Entergy is into energy. The integrated utility holding company's subsidiaries distribute electricity to 2.8 million customers in four southern states (Arkansas, Louisiana, Mississippi, and Texas) and provide natural gas to 199,000 customers in Louisiana. Entergy operates 15,500 miles of high-voltage transmission lines and 1,500 transmission substations. In addition, the company has interests in regulated and nonregulated power plants in North America that have a combined generating capacity of about 30,000 MW (including nearly 10,000 MW of nuclear power). Entergy is one of the largest nuclear power generators in the US.
The company operates primarily through two business segments: Utility and Wholesale Commodities.
The utility segment (82% of total revenues) includes the generation, transmission, distribution, and sale of electric power in Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans. It also operates a small natural gas distribution business. Entergy's wholesale commodities segment (18%) owns and operates six nuclear power plants (10,000 MW of capacity) in the northern US, and sells power from these plants (and from its interests in non-nuclear power plants) to wholesale customers. It also provides services to other nuclear power plant owners.
Entergy's major subsidiaries include Entergy Arkansas, Inc., Entergy Gulf States Louisiana, L.L.C., Entergy Louisiana LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc., Entergy Texas, Inc., Entergy Nuclear, Inc., Entergy Wholesale Commodities, Entergy Solutions District Cooling, LP, and Entergy Thermal, LLC.
Entergy performs operations across a 114,000 square mile area in Arkansas, Louisiana, Mississippi, and Texas.
Sales and Marketing
Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas. The electricity is sold to wholesale customers and is distributed via substations, transmission and distribution lines.
Entergy Wholesale Commodities' customers for the sale of both energy and capacity from its nuclear plants include retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. These customers include Consolidated Edison and Consumers Energy, companies from which Entergy purchased plants, and ISO New England, NYISO, and MISO.
In 2015 net revenues decreased by 8%.
Revenues from Entergy Wholesale Commodities decreased primarily due to lower realized wholesale energy prices, primarily due to significantly higher Northeast market power prices in 2014, and lower capacity prices in 2015; and a decrease in net revenues as a result of Vermont Yankee ceasing power production in late 2014. The decrease was partially offset by higher volume in the Entergy Wholesale Commodities nuclear fleet, excluding Vermont Yankee, resulting from fewer refueling outage days in 2015 as compared to 2014.
Revenue from Utility Retail Electric dropped due to rate increases at Entergy Louisiana, as approved by the LPSC; an increase in energy efficiency rider revenue primarily due to increases in the energy efficiency rider at Entergy Arkansas, as approved by the APSC and new energy efficiency riders at Entergy Louisiana and Entergy Mississippi; andan annual net rate increase at Entergy Mississippi as a result of the MPSC order in the June 2014 rate case.
The volume/weather variance was primarily due to a 1% increase in billed electricity usage, including an increase in industrial usage and the effect of more favorable weather. The rise in industrial sales was primarily due to the expansion in the chemicals industry and the addition of new customers, partially offset by decreased demand primarily due to extended maintenance outages for existing chemical customers.
The Louisiana business combination customer credits variance was due to a regulatory liability of $107 million recorded by Entergy in October 2015 as a result of the Entergy Gulf States Louisiana and Entergy Louisiana business combination.
The MISO deferral variance is primarily due to the deferral in 2014 of non-fuel MISO-related charges, as approved by the LPSC and the MPSC. The deferral of non-fuel MISO-related charges was partially offset in other operation and maintenance expenses.
The Waterford 3 replacement steam generator provision was due to a regulatory charge of $32 million in 2015 related to the uncertainty associated with the resolution of the Waterford 3 replacement steam generator project.
In 2015 Entergy's net loss decreased by 116% compared to net income in 2014, mainly due to asset write-offs, impairments, and related charges related to Waterford 3 replacement steam generator project.
Cash from operating activities decreased by 15%.
The company expecting that the diverse industrial base in the Gulf South region, including chemicals, primary metals, wood products and petrochemicals will deliver significant utility sales growth through 2017.
In 2017, after years of negotiation with state and federal officials, the company agreed to to close the Indian Point nuclear power plant (located just 25 miles north of New York City) in 2021.
Entergy publicized several transmission projects in 2014 and early 2015 in Louisiana and Texas, including the Lake Charles transmission project. It also announced an accelerated gas pipe replacement program to replace about 100 miles of pipe in Baton Rouge, over the next 10 years.
In 2015 the company initiated a large transmission project and began the installation of smart meters to benefit its customers and lay the foundation for the next generation of grid technologies on its system.
To raise cash, in 2015 the company sold a natural gas-fired power plant in New England to the Carlyle Group or $490 million. That year Entergy announced that it will close its Pilgrim Nuclear Power Station in Plymouth, Massachusetts, no later than 2019, because of poor market conditions, reduced revenues, and increased operational costs.
To save operating costs, in 2014 Entergy Louisiana and Entergy Gulf States Louisiana asked the Louisiana Public Service Commission for permission to merge into a single utility.
In another move to improve operating efficiency, that year Entergy broke ground on a new $23-million Transmission Operations Center in Little Rock that will will be a nerve center where employees monitor the status of the Arkansas transmission system, coordinate line outages for maintenance or repair, and remotely operate switches and breakers at substations.
Mergers and Acquisitions
In 2016, Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans purchased the Union Power Station, a 1,980 MW power generation plant near El Dorado, Arkansas, consisting of four natural gas-fired, combined-cycle gas turbine power blocks. Entergy Louisiana purchased two of the power blocks and a 50% stake, and Entergy Arkansas and Entergy New Orleans each purchased one power block and a 25% undivided ownership interest in such related assets. The price for the Union Power Station was $948 million.