loddenburg. Paul, your line is open.

Hey, thank you very much, and congratulations on a strong quarter. I guess my first question is, can you give us a sense of the load that's associated with the three customers?

Good morning, Paul. Unfortunately, I can't. We don't have authorization to talk about specific customer load, so I wouldn't mention that to you. I would say, you know, these are large industrial facilities, and they would be on par with, you know, things that you might see elsewhere, but I can't give you specifics, unfortunately.

And then your transmission filing in Texas, is that a 365, 500, or 345 kV line that you're proposing, and I guess how many miles should we think of additional transmission?

Yeah, that's 500 kV, and it is 130 to 160 miles. There's a slide in the materials on that that you can look at, and it actually will sort of terminate, ideally, with the line that we are requesting for approval in Louisiana. So you'll get, in addition to customer support, I think you'll get a good resilience benefit out of that as well to help us with storms.

And sort of last question there, what would be the completion if you were to be awarded the project? What would be the completion date?

We think it would be just outside of our outlook period in 2029.

Great. Thank you so much.

Thank you.

Thanks, Paul. And our next question comes from the line of Steve Fleishman with Wolf Research. Steve, your line is open.

Yeah, hi, good morning. Good

morning,

Steve. Yeah, just, I guess just on the sales guide for 25, you took it down a little bit. Just any, I know it's still really good, but just any explanation for that?

Yeah, good morning, Steve. It really is just, as we get line of sight over the course of the year, we know the industrials will come in, their ramps may vary. They come in, large load comes in a little bit of variety over the course of the year. So still at five and a half percent, we still see strong sales, but just a little bit of clarity on how that's going to come in.

Okay. And then the last quarter, I think you had this second Mississippi customer that you kind of announced, but hadn't been named. Is there any more clarity on that customer?

Yeah, so we are still all on moving forward with that customer. They have not announced themselves. And so we're working to their schedule, but there's nothing new from our end. We are moving forward on everything we need to do to serve that customer.

Okay. Then on the regulatory on the Texas plants that you're, the next round of plans that you're looking to build, I think staff came out against it more because they thought you should have had a RFP. Just could you talk to your views on being able to kind of resolve that constructively?

Sure. Yeah, we, as I mentioned in my remarks, there is no disagreement with the need for incremental generation in Texas. Everybody recognizes that. And then I think everybody also appreciates that we really need to move quickly to support the low growth in Texas as well. That's fully in the record and well supported the rationale for why we needed to move quickly. We've already got the Orange County plant. We'd actually did a full RFP for that one and there were no other competing bids for this project in lieu of the longer time required for a full RFP. We did bid out all the, some of the major components for the plant. So there is RFP in there, just not for the whole thing. That's all reflected in the record. And we understand what the staff was saying, but we do believe there's support for us to continue to move forward and get to the finish line. Of course, we got to, we have to finish out the process with the commission and the commission needs to agree with that. But we believe that there's evidence in the record that'll support moving forward quickly.

Okay, great. That makes sense. Thanks.

All right. Thank you, Steve. Thank you, Steve. And our next question comes from the line of Sophie Karp with KeyBank Capital Markets. Sophie, please go ahead.

Hi, good morning. Thanks for taking my questions. Good morning, Sophie. Hi. So a couple of questions on the, I guess, the degeneration portfolio, how you think about that. I was curious to hear your thoughts on what would make, what kind of market signal would make you take a closer look at nuclear and maybe bring those opportunities forward. And also, some of your peers are discussing how building gas plants takes a little bit of time, right? And what are you seeing and how fast can you basically build a gas plant right now?

Yeah. So with regards to nuclear, we are working on opportunities right now, as I mentioned. So we have the early site permit in Mississippi that is an opportunity for us. And we're talking with stakeholders, including customers and vendors on that. I don't know that there are any other market signals that we could see. The key issue for us is our ability to manage the construction risk. And, of course, we need a customer to want to pay for that. So there's a lot of political support in Mississippi, Louisiana, Arkansas, and in Texas. Some of the states have laws in their legislative sessions right now that they are considering to try and facilitate nuclear investment. We view that as all very, very positive. But we need to be able to solve that commercial question up front in order to move forward with on a more rapid pace. Regarding combined cycles and the path there, we have the key for that is where are you in the queue? And so we have queue positions that would allow us to build plants in you saw the examples today. And the customers that are coming in are coming in in that time frame. That matches up with our ability to continue to build. So that's the time frame that we are looking at right now is that time frame in order to bring on combined cycles. I think that's, if you have queue positions, I think that's consistent with most. I think there may be few people that have sort of uncommitted queue positions maybe in 2027. But that's about as early as I think you can get today that we've seen that could come into our service area. And then if you're not in the queue and you're trying to get into the queue today, it's probably more like 2030, 2031. So it's a little further out.

