Entergy Aktie

Good afternoon, and welcome to Entergy's Investor Day. I'm Liz Hunter, Vice President of Investor Relations. We have a couple of items to cover before we begin our program. First, we'll start with a safety message from Lieutenant Saba on behalf of the New York Stock Exchange. Lieutenant?

Hello, everybody, and welcome. As she said, my name is Lieutenant Saba. I'm here 45 years and my partners at 31. So that's over 80 years combined of services. So just to tell you a little bit about ourselves with both fire and safety directors. The important thing is we have all these large groups, everybody should know where the exits are.

We have three exits on this for A, B and C. The all emergency exits, you'll be instructed by our fire safety team and got a bit of an emergency, what exit to take. We tell you not to take the elevators unless otherwise instructed. All our security offices are CPR and AED in emergency oxygen. So just in case there is a medical we'll respond.

Sargent Ramos is going to show you all the exits now, which is very important. Because I can tell you where they are, but you may not find them. So he's going to show you how. Sargent Ramos.

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Okay. You have the A stair case, it'll take you down to 11 Wall and New Street. The B and C staircases will take you at a broad street and then the stage and area will be right outside. We just emphasize when you get up and take a break, walk around A, B and C. We have an interior staircase, which is it goes from seven to six. We advise you not to take that because that's not going to take you outside.

So just remember, A, B and C. And pretty much that's it. Welcome, have a good time and a safe time. Its nice be in you all.

Thank you. As you all know, today, we will make certain forward-looking statements. And as you would expect, actual results may vary due to market conditions and other factors. We are so excited to have you all here with us this afternoon. It is great to see so many friendly faces in the audience as well as now we have many familiar faces listening online as well.

Today, we are going to share with you the story of Entergy's growth opportunity. Kicking us off, Drew Marsh will highlight progress that we've made since our 2024 Investor Day in New Orleans as well as share an update on our business strategy. Next, AWS and Meta are here, and you will hear from Brandon Oyer of AWS and Nat Sahlstrom of Meta as well as Haley Fisackerly, for Entergy Mississippi and Phillip May for Entergy Louisiana in a conversation about powerful partnerships and how we're able to work together to benefit all stakeholders.

We'll have a brief break and then Kimberly Cook Nelson and Bill Abler will take us on a deeper dive into Entergy's strategy for execution on growth and operations. And Kimberly Fontan, will share our strong financial plan and how it's differentiated.

Drew Marsh will round us out on near-term and long-term growth drivers and opportunities. You may have questions as we go throughout the day. We ask you to please hold your questions until the end. The six Entergy management presenters today will have a live 30-minute question-and-answer session where they will be able to answer your questions at that time. We're thrilled to have you here and we can't wait to get started.

So without further ado, introduce Chair and CEO, Drew Marsh.

Good afternoon, everybody. I'm very excited to be here. Thank you all for being here. Thank you, Liz, for introducing us. It's an exciting day. We have a lot of things going on. We have a story to tell you that starts with tremendous unmatched outlooks in the industry, and it also includes a lot of things that aren't yet in our outlooks. And these are all for the benefit of our stakeholders. So it's a unique opportunity for us to tell our story, and we're excited that you're here.

So I'm going to start, as Liz said, talking about the plans that we set out for you 2 years ago at our Investor Day. And we have been sticking close to those plans. They have yielded significant benefits for our four key stakeholders. And then I'm going to tease a little bit about the opportunities that are still ahead of us. But it will get filled in by some of the other presenters as Liz said.

So let's get started. Two years ago, when we came -- or when you all came to New Orleans for Investor Day, we said that we wanted to be the premier utility. And I'll admit there were a few sneakers in the room when we said that 2 years ago. We said what we wanted to do was to create value for our four key stakeholders.

We wanted to make sure that our customers had success and they were loyal. We wanted to make sure that our employees were talented and engaged. We wanted to make sure that our communities were growing and vibrant. And if we had those things, we were confident that our owners would get to earn their returns. So that was what we wanted to do.

We also laid out how we wanted to do it. And it starts with our customers, always starts with our customers, what our customers want to achieve, what are they trying to do going forward? How can we help them? And then we got busy trying to transform ourselves to meet those customer expectations, things like changing our culture, changing our mindset, changing our skills and capabilities changing our organization design, in some cases, our processes, whatever it took to make sure that the customer needs could be met.

And with that in hand, we got to work, trying to execute with excellence. And that started with building a plan, building a plan that met all the goals of our 4 key stakeholders. And once we had that, we broadened it out to a much bigger stakeholder group. That's part of our stakeholder engagement efforts.

And that allowed us to create all kinds of opportunities going forward. Once we had that in hand, we could get them to buy -- to help us to buy in to support what we were doing to give us input and feedback and go on to actually give us some arms and legs to get the approvals required going forward.

Once we have those approvals, then we would drive to operational excellence in the capital project space. and in the operational excellence and ongoing operation space. Having gone through all of that work in the how we could get to the outcomes that we are looking for, for our 4 key stakeholders.

And of course, 2 years ago, we talked about the sales growth opportunity that we had. And it's the same sales growth opportunity that we have today. You know about the technology space and all of the data centers, that part is very clear, and there's a lot more opportunity and we'll get to that.

Today, we have two of our largest customers here to talk about it. But I want to remind you about the onshoring piece. That's our more traditional industrial customers. And the ingredients for that that have been driving 5% growth over the last 15 years are still in place. That includes access to the Gulf Coast and Mississippi River to get our customers to get to international markets.

That includes abundant energy and transportation infrastructure in our service territory. It includes welcoming communities. And of course, it also includes some of the lowest energy costs in the country, including us having some of those low electricity costs, some of the lowest in the country. And the base is from those costs to other key markets in the world, Europe and Asia. That hasn't changed, and we do not expect that, that will change anytime soon.

So that is an ongoing continued advantage for our region. And then the other opportunities are still there. Clean energy, our industrial customers ultimately need to clean up their emissions and electrification, which is a multi-decade trend. Those are not as prominent in our current outlook, but they are going to be significant in years to come. So we're excited about all of these things. And following this plan and these opportunities is what has created a lot of value for our 4 key stakeholders.

So let's talk a little bit about the value that was created for our 4 key stakeholders. Starting with our customers and the proof -- the most obvious piece of proof for that is that our customers are showing up. When we talked to you 2 years ago to today, our electric service agreement backlog has grown by nearly double.

And it's an incredible backlog that includes lots of major companies. Yes, data centers are in there, but it also includes LNG and steel and petrochemical companies. So it's a very diverse backlog. It also includes robust international companies with a lot of experience in industrial development. So there's a lot of capability in the backlog.

And of course, it's continuing to grow. So it's an exciting backlog that we have, and there's a lot more associated with it. Of course, our industrial customers only make up a little over 50% of our sales. And we have 3.1 million customers. The vast majority of our customers are residential customers. So we pay close attention to them as well.

And we're proud to say that we still have some of the lowest residential rates in the country. And our advantage over the national average for rates is continuing to grow. And that has translated to continually lower share of wallet for our residential customers. We are at 25-year lows and we do not see that changing anytime soon. And while we've heard a lot about dissatisfied residential customers from the national media, it is a very different story in our service territory.

In the last 2 years, our Net Promoter Scores have risen dramatically such that we are now in the first quartile for the industry on Net Promoter Scores. So that's a lot of what our customers have been experiencing, but they have a lot more to still look forward to. And it comes in the form of the fair share plus pledge.

Of course, that is the pledge that we've made that matches up with our data center customers, rate payer protection pledge. And fair share means that the data center customers are going to cover the incremental costs associated with serving them. It also means that they're going to pick up their share of fixed costs, things like storm costs and overhead costs.

And that adds up over the 15 to 20-year lives of these contracts -- that means $7 billion of savings for our existing customers. And Kimberly Fontan will talk a little bit about the contract provisions that are helping make sure that those savings stay in place. Of course, we care about our employees as well.

Our employees are critical to our success. We've gotten a lot of our employees have experienced a lot of upside in all of this growth, right? They are -- we are learning a lot. We are learning new processes, new tools, new capabilities, and we're growing, and it's energetic and exciting. So there's a lot of our employee experience that we've been gaining as an organization.

But we also know that we need to attract and retain our talent on an ongoing basis. in today's competitive market. So we've been actively improving our benefits to try to do that. We've also been upping our game on training and development, leadership and team building and also individual capability building like AI and making sure that our own employees can figure out the best way for them to make their job more productive, make themselves more productive and make their lived experience as an Entergy employee more valuable to them.

With those things in mind, we have driven down voluntary turnover in Entergy by 15% in the last couple of years. And that means that we have more productivity internally and we have a much better chance to execute on all of the activities that are ahead of us.

Beyond employees is communities, and we have been active in communities for a long time. In the last year, our employees racked up over 600,000 hours volunteering and our various philanthropic initiatives created over $145 million of economic value in the communities that we serve. But the place where we can have the highest impact is in the multiplier effect of economic development.

That's where our biggest opportunity is. And this is where the plus part of fair share plus actually comes in. In that plus part are more jobs and more revenues through tax dollars and other mechanisms in communities. That means help and support for schools and libraries and fire departments in the communities we serve.

A great example is Richland Parish. Teacher pay and Richland Paris was in the bottom 10 in the state of Louisiana. And now it's moving into the top 10 in the state of Louisiana. Now Richland Parish is one example, but this is playing out in counties and parishes throughout our service territory because it's not all happening in one place. It's happening throughout.

And the benefits for our communities aren't just coming through tax dollars. They're also coming through the customer bill, things like investments in energy efficiency that our customers are making and we are making investments in low income initiatives and also through the infrastructure that we're building.

The infrastructure that we're building is making our grid more resilient, which in turn makes our communities more resilient. And it also means that the infrastructure we're making is going to be more fuel efficient. And that benefits our customers, which benefits our communities. And we know that if we create value for our customers our employees and our communities. That is the bedrock for our stakeholder engagement.

So 2 years ago, we talked about stakeholder engagement as a new focus area for us. And our strategy was to highlight these benefits on an ongoing basis. And as we did that, we could bring the benefits not only to these key stakeholders, but we could spread the word to other critical stakeholders in the processes that we are running.

And as we did that, we gained followership support and sometimes, as I said, arms and legs to actually go out and make these things happen. And the benefit of then ongoing success in legislation to drive additional economic development success in getting more resilient success in getting faster storm cost recovery.

All of these things are benefiting customers and communities. And as we said before, our formula is to create value for our customers, our employees and our communities so that our owners will earn their return. And here is the evidence that that's happening. Our sales growth from 2 years ago has doubled to 9%. Our 5-year capital plan from 2 years ago has doubled to $67 billion.

Our total shareholder return has more than doubled the S&P 500 over that time frame. And of course, our earnings per share growth rate is nearly double the median of the S&P 500, excuse me, the utility peers.

That is premier utility performance. And so we are very excited about that, and maybe we should stop there. But wait, there's more. There, you'll hear from our customers in a minute, and they are going to talk about their continued interest in growing through and they're going to need more electricity for that.

That's a significant opportunity for that -- for us going forward. But it's not just about electricity from data centers. There is still the industrial growth opportunity there still electrification. There is still clean energy opportunities. And but beyond that, beyond electricity sales, there are other products and services that our customers need from us.

Starting with resilience. We've been talking about resilience for several years now, and that is still ongoing. And there are clean energy investments. And Kimberly Cook Nelson will be up here in a minute to talk about some of our strategies associated with the clean energy investments and the resilience how we can cross that economic threshold so that our customers can benefit from our work.

So these are the opportunities that are in front of us. And of course, as we always do, we're going to start with our customers and so we will set the stage and bring our customers up with Haley and Phillip, and we'll get started with the next section. Thank you.

Good Afternoon and thank you for joining us for what i think is one of the most important conversation we have this afternoon. And that is a discussion we have two of our largest most sophisticated and fastest growing customers in our system. I am Haley Fisackerly, President and CEO of Entergy Mississippi. And to my right is Brandon or with Amazon Web Services, and Brandon is Head of Energy & Water for the Americas at Amazon Web Services. He has more than 2 decades of experience in critical infrastructure and energy markets.

And in his current role, he is responsible for procuring energy and water for all of Amazon Web Services in North and South America data center. So a big job he has in front of him. He's been with Amazon since 2018, he has worked at various roles. But what I think is really neat, he began his career in United States Navy Nuclear Submarine Force. Where he supervised reactive plant operations. And get this he spent over 2 years living under water. Thats not for me. And led reactor defueling and refueling where he learned the ins and outs of nuclear energy.

And after his naval career, he transitioned to the civil sector, where he oversaw 600 megawatts of thermal generation and distribution management of Brookfield Asset Management. Thank you for your service, and thank you for being with us today, Brandon.

Thank you, Haley. Thanks for having me. Thanks for the intro.

Phillip May, I am President and CEO of Entergy Louisiana with me is Nat Sahlstrom, Vice President of Energy and Sustainability at Meta. Where he leads the company's efforts to secure energy infrastructure and drive strategic transformation of power systems to support Meta's global data center portfolio.

Nat has been a leader and innovator of data center energy infrastructure since joining Amazon in 2011 as their first energy hire. He has worked with policymakers in 27 countries and around the world, creating commercial and regulatory structures that enable scalable development of highly reliable data center infrastructure. Most recently, Nat served as the Chief Executive Officer of Track Capital Management, where he led the team focused on securing energy infrastructure and renewable energy for hyperscale data center campuses. Please join me in welcoming Nat Sahlstrom.

Well Nat and Brandon thank you for being here. I mean your two companies represents some of the largest capital investment world have ever seen. So its amazing what significant here. And you two are diffitnately familar with each other and Nat you spent time with AWS so glad to have you. So the first question I have is for both of you and its kind of a two part question. So first if you will share with our friends today one your presence in each of our state. You can give them a fell where you are, what is your presence today.

But also why Entergy, you are making major investments anywhere in the country but you chose our service territory. What is been unique about parnering with Entergy? If you can. Brandon start yourself.

Well, thank Haley. I think -- first, I'll just clear the air in the room of -- I wouldn't carve out time in my schedule for most days to come sit with most of my utility partners around the country. But when you called and asked, it was a pretty easy decision for me to come and explain the story because what we've done to grow in the state of Mississippi is impressive. I'm proud of it.

The company is proud of it and our customers are benefiting from it. And I think really what's differentiated the work with Entergy and AWS has been -- we have started from the ground level at -- set the stage from a government perspective.

So there's Senate bills that are established in Mississippi that enabled our rate making. And then from the first deal that we've done in Canton and Rain Bridgeland, where we have two campuses there, we work together to build a commercial relationship. We want to keep cost out for our customers. We want to grow scalably. We want to be a part of the community. We don't want to impact your residential rate payer customers. And we just had a mutual alignment and that's happened since the day one.

And then we went into an execution phase, executing for our customers is core of what AWS does every day, day in and day out. And we get into the project and Entergy energizes a substation before we're done completely building out the data center, and that doesn't happen around the country.

So that saw that we wanted to keep doing this, build on a good thing, right? So now we've recently announced an expansion down in Vicksburg. So we started in Canton, go to Bridgeland, expand down into Vicksburg.

And we just continue to have a relationship where you have commercial ability, engineering, technical ability that works with our teams on the ground, going to tell our story in the community. We want to be a part of the community. We have customers and employees in the community just like you do.

So there's this natural fit with how everything works. And we're building out our scale, things don't always go perfect. We work through any challenges that we've had, and there's been this mutual trust built. So we're excited for what we have done, and we see plenty of runway left in the State of Mississippi.

Well is a lifelong, Mississippi. And I am excited about transformation that you will bring in to our state opportunities. So thank you for that...

Nat?

Sure. Perhaps an observation on where we are today, it's not lost on the fact that we have two energy infrastructure folks from cloud companies sitting at the New York stock exchange sharing anecdotes butter experience with an IOU. 15 years ago that would have been unheard of. And it's worth recalling just the fact that, Phillip, you mentioned earlier that at

Amazon, they did not have an energy person on staff. Neither did Microsoft, neither did Google, neither did Meta. And the reason being is energy was not scarce. It was not critical. It was almost an afterthought. And I want to talk a little bit about scale because the first data center I have visited was in Northern Virginia in 2011. It was in the process of being converted from a keler chocolate chip cookie factory into an AWS data center, and it was a 10-megawatt facility. When we talk about scale today, and we're going to talk about the partnership with Entergy, we're talking about gigawatts of investment, 100-megawatt buildings in sequence being churned out like factory.

That is just fundamentally different than where we were 15 years ago, and it's why people like Brandon and myself were up here talking because energy has become the critical feedstock into cloud and AI infrastructure. And partners like Entergy who have the vision, the perspective, the customer-orientated mindset to say, what would have to be true in order for us to go build 5 gigawatts with you versus, oh, we could never do that. Our commission went to approve. Our transmission group is too busy to go talk with you.

There's an attitude of problem solving where the Entergy team people latched on to the vision almost immediately. And as a result, we've had our biggest project ever, which is in Richland, Parish. Bill, bear with me for a second, I think scale from 10 megawatts to a 5-gigawatt infrastructure project that we're building in Louisiana right now. And 5 gigawatts, some of these numbers almost become abstractions at the point that we're dealing in today. But maybe I can capture your imagination for a second. 5 gigawatts is 5,000 acres. 5,000 acres may be an abstract unit to measure. But when you go to our site in Richland, Paris, it stretches as far as you can see.

The horizon is dominated by the construction of these facilities in partnership with Entergy and the thousands of men and women who are helping us build that facility every single day. And that has an enormous knock-on effect that's so positive for that community.

And it manifests itself in almost strange figures. For example, we found out that we have the largest private truck gas station in the country right now. 1,200 trucks visit our site every single day. And across that 5,000-acre 5 gigawatt plant of IT load, we're talking about a $50 billion investment across Meta in partnership with Entergy. So the scale that we're working on just really requires that type of vision that the Entergy leadership team has met us with.

So from chocolate chips to -- I don't think we have a lot of chocolate chips in Richland, but we do -- we're going to have a lot of AI chips. We talked to -- Drew mentioned the change in teacher pay in Richland, Parish. So it went from bottom 10 to top 10 as a result of the sales tax revenues and so forth. It's the way that we're changing the state, it's not limited, as Drew mentioned, to Richland Parish.

I have a friend who has a business in New Orleans, Gallo Mechanical. They hired 100 people that are going to be working out of that site and their expectation is they'll probably be there 10 years. That's the impact that we're having on our state.

Now one of the things that impressed me when we first started talking to Meta back in 2024 is your commitment to protecting our customers, that rate payer protection that was a focus of how we contracted and so forth. So if you would talk to me about beyond just the fact that we're creating direct customer benefits by the way we contracted with Meta and with AWS.

Talk to me about the other things that we are seeing in the way of benefits, certainly, customer rate benefits, but also Meta announced an infrastructure or a training program today. And maybe you'll share a little bit about that. And just in general, the kind of benefits we're seeing across our service area.

Yes, sure. I think the first one is just it's -- the new paradigm is that hyperscalers paying for all of their infrastructure, energy supply and associated costs is just table stakes. -- that is the new normal. Folks like Amazon and Brennan and his team and the team at Meta, we like to transcend just the table stakes of paying for our own way, but also participating in investment programs that directly impact the communities where we have operations.

So one of the things that we've looked at is kind of the abstract numbers, which are the savings that accrue to ratepayers and energy system. Together, we've calculated that's roughly around $2.6 billion over the life of the projects that energy ratepayers will benefit from. And then some of the direct investments come with the $200 million matching fund that we've done for low-income assistance programs in your service territory.

But aside from the dollars, I think some of the things that are really powerful are the personal stories because these economic output numbers almost become abstractions. They're like gigawatts and billions of dollars. What does that even really mean? The really powerful transformational stories that I think impact our social license to operate come from people whose lives have fundamentally changed because of the investments in your service territory.

I think about the people who create food trucks that were unsure about seasonal volatility about their income and they went from having one food truck to having five food trucks. Then I think about the workforce mobilization programs that my friend, Brannon and Amazon are doing and that Meta is doing. Yesterday, we announced the American Workforce Academy, where we're planning -- we already seeded that with $150 million investment that's going to create new jobs in the trades.

We're starting with four states, including Ohio, Indiana, Texas and Louisiana. We had another program that we call the Level Up program with enough dollars and time, these energy issues, they can be solved.

Workforce development, I think, is the next big challenge on the horizon, and Meta is standing up to go meet that challenge with these programs. I was talking with Phillip backstage a little bit about this, but our Level Up program, which is for new fiber technicians, we had 400 positions for this. It was a pilot program. It had 30,000 applicants almost immediately.

If you think about the math on that, it's like getting into Harvard to get into this type of program. And one of the things that we're really excited about these type of programs is it reduces friction for workforce mobility and transformation. If you think about those times when you've thought about making a career transition or thinking about taking on additional training, one of the points that makes that tough is the friction, the transaction cost.

By paying people wall in these programs by making the tuition free and by underwriting a job at the end of that process, you eliminate a lot of that friction, which we think benefits everybody, including the communities where we operate because new jobs are created.

It's great. And the great thing about that program, too, is it continues to have a desire for lifelong learning because it increases your income and your capacity and your value. And Brandon, I know you guys are partnering with Entergy Mississippi on a number of things, including infrastructure in Mississippi. You want to share some stories there?

Yes, sure. But I think just to build on Nat's point here real quick before we move off of the workforce development. The numbers, they can kind of become abstract after a while. But an anecdote from a recent graduation cohort in one of our workforce development in Mississippi was a son and a mother went through one of these programs together.

And you want to talk about generational impact and like building a foundation in a community. And when you start having multigenerations of families go through that learn how to cable splice and repair servers from somebody who probably didn't even know what a data center was 12 to 18 months ago, like that's what makes us proud to go and invest in these communities and really watch the impact.

So aside from the numbers, like I just -- I like those little anecdotal stories. But yes, I mean, from an infrastructure perspective, obviously, being an engineer at heart and loving to see physical infrastructure get built, one thing that Amazon has always wanted to pay our fair share, and we understand that we will trigger infrastructure that needs to be built to support our load.

And we also know that the infrastructure around the United States is aging, 50, 60 years old. So eventually, that's going to need to be replaced. And when we started talking with Entergy about how our projects would be served, we saw that there was upgrades that were going to be needed to meet the reliability that our customers would want. And there was a natural fit.

And recently, Entergy announced Super Power, Mississippi, where revenue from the data center is going to enable $300 million worth of investment to go upgrade infrastructure that had been deferred. Had it not been for the data centers coming to invest a substantial amount and put a substantial amount of load onto the system, eventually, that would have been borne by the ratepayers.

I saw Drew's slide earlier where he's keeping his increases in electricity costs below the national average. And I think that this just continues to show that. It's part of being a good neighbor, invest in the infrastructure that everybody benefits from. It's why connecting to the grid makes the most sense. We continue to see a lot of noise out in the industry about people wanting to do other things.

And I think like we continue to see over and over again, it's most cost effective and the most reliable to stay connected to the grid. So it's great to spread those benefits throughout the community. So yes, I mean, from jobs to building out infrastructure to benefit the broader community, like we're proud of what's going on.

We are, too. And one story didn't get told enough, we were talking about Mississippi alone we have seen six manufactures are all exist in the state. They have lost half a billion dollar worth of expansions and almost another 1,000 jobs. And they are providing components to data centers and also electric companies and stuff. So huge opportunity, so it is transformative.

Lets pevit here now little bit, both companies yu made very clear when you were engaging with us the importance around clean energy. So if you can share with audiance what is it about partneership with Entergy? What characteristics happen you meet those objectives?

Yes. I mean it's no secret that we have a goal to be net zero carbon by 2040. And thankfully, due to the natter here sitting to my right, Amazon has a portfolio of 40 gigawatts of renewables around the world. We have 700 renewable projects all over the world. We've made an investment into X-energy to develop next-generation SMRs. We're working with Energy Northwest for the first deployment of that.

We see a natural fit between how Amazon thinks about clean energy and Entergy's goal to clean up over time as well. And there's -- again, since day 1, we've just seen that natural fit. So we built on the renewable portfolio that we had already established in Mississippi. Entergy had some projects teed up. One of our first projects enabled a substantial build-out of a solar facility.

And there will be thermal resources and gas resources built to meet the need now, but we're looking down the road on next-generation technology on how can we cost effectively clean that up. So there's -- again, we need to meet the need now, but we're not throwing everything to the wayside. We know that we've got to make decisions to grow the business, to keep costs out of the business while also having a long view in how are we going to decarbonize.

And thankfully, Entergy looks at it as a holistic approach. We don't think there's a one-size fits all from a clean energy perspective. We see it as a natural portfolio of a bunch of tools that will fit together. So we'll continue looking at solar. We'll continue looking at investing in nuclear, whether it's SMRs or uprates or anything under the sun really. So I think that, that portfolio view that Entergy holds fits well with how Amazon and I think how some of the other larger hyperscalers build.

Great. Nat, how about Meta? What's your approach on this?

Yes. I would say that one of the things that Entergy has done to differentiate itself is to meet our decarbonization goals with a corresponding level of seriousness about the investments in the generation and transmission resources required to go meet those challenges. Net zero carbon by 2040, by 2030 is no insignificant challenge. And when you're talking about bringing gigawatts of new load onto a system, there has to be a corresponding seriousness about how do you keep those loads met reliably and cost effectively.

And the Entergy team has just been an exceptional partner about thinking about integration resource mix transmission, how can we do this in a cost-effective way? How can we do this in a way that's rate payer neutral? How can we do this that will meet the box requirements of third-party groups that are going to be perhaps intervening in corporation, just a full thoughtful curated approach towards what do we want to do versus the realities of matching your system.

And I think that even expands to longer-dated technologies. Brandon alluded to the fact that some of the tech companies like Meta and Amazon, Google, Microsoft and others are making investments in longer-dated technology. And similar to how like an organization like Entergy has an integrated resource plan with an eye towards the future and emerging technologies.

Entergy has met with us and said, "Oh, if you want to look at SMRs, you want to look at Gen 4 technologies, you want to look at solar and battery integration, we'll work with you hand-in-hand to go choreograph how those type of investments, your ESG goals can meet with our requirements around system reliability and cost effectiveness.

No, I appreciate that. And we're looking forward to the partnerships we can have around clean energy and continue to expand that. The -- now you talked about it, just the scale of this project, and I get to get up to that part of the state from time to time when you fly in and for you folks, you can now see it on Google or you can see it for yourself. When you fly in, about 50 miles out, you can see that site. That's the scale of what we're seeing here.

And what we're seeing also is a trend towards this growing scale of these data centers and so forth. I know I think your term is super clusters is something along that line. Give your thoughts on, first of all, that trend towards these larger data centers, I mean, moving away from the chocolate chip cookie factory to 5,000 acres of of this stuff. And what do you see in terms of the growth of this over the longer term? And how much appetite for compute does this industry have?

It's a good observation. And one of the things I would first say is that it surprised me in some sense, our willingness to concentrate so much load in one region. But a key to that is a lot of the benefits that you achieve around economies of scale, having dedicated mobilized workforce that you can plan on for the next 10 years comes with the spirit of partnership that we built with Entergy and local government officials.

And you need to have that level of patronage and support for the long run in order to go and invest in a project that will last 10 to 15 years across its build cycle to say nothing that we're going to be operating in these data centers. Frankly, I've never -- we've talked about demobilizing data centers. I've seen the data center close. they don't close.

Talk the chip cookie factory. If it's the one I'm thinking of.

But they tend to be around for a long time. But if you have a well-defined path towards energy resources, job creation and a social license to operate like we do in Richland Parish, then I see that, boy, that 5-gigawatt cluster strategy makes a lot of sense. And having a partner like Entergy who is willing to say, "Oh, we found what worked really well for this first pattern.

You've got a big service territory, you've got sister companies. If you can rinse and repeat and make those transactions less painful. We had a lot of negotiations with your team, understanding each other, how we work, how our legal teams work, how our accounting teams work. That's an awesome thing to harvest those learnings and rinse and repeat and cut the cycle time down on the next one, 6 months, 9 months, 18 months.

And there's a lot of benefits that accrue to both of our organizations from doing that type of strategic planning. If you think about supply chain, which is something that keeps me up at night, and I'm sure your organization as well, all those secondary and tertiary benefits can be rinsed and repeated as we go into other big campuses.

Yes. And I think the benefits of these things are starting to sync in. So other communities are keenly interested in getting some of this action for themselves, right? Brandon, you guys have a little different approach to this, but it's also one that's scaling up. Tell us more about that.

Yes. And I think the benefits of these things are starting to sync in. So other communities are keenly interested in getting some of this action for themselves, right? Brandon, you guys have a little different approach to this, but it's also one that's scaling up. Tell us more about that.

Yes. Well, I'm going to break script here a little bit and get into the interactive part of the discussion for the room. Raise your hand if you plan on using less data in the future. All right. So like the day in and day out, we were becoming more No, I didn't see any.

So day and day, we're becoming more dependent upon data. We use it to make ourselves more efficient. We use it to get our kids to and from school so that they can learn for higher education learning for solving complex cancer solutions and everything in between, F1 racing.

So I think that like there's going to be a continued need for more data over time. And there's a big focus on AI build-out. And for Amazon Web Services, it's more than just AI buildup. AI is a big part of that. Don't get me wrong. But we have a service that we've been building and selling to customers for a couple of decades. And we know that there is going to be growth from general compute, from storage and then into AI.

And we also know that AI is going to change over time. So we are definitely building these large campuses that we know right now, designing to handle the workload of AI. But having a mind of, well, what about in 10 years when something changes, how are they going to be utilized then? So AWS is building this durable business on the -- like back of what's been built over the past couple of decades.

So right now, maybe we're not building a 5-gigawatt campus, and I don't even think we've announced how many gigawatts we're building, and I'm going to keep it like that today. But we will continue to grow across the service territory where it runs our workloads that our customers can tolerate. We start to run into physics constraints. Unfortunately, we haven't figured out how to fix the speed of light that transmits through fiber. So we have some constraints there.

And -- but we will continue to adapt and grow so we can balance what our business needs along with where does it make the most sense within the system. And our planning teams work together, like we've built out a transmission modeling team where we can run simulations, Entergy can run simulations, and we can say, "Hey, where does load actually benefit?

And I think that that's how we'll continue to build this partnership because we want to keep cost out. We want to build most efficiently, but continue to grow. I don't think our Vicksburg announcement would be the last announcement if I had to guess. So I think there's plenty of runway left and look forward to the partnership.

Great. Thank you. Thank you both.

Well, very good. And I think this panel has helped illustrate the value of these partnerships and the meaningful changes, changing forever the economic trajectory of the regions that we serve.

And we're very excited about that. Now Haley and I being our most experienced opco residents. One of the job hazards of working with folks like this is we have permanent smile on our face.

Yes, we do.

Thank you all for participating. I appreciate you making the trip into this, and please join me in thanking our guests. We're going to go into a short break, and we'll be back in this room at 2:10. Thank you.

[Break]

Good afternoon. I'm Kimberly Cook Nelson. I'm Entergy's Chief Operating Officer. And you could tell from that video, we have a lot going on.

And I'm Bill Abler Head of Entergy's Resource Planning Group. It's great to see so many familiar faces in the audience, and thank you for the accolades. So Kimberly and I are going to talk about Entergy's operational blueprint for success. I'm going to start with talking about our customer-centric planning process and how that has enabled growth.

Second, I'm going to talk about our gas generation portfolio, how we're executing with scale with speed and efficiency, using our large network of partners and with standardization. I'm also going to talk about how we're taking that same framework and applying it for success in areas like solar and carbon capture.

And third, we'll both discuss how effective planning and execution positions Entergy to do even more. So supply planning has been a key enabler to say yes to large load customers and capture that growth. That is especially critical in today's tight markets. We're having a resource plan being able to serve is the first gating criteria to capturing that growth. The results of our effective planning are evident when you look at the magnitude of growth in our 5-year plan.

Our industrial customers are leading the way. The sales growth is expected to more than double over the next 5 years, coming from data centers, also traditional industrials like LNG, steel and petrochem.

This is leading to a total retail sales increase of over 50% and which is commensurately driving our resources to also increase by more than 50% over this period. So as I've discussed supply planning internally, I'm very fortunate to have a leadership team that understands the planning process.

You have Drew, you have Kimberly, you have Kimberly Fontan who all held my job at prior points in their career. They understand the planning process. Though with unprecedented growth, tight speed to market requirements, shrinking reserve margins across the country and a very dynamic federal regulatory landscape.

I have let them know that this is not your father's resource planning job. The traditional planning process does continue to underpin planning for our traditional residential commercial and traditional industrial customers. And to make sure that we deliver on the three core planning objectives of affordability, reliability and sustainability.

In addition, we've had to evolve our planning process to work with data centers to be more iterative to be develop bespoke solutions, deliver on what they're looking for, which is speed to market, firmness of service, cost competitiveness and clean energy. And we need to make sure we protect our other customers along the way.

And that means maintaining reliability of the bulk electric system as well as ensuring that existing customers benefit from these large load additions consistent with our fair share pledge. The bottom line is we have found ways to say yes to our customers through our planning process. We have many structural and regional advantages that have helped us capture the growth, we have a lot of land. We have welcoming communities. And as you just heard from the panel, data centers want to locate in our region.

In addition, being vertically integrated has allowed us to provide complete power solutions for the data centers and protect other customers along the way while we do that. And it's many of the same advantages that allow us to site and build new generation.

In addition, we have been deploying transmission strategies to lower the cost and increase the speed to market for our transmission. For example, we were successful obtaining 14 interconnection rights for power plants through the MISO ARRIS process. We are repurposing over 4 gigawatts of interconnection rights to support other new generation and we have been very strategic as to where we are citing our new generation to relieve congestion and lower the cost of transmission for the new generation. We have advantages with natural gas and as many of the same advantages that are driving tremendous amounts of new generation in our plan.

So when you look at and double-click on fuel and say, why is energy different? it's pretty apparent when you look at the network of natural gas pipelines in our region. It has a robust network of natural gas supply. And what that means is that we can more quickly and cost-effectively interconnect new generation.

We can do so either with spare capacity on existing pipes. We can work with the pipelines to rapidly expand that capacity through compression. And when we do need to build new pipe, we can do so quickly and cost effectively due to existing rights of way, supportive communities and short distances to supply.

From a supply and demand perspective across the U.S., there is plenty of natural gas. Obviously, there's a lot of growth in LNG exports. There's a lot of growth in power demand for data centers. The markets which fully see and understand these demand dynamics agrees with the perspective I just shared. When you look at the NYMEX Henry Hub fuel prices, they're trading at roughly $3.50 for the annual strip over the next decade. That is flat nominally and declining in real terms.

And even better for Entergy customers, most of the markets we get are fueled from actually trade at discounts to Henry Hub that further supports affordability and there is high liquidity in these markets as well. And one of the reference points on that map, there's about 20% of the daily flows for U.S. gas is flowing through that every day.

We have the Haynesville Shale gas in our backyard, and we have growing access to low-cost Permian gas through projects like the Trident pipeline. Trident is a great example where we partnered with an LNG customer. We partnered with the pipeline to build new pipe delivering lower cost fuel and also more flexibility of supply. And there's many other examples where we're partnering with customers and pipelines to deliver similar outcomes.