Thank you. It's a very helpful call. And then my other question is on the legislature that you mentioned in Arkansas and in Texas, I believe that improves the recovery mechanisms for plant under construction and storm recovery. How should we think about potential financial impacts of those? Obviously, this is a positive, but how much would that be, I guess, a creative on a normal year to you guys?

Good morning, Sophie. It's Kimberly from the Arkansas Legislation. It does allow us to build earlier because you get recovery earlier through you get AFUDC through, or you get cash CWIP rather than AFUDC. We haven't quantified that effect. We'll look at what specific investments will use that mechanism for and how that will benefit customers. So that will be coming in future quarters, but certainly sets us up to move faster and actually provides lower cost to customers because of the CWIP recovery early in the construction period. In Texas, I think the mechanisms are more around ensuring risk. There's wildfire legislation. There's other legislation there, but I don't know that you'll see a lot of changes in the financials from, depending on what goes through the legislation session there. From a securitization perspective, it is timing of the ability to recover the cost, which does lower cost to customers because of the carrying cost on that time to get those dollars back.

Thank you so much.

Thank you. Thanks, Sophie. And our next question comes from the line of Ryan Levine with C. Ryan, please go ahead. Good

morning. Two related questions, particular to Louisiana. How does the Woodside FID decision impact the availability of power or time to market for new data center customers in your service territory? And then related, given the macro uncertainty, any color you can share around GDP sensitivity to your load or customer activity in your plan and how that could impact the large load customer conversations?

Ryan, I'll just the first part of your question regarding the data center and how the large customers affect that. We've talked before that our large traditional customers are in a probability weighted pipeline in our forecast. The large data centers are, we consider them binary. So we look at what does it take to make sure that we can supply those. And then also we add that as needed when we add that large customer. That's what you saw the last couple of quarters. So they're not mutually exclusive, but they're also not as dependent on each other. We look at that supply for the probability weighted, and you look at the supply for the specific large customers. So we think that we can continue to data centers over time. Obviously Drew talked about the timing on construction, but we think we still have a lot of opportunity there.

And then just to make sure I understand your second part of your question, Ryan, you're asking about macro drivers and whether those would affect, how would those affect like Woodside in particular?

How those would impact some data center conversations to the extent that the economy were to slow and that may reduce your load and you expand to your reserve margins?

Yeah. So I mean, I would think that's, I don't think data centers are really any different than our traditional industrial customers in that regard. They are looking at long-term investments. And so they're looking past any near term macro effects that you might see from tariffs or recession or anything like that, that could come about. So that's at least that's what's happening in the conversations that we're having. They're looking well out into the future and they're not looking at just these investments, but lots of investments. And so that's, I think that would be the driver for them, not near term macro, but long-term expectations.

But in terms of your core business outside of those customers, how GDP sensitive is your load?

I mean, it is not recession proof if that's what you're asking. But we have some of the most competitive industrials in the world, given all the investments that's happened over the last 15 years in our service territory. So in any sort of macro change, they would be the last to turn off and the first to turn on. And that's looking at the commodity spreads from the US to global markets right now. Those continue to be favorable, particularly for the Gulf Coast. So we might see some temporary downturn, but anybody that's operating today would probably continue to operate very soon if they had to turn down at all. As I mentioned earlier, our sensitivity from an earnings perspective is really low, one cent for any one percent change in our industrial sales. That shows you how low the sensitivity is and the significance of the demand charges that we have. And so I would think that our industrial customers will be very robust through any sort of downturn. And from an investment perspective, as I said, the data centers and the large industrials, traditional large industrials, they're looking at many decades of investment, not the current macro environment.

Thank you.

Thank

you. Thanks, Ryan. And just a reminder, folks, if you'd like to ask a question, again, it is star one on your touchtone phone. Once again, star one. And our next question comes from the line of Anthony Croudell with Mizzou. Anthony, your line is open.

Hey, thank you. Good morning. Just a couple of quick questions on transferability. I appreciate you gave us some numbers, but what's the impact to your FFO to debt metric if transferability were at a sunset?