So the results of our nimble and customer-centric supply planning process are evident when you look at the longer-term plan. On the left, you can see a significant amount of load that's meant by 30 gigawatts of new and repowered resources over the next 10 years. And you can see that we are maintaining reliability of the bulk electric system along the way.

On the right, you can see the types of resources that are in our plan. CCCT have unique attributes to reliably serve high load factor 24/7 customers like data centers. And given their cost advantages, it is no surprise why the majority of the resources in our plan are combined cycles.

Now we do have many other types of resources. As you can see there, for example, we have 4 gigawatts of batteries and demand response, we have 3 gigawatts of new solar. And even without any incremental sales, those solar additions could expand by another 5 gigawatts based on the clean energy demands, of already contracted customers. Now the only way to translate that plan into outcomes for all of our stakeholders is through execution.

Kimberly is going to talk about our self-build execution in a second, but I also wanted to let you know we've been very active driving execution on the commercial side, too. We have 6 gigawatts of acquisition and contract resources in this plan.

And we have already contracted for 2/3 of that. So now I'm going to go ahead and turn it over to Kimberly, and she's going to talk about how we are driving execution across our generation, transmission and clean energy projects.

Thanks, Bill. You all heard from our customers earlier today. They are asking for more and more energy while also demanding higher reliability and more certainty. Because of that, we know we have to execute, and we're ready.

Overall, our execution strategy is simple: leverage our scale, work with our broad network of trusted credible partners and then standardize and repeat. I think you heard a little bit today rinse and repeat. We like to say standardize and repeat.

We have the capability and the resources to meet our customers' needs. Not only do we have turbines. We have lots of turbines. You'll see that in a second. But we also have breakers and transformers and generators and people and capabilities. We have it all. We have it all locked up through 2032.

Our scale gives us credibility. Our deep partnerships give us access. So let's start with scale. As you can see in this waterfall, we have secured 24 gigawatts of dispatchable generation and to answer our customers' request for more, we have it.

We've added 6 more turbines in just the last 6 months. Our large portfolio helps us to attract partners. It attracts a workforce, it attracts better pricing. And we have the experience and the proven results that we have delivered time over time.

Just in the last couple of decades, we have built multiple gas generation units. On time, on budget, overcoming some significant challenges. We're poised to do that again and more.

Next comes our strategic partnerships. Because we know people are core to our success. With scale like ours, our EPCs can attract and retain a trained workforce because we offer continuity. We're not just selling jobs. We are selling careers. We're creating a standard workforce that we can move from plant to plant to plant across a nearly identical portfolio.

Someone gets started with us as an apprentice and be a construction superintendent or more before they're done with our portfolio. In fact, we've already had over 700 people move from our first project onto our next projects, 700 people with our strategic partners, scale with the strategic partnerships also provides mutual benefits.

For our EPCs, that means higher productivity over time because the continuous improvement because of a deepening expertise within their workforce because we're having more efficient and are driving more efficient schedules, and it creates better cost competitive cost competitiveness for our EPCs.

Now we're leaning on our current consortium quite a bit Sargent & Lundy, Mitsubishi, the industrial company, but we're also continuing to explore and sign up additional EPC partners like we did with Zachary earlier this year.

Beyond our constructors, we also have strong partnerships in our supply chain, in our engineering support partners with strong capabilities that we've worked with for a very long time. And we have great relationships with.

Because of our scale, we also get high-priority responsive service from these partners. Our third element is standardization. Standardization drives efficiency and predictability. Over the last few years, we've adopted a design one, build many philosophy. It's transforming the way that we engineer, we construct and ultimately, how we operate our fleet.

It unlocks faster engineering, more timely procurement, faster construction. You can see the progress we've made in just our first few plants and projects. And we're taking that progress, and we're applying it into our schedules for our upcoming plans because it helps us meet that cost certainty that are so important for these customers that you saw on the stage today.

Standardization also unlocks supply chain. It allows us to do things like buy and bulk we're buying equipment and materials in bulk. We're buying out whole steel runs for some of our projects and allows us to access long lead equipment and allows us to negotiate better pricing. In the long term, standardization supports shared resources, shared inventories, improved maintenance strategies and a lower lifetime costs for our units.

So our current plan has unprecedented growth in it, and we have a solid plan to execute. So you might be asking, how much more can Entergy do?

Could we serve another 15 to 20 gigawatts of large load growth over the next several years?

The short answer is yes.

From a planning perspective, there are a number of ways we can accomplish this. we would take an all-of-the-above approach in balanced real-world constraints like equipment and labor availability. Here's a Stroman portfolio of how we could do that with ramp starting in 2028, reaching full service by the middle of the next decade. Ultimately, any specific solution will be determined by the customers. So we will work with -- iterate with to develop their preferred solution set.

And we can't execute on this growth. Our execution strategy of scale, partnerships and standardization works great across all of the generation that's in this plan here.

So the result of Entergy's ability to both plan for and execute on another sizable tranche of growth shows that the very high near-term growth rate we have of both load and generation is sustainable throughout the next decade.

But wait, there's more. Because we can take the same framework and apply it not only to what we have in our plan, but use it to unlock additional growth and investment in places like expanded solar, CCS new nuclear transmission resilience.

Let's take a look. Let's start with transmission. These large loads and associated generation, they need a strong backbone. So we're expanding our generation portfolio. We're building over 1,000 miles of new [indiscernible] say generation I meant transmission. We're building over 1,000 miles of new transmission with 800 of those miles being big 500 kV lines.

Now transmission is often seen as poles and wires. But I'll tell you the engineering behind it is much more complex. And we're continuing to improve our designs and our construction methods just recently across two projects applied continuous improvement principles and saved over $200 million, and we're taking those great ideas and expanding it through the entire portfolio.

Plus, you heard earlier, our teams have a track record of meeting and beating those in-service dates that our customers are relying on. We're optimizing our towers, our conductors, our foundations, our construction methods.

Just take a look at this video. So what you have right here is a helicopter bringing it across arm. What you'll see in a second is that cross arm setting into a cross-arm guide. This cross-arm guide was designed and built by our teams. I've challenged them to patent this thing.

When it lands into the crossarm guide right there, it also auto pins instead of the old manual methods that we used to use. What does that do? -- it saves hover time for that helicopter that improves safety and that also improves efficiency. And we're taking great ideas and applying it through all thousand of those miles.

Our transmission scale also supports our resiliency goals. As we're building out our transmission system, we're building it to the higher resiliency standards that we expect from today's day and age.

With that, we get incremental resiliency benefits. What does that allow us to do? It allows us to do less transmission specific resiliency projects, which opens up and unlocks the potential for more and faster distribution specific resiliency projects.

So in the end, our customers get more resiliency benefits -- so we're continuing to monitor our capital plan and investments, and we put in phased regulatory filings on resilience to make sure that we're continuing to maximize the benefits for our customers while also optimizing our spend.

Now back to gas. You might -- all this gas that we're building, you might be asking, how are we going to clean it up affordably? Our answer, one of the key answers is carbon capture and sequestration, which is still in first-of-a-kind space, which means higher costs and more uncertainty. So we need to fix that.

But we are uniquely positioned for success in this area. Starting with literally where we're uniquely positioned. In our service territory, you can see we have the geological formations that are conducive to carbon dioxide storage. We also have lots of wells that are established or in various stages of establishment. And we're right in the middle of CO2 piping infrastructure.

So we are uniquely situated. Beyond that, we apply our same strategy as we did with gas, scale partnerships, standardization. In scale, we are building dozens of gas units, nearly identical. That volume gives us -- that gives us the volume to move from first of a kind to enthobakind, where carmacapture and sequestration will become viable, affordable and investable.

In partnerships, I'm happy to announce today that we have very recently assigned an MOU with our strong partner, Mitsubishi. The objective of this MOU is to bring the eighth carbon capture unit to 50% of the cost of the first carbon capture unit. Right within that band where you heard today, it has to be affordable which right within that band that we feel like our customers are willing to pay.

Drew and I were just in Japan a couple of weeks ago, solidifying that vision with Mitsubishi leadership. Our goal and objective is by the end of the year to have a clear plan and road map of how we're going to make this happen that we can shop with and align with one of our major customers that are equally committed to clean, sustainable energy and want to embark on this portfolio with us.

Solar. You heard Bill 500 gigawatts of interest in solar. How do we do that? Scale will help us meet that interest while also meeting our philosophy of an all-of-the-above generation portfolio.

Historically, on the left, we've treated solar as individual projects bidding into one-off RFPs. Moving forward on the right, we're targeting multi-gigawatt standardized portfolios. Because we know when we bid into those RFPs, we win. That means we're competitive.

But the portfolio approach sets us up for expanded success. The first being that key pillar of scale, followed by standardized designs and constructions and working with our construction partners for more efficiency in construction methods.

This is very important because we know that solar is essential to our customers' clean energy desires. Looking a little farther ahead is new nuclear. We continue to view new nuclear as a very important baseload clean energy generation for our customers.

As of today, nuclear is still high cost with some schedule uncertainty. But we are really, really excited about all of the efforts undergoing in the industry right now to fix that. Things like NRC reforms, looking at simplifying designs through risk-informed regulations and standards or testing new technologies like accident tolerant fuel or TRISO fuel again, going after simplifying those designs. Who knows, a future nuclear power plant could resemble a CCCT just powered by a nuclear reactor.

In addition to those efforts, we need partners. We need partners that will help us to manage and spread the risk, partners like the large-scale customers government agencies, OEMs, developers, other utilities people that we can work with to figure out how to solve this unit we are -- this issue.

We are actively engaging with all of those partners because we have to figure out how to put all the puzzle pieces together to get to success. Because new nuclear is hard. But again, our view hasn't changed. We see nuclear in our future. It is important for the long run. But we won't put our customers or our operating companies at risk.

We are willing to take some risk, but it has to be proportional and it cannot violate that first rule. We will not put our operating companies or our customers at risk.

So in the end, you've heard Bill and I talk about, we have a clear blueprint for successful execution. First, we have our solid base in our customer-centric supply plan that enables growth.

Second, we have our strategy, which is consistent and proven, scale, partnerships, standardization. And third, we're applying this framework to unlock additional growth opportunities in areas like expanded solar, new nuclear, carbon capture. We do have a lot ahead of us, and we are executing and we're continuing to look forward just like we did with our gas generation procurement strategy.

Thank you all, and we'll turn it over to Kimberly.

Well, good afternoon, and thank you, Bill and Kimberly for clearly laying out how we are executing on our plan and how we can do so much more. Our financial plan reflects the significant large load growth that we have. First, it is strong and differentiated. Second, it has flexibility to ensure we manage risk, execute and deliver on our outcomes, and it enables us to do more. And third, it is an unmatched investment.

So let's take a look. Our retail sales are 9%. You heard Drew say this earlier, and that is underscored by 16% industrial growth across the period. 9% retail sales growth that is unmatched in the industry and twice what we had just 2 years ago in New Orleans. And that 68 terawatt hours that you see there, we sold 128 terawatt hours in 2026. So that is a better than 50% increase in just a few years. And as a reminder, we only include hyperscale sales at their minimum bill level and our large industrial customers at their probability-weighted level, giving us confidence in our forecast and opportunity to do more.

Now looking a little closer at our industrial sales. The colors across these 2 charts reflect the diversity of the sales in this segment. And on the left, what you see, the hyperscale, represented by the gray bar, reflects a better than 50% increase from that specific customer sector. But the chart on the right shows that by 2030, the hyperscale and the large industrial customers each represent roughly 50% of our overall customers in this segment, reflecting the diversity of our customers in the industrial space.

Now this level of investment requires a significant -- this level of sales requires a significant amount of investment, and we see $67 billion again, consistent with our sales, that's twice what we had just a couple of years ago. And it reflects the CCCTs that Kimberly talked about, the 1,000-plus miles of transmission, solar and batteries for the customers that want that, distribution to improve local service reliability. And when you translate that into -- you can see -- on the left, you can see investment and depreciation. And what you see on the right is rate base, $97 billion of rate base by 2030. Roughly $100 billion, more than twice what we had just a few years ago, a 16% rate base growth since 2025. That is the highest rate base growth in the industry.

Now this level of investment requires significant focus on affordability, and we start from a really good place with our rates well below the national average, and we would expect that to continue as our bill trajectory through this period increases roughly equal, slightly above inflation, assuming flat fuel. And we offer a number of tools to help our customers, whether that's levelized billing, pick a date, payment arrangements or new tools like the low-income rider that was filed in Arkansas earlier this year to help qualifying customers. And that doesn't include the support that you heard from Meta and AWS early, who are partnering together with us and also Google, where they are supporting our energy efficiency programs and our Power to Care program to support our customers.

We're also managing our O&M. And here again, we start from a very good place with our $1 per megawatt hour in the first quartile in the industry. And with the significant amount of investment that we're making, we would expect only a modest increase in O&M such that we would expect that $1 per megawatt hour to decrease over this period by at least 20%. And we're deploying technology and AI across our business in the operations space and vegetation management. We're targeting using AI to ensure we're effectively deploying those dollars in our call centers, we're using AI to aggregate our calls, understand our customers, improve the customer experience. And in our back office, we're using AI to help with our workflows, all focused on ensuring that we are managing cost for our customers.

Now we're also managing risk across the business to ensure that we deliver on our commitments and enable us to do more. That starts with our contracting strategy. It builds into our significantly improved balance sheet size and strength. It's supported by our very healthy liquidity and our accelerated resilience investments and our constructive regulatory mechanisms.

In the regulatory space, we have partnered with our commissions to ensure that we have what we need to create economic development in our states. In every one of our operating companies, we either have one or both forward-looking mechanisms or riders that ensure we can make the investments we need to help our customers to grow. And we're seeing that partnership show up in our returns because over this period, we expect our utilities collectively to earn roughly equal to their allowed ROEs, underscoring that partnership and underscoring how we're managing risk, to execute and deliver on our commitments.

So looking at our contracting strategy with the hyperscale and you've heard a bit of this today, but it starts with a 3-pronged approach. The first is pay your fair share. And Drew talked about that, but that means that customers pay the incremental cost that they drive on to the system and the appropriate allocation of embedded cost.

The second is support our credit, ensure that we are healthy during the construction period and beyond. And the third is get your clean attributes from us. And when we couple this 3-pronged approach together, we help our customers to grow

in our service territory, we support a healthy utility, and we support all other customers. And it translates into terms like 15- to 20-year contract lengths, significant minimum bills, credit commensurate with the customer with adjustments as appropriate if that credit profile changes and early termination provisions should those be needed. And you heard Bill talk about how we're managing supply and load to ensure that as we're building the assets, these customers can ramp. And we're offering demand response options for them to also ensure that other customers are supported as they ramp up.

We're also continuing to focus on our storm exposure, both physically and financially. From a physical perspective, the infrastructure that we're deploying for the large customers makes our system more resilient and is built to the latest standards. And the accelerated resilience dollars that we have approved are also furthering the strength of our system.

From a financial perspective, we saw structural changes just last year in Louisiana and in Texas that enable us to significantly reduce the amount of time it takes to recover those dollars when a storm does occur, supporting our balance sheet and lowering cost for customers. And our very healthy liquidity position means that we are able to manage through should a storm occur and our growing balance sheet size means the storm of $1 billion is substantially less, 70% less than it was just a few years prior.

We're also focused on credit. And as you know, we have spent a lot of time working to improve the strength of our balance sheet, and it is showing because on the Moody's basis on the chart on the left, what you see is capacity against our threshold at least 15% or greater in every year in the forecast period. That's 100 basis points of room against our thresholds. In 2025 -- we closed at 2025 with the highest FFO to debt on a Moody's basis in the industry, significant focus on improving our balance sheet strength here.

And you see the same thing on the chart on the right with S&P, where we have space against our threshold to manage the business. And you see some differences in the calculation that's primarily methodology differences in how cash from customers is treated. But the message is the same. Focus on our balance sheet gives us the ability to execute on our plan, the opportunity to do more. The uplift that you see in the back end of the period is related to investment tax credits for solar and batteries, which we would fully expect to provide back to customers to support customer affordability, but that provide flexibility in the near term.

And as a reminder, we only include nuclear production tax credits when they're earned. So the 2025 earned credits are reflected in 2026 as they're expected to be monetized this year. The '27 through '30 include no nuclear production tax credits. giving us confidence in our plan, flexibility if they incur an opportunity to help manage affordability for our customers.

Now that brings us to our earnings per share. And when we roll forward our adjusted earnings per share, we see greater than 8% growth throughout the forecast period through 2030. And the underlying growth rate is double digit. Consistent with what I said on the first quarter call, the year-over-year growth for 2030 is similar to the year-over-year for 2029 or 12%. This is the highest adjusted EPS growth rate in the industry. And it comes with clarity and transparency by year of our expectations across the period, a clear executable growth trajectory.

Now of course, we have to finance all this investment to ensure that we can deliver on our plan, and we are well on our way because you see that the funds from operations support roughly 50% of the funds that we need. We've also assumed $3 billion of junior subordinated notes, $7 billion of equity, and our alternate financing assumptions haven't changed in this forecast, meaning we've assumed a couple in this period.

Now our $7 billion equity, that is in the bottom end of our 10% to 15% equity target on our total capital plan. This is a key differentiator for us. And the block issuance that we did just last month means that we have sourced roughly 60% of our equity needs, giving us ample time to source the remaining as we don't need it until 2028 and giving us flexibility to execute across the planning period. And we've assumed a 6% dividend growth rate over the period, balancing supporting the dividend and supporting the growth needed to help our customers continue to grow in our territory.

Now Drew, Kimberly and Bill talked about the opportunity to do more, and we are ready and able to finance that opportunity. We see 10% to 15% equity on a percentage of total capital plan on a run rate basis, supported by cash from operations, significant cash support from our customers, our constructive regulatory mechanisms and alternative financing tools like the first-of-its-kind build-to-suit lease in the utility industry that we closed on just last year.

Managing our equity growth, while enabling us to continue to grow and deliver not just on what we have, but the opportunity for more. Our EPS growth trajectory is the strongest in the industry, and it is not even to close. And our premium reflects that in the near term, but it trails off in the long term. So perhaps the question you have is, does it last? How long does it continue?

And the answer to that question is we see greater than 8% growth rates in the base case through at least the middle of the next decade, greater than 8% growth in the base case through at least 2035. We have a strong differentiated plan with flexibility to deliver on the plan, manage risks and enables us to do more. And that makes us an unmatched investment.

And with that, I'll turn it over to Drew to talk about that additional opportunity. Thank you.

All right. Thank you, Kimberly. And so you've heard about our story. We have a great story, and we have even greater opportunity ahead of us. Our story is one that creates value for all 4 of our key stakeholders. And as Kimberly said and others, there are some real amazing attributes associated with it. The 9% retail sales growth outlook. The $67 billion capital plan is $13 billion on average a year. The solid credit outlook that's well north of any critical thresholds and of course, the unmatched earnings per share growth rate. These are great things. But as I said earlier, wait, there's more. There is more opportunity out there. You heard from our customers today talking about the sales growth that they are going to drive themselves. They have more needs, more interest, more objectives, and we are a preferred partner for them.

So we expect that there will be more opportunity in that space. It's not just the data centers, though. It is also our traditional industrial customers. That growth opportunity is still there. And as we look forward, there's more opportunity beyond that in terms of the clean energy and the electrification trends that are still ongoing. And then Kimberly talked about the potential to unlock these other strategies. And you heard from the customers that they are interested in clean energy. And you know our residential and commercial customers are still interested in resilience. So these are opportunities that we're working hard on.

Let's talk a little bit more about the sales growth. So we've shown you this before. We have a funnel that a pipeline just like everybody else. This pipeline has been growing substantially. Just a year ago, it's grown over 20% at just about every single point from the beginning to the end at the ESAs. And that is what allowed us to backfill this disclosure on the right, our 24-month ESA outlook. And that is the 7 to 12 gigawatts for data centers and the 3 to 5 gigawatts for other industries. That is substantial and it's continuing to grow even as we are knocking it off.

In this past spring, we signed a number of electric service agreements with data centers and with other customers. So this opportunity continues to be very strong. I keep this disclosure here in mind because I'm going to talk a little bit about and follow up with what Bill Abler was discussing, how are we going to serve that next 15 to 20 gigawatts. And as you can see here, above our base case and as Bill described, there is opportunity for some of the growth to show up in our current outlook period.

The bulk of it would be in the first half of the next decade, but it can also show -- begin to show up in the next 5 years. And of course, the capital plan would follow that. The capital plan over here would say that there is opportunity for incremental capital deployment in the current outlook period. And of course, the bulk of that growth would be in the first half of the next decade.

Kimberly pointed out the base case. And she said, in the next part of this, the first half of the next decade that we expect that in our base case, we would continue to be able to grow at greater than 8%. And if you add in these sales growth opportunities, which roughly are equivalent to the midpoint of our disclosures on the previous page, that would get us well into the double digits again. So that's a significant sales growth opportunity that's ahead of us. But as Kimberly Cook-Nelson described, there are things that we are working out on to unlock these other products and services that our customers are asking for, using things like scale, partnerships and standardization, advantages that we have because of what we're doing already.

And in some cases, there are other advantages like geography that are important to what we can do here for our existing customers. So this is a significant opportunity for us as well that is not baked into our outlooks. So if you put it together, you have unmatched earnings per share growth for the next 5 years. And then you have the potential to continue that growth at least our base case level, and we have clear line of sight above that with our sales growth opportunity and then even more opportunities beyond there. So that lays out a significant growth path for the next 5 years.

If you permit me to even look further ahead, but wait, there's still even more. And this is going back to some discussions that we've had with you over the last several years. Coming out of 2020, we did an analysis that said using the same growth drivers that we've been talking about, technology and data centers, large industrial growth, clean energy and electrification that we should expect that we could triple our 2020 sales by the time we got to 2050. And we've updated that. We've grown a lot.

As Kimberly said, we had 128 gigawatt hours of sales last year. That was up well over 20% from 2020. We updated our analysis with the same drivers, and we still expect to triple our sales growth from 2025, a much higher base by the time we get to 2050. That is significant growth and significant opportunity. And when you think about the unmatched earnings per share growth in the next -- the current outlook period, the opportunity to meet that in the next 5 years, looking at this analysis, we really don't expect it to slow down anytime soon.

So it's a great plan and an even greater opportunity. This is going to create value for our 4 key stakeholders, and we are excited and honored to have the opportunity to really work on this and bring value to all of our stakeholders, including all of you as owners. It's a unique position that we're in to be able to execute on this and we're looking forward to it.

Thank you very much for your time today. We really appreciate the opportunity to tell you our unique customer-led growth story. Thank you. So we are going to reset now and do the question-and-answer session. So you have a chance to ask your questions. So just give us a moment to get the chairs back up on the stage, and we'll go again.

All right. Okay. So we have some microphones, which are going to go around the room. And so we'll start taking the questions.

Andrew and team, obviously, nuclear is kind of a very large opportunity in front of the industry, but not without its risks. There have been numerous MOUs on nuclear, including with Entergy. So hyperscalers keep backing the SMR. Can you elaborate maybe on the inbounds are focused on small nuclear, large-scale nuclear? And if the interest starts translating into appropriate risk agreements, what regulatory constructs do you see would be needed?

Well, we're still a long way from regulatory constructs. I'll say that. There's been conversations for both advantages and disadvantages to both, right? If you talk about the AP1000s ,you've got a large-scale economies of scale that go with that, and you have the fact that those have been built. But the AP1000s are taking advantage of some of the newer regulations that Kimberly was talking about. And so they may be able to reduce cost and risk in a way that the AP1000s can't. We're working through all that and trying to figure it out. I don't know if you want to add anything to that.

No, I would just say from a technology standpoint, I mean, there's plenty of technologies out there that will be successful. And we are ready to follow the lead of a customer, what the customer would like us to bring to the table. We can make any of them work. It's the risk and the other constructs that we need to look at.

Yes. I don't think we'll be able to rely very cleanly on the regulatory construct. We need to make sure that the risks are managed by -- in another way. So we could get some help from the regulatory construct, but we need to make sure that the risks are coming back to our customers in a significant way.

And maybe to elaborate a little bit on just the regulatory constructs in general, of the questions around Genco or any kind of separate entities in building out the generation. Is there -- do you see any kind of opportunity set there with the Genco given kind of the continued expansion of that backlog, as you mentioned?

Yes. I mean it's something that we've looked at. We know that there are other utilities who have done something like that. So it's something we'll consider. We want to make sure that the customers continue to benefit. That's probably really the key criteria. All the value that we're able to create for our existing customers and the way we set it up, we think that works really well. But if there's other ways to create even more value for customers, certainly, we would look at them.

And maybe just a quick one for Kimberly. Can you maybe talk about the ESAs that are kind of starting to ramp up soon and going beyond the minimum take levels? Is there an opportunity to kind of change regulatory strategy around recovery? Does that kind of give you some leeway in terms of stay outs or deferring some rate cases?

Yes. I mean we only include minimum bills, as I said. So it does give you opportunity for additional revenues in the period. We have to decide what we do with that. So in Mississippi, you heard Superpower Mississippi referenced, you could use that to deploy other investments across the board. You could use it potentially to move in your ranges. You could use it to help customer affordability. I'll point to Phillip's FRP, which was filed just earlier this month. He did not have a rate change in his FRP. I think you're starting to see the effects of large customers helping that $7 billion is really coming from not having an increase in your embedded cost because structurally, those -- you've got more customers that are paying those costs.

Jeremy Tonet, JPMorgan. 10 years is a long look longer than Entergy has talked about before. I was just wondering if you could expand a little bit about what's locked in there? What gives you the confidence now to think about that such later data growth, that type of duration?

Yes. We certainly had a lot of discussion about that longer-term growth trajectory. And we are very clear in our 5-year period, we give you specific clear outlooks. But what we see is greater than 8% off of 2030. And Drew talked about the elements. So we talked about 7 to 12 in the data center space, 3 to 5 in the -- gigawatts in the other and customer space. That sales growth, which is what we've seen over the last 5 years, we don't see any reason that, that stops, and that's going to continue to drive you above that 8% would be our expectation.

And then just unlocking other investments for our customers, whether that's the clean energy he talked about or other elements. But really, we don't have the year by year through 2035, but we see enough opportunity that we're comfortable with that growth rate through that period.

Got it. And then at the risk of getting too far ahead of myself, the upside scenarios, I was just wondering if you might be able to provide a bit more color or quantification or some sense of what could that look like?

I think we gave you what we're comfortable giving you, but better than 8% in the base case, that sales opportunity moves back to double digits, as Drew said. And the investment is really going to depend on what our customers are willing to sign up for. If we can drive the CCS down, like Kimberly said, we make those incremental investments. There's none of that in the period. So there's a lot of opportunity for investment. But we won't do it on the back of the regular customer. We're going to need our large customers to help support that, which will help us continue that significant growth rate.

Paul Zimbardo from Jefferies. I don't want to pin you down on the mix too much. But as you look beyond 2030, obviously, the next 4 or 5 years heavily driven by gas and generation almost half the plan. Does that shift to be more renewables? You mentioned a little bit the nuclear, the CCS. Could you give kind of a flavor of where you see the mix of the capital framework evolving in that 5-year plan?

Yes. I think it's -- Bill described it, but maybe, Bill, you could elaborate a little bit more on the mix.

Yes. Paul, you kind of got a sense for what we're thinking for the next tranche of growth. I mean, there clearly is more combined cycles in there. Those are the workhorses to deliver the 24/7 energy, but it is truly all of the above that delivers that speed to market, which is a key attribute. In some cases, it's a bridging solution, too. It may be whether it's an on-site generation or whether it's extending the lives of some of the existing generators, how do we use that to help serve them now, but maybe bridges to a different solution down the road.

Okay. Great. And then one other one, just in terms of the potential ESAs, the large load customers that your 2 big ones up there on the stage, are you seeing more clustering? And should we think about like the pipeline is existing customers expanding campuses, expanding in the region? Are you seeing some diversification, as you mentioned, like the non-data center side as well?

The answer is yes. The clustering hubs, kind of similar terminology, a little different structure, but they're coming at with larger scales. And I think what you heard from the customers is they see synergies, whether it's through the partnership with us, whether it's through workforce synergies. So I think they like scale. We like scale, and I think there's a lot of benefits of building at scale.

And if I could add to that, we're seeing all of the above. What we're finding though is with the larger balance sheet, better credit quality companies, they're looking for larger scale. We're just seeing that ramp up over time. And so it is truly kind of an all of the above. You still have a lot of interest in what we will call smaller data centers, maybe sub gigawatt, but very large, but the trend moving towards those larger super clusters.

Haley, do you have anything to add to that?

No, I would agree. And they've all situated themselves with enough land to grow. And that's one of the area they've gotten where they could come to the south and find large areas or rural areas that allow that expansion to happen. And so they've all positioned themselves for that opportunity.

Nick Amicucci from Evercore ISI. I have a 2-parter here that kind of dovetails with each other. So just with the amount of generation that you guys are building simultaneously, what -- how much schedule and budget contingency is kind of embedded in the plan? And then just to piggyback on that, the plan also has 1,000 miles of transmission lines. So how dependent is the generation on that transmission build-out and the interconnection keeping pace?

You want to talk?

Yes, I'll start. We scheduled out, particularly if you think about the generation with the large customers like the hyperscalers. We worked with them on what delivery points they wanted. But we built in enough flexibility that we believe that we could deliver on the schedule that they needed. And yes, you do need the transmission to connect with the generation in order to allow them to ramp up. But we plan that out just like we would plan out any build-out like that.

So we believe we have a schedule that we can deliver for our customers and make sure we're meeting them. And you heard Brandon say earlier, we delivered the substation before the customer could even take it. So we're seeing some good outcomes come out of part of our execution.

And I talked about continuous improvement through our standardization, and we're continuing to get better and better. I saw that on a couple of the slides. We're baking those improvements into our schedules to again make sure that any issue that comes our way, we have some room to maneuver through it and make sure that we keep that certainty that the customers are looking for.

And Bill, do you want to talk a little bit about the transmission and the linkage to the generation, how those things have to work together?

Yes, absolutely. So it somewhat depends on the generator situation. There's a MISO interconnection queue. We got to have physical transmission. So it is dependent, but we certainly map those things out in our processes. And the other thing I wanted to mention on contingency, it's not just about budget contingency. It's about resource adequacy contingency. So we're building in a lot of provisions in our contracts so that if there was a delay in the generator in-service date, we don't firm up the service until that date. So that helps make sure we ensure bulk electric system reliability.

Okay.

Brian Nolan from RBC. I just had a quick one on the 15 to 20 gigawatts of potential capacity from the RFP. Understood that it's illustrative, but there's a ton of growth here. So just trying to wrap my arms around it. The base case here, that's kind of what's underpinning that 8% EPS growth, and I assume that the 15 to 20 gigawatts above that, is that kind of what's getting you into that sales and that potential upside unlock? Can you just kind of parse like the difference between those 2 and kind of where that falls out?

Yes, the 15 to 20 gigawatts is not baked into that base case. That's right. And what Drew talked about is that sales opportunity is that second tier, which you would need to get into that 15 to 20 gigawatts. I think in his sales opportunity, he was in the middle to lower end of the total 10 to 17 gigawatts. So roughly lines up that 15 to 20 gigawatts would be a little more than that. But underlying, that's not in your base case.

Understood. So when I'm looking at the slides, kind of where you go from 2030 to your base case in 2035, none of this would be embedded in that base case out to 20 gigawatts.

That 15 to 20 gigawatts is not embedded. That's right.

You guys have talked about sort of significant cost reduction expectation in carbon capture technology. Can you give us sort of a sense of where -- what the cost is today? And what type of demand for carbon capture are you seeing from your data center type customers?

Yes, I don't have those numbers in front of me, but it's definitely higher than what our customers are willing to pay right now, which is why we have to bring the cost down. Our data center customers are interested in clean energy. They talk about that a lot, and we're working together with them on what those solutions could look like, whether it's solar plus batteries, whether it's carbon capture, looking for all of the options and putting them on the table. We do feel strongly that we'll be able to drive down the cost of carbon capture, working with our partners, but we're not there yet.

We do have a slide in our appendix too that shows you a range of potential LCO, levelized cost of service, for different technologies. And it does have carbon capture, there is a range because there is uncertainty there. But you can kind of get a sense for what we're thinking that range might be currently.

Andrew Weisel with Scotiabank. Another question on the added generation capacity. So you talked about upside of 10 to 17 gigawatts of customer demand relative to the base case, and you mentioned the 10 gigawatts of CCGT that you got secured. Would the first 10 gigawatts necessarily be served by CCGT? Or would that also be a mix of the -- all of the above? And then more broadly on gas, we heard from the hyperscalers, they are committed to net zero by 2040. So how do they think about the next few gigawatts being served by gas as opposed to something not emitting, especially if nuclear continues to be challenged, shall we say?

Yes. So that's actually 10 turbines, not 10 gigawatts. And each one of those turbines is consistent with our [ Novum ] one-on-one configuration, which is roughly 750 megawatts. So it's more 7.5 gigawatts rather than 10 gigawatts. When you look at that illustrative thing that I showed with the 10 to 15 (sic) [ 17 ] gigawatts it is similar where some of the resources that are available earlier include like on-site generation, include like batteries because when you look at the -- whether it's the EPC market or whether it's even the interconnection process through MISO, there are certain things that can drive out that time line further.

So what can we do to get that ramp earlier with some other technologies. But again, recognizing that as we get to that 2030, '31, '32 type time frame, when we can start adding a lot more combined cycle to the system at that point.

I think as we've been having our discussions with our customers as well, each one has a different outlook and what they like a little more than another. So we continue to work with our customers, be customer-centric, iterate with them on what the supply plan is that meets their individual desires and needs.

And I would just add then on the turbines and the proximity to clean energy goals that our customers have. We're aware of that, and that's why we've got a new MOU with Mitsubishi to try to find a way to get those to be economic because we think that gas will be an opportunity for people to generate electricity for a long period of time, but we'll have to find a way to make it clean at the same time. So that's why we've embarked on this MOU with Mitsubishi to try and find a key to unlock the door on bringing the cost down overall for CCS.

Okay. And one more for Drew and Kimberly. I know you've been asked this many times, but another financial update, another opportunity to ask. You continue to point to greater than 8% as the CAGR and yet the year-over-year growth rates are more like 12% to 13%, it's a pretty big delta there. Why the disparity? Is it conservatism? Is there something else holding you back on the CAGR? Can you just kind of address that gap?

Yes. Our view hasn't changed on this. It is greater than 8%. It may be well above that. But you don't necessarily see it linear in any given year. We want to be consistent about that greater than 8%. And also, it helps with all of our stakeholders beyond just -- I know we're talking to our owners today, but beyond just this group. And so just -- it's a solution that gives clarity and transparency across the board without having to make those adjustments every single time. I'll also point to, in the 5-year period, we give you every single year. So we have the clarity that enables you to calculate that. So that's how we're threading that needle.

It's Bill Appicelli from UBS. Just going back to the earlier points on the ESAs and minimum volumes. I mean can you provide any color about the earnings sensitivity once you get out into 2030? I know currently, a 1% change in industrial is relatively small to EPS as we stand here today for '26. But how does that number evolve? I mean, can we kind of contextualize what that earnings sensitivity is for being above those MVCs?

Yes. We haven't given that, and we haven't given it for a couple of reasons. One, we haven't given what the minimum bill is. We've said it's significantly more than 50%. The other is what I said earlier that we'll have to decide what we do with that. So it could be affordability, could be supporting other investments or it could be trading something else or giving some EPS. So if those materialize, we'll deal with that in the year that it comes in. But until then, we'll have to decide -- we want the flexibility to decide how we use that.

And I'll just add that there is high -- the minimum bills that we have are high. And we do not expect even the data centers to run at 100%. So the gap is maybe not -- it's not as big. So there's certainly opportunities there, but they're not going to completely reset expectations for the future, I don't think.

Okay. And then just one point of clarification. When you talk about the earnings growth through '35, are you anchoring that off of the new midpoint for 2030 today? So when we think about sort of when you talk about, Drew, you mentioned some of these opportunities that could push you into double digits. So we should be thinking about that off of kind of the '30 starting point to '35? Or is that over sort of the totality of the 10-year horizon?

Yes, that base case, that incremental greater than 8% is off of 2030. So that's a base case off of that.

Dave Arcaro with Morgan Stanley. I had a question on the equity financing plan, 10% to 15% of your capital plan being equity funded, much lower than most utilities in the space. And I was wondering, how do we think about that? Is that structural now as we look if there's upside to the current plan, if we look out into the 2030s, does it stay at that funding level? Can we think that as long as you've got these large load customers still driving a meaningful part of the growth outlook that it's going to be in that same kind of proportional range?

Yes, that's right. We don't see anything structurally change in that 10% to 15%, assuming you have the support of the things I talked about. So the large customers, as you said, and how we structure those contracts that our mechanisms continue to support strong cash from operations. But fundamentally, we don't see differences that would structurally change that 10% to 15% over the total capital plan. You can move within that range, certainly.

Rich Sunderland with Truist Securities. Turning to the solar opportunity that 5 gigawatts referenced. I'm curious if standardization has changed the customer conversations around that and how you see that playing out over resource mix over the next 2 to 3 years for new additions?

Well, maybe we'll start with Kimberly, and then we can go to Phillip and Haley on that.

Sure. I mean we're taking advantage right now. There's a lot of projects that are honestly being sold right now with the customer -- with the tax credits. And we're looking at ways to bring those together and package them for the customer as a large portfolio because when the customers are talking to us, they're not just talking about one small project. They're asking for large expanses of gigawatts.

So we're working with local vendors, local suppliers, applying the framework that we discussed earlier around scale, partnerships and standardization and really starting to see some traction and benefits come out of that. But we haven't put together that full portfolio just yet. It's coming.

I'll just add that many of our customers still have sustainability goals and solar is the near-term solution, right? Ultimately, we'll see other technologies. We're working on CCS. We're certainly have an interest in nuclear when we get the framework and the risk management right. But you have these goals and solar is the path we have that we can do today, and we're working on making it more efficient, making it more affordable, making it more -- work better for our customers. And we think there will be considerable interest in that for some time.

And the same goes with us too. We've -- for example, in the deal with AWS, in the first deal we signed, we had an agreement to seek 650 megawatts of solar there. We're pretty much most of the way along that. But in the second deal, we also agreed to do RFPs of around 250 plus each year. In fact, another one of those RFPs is going out this week, I think, pretty soon, where they have an opportunity to take or leave those opportunities. So there's still a lot of interest for them to look at that.

And I would just add that as you heard from the customers earlier today, it's all about economics. And I think, as Kimberly described, we are winning the RFPs because we have lowest cost of capital, and we have the ability to -- we don't have any development fees. We can execute really well. So those are basic advantages. But if we add this scale dimension in, we think we can be very, very competitive and start to fulfill those customer needs on a much larger basis.

And then on the accelerated resilience front, you spoke a little bit about transmission enabling more capital flowing to the distribution side. Could you unpack that a little bit more in terms of what's in the plan and what's the opportunity and over what period that opportunity falls? So how are you thinking about managing accelerated resilience in this next phase of growth?

Yes. We have what was approved in the first round in the plan. So it's a little more than $2.1 billion. New Orleans has filed $400 million. You probably saw that. I would expect -- so I can speak to that. I would expect Louisiana to file in the next few months. I think what you'll see is a continuing phased approach because there's support for the resilience but there's also a real focus on affordability. And so it's really balancing that out. So it gives us the opportunity to continue to step into that while we're continuing to harden the system with just the broader investments.

And I'll just add, look, we're learning as we go. We're becoming more efficient in the engineering. We're becoming more effective in how we plan these things. So we look at what we've done already and how effective that has been. We had undergrounding, for instance, we deemphasized undergrounding a little bit because we think we can do it more efficiently, more cost effectively with overheading that is very robust. And so it really is thinking through that plan. The transmission build-out that we have gives us an opportunity to do more on that distribution side in a very effective way.

And I would just also throw in one more point there that the things that Kimberly was talking about in terms of those -- the extra scale of the transmission and things like that, that gives us more opportunity in the same space. And so that's -- there's just another log to throw on the fire to create opportunity for us to keep going in the transmission resilience space.

All right. And that's 30 minutes. So thank you all for your questions. We're going to move to the reception. Thank you.

Thank you.

Good morning. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to Entergy First Quarter 2026 Earnings Call and teleconference. [Operator Instructions]. I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation. Liz?

Good morning. Thank you, John, and thanks to everyone for joining this morning. We will begin today with comments from Entergy's Chair and CEO, Drew Marsh, and then Kimberly Fontan, our CFO, will review results.

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. Entergy 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 productive first quarter in which we delivered strong financial results. We launched our Fair Share Plus pledge and we advanced customer initiatives with the execution of several electric service agreements, including the one with Meta that improve our financial outlook well into the future.

Beginning with financial results. Today, we are reporting first quarter adjusted earnings per share of $0.86. 2026 guidance remains on track and we are increasing our already strong adjusted EPS outlook driven by 8.5% Retail sales growth. Now I'll cover the business updates in the quarter, and as always, I'll start with the customer.

For several years, we've worked with stakeholders to recruit data centers and capture the transformative impact they can have on our communities through investment, jobs and other support, while at the same time, protecting and benefiting existing customers. Earlier this year, we formalized that commitment with the launch of our Fair Share Plus pledge. The Fair Share Plus pledge is a set of guiding principles that ensures that data centers pay their fair share for the power they consume, plus additional benefits for customers and communities. Our pledge aligns with the Rate Payer Protection Pledge that our customers signed with the White House. Fair Share is achieved in several ways; minimum builds and contract lengths cover incremental costs, termination provisions ensure current customers avoid unneeded costs, clean energy terms support a potential future transition and strong credit terms give us confidence in all of it.

Fair Share also means that data centers cover their portion of fixed costs that our current customers pay for, today. The fair share portion alone is a source of the estimated $7 billion of benefits we have highlighted and current customers' bills will be lower than they otherwise would have been because data centers are paying for the incremental infrastructure they need as well as their share of fixed costs. The Plus component is all of the community benefits originally envisioned by our state and local leaders, including well-paying jobs and targeted workforce development, a substantial influx of new support for schools, nonprofits and other state and community needs and multiplier effects from new businesses and employment opportunities that come about, because of the data centers. The plus component also includes a stronger electric system with reliability and resilience benefits, lower average fuel costs driven by more efficient generation and specific customer benefits like low-income or energy efficiency support. The plus component is clearly valuable and it is in addition to our estimated $7 billion in customer benefits.

We're proud that the framework we committed to more than 2 years ago was already providing significant benefits for our customers and communities. And those benefits will compound well into the future. I cannot say enough about the tremendous work our employees have done to create this transformative opportunity for our communities while also providing so much value for our existing customers, and we aren't done yet.

In late March, we announced a new Electric Service Agreement with Meta for another data center in North Louisiana. The Fair Share value from this agreement alone is expected to be $2 billion, which is included in the $7 billion I mentioned. In the Plus category, over the next 20 years, Meta has made other commitments. $140 million for energy efficiency programs and $60 million for our Power to Care program. Entergy Louisiana will match Power to Care funding, bringing the increase to $120 million. For context, that is a 5x annual increase for 2025 levels that will meaningfully improve outcomes for our most vulnerable customers.

Shortly after executing the agreement, Entergy Louisiana filed an application with Louisiana Public Service Commission, requesting approval for assets needed as a result of adding the new Meta data center to the system. The investment includes 7 new combined cycle units, transmission infrastructure and battery storage facilities. The cost of the proposed facilities will be covered by payments from Meta, whether from their tariff or other contributions, yet all customers will realize reliability and resilience benefits and lower fuel costs from these investments.

We also agreed to pursue another 2.5 gigawatts of renewables, and further investigate CCS, nuclear upgrades and new nuclear to support Meta's clean energy goals. We'll add projects to the plan as assets are identified.

This month, the commission affirmed at our request falls under their new Louisiana Lightning Initiative, and they directed that the procedural schedule should support a decision at the December B&E meeting. The commission's Lightning initiative as part of Governor Landry's Project Lightning feed to support economic development that provide significant benefits to state and local communities. We are requesting approval for more than $15 billion in capital with about $14 billion in our 4-year plan. As a result of the agreement and pending the approval request, we're also raising our sales and adjusted EPS outlook. Kimberly will discuss in more detail.

Beyond the Meta agreement, so far this year, we have signed ESAs totaling over 1,000 megawatts. These agreements were from multiple industries across all our operating companies, and they indicate that customer growth beyond data centers remains robust in our region. We also continue to receive data center interest within our service area. After all agreements signed to date, including the recent agreement with Meta, we still have a pipeline of 7 gigawatts to 12 gigawatts of potential data center customers that are not in our plan.

Moving beyond the customer growth update. I'd like to cover a few more items. Operational excellence remains a key focus area, and we will talk in more detail about that at Investor Day. For today, I'll share a couple of highlights. Orange County Advanced Power Station achieved its first fire milestone, bringing it one step closer to delivering reliable power for our customers in Texas. We expect the plant to be fully online in late summer. Recently, our power delivery team identified more than $30 million in capital savings on the Commodore to Churchill 230 kV project. Our engineers developed a solution, which improved the design, lowers material costs and enables faster customer delivery. Importantly, the improvement can be applied to future large transmission projects. This kind of innovative thinking, combined with the scale of our capital plan will continue to lower cost for customers and unlock additional customer investment opportunities.

Entergy Texas is working to expand its spinning generation capacity to serve a growing customer base. Following the commission's feedback, they issued an RFP in February for combined cycle capacity and energy. Across our system, we continue to expand our renewables portfolio, driven by our customers' desire for clean energy options. We have active RFPs for more than 1,600 megawatts of renewables and storage, and we have over 4,500 megawatts of renewables and storage in various stages of negotiation after selections from prior RFPs in Arkansas, Louisiana and Mississippi. Roughly 2/3 of the megawatts in negotiation would be owned. In addition, we are actively managing proposals through Louisiana's Accelerated Renewable Review Process. These are important tools to help us identify projects supporting customers' clean energy goals.

As we indicated on the previous earnings call, Entergy Arkansas filed its base rate case in late February, requesting a $45 million rate change, which is less than 2%. Because bill impacts vary by customer type, the residential impact would be less than 1%. Some of the features that we requested include an optional time-of-use rate that provides residential customers with the opportunity to lower bills by shifting energy use to lower-cost hours, and low income rates that provide a 50% discount on the customer charge for households to qualify for LIHEAP assistance. We also elected to resume Entergy Arkansas for [indiscernible] FRP after the rate case is resolved.

Entergy Mississippi filed its annual formula rate plan with no change requested. Arkansas and Mississippi, both have mechanisms that provide cash allowance for funds used during construction, for investments to support significant economic development projects. To that end, Entergy Arkansas filed its first annual generating Arkansas Jobs Act rider in March and Entergy Mississippi updated its interim facilities rate adjustment in January. One additional comment about Mississippi, the state recently passed legislation authorizing securitization of costs associated with Winter Storm Fern. Kimberly will provide additional details on that as well.

Beyond Fair Share Plus, our employees continue to work every day for the benefit of the communities we serve. We recently participated in the industry's LIHEAP Action Day in Washington, D.C. to advocate for energy affordability for our customers in need. Congress approved an appropriations package that includes a $20 million increase for LIHEAP, which reflects growing recognition of the program's importance. For more than 15 years, Entergy has also provided free tax preparation for low- to moderate-income customers at sites throughout Entergy's region. In 2025, we helped customers receive $54 million in earned income tax credits, putting money directly into our customers' pockets.

Finally, we are very excited about our upcoming Investor Day in June. We plan to walk through the clear line of sight for our multiyear strategy and outlook in detail. And you'll hear directly from our leadership team on the opportunities ahead. Highlights will include a conversation with large customers on how we partner together to create better outcomes for our key stakeholders. A view into our operational strategy to successfully execute on the large build cycle ahead of us. A discussion of the work we are doing to unlock additional capital deployment opportunities, a review of our approach to maintaining financial discipline, and finally, a deeper dive into the significant near- and long-term customer growth opportunities to sustain our strong growth well beyond our 5-year outlook.

We had a productive start to 2026 with solid progress and execution across the business, and by continuing to put our customers first, we will deliver premium value to each of our key stakeholders. We look forward to discussing this in more detail with you at our Investor Day. I'll now turn the call over to Kimberly for the financial update.

Thank you, Drew. Good morning, everyone. I'll now review our financial results and provide an update on our long-term outlook. Our results for the quarter were straightforward.

Our adjusted EPS was $0.86 as shown on Slide 4. The primary drivers were from the effects of investments made for our customers, including regulatory actions net of higher depreciation expense, taxes other than income taxes and interest expense from financing capital expenditures. The per share increase was partially offset by a higher share count from settling equity forwards. Industrial sales growth was very strong at 15% and new and expansion projects continue to ramp up their operations. Overall Retail sales increased 6%. The earnings contribution from Retail sales growth was essentially neutral as higher revenue from the Industrial growth was offset by the effects of weather, including positive weather in the first quarter of last year.

As Drew discussed, the Meta contract creates significant customer and community benefits. In addition, we are refreshing our outlook to reflect the new agreement and other minor updates. The highlights are summarized on Slide 5. This agreement further strengthens our Retail sales outlook. We now expect approximately 8.5% compound annual Retail sales growth through 2029, driven by 16% Industrial growth. Data centers continue to be a significant driver along with growth from a variety of traditional Gulf South industries, including LNG, industrial gases, petrochemicals, agricultural chemicals and primary metals. As a reminder, we only add hyperscale data centers to our plan once we have a signed Electric Service Agreement, and then we include them at minimum bill levels. This conservative approach ensures that we can count on the revenue that we've included in our plan.

Our customer-centric forward year capital plan is now $57 billion, which is [ $14 billion ] higher than our plan last quarter. The increase includes the investment needs resulting from the new customer agreement, primarily 7 new CCCTs as well as Battery Storage projects. All 7 CCCT have in-service dates in 2030 and 2031, such as not all of the capital for these units is in our 4-year horizon. For the transmission investments in the filing, we've made a conservative assumption not to include them as we work through financing options. We have also not yet included the Renewables or River Bend nuclear upgrade investments discussed in our filings. These would be added to the plan as specific projects are firmed up.

The equity associated with our 4-year plan is now $6.6 billion at the lower end of our target range of 10% to 15% of the total capital plan. Our strategy to be proactive in addressing our equity needs provides certainty and flexibility, giving us ample time to raise capital. We have successfully sold forward contracts through our robust ATM program as well as the block transaction we executed last March. The agreements we have in place cover about 30% of our 4-year need. With $1.9 billion already contracted, that leaves $4.7 billion to be sourced, which is not expected to be needed until late 2027 through 2029. Our forecast also includes $3 billion of hybrid instruments [ at parent ].

Slide 6 summarizes our credit ratings and affirms that our credit metric outlooks remain better than rating agency thresholds. Our plan reflects FFO to debt at or above 15% from Moody's metrics throughout the period, giving us capacity to manage events in the business as they occur. While financial health is bolstered by the way -- by the work we've done to strengthen our balance sheet and create benefits for customers, including structuring large agreements to protect existing customers in our credit, solidifying our pension funded status and receiving constructive regulatory mechanisms. You may recall, our system experienced an ice storm earlier this year. Mississippi's recent legislation provides a path to securitize the storm cost, which we estimate in the $200 million range. This will lower the overall cost for customers. We will submit our filing by October 5 and we expect the commission to issue a decision within 60 days of our filing.

As shown on Slide 7, we are affirming our 2026 adjusted EPS guidance and updating our outlook. For 2026, we're firmly on track, and we remain confident that we will deliver on our guidance. Looking ahead to the second quarter, with other movements in our plan, we expect other O&M to be approximately $0.15 higher than the same quarter last year, reflecting higher vegetation spending and the timing of nuclear maintenance. Beyond 2026, today's update reflects our new capital plan, which includes investment resulting from the latest customer agreement as well as other updates since the third quarter. Our adjusted EPS outlook for next year is now $0.20 higher. As the investment accumulates the increase grows ratably to $0.50 in 2029 to $6.40. We will extend our full outlook to 2030 at our Investor Day in June.

As a preview, the 2028 to 2029 year-over-year adjusted earnings per share growth was 12%. We expect approximately the same for 2030. Entergy is executing a differentiated growth strategy, delivering strong, sustainable results. Through our disciplined customer-centric approach, we are creating value for all our key stakeholders, including our owners. Our plan is solid with clear line of sight to achieve our outlook, and we have significant opportunities before us. This update makes our already strong growth profile stand out even more. And now we're happy to take your questions.