Yeah, it's Kimberly. The numbers that I gave you, as I noted, we didn't give a percent on FFO, but we would be well above our or we would be above our thresholds, I should say. We also would look to maintain some of that through other mechanisms like I talked about, safe harboring potentially, or also tax equity partnerships. So that is sort of a bookend case, but we would expect to be able to manage that as well. But regardless, we still expect to be above our thresholds.

Great. And maybe it's more of a rating agency question, but if one of the options were tax equity, do you know if the treatment of that is some of the transferability or that's not included in the FFO calculation?

Yeah, we've done a few of those already over the last few years, and they're treated in the normal course. So I wouldn't expect that to be any different.

Great. Thanks for taking my questions. Congrats on a good quarter.

Thanks. Thanks, Anthony. And our next question comes from the line of Andrew Weisel with Scotia Bank. Andrew, please go ahead.

Hi, thanks. Good morning, everyone. If I could first just elaborate on the slight reduction to the low growth forecast. First, just to clarify, you're saying it's about the pace of new customers ramping, not about usage from existing customers. Is that right?

Yes, I think that's a fair assumption.

Okay, great. And then I recognize the EPS impact is modest, but can you detail you originally guided to 11 to 12% industrial growth in 2025? What's your new forecast to the industrial class?

I don't think it's substantially changed. I think you'd still be close to that range. Really, this is about, like I said, timing, ramping, but not a significant change in where we are.

Okay, very good. And then one more, if I may. I appreciate the easy to read list of the significant investment proposals on slide 15. And it does add up to a lot of potential spending, mostly in Louisiana and Texas and across generation and transmission. My question is how much of that is already included in the CAPEX plan? And is there sort of a risk adjustment for some or all of these projects? And would there be upside or down to the plan pending regulatory approval? $37

billion through 2028. What you're seeing on 15, that list of investments, those are all, I would assume those are in the financial plan. Anything that's not in the financial plan, we'd have to look at whatever that is in the future, depending on additional customers and that sort of thing.

Okay, appreciate you clarifying. Thank you.

Absolutely. Thanks, Andrew. And our last question today comes from the line of Travis Miller with Morningstar. Travis, your line is open.

Thank you. Good morning.

Good morning.

A high-level question here. With all the large load conversation and the potential new generation transmission, etc., have you changed any of your strategic conversations when you're thinking about contracting with these customers? I.e. going from maybe shorter-term types of contracts to longer-term offtake types of contracts or fixed-price types of contracts? I'm just wondering if there's been any change there in your strategy?

Not actually, not really. One of the advantages that we have is we've been serving large industrial customers for a while and we were able to take advantage of those structures and frameworks that we had been contracting with previously. That included credit provisions, fixed demand charges, what we call minimum bill, I guess, sometimes, minimum bill charges and other features, termination features and things like that, and adapt them for the current environment, and particularly with the data centers. But I don't think our strategy changed all that much, but we have had to be disciplined with the way that we approach this so that we can make sure that we keep all of our existing customers in a good spot while we get these new customers up and running.

Sure, okay, that makes sense. And then a specific one on the Louisiana New Customer filing. Is there a precedent either in Louisiana or other states you serve or other states you researched for a decision like this? Is there any kind of precedent ruling you've seen?

I'm sorry, I missed the first part. A precedent ruling on transmission investment in Louisiana?

No, the new customer investment.

Oh, the new customer, yes, okay. Well, I mean, I think the components themselves, nothing is new that's in there. And so it's standard generation and transmission investments that have been requested before. There is a specific customer that we are aiming to serve in this docket, but outside of that, and I think that actually helps because it helps illustrate how we will manage the overall impact to existing customer bills. And so I think that probably helps the conversation. But the investments themselves are nothing new for the commission to consider.

Okay, I was thinking more of the kind of fixed price type long-term contract approvals.

Yeah, well, again, we've had those kind of contracts before they exist in our existing tariffs that we have. In fact, in Louisiana, we have an existing high factor load serving tariff, and that allows us to serve a lot of these large industrial customers. We're able to use that same tariff for the new customer.

Okay, perfect. That's great. I appreciate it.

Absolutely.

All right. Thank you, Travis. And that does conclude our Q&A session today. Thank you so much, everyone. I will now turn the call back to Liz Hunter for closing comments. Liz?

Thank you, Greg, and thanks to everyone for participating this morning. Our quarterly report on Form 10Q is due to the SEC on May 12th and provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10Q filing to 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 Another 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.