[Operator Instructions] Our first question comes from the line of Shar Pourreza with Wells Fargo.

So obviously, a great update this quarter with the Meta deal. Just -- I just want to be crystal clear here as today's results just kind of raise the bar again. Does the CapEx increase today fully support the deal? Or do you see additional CapEx and earnings accretion as we shift focus to the Analyst Day? I mean, you just had a strong update. So should we assume there could be further updates to the capital plan in addition to the roll forward in the June Day Analyst Day?

Shar, it's Kimberly. As I noted $14 billion was added to the plan. The filings had about $15 billion and the CCCTs close outside the period. But what's not in the plan is the renewables that are under the agreement as well as some of the nuclear pieces. So certainly, there is more opportunity, both in the period and beyond. But what we've provided here today is largely around the generation pieces that you see in the filing.

And what we would probably expect for our Investor Day through '29 because it's only 6 weeks away. It's a very short window. So we try to give you a preview of it this time today.

Got it. That's perfect. And then just lastly, in terms of financing, I guess what are the specific mechanisms that keep incremental equity funding for the $15 billion in new CapEx under 20%. Is that something that would get replicated beyond the current CapEx plan? I mean most of the new investment is in Louisiana, but do you see the same accretion from DC clustering in Arkansas and Mississippi?

Yes, we have been able to maintain that 10% to 15% rate, on our capital plan for some time. And I don't see any factors that change that. There's a number of factors that help support that, whether it's the mechanisms that we have, the forward mechanisms, the recovery of AFUDC during the construction period. I mentioned funding of our pension status. So it's a variety of mechanisms, but no fundamental structural change that I see that causes that to really shift as we think about new capital.

Our next question comes from the line of Nicholas Campanella with Barclays.

Productive quarter, like you said. So thanks [indiscernible]. So I just wanted to follow up on some of your prepared. You said that you have a pipeline of 7 to 12 gigawatts that are still not in the plan. You used to have this nice slide around EEI, which kind of showed how much equipment you secured to facilitate growth above the plan. So can you just kind of talk about after this Meta announcement after the other gigawatt that you highlighted as well that you executed on in the quarter, what is the equipment outlook look like for you now?

Hi Nick, it's Kimberly. Appreciate the question. Yes, Drew did confirm that even after this agreement, our pipeline is still 7 to 12 gigawatts and that underscores the fact that we continue to see that pipeline, things move through the pipeline and that pipeline refresh. From an equipment perspective, we'll give you a full update in just a few weeks at Investor Day, but we have additional turbines both on that side, and we're not seeing it still relative to continuing to ensure that we can support that incremental growth as well as we'll talk about what else is out there relative to all of our other industrial customers in just a few weeks.

Okay. Looking forward to that. And there was some discussions in the filing at the regulator about exploring kind of new large-scale nuclear studies at certain sites. And Drew, just maybe given your involvement in NEI, maybe can you kind of talk about where the company stands on committing to large-scale NUC at this point? What the industry still needs to move forward and what Entergy would need to kind of move forward? And this is -- is this something that we should be keeping in mind as we kind of get to this Analyst Day update.

Thanks, Nick. Certainly, new nuclear is something that we believe we will need when we look out into the long term. Certainly, we talked about this in the past. We don't think we'll get to something like 2050 without having new nuclear as part of our portfolio. So it's something that we are continuing to actively explore and investigate and agreement that we signed with Meta helps move that forward a little bit. We are in the same spot from a financial risk perspective that we always have been. And that is that there is significant challenges that we still have to overcome from a -- from a cost and a cost uncertainty perspective. And we are mindful of what that could mean to the balance sheet of Entergy Louisiana or any of our operating companies.

So we are going to enter into any agreement that that creates an existential risk right off the bat. And we've said that many times. At our Investor Day, we'll have some ideas about how we could manage that and how we could move the needle on the cost and the risk associated with construction that could help us get there. But our balance sheet isn't big enough to cover the whole risk by ourselves, and we're aware of that.

Our next question comes from the line of Jeremy Tonet with JPMorgan.

This is Diana Niles on the call for Jeremy.

Absolutely.

So I was hoping, could you elaborate on the 1,000 megawatts of additional ESAs beyond the Meta agreement and maybe how you would characterize the kind of Industrial breakdown there and ramp going forward?

Yes, there are things that you're familiar with, steel, petrochems, I don't have a specific by industry breakdown, lots of smaller ones. There are many that are in the less than 20-megawatts kind of range. But altogether, they add up to 1,000 megawatts. I don't have a specific breakdown for you.

And I will also add that one of the things that I just got to remind you of here in the room, we probability weight those non-data centers projects. So those are still probability weighted. They're not all in at 100%. And as Kimberly noted in our remarks, the data centers only go in whenever we have a signed ESA.

Got it. So to maybe clarify there, there could be upside should the more traditional industrial load all come on at the full capacity?

That's true. That is correct. It were all to come on. It's probability weighted for a reason because that doesn't usually happen. But if they were all to come on, yes, there would be upside.

Got it. And maybe to piggyback on the prior question, and apologies if you already spoke to it, and I didn't hear. But I saw that the study in the Meta agreement speaks to AP-1000s. Was that selection of technology a preference from Entergy or from the customer?

Well, we are supportive of any of the technology that are out there, and we're investigating and talking with the vendors for all kinds of different technologies. Certainly, the AP-1000 is one that is had been constructed and built and there is a full design. And it's also a technology that we're familiar with because it's BWR. So I think those are things that we are -- that we are comfortable with. And so I think there's some benefits associated with that. But we are more or less agnostic to the technology. What we're more concerned about is the risk sharing for construction.

Our next question comes from the line of Richard Sunderland with Truist Securities.

Speaking to some of those other CapEx elements for Meta that are outside of the plan. Could you speak a little bit more to sort of guardrails, timing, other elements you have [indiscernible] before you would go and add those to the plan? And then, I guess, similarly on the size and scope, I know the transmission you outlined, but what are you thinking about as an order of magnitude on the other buckets?

Yes. Richard, certainly, we saw Meta as well as other customers have made commitments or signed up for new solar in multiple of gigawatt amounts. We do have open RFPs to build those as well as we're looking at our own self-build that we would put into those RFPs to fill that. And we would be looking to fill that over the next several years. So you could see some of that come into this 4-year plan, and you could see some of it stretch a little bit beyond that.

But from a size and scope perspective, 2,500 megawatts in this Meta agreement, 1,500 megawatts in the previous agreement, all provides a good framing around incremental solar that we could have, and then you can have incremental in other areas as well as asset solar, but it could also be batteries as well.

Got it. That's helpful context. And then just turning back to the 7 to 12 gigawatts backlog. I'm curious if the the Meta addition today, did that move through the backlog until you then backfilled with new interest to get back to the 7 to 12 gigawatts? And then even on the Industrial side, just like how have some of those trends been relative to crystallizing the 1,000 megawatts that you also referenced today? If you could provide any color there?

Yes. So on the 7 to 12 gigawatts, you're exactly right. Meta would have moved through that. It's now in our plan. So it's not in the 7 to 12 megawatt that references data center opportunity that's outside of our plan. We -- our 7 to 12 gigawatts was never our full scope of plan. So as things move through, we've got additional things coming in as well as we've had additional interest.

On the broader customers, what Drew referenced on the 1,000 megawatts is really closing out specific customers that either getting them to sign agreements which would adjust the probabilities as well. But we'll give you a full update on that pipeline again in a few weeks, but that continues to be strong as well.

Our next question comes from the line of Paul Zimbardo with Jefferies.

Good morning, can you hear me okay?

Yes, you're breaking up, but we can hear you now.

Good, good. And again, setting a [indiscernible] from by saying a productive quarter, my goodness. I did want to clarify and Kimberly really mention a little bit, just in terms of the conservatism -- the kind of the minimum take-or-pay minimum bill -- is there any way to frame kind of what that benefit can be to earnings or cash flow? Just any parameters would be helpful there.

Yes, we haven't given specifics around the minimum bill levels except to say that on all of our industrial customers, we have minimums or demand charges and all the hyperscalers. It is significantly higher than what we've had on traditional customers for the amount of incremental investments that they drive on to the system. In the forecast period, I would think about these customers are going to be ramping up. And so their minimum bills are coming in during the period and they go into the ramping period. So you're going to have more opportunity once they get to full load versus a minimum bill, but certainly there could be some opportunity near term if perhaps they ramp fast faster. But generally, I would think about it as we haven't given it, but the minimums are pretty substantial. So there is some margin but it's not equal to what's already there.

Okay. No, that's helpful. And one other [indiscernible] again, I can't wait for the Investor Day. Just as we think about the capital you put into the plan today, relative to the $0.50 of increase in 2029. Is there any information on shaping? Is that kind of back-end weighted into 2029 non-CapEx? Just it seems like there's more earnings to come, not to ask a leading question, but more earnings to come from that capital. Any flavor you could provide would be helpful.

Yes. So you can see the shaping of the earnings through '27, '28, '29 in the materials. And then in my comments, I did note for a preview to '30 that we would expect the year-over-year from '29 to '30 to be roughly the same as the year-over-year from '28 to '29. So that gives you some indication of how that shapes into that fifth year.

Our next question comes from the line of Bill Appicelli with UBS Financial.

Just isolating the Meta update here. I mean is the $14 billion of incremental capital entirely attributable to the expansion of that agreement?

Yes, Bill, you can see the filing. That's pretty close to what is included there in the filing. There's something -- and I went through what we included and what not -- what wasn't, but that's essentially the add here.

There has been other capital added since our last earnings change. You recall that we added Cottonwood and there's been some other things that have happened. But certainly, the $14 billion is the key driver here.

Right. And then on top of that, there is still some residual generation spend that will show up in '30. And then you talked about the transmission renewables also not included, right? So when we think about the totality of what that Meta deal is worth in terms of CapEx, it's obviously something north of the $14 billion, right? It's an incremental several billion. Is that fair?

Yes. Drew mentioned in his comments that it was more than $15 billion that happens outside the period. And certainly, depending on where the solar and battery, the renewable lands gives you some upside opportunity there.

Okay. And then when should the full earnings run rate be realized on the meta expansion? Is that -- I know you're talking about the CODs are in [ '30 ], I think, into [ '31 ], right? So is that -- when we think about the the entirety of the return on the capital being reflected in financials, is that sort of at that point in time, is that sort of '31 mid-31 period?

Yes. The CCCTs finished closing in '31. So most of your capital is in by then we gave you the ramp-up through '30. And we'll talk about what longer-term visually looks like without giving specific outlook at Investor Day.

Our next question comes from the line of Steve Fleishman with Wolfe Search.

I think my my questions -- a lot of my questions got answered on this, but just -- it sounds like there is meaningful earnings that come from the Meta CapEx, even though it is largely in play through '29, the earnings tail a little later just as the projects come on, is that not that $0.50 is not a lot, but...

Yes. See, what you're seeing with all construction projects, you've got AFUDC, that sort of thing, leading up to the construction, leading to the close through the construction period. And then again, in '30, I would see a similar uptick in ratably as to what we saw in the years that we gave you for getting you to the similar type of growth rate in '30.

Great. And then just the $14 billion that you added to CapEx, is that before KAYAK or after KAYAK because we don't have rate base to kind of match up to from you?

Yes. I would think about that related to the CCCT is largely overnight costs. So we did -- I mentioned the transmission wasn't included and then the financing costs largely are not included in there either.

Okay. You also mentioned this renewables RFP separate from Meta, the 4.5 gigawatts, of which 2/3 would be owned. Is that in your plan at 2/3 owned or not?

About half of that is not in our plan, is the way to think about that. So pretty good upside there relative. So we had some projects that we had worked to safe harbor or just get ahead of relative to other solar interest, but there's a good bit of that, that's not in the plan.

And then just on -- I know you don't need equity for a while, timing-wise, late '27 or '28, '29. Just how are you thinking about just though approaching equity or you continue to try to get out ahead of that? And just any thoughts on ways to approach getting the equity for this?

Yes. To your point, we don't require equity until well into '27, but we have been proactive about ensuring that we stay ahead of that 30% is already on the table. But the ATM has been an effective tool. We were able to use a block last year. But I would expect that we don't require additional equity until '27. So we can't speak to the specific timing, but I would think about it that way.

Our next question comes from the line of Sophie Karp with KeyBanc Capital Markets.

Congratulations on a strong update here. So maybe if you could talk a little bit about the regulatory maintenance that you have, particularly in Louisiana and other areas that they experienced significant growth. Do you feel like you have sufficient regulatory recovery mechanisms in place? And is there a risk of some regulatory fatigue if the capital growth as much as it has been growing?

Thanks, Sophie. It's a good question. I think we have adequate regulatory mechanisms in place. Certainly, you've seen our regulators begin to change some of their processes. A good example is in Louisiana, the Louisiana Lightning Initiative to accelerate reviews for strong economic development projects. And I think that's really the key is that we are providing significant benefits for customers, communities, I think the regulators will be very supportive of these kind of ongoing activities. And I don't know that there would be necessarily any fatigue associated with that. And that's why we've really been focused on these things. If we can't provide that, obviously, that would be a different story. But we've been able to do that pretty well so far, and we'd expect to be able to continue that story going forward.

And then maybe real quick, if you could maybe come and give us some color on how the -- I guess the situation in oil markets and around the conflict in the Middle East, is impacting your industrial customers? Is it a positive for them? Or is it a negative for them? Like what is the situation on the ground in your territory?

Great question. So the I guess, generally, it's been -- I would say it's probably been positive for most of our industrial customers. The things that they are looking at are spread between oil and gas, that have obviously increased geographic spreads between the Gulf Coast and the Asia, Europe, those have increased. And so our industrial customers along the Gulf Coast have a -- I would say, probably benefited somewhat from the conflict over there.

But simply because it's dislocated the prices a little bit. But I would say it's not out of alignment with where we've been over the last decade to 15 years. I'd say prices were, as you know, for oil a little bit lower early in the year. Obviously, they're higher now. But that the spreads that they pay attention to, those are the same spreads that they've been seeing for a long period of time. And frankly, we would expect them to continue to stay in place well after the conflicts are resolved.

Our next question comes from the line of Steve D’Ambrisi with RBC Capital Markets.

I just had a quick one. If I look at the change in terawatt hour sales growth from 4Q to this update, it looks like it's just about 3-terawatt hours. And so if I try to back into what that means from an incremental load from data centers, it seems like it's only 400 or 450 megawatts. And so can you just talk a little bit about how the Meta facility ramps because if it's 5.5 incremental gigawatts, it feels like there's a ton of terawatt hour sales that are going to come beyond 2029. So I just want to understand what that means both for earned returns and also like capital deployment beyond '29?

Steve, it's Kimberly. You cut out a little bit, but I think your question was -- how does the Meta agreement ramp? And how do I think about the terawatt hour sales that you're seeing. Yes. Certainly, we have to build to support this customer. You see that in the CCCT deployment, which come online in '30 and '31. So they are able to get some ramp in the period, but your full loads aren't going to come online until all of those offsets come online. But recall that we have minimum builds on these customers as they ramp and that minimum bill is reflective of ensuring that they cover the incremental costs that they drive over the life of the contract. So that minimum bill may not be directly in sync with the ramp for example. So what we've included in our forecast is the minimum bill here, but you should continue to see ramp as those assets come online.

Okay. And any -- just again, like it seems like it's really a very small amount in '29, and I know you rolled to '30, but any flavor for what adding 5 gigawatts to the existing sales forecast does like to sales CAGR through 2032 or something like that? Because it just -- it seems very, very like a significant incremental step-up. I just want to understand like if that has customer benefits or rate benefits that you can pass back? Or is there any way to think about that?

Yes, we'll give you the sales growth through '30 in just a few weeks, and then we'll show you sort of how we think about opportunities longer term, but all customers are benefiting from this ramp and from the minimum bill to the point that Drew made, both from the fair share component, ensuring that they're paying their portion of the incremental cost and that will flow through the traditional mechanisms in Louisiana, similar in other jurisdictions. So there is opportunity and benefit there for other customers. But we'll provide you that sales forecast in just a few weeks through 2030.

Our next question comes from the line of Chris Ellinghaus with Siebert Williams.

Drew, vis-a-vis the Iran issue, is that providing some impetus were interest in new ESAs in their sort of calculus of where the world markets are?

Perhaps, I mean, certainly, we have a lot of natural advantages associated with where we're located. We're along the river and the Gulf Coast, we have access to global markets, and we have significant energy infrastructure with pipelines and low energy costs and rail and other transport availability to domestic markets. I mean we're well situated with a supportive community that values industrial investment. All of that has meant that when people look around for places to invest in industrial facilities, they look at the Gulf Coast.

And certainly, over the last few years, we've seen a lot of interest in on-shoring because of geopolitical uncertainty. And I would say that this current situation is just more continuation of that. So to the extent that people around the world are looking for a stable place to invest. And given the opportunities that are here and the advantages associated with the Gulf Coast, it becomes a natural potential location when you're looking around the world. It's a very attractive place to invest. So certainly, this situation is not -- I would say it's probably causing people to look maybe even a little bit more, but it's not a new scenario. And it goes with the long-term kind of commodity spread discussion that I was talking about just a minute ago.

Sure. That makes sense. I'm just curious whether it was expediting anybody's thought process. Are there any other Cottonwood type transactions in your mind sort of in the hopper?

Well, there's -- I mean, we normally don't talk about M&A, but I will say, in this case, there's really just not much in terms of other generators that are around. So I would not say that we'd expect that asset M&A to be a significant part of our potential capital outlay going forward beyond Cottonwood.

Okay. Given the significant increase to the CapEx. Can you give us any idea of how it might alter your thinking about the cadence of dividend payouts over the 4-year horizon?

Sure. It's Kimberly. We have historically had a 6% growth rate on our dividend, and we're obviously growing faster than that. And so that has an effect on your payout ratio, but that's been our philosophy to balance the growth rate in the earnings in our sales growth rate relative to the growth rate in the dividend to date, that's the philosophy that we've taken to date. And I think that, that is an appropriate balance as we think about that over the next 4 years.

Okay. That helps. Lastly, I guess, Mississippi data center interest just seems to be exploding. Can you talk about -- or maybe this is something for June, what's in the plan at this point? And is there a significant bucket of unplanned at this point?

Yes. I would reference you back to our 7 to 12 gigawatts, which is not OpCo specific, but that's our enterprise view of the data centers. We don't provide that breakdown sort of either where they are in the pipeline or where they are specifically by OpCo. But still, significant opportunity before us, one that we're working to shore up and to capture as much as we can. So lots of opportunity there, but no specifics by operating company.

And the data centers that are in our plan, are already signed. We do not have any data centers in our plan that are prospective.

Our last question for today comes from the line of Andrew Weisel with Scotiabank.

Two for me. First, in terms of financing the incremental $15 million of CapEx or so for Meta. I understand that Meta is going to be paying for that under the Fair Share Plus commitment great setup, of course, but you're obviously including that in the CapEx and the equity plan. Maybe just remind me or help me understand how that works from a timing and cash flow perspective? If you're not going to collect the revenue or how and when will you collect the revenues relative to the construction and equipment payments and how and when will the $2 billion or $7 billion be returned to customers. How does that work in terms of the timing and how that impacts your credit metrics? I know you reiterated the credit metrics, but how does that work in terms of the short-term impacts of credit rating metrics and your conversations with the agencies and cash flows?

Yes. Our Fair Share Plus as a reminder, is our commitment in ensuring that these customers are paying their fair share, and that covers a number of areas. One is ensuring that they're paying to support not just the incremental cost that they drive, but also the embedded costs that are already in customers' bill. So that shows up in ways like in Mississippi, we've talked before about Super Power in Mississippi, where they're deploying $300 million of capital without incremental cost to customers because of the embedded costs that AWS is supporting enables us to continue to make investments for customers without incremental cost. So I think about it that way.

Another example is in Louisiana, we have securitized storm costs on their bills already related to previous storms, and these customers will pick up their allocable portion of those costs. So customers that were paying and will see slightly less cost. That's how that $7 billion effectively flows back to customers.

Okay. In terms of the credit metrics and timing issues, is that -- how does that work? And is there going to be a temporary pressure on the credit metrics during construction?

Yes. As I noted in my comments, our credit metrics on a Moody's basis are 15% or better throughout the 4-year forecast period during this heavy construction period and that has a lot to do with all the constructive mechanisms we have as well as how we are contracting. So that doesn't, in and of itself, put pressure on metrics because, again, it's enabling you to make investments as these customers pay a portion of incremental costs that customers otherwise would have paid for previously.

Okay. Very impressive. And one last one, if I may. The 15% industrial sales growth in the first quarter was notably better than your guidance of 10% for the year and a big pickup from last year's full year results of 7%. You mentioned in the remarks that it was a combination of new and expansion projects. Can you just elaborate a little bit on what you're seeing? And does that change your full year -- your expectation for the full year?

Yes, we did have a good first quarter. But on a year-over-year basis, we expected customers to ramp up. That's what you're seeing there. We -- it doesn't change what we expect for the full year. It does shore up that -- those customers are coming online. But even if the volumes were off a little bit, you wouldn't see a decrement because of the minimum bills and other structures that we have, to support. So we're comfortable with our guidance and our -- and we're pleased to see the volumes starting to come in.

Does it position you towards the high end? Or is it too early to say something like that?

Yes, it's way too early. It's first quarter. So we've got -- we obviously have to get through the summer and then all the way through the end of the year.

Thanks, Andrew. And that concludes our Q&A session for today. I will now turn the call back over to Liz for closing remarks.

Thank you, John, and thanks, everyone, for participating this morning. Our quarterly report on Form 10-Q will be filed with the SEC at a later date and provides more details and disclosures about our financial statements. Events that occur prior to the date of our filing may provide additional evidence of conditions that existed at the date of the balance sheet will be reflected in our financial statements in accordance with generally accepted accounting principles.

Also, as a reminder, we maintain a web page 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.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect your lines.

Good morning. My name is JL, and I will be your conference operator today. At this time, I would like to welcome everyone to the Entergy's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions].

I will now turn the conference over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation.

Good morning. Thank you, JL, and thanks to everyone for joining this morning. We will begin today with comments from Entergy's Chair and CEO, Drew Marsh; and then Kimberly Fontan, our CFO, will review results.

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. Entergy 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, and good morning, everyone. The last couple of years have been transformational for Entergy. While 2024 reshaped our long-term expectations through historical new demand for power, 2025 was affirmational as our success has continued. Today, I'll highlight our 2025 achievements and discuss our ongoing efforts to successfully execute on our customer-first strategy that creates value for all stakeholders.

Starting with the financial results. We are reporting 2025 adjusted earnings per share of $3.91, which is in the top half of our guidance range. We continue to expect greater than 8% adjusted EPS annual growth through 2029, and our transparent outlook provide specific expectations by year.

Turning to the customer. Our initiatives to improve customer experience have yielded positive results. Based on J.D. Power data, Entergy's utility remains in first quartile for Net Promoter Score for both residential and business customers. Three jurisdictions were in the top quartile for residential NPS and Entergy Texas was ranked #1 in customer satisfaction for business electric service in the South among midsized utilities. Our work to meet our customers' needs while maintaining low rates is being recognized, and this will remain a key focus for us going forward.

We had 4% sales growth in 2025, driven by a 7% increase in industrial sales, continuing a long history of strong growth rooted in the advantages of our service area. We anticipate the sales growth trend to accelerate an expected 8% compound annual growth rate through 2029 from 2025 and driven by 15% industrial growth. Last year, we signed electric service agreements totaling approximately 3.5 gigawatts. There were several noteworthy customer announcements, which give us confidence in our outlook for growth from data centers and traditional industrial segments.

Customers achieved important development milestones, including those in the steel, petrochem and LNG sectors. In fact, with Hyundai Steel's $5.8 billion planned investment in Ascension Parish, Louisiana earned Business Facilities Platinum Deal of the Year, the first state to accomplish the feat 2 years in a row after the Meta AI data center project in 2024. We also had new data center announcements in Arkansas, Louisiana and Mississippi, including both colocation developers and hyperscalers.

Entergy's service area remains attractive, starting with our low electricity rates and vertical integration, business-friendly environment, welcoming communities and proven workforce. Our geographic location provides access to diverse energy sources and robust infrastructure that are attractive to industrial customers. Our integrated stakeholder engagement is also an advantage as we bring parties together to discuss potential development solutions and a common understanding of benefits.

We continue to have meaningful conversations with potential new customers to secure additional growth to benefit all of our stakeholders. And our pipeline is unchanged at 7 to 12 gigawatts for data centers and 3 to 5 gigawatts for other industries. We have clear line of sight on equipment to serve 8 gigawatts of incremental load above our current plan. We've also confirmed EPC engagement for projects in our outlooks and beyond. Entergy has distinguished itself with a long history of greater than 5% compound annual large industrial growth over the past 16 years. We know how to attract new business and serve new large low customers while delivering positive outcomes to all our stakeholders from operational execution to affordability.

The economic development activity has paid off as all of our states achieved record employment milestones in 2025. From the beginning, our hyperscale electric service agreements were developed with guiding principles that account for both the new customers' goals and impacts for our existing customers and communities. For our residential customers, we estimate the data center contracts in place today will generate approximately $5 billion in rate offsets from their fair share of contributions to fixed costs during the life of the contracts. That equates to more than $5 per residential customer per month on average, and that has the potential to grow with additional data center contracts.

Customers will also see improved reliability and resilience from new generation and transmission infrastructure built to the latest standards. In addition, new, more efficient power plants will lower fuel costs for all customers. Our operating companies have implemented programs such as Superpower Mississippi and Next Generation Arkansas made possible by data center revenues that will improve reliability and reduce outages for all customers in those jurisdictions.

Our long-term data center contracts include early termination penalties and minimum bills to ensure that other customers aren't left to pay for investments needed as a result of adding large loads to the system. Plus, on their own, these customers will create real value for our communities, including benefits from jobs and increased tax base and economic development. These are just a few examples of how data center growth is enhancing Entergy's efforts to support customers and communities every day.

Beyond data centers, our operating companies have implemented many other ways to help manage customer rates and benefit our communities. That starts with cost discipline, including an ongoing focus on O&M efficiency and scrubbing our capital projects to ensure the best outcomes for customers. Our teams work closely with regulators to manage bill levels and volatility, which includes use of tools like deferred fuel collections, state and federal grants, tax incentives, philanthropic support and securitization.

Our operating companies also proactively engage customers to ensure they are aware of programs to help manage bills, including energy efficiency programs, LIHEAP funds for qualifying customers and our Power to Care program for low-income seniors. Currently, we are exploring new rate offerings such as demand response and time of use rates to complement our average bill and deferred payment options.

This year, our employees delivered more than $100 million in economic benefits to the communities we serve through philanthropy, volunteerism and advocacy. That includes our employees volunteering for approximately 170,000 hours in our communities last year, the equivalent of roughly 81 full-time employees. Our employees are also focused on delivering benefits to customers from our 4-year capital plan. Because of our track record, we know what it takes to successfully execute large projects. With a $43 billion capital plan through 2029 to support customer needs, we have a sizable build cycle ahead. In 2025, we invested $8 billion to benefit customers with about half of that in generation. That includes significant work on Orange County Advanced Power Station, which is entering the final stages ahead of a summer in-service date and Delta Blues in Mississippi.

Looking ahead, new generation is a big part of our customer-centric plan. We have several projects in early stages that will come online in the next few years, including Franklin Farms Units 1 and 2 and Waterford 5 in Louisiana, Legend and Lone Star in Texas, Ironwood in Arkansas and the Vicksburg Advanced Power Station and Trace View in Mississippi. We also have 5 owned and contracted solar resources approved or in progress totaling 740 megawatts. Including gas, solar and battery storage, we have nearly 9 gigawatts approved and under construction towards our planned 13 gigawatts of new capacity to serve and support customers over the next 4 years.

In 2025, our nuclear fleet operated safely and reliably, achieving a 90% unit capability factor. All refueling outages, including major turbine and generator projects were completed on schedule. The team also delivered more than 35 megawatts, sorry, of additional clean capacity from plant upgrades and replacement of older equipment. Looking ahead, at Waterford 3, previous investments in low-pressure turbines have paved the way for a 45-megawatt upgrade later this year.

Turning to energy delivery. We invested about $3.5 billion in 2025, which includes accelerated resilience projects to support customer growth and to improve reliability. Thus far, we have invested $800 million in approved accelerated resilience work, including 17 substation upgrades and 59 line hardening projects, upgrading more than 15,800 structures. In total, our 4-year $17 billion customer-led energy delivery capital plan includes new construction on more than 570 miles of 500 kV lines and 175 miles of other transmission lines as well as investment in new substations. This also includes $1.4 billion of approved projects to harden more than 45,000 assets.

System resilience is a key area of focus, and we are planning to continue progress on delivering that value to customers. To that end, Entergy New Orleans filed an application for the second phase of its resilience program, requesting approval for up to $400 million in projects. While we have and will put forward recommendations for projects that have both resilience and cost benefit value for customers, we recognize it's important that we balance near-term affordability with the need to continue to strengthen our system.

The topic of reliability is never more in focus for us and our customers than when faced with the storm. A couple of weeks ago, Winter Storm Fern affected our service area, particularly in North Louisiana and Mississippi. Throughout the event, we worked closely with state and local leaders to stay aligned on our restoration efforts. Our generation fleet operated well, providing critical energy to serve customers who could take power. At the same time, our distribution and transmission lines were impacted by significant ice accumulation well over an inch in some places.

Fern disrupted 170,000 of our customers. But ultimately, we restored power for more than 360,000 cumulative outages because many customers were impacted multiple times due to ongoing tree damage from the heavy ice. Damage resembled a strong hurricane, but with more dangerous icy restoration conditions afterward. In fact, we replaced more poles, more miles of wire and repaired more substations than we did for Hurricanes Barrel or Francine in 2024. Our employees, contractors and mutual assistance workers performed very well in these dangerous and difficult conditions. I sincerely appreciate their hard work and dedication to safely and quickly bring power back to our affected customers.

Legislative and regulatory processes support our ability to successfully execute initiatives to provide long-term benefits to our customers. In 2025, Arkansas passed the Generating Arkansas Jobs Act, which materially improves utilities' ability to make critical generation and transmission investments needed for economic development in the state. The act paved the way for assets like Jefferson Power Station and the Cypress Solar and Battery project. Meanwhile, Texas passed legislation enabling rider recovery of MISO capacity costs, which historically were recovered in base rates.

A year ago, I said that our 2025 regulatory calendar would be busy, and it was. Our regulators made tremendous headway to benefit our communities and to advance customer growth. They approved routine updates to base rates and riders as well as major transmission projects and new generation, both modern gas and renewables. All of these projects will modernize our infrastructure, provide customer reliability benefits and support growth that's critical for our communities.

Our regulators are considered -- also considered policy issues aimed to promote economic development. For example, the Louisiana Public Service Commission in December voted to adopt a policy proposal referred to as the Louisiana Lightning Initiative, which provides a path for utilities to efficiently meet the needs of large new loads. The rule allows for RFP exemptions and an expedited review in specified situations with all actions subject to prudence review. This policy will align with Louisiana's broader Lightning Speed initiative to better coordinate among critical state permitting offices, allow us to bring new customers online faster, which will attract new business to Louisiana. You may recall that Arkansas and Mississippi also adopted rules and processes to foster economic development and attract projects that have speed to market as a top priority.

There are a few other regulatory updates since our last earnings call that I'd like to highlight. The Arkansas Public Service Commission approved the special rate contract for Google. They also approved construction of the Jefferson Power Station and established a benchmark against which to measure the cost. In December, Entergy Louisiana filed a request to acquire the Cottonwood facility with an upfront purchase price of $1.5 billion as well as $300 million of investment for maintenance and improvements. This is an attractive opportunity to acquire additional energy and capacity sooner and at a lower cost than a new build alternative as Louisiana continues to experience significant customer growth.

We requested a decision from the LPSC by the end of this year to allow for an acquisition early next year. In November, Entergy Louisiana also filed a request for approval to construct the Segno and Votaw solar units. These projects were safe harbored earlier this year -- earlier last year and will be attractive resources to support customer clean energy demand.

For our 2026 regulatory calendar, we're planning for another productive year. In addition to the projects I just mentioned, we have 4 major generation and transmission projects that are awaiting commission decisions in the year. Arkansas Cypress Solar with battery storage, the Babel to Webre 500 kV project and the Waterford 6 and Westlake combined cycles in Louisiana, which were filed yesterday.

Later this month, Entergy Arkansas will file its first base rate case since 2015, following 10 years of formula rate plans. Our current expectation is to request a rate change of well below 3%, and it could be lower for residential customers, which will support our continued efforts to invest for the benefit of our customers while being mindful of affordability. Our goal is to receive a commission determination by the end of this year for rates effective at the beginning of 2027 and a renewed formula rate plan starting with the 2028 forward test year. The formula rate plan benefits our customers and other stakeholders through predictability and ease of implementation while supporting continuous regulatory oversight.

In addition, we expect to implement the Generating Arkansas Jobs Act rider for the next few weeks, supporting economic development. And the combined total rate change for residential customers between the rider and the rate case is expected to be at or below recent FRP rate changes and also maintain Entergy Arkansas' competitive position with rates well below the national average. Mississippi, New Orleans and Louisiana will file their formula rate plans between now and May, and Entergy Texas expects to request updates to its transmission and distribution riders as needed. Entergy Texas also plans to utilize the generation rider after Orange County Power Station is placed in service, which will trigger a base rate case in 2027.

2025 was an affirmational year, building on our continuing transformation. I appreciate everything our employees have done to create value for our customers and as a result, all of our stakeholders. As we move into 2026, we will continue to put the customer first in everything that we do. Before I turn it over to Kimberly, I'm excited to announce that we will host an Investor Day on June 9 in New York City. We will continue the conversation on the significant opportunities that we see ahead, including 5-year outlooks as we've done in the past.

And now Kimberly will review our 2025 financial results as well as our outlook.

Thank you, Drew. Good morning, everyone. As Drew said, 2025 was another important year in our growth journey. I'll review our 2025 results and then provide an overview of 2026 and our longer-term outlook.

Starting with earnings, our adjusted EPS for the year was $3.91, as shown on Slide 4. Our results reflected strong sales growth and the effects of investments made for our customers. The increases were partially offset by higher other O&M and an increase in our share count from settling equity forwards. Earnings contribution from sales growth for the year was positive, including the effects of weather. Excluding weather, retail sales increased approximately 4%. Industrial sales were the largest contributor at around 7%, including sales for new and expansion projects that continue to ramp up their operations.

The highlights of our 4-year plan are shown on Slide 5. Our retail sales outlook remains very strong. Off of 2025 weather-adjusted results, we expect 8% retail sales compound annual growth, driven by 15% industrial growth through 2029. Data centers are the primary driver, along with growth from a variety of traditional Gulf South industries, including transportation or LNG, primary metals, industrial gases, petrochemicals and agricultural chemicals. As a reminder, we take a conservative approach with hyperscale data centers. We only include them in our plan once we have an ESA in place, and we include them at the minimum build levels.

Our customer-centric capital plan is now $43 billion, $2 billion higher than our preliminary plan presented at EEI. The increase includes the investment for the Cottonwood Generating Station that Drew mentioned. For 2026, our capital plan is $11.6 billion, approximately $3.6 billion higher than 2025, reflecting the step-up in investment to support our customer growth. The equity associated with our 4-year plan is unchanged at $4.4 billion at the lower end of our target range of 10% to 15% of the total capital plan.

Our forecast also includes $1 billion of hybrids in the back half of the forecast. We have been proactive in addressing our equity needs, selling forward contracts through our ATM program as well as the block transaction we executed last March. We've taken significant price risk off the table, and we have ample time to raise capital. For our 2026 through 2029 equity need, about 45% is already contracted, meaning we wouldn't need to transact again until well into 2027. In February, after year-end, we settled an additional $345 million or about 4.6 million shares. We are using those funds to continue to invest for the benefit of our customers.

Slide 6 summarizes our credit ratings and affirms that our credit metric outlooks remain better than rating agency thresholds. For 2025, we estimate that Moody's cash flow from operations free working capital to debt is greater than 17% and S&P's FFO to debt is approximately 16%, both well above the agency's thresholds. Moody's metric includes approximately $550 million for nuclear PTCs that were monetized in 2025. Without the PTCs, 2025's estimated Moody's metric is still well above our 15% target.

Based on final MISO prices and strong nuclear production, we also recorded nuclear production tax credits in our 2025 results. We plan to monetize these credits in 2026 and estimate that the net proceeds will be approximately $215 million. Tax credits will ultimately provide benefits to customers.

Beyond 2025, our credit metric outlooks are strong with FFO to debt above our thresholds throughout the outlook period, achieving our 15% target for Moody's metric during the period, giving us capacity to manage events in the business as they occur. As a reminder, because the value of nuclear PTCs is highly dependent on average revenue per megawatt hour, we do not include cash benefits in our cash flow or credit metric outlooks beyond 2026.

Our financial health is bolstered by all the work we've done to strengthen our balance sheet and create benefits for customers, including structuring large customer ESAs to protect existing customers and our credits, improving our pension funded status and receiving constructive regulatory mechanisms. As Drew discussed, in late January, Winter Storm Fern impacted our service area. Our preliminary estimate for restoration cost is up to $300 million for Louisiana, up to $200 million for Mississippi and approximately $60 million for Arkansas, the majority of the cost being capital. Our current expectation is that these costs will be recovered through normal mechanisms.

Our adjusted EPS guidance and outlook are shown on Slide 7. Throughout the outlook period, we continue to see very strong growth, driven by our customer-centric capital plan and our long-term compound annual growth remains strong at greater than 8%.

Slide 8 provides additional detail behind our guidance assumptions. For 2026, we expect continued benefits from strong sales growth, especially as data centers increase their usage. Our guidance also includes the effects of investments made for customers, including regulatory actions and increases in depreciation, property taxes and financing costs. Share effect will also be a driver as our fully diluted average share count increases. Additional information on specific drivers for the year as well as detailed quarterly considerations are included in the appendix of our earnings call presentation.

We have a very strong growth story that supports our plans to invest in reliability and resilience to better serve our customers. We have a solid base plan consistent with our strategic objectives and a strong customer pipeline, including 7 to 12 gigawatts of data center opportunities. And we have secured critical equipment to bring additional customers online. We're very proud of what we have accomplished, and we are working hard to make 2026 another successful year, continuing to prioritize the needs of our customers to create value for all of our key stakeholders. We have a very unique growth opportunity before us, and we're excited about what the future holds.

And now the Entergy team is available to answer questions.

[Operator Instructions] Our first question comes from the line of Shar Pourreza of Wells Fargo.

Just on the large load ramp, Hut 8 was the most recent announcement. Was Phase 1 of that project already partially in plan and with the formal FID, does that kind of put some upward pressure on rate base growth? Or is Phase 2 the upside? I guess maybe just help us frame if there are other probably weighted projects in '26 and '27 as well. It's two-part question.

Yes, sure. I would think about Hut 8 and similarly sized data centers like we think about our probability weighted industrial growth overall. So that would have been included in the probability weighting there. Certainly, we're seeing positive progress in that space. And so that increases that probability weighting, but it would not be a separate discrete item like a hyperscaler.

And also, first part of what they have announced doesn't add to the capital plan, but -- and I'm not sure what you mean by Phase 1 and Phase 2, but additional incremental growth in that customer would likely require incremental capital for capacity.

Got it. Yes, I guess there's going to be a second phase they've talked about that could be fairly material. Okay. And then Drew, I want to ask on the large load protections you have as you kind of put the CapEx into plan. I mean we've seen at least one data center walk away from a project despite having a signed ESA. Obviously, different state than yours, of course. Just remind us on the level of comfort, the collateral requirements, et cetera. You have some lumpy projects there, which can be sizable so that could move the needle should one of these customers walk. Just maybe overall, just on the ESA environment and the protections there.

Sure, Shar. On the overall large load customers, including not just the hyperscalers, but also colocators like a Hut 8, we have significant credit requirements that require things like termination fees, that sort of thing as well as minimum bills. And what we've included in our forecast is only the minimum bill. So certainly, there's -- to the extent that they run up to their full capacity, there's opportunity there. But to the extent that they choose to not run or not continue, there's the termination payments that protect us there as well. And those are backstopped all the way up at their parents.

Okay. Got it. And then just maybe one quick one I'll squeeze in is, I know the prior update noted 4.5 gigs of power equipment associated with potential upside. Is any part of that spoken for at this point? Have you started to expand those expectations given continued large load expansions if Cottonwood potentially added to that number?

Yes, Shar. We have about 8 gigawatts of turbines and other plant island equipment available for growth. We haven't turned those into specific projects tied to ESAs at that point. But if you recall that turbine schedule that we showed you, those are all the great projects there. We continue to have really positive conversations with our customers and would expect to be able to continue to grow our portfolio. But certainly, we haven't -- we don't have anything specific here. That is lumpy, as you well know, but we have the opportunity to add incremental.

I will note that Cottonwood that was added into the capital plan does not replace one of those turbines. That's existing capacity that provides additional space in Louisiana to continue to meet customer needs, but it doesn't replace any of those turbines.

Your next question comes from the line of Julien Dumoulin-Smith of Jefferies.

It's Paul Zimbardo on for Julien. The first, just a quick clarification. I think you said the CapEx change increase is Cottonwood. Are there other major changes going on? Or is it really just the Cottonwood being rolled in?

Paul, it's largely Cottonwood. There is a little bit of capital from '25 that rolled into '26. So the overall increase there is not fully incremental versus what we had in '25, but most of what's there is Cottonwood.

Okay. Okay. Great. That's my thought. And then you had that comment around the $5 per month of customer bill savings from the data centers that you've kind of secured to date. Are there good ways to think about it? I know it's difficult rules of thumbs or just ways to think about potential future savings from that data center pipeline for customers.

Yes. I would think about that as the data centers' contribution to embedded fixed cost. So there's not a good rule of thumb. It's going to depend on the size of the data center. But in general, what you're doing there is you're essentially -- you've got your embedded fixed cost that you're spreading over more kWh. So the size of their kWh is going to drive what that opportunity is. But there's not -- I don't have a good rule of thumb for you.

Yes. And I would add to that, Paul, that we think that, that's conservative because there are other things that the customers are benefiting from. And I listed some of those in my remarks, like fuel efficiency and things like that, that are important contributions, more reliability, more resilience from the new infrastructure, not to mention all the community benefits like taxes and so forth. So there is a lot of value for customers, but we thought it would be important to label that fixed cost contribution part because it is significant.

Okay. That makes sense. And if I could squeeze in one more quick. Just on the -- after the Jefferson approval and the Texas generation approval, noting that Louisiana has that Lightning amendment, have you seen kind of customer preferences shifted between different states? Any color would be helpful there.

No real change among states. The customers that we have in our states are continuing to invest where they are, and they are very comfortable with the rules where they are. But I think it will help attract incremental customers potentially. And so we've seen some support for that as well. But I don't think it's causing hull from one of our jurisdictions to another jurisdiction at this point.

Your next question comes from the line of Jeremy Tonet of JPMorgan.

This is Diana Niles on the call for Jeremy. Going back to the customer benefits from data centers and the $5 billion in rate base offsets. Could you provide some color on what buckets this covers, whether that's transition required for new load or previously complicated resilience investments? Any color there would be appreciated.

As I said, I would think about that as contribution to incremental cost. So that is things like in Louisiana, they had storm costs that were already securitized the customers were paying for, they're paying a contribution to that. In Mississippi, we had announced Superpower Mississippi, where we added incremental capital with no increase in rates because the revenues coming in from the hyperscalers there were providing room to continue to invest in resilience and reliability. And then as you think about going forward, that incremental revenue is helping to offset future rate changes as you make investments over time. So it's those categories that I would think about.

Great. And one more, if I may. The Cottonwood addition to the plan. Is it already contemplated in your outlook going forward? Or to what extent do we need to look at future approvals to think about the inclusion in the plan?

Yes. So Cottonwood is included. It's in our -- if we added it into our capital plan, it is pending regulatory approval. But from an EPS outlook perspective, it just moves us in the range, but it doesn't change our ranges.

Your next question comes from the line of David Arcaro of Morgan Stanley.

I was wondering what updates should we expect at the Investor Day coming up in June? Is that a natural time when you might expect more data center contracting clarity to come in or capital projects to be approved and added to the plan? Any specific update that might be incremental in June?

Yes. So I appreciate that question, David. So we never know exactly when a data center contract might land. But certainly, we're going to give you more color around the data centers and how we're positioning ourselves and things like that. We'll give you a little bit of a longer outlook and you typically have been going out 5 years from that period. And we'll try to get a couple more of our leaders in front of you so that you have a chance to talk to a little more depth in our team. So you have a chance to really understand perhaps the various jurisdictions and what those mean and what they're trying to do.

So those are the kind of things that we would try to update you on to give you more comfort around the plan that we've laid out. And if we're fortunate, maybe we'll have something to announce. But the timing, you never know about the timing for a large customer contract.

Yes. Got it. That makes sense. That's helpful. And then I'm just curious, what's -- more broadly, what's the latest feedback that you're getting from the political and regulatory standpoint related to data center activity? Are you seeing -- is it continued support here as you continue to accelerate? Or are you seeing increased pushback challenges locally to the activity that's popping up?

Yes. Thank you there. That's another good question. So the -- we still continue to have strong support for the data centers in our jurisdictions. The Lightning Initiative that I mentioned in Louisiana is a good example of that. That was just the end of last year. And we continue to see strong support in other jurisdictions, not to mention a lot of customer interest and a lot of customer activity. So we see a lot of positive movement, and it continues to bode well for the expectations that we've laid out for you all. In fact, I think they probably strengthened since we talked to you last quite a bit.

There still is some concern about things like affordability and rates. And I outlined a lot of the things that we are doing. In fact, the comments about customer -- existing customer benefits from the contribution of fixed costs and other things are, we think, really important to continue to maintain the positive momentum in our jurisdictions. But right now, we continue to see very positive momentum from both customers and communities about data centers.

[Operator Instructions] Your next question comes from the line of Andrew Weisel of Scotiabank.

I hope you guys are getting ready for Mardi Gras. First question, I wanted to clarify a little bit the forecast for retail sales growth on Page 5. I see you increased the CAGRs, but the numbers in the bar chart went down. Am I right, that's just because you roll forward the starting point from '24 to '25. And I know you're not showing the forecast in absolute terms, but if my math is correct, I think your forecast for '28 to '29 went up by about 2 terawatt hours or 4% to 5%. And if so, is that driven by a small number of specific projects? Or would you call that broad-based growth?

Relative to the roll forward of the year and what you're seeing on the dimensions there on the chart. We can get you the specifics on '28 and '29 to confirm your terawatt number. But we have seen the step-up from '27, '28, '29 as these large customers continue to ramp, the ones that we've made significant announcements on. And then any adjustments to the probability weightings would also show up there.

Okay. But does that sound about right? Are they going up by about 5%?

I think overall, I would look at the -- we looked at the 15% off of the '25 base. I don't have those other numbers right off the top of my head, but we can certainly double check them and circle back with you, Andrew.

Okay. Fair enough. Directionally, it seems like it's certainly going up, though. Next question, regarding the Meta contracts, help me understand the pushback or confusion around contract terms. It seems like Meta structured these leases as a series of 4-year subcontracts under an entity owned by Blue Owl with the ability to exit or renew every 4 years. Yet you and the regulators are describing it all as a 15-year structure. And of course, the new gas plants will have a much longer useful life of a few decades. I certainly don't want to put words in anyone's mouth, but help us understand the 2 different perspectives and how to reconcile these 4-year terms versus the 15 years and how that may or may not create risk for investors or rate payers and why there seems to be...

Yes, I would think of as 2 separate transactions. So on the electric service agreement side, we have a 15-year term with a subsidiary of Meta backstopped all the way at the parent. That is the service agreement, and that has all the provisions that I mentioned earlier around termination fees and minimum bills and those sorts of things.

On the -- separately, what Meta has pursued is a transaction with Blue Owl, where they are structuring the capital that they're spending on their side, that is where all of those terms that you're referencing are. And I don't have the details on all those terms, but they're separate and apart from the ESA that they have with us that backstop by their parent.

Okay. So who's the ultimate guarantor on your ESA?

It is the parent. It is Meta all the way up.

And I don't know if you heard earlier, but there's -- we were worried that there might be sirens in the background because of all the Mardi Gras floats that are getting escorted around town right now.

Your next question comes from the line of David Paz of Wolfe.

Just with the 8 gigawatts of gas turbine availability, what level of flexibility do you have in the equipment delivery period? So just thinking about the chart from EEI, I think there were some, let's call them, open slots in the '28 to '30 period. Are those -- to the extent you don't have a new announcement, say, this year, for instance, how would you kind of fill those in? Would you just push those out a little? And just can you maybe better explain how to think about the cadence?

David, this is Drew. So thanks for that question. First of all, we fully expect to utilize the turbines that we have ordered on the time line that we have them ordered. We have customers that would move them forward if they could. And we fully expect to utilize the turbines that we have. If for some reason, we don't have contractual arrangements, we don't have ESAs in place for customers when we need to make -- start making payments on these turbines, we're likely to get reimbursement agreements from customers. So that shouldn't be a problem for us financially. But we fully expect to meet the time line that those turbines are on. So that's -- I think that's where we are right now.

There are no further questions at this time. Liz, I will now turn the call back over to you. Liz?

Thank you, JL, and thanks to everyone for participating this morning. Our annual report on Form 10-K is due to the SEC on March 2 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 web page 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.

This concludes today's conference call. You may now disconnect.

Hello, everyone. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to today's Entergy Corporation Third Quarter Earnings Call and Teleconference. [Operator Instructions]

I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation. Liz?

Good morning. Thank you, Greg, and thanks to everyone for joining this morning. We will begin today with comments from Entergy's Chair and CEO, Drew Marsh, and then Kimberly Fontan, our CFO, will review results.

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. Entergy 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, and good morning, everyone. Today, we are reporting strong financial results as well as continued progress on business and regulatory matters. Starting with our quarterly financial results. Our adjusted earnings per share was $1.53. With our results to date and our biggest quarter behind us, we are narrowing our guidance, raising the bottom by $0.10. We also remain well presented to achieve our long-term growth outlook. Kimberly will review the financial details in a moment.

Turning to the business. Last quarter, we achieved the first quartile Net Promoter Score for utility residential service for the first time since we began tracking this metric. We're pleased to report that we've maintained our first quartile position. We are keenly focused on meeting the needs of our 3 million customers, and we believe our strategy will carry this momentum forward. Our focus on the customer starts with keeping our rates as low as possible. And again, we aim to maintain our average rates well below the national average through the remarkable commitment and creativity of our employees and a culture of continuous improvement. City share of wallet is roughly the lowest our customers have seen over the last 20 years. We expect it to stay in that range over the outlook period.

Of course, there is more to it than that. We proactively manage the effect of fuel volatility on customers' bills, through fuel hedging programs and mechanisms to defer fuel costs during peak prices. And for individual customers, we have developed tools to help them manage their bills, such as approved bill discounts for low-income seniors, payment options like average billing and payment timing, energy efficiency services and customer assistance programs like power to care and light heap advocacy. I'm proud to highlight that our digital LIHEAP platform recently received a Silver Best Practices Award from Chartwell for excellence in serving vulnerable customers. This tool streamlines access to energy assistance and provides real-time updates for customers in need. And as we've worked to attract new hyperscale data center customers, we ensure that they pay their fair share of energy infrastructure investments while bringing other significant benefits to our communities, such as jobs, property tax payments, direct municipal infrastructure investment and workforce development.

This is consistent with their stated intent to be good neighbors. For example, at the recent groundbreaking announcement, Google said that they will protect energy affordability for existing customers by covering the full cost of powering the data center in West Memphis. They're also committed to making a significant community impact, including a $25 million fund to accelerate local energy efficiency efforts and workforce development. In September, Entergy Mississippi announced a new customer-focused initiative known as Super Power Mississippi. The initiative includes a $300 million investment to harden the grid and improve reliability with the goal of reducing outages for customers by half within 5 years. We're able to add this investment for great improvements at no additional cost to Entergy Mississippi customers because of new revenues from Amazon and other large industrial customers investments in the state.

Haley Fisackerly, our CEO in Entergy Mississippi, recently noted that customer rates would be 16% lower than they otherwise would have been due to these large customers, and that includes the incremental Super Power Mississippi investment. In customer growth news, in late September, Sempra reached its final investment decision for Phase 2 of its Port Arthur LNG project. In addition, a colocation data center, Avio announced an investment in Entergy Mississippi service area. While these were included in our probability-weighted sales forecast, these developments continue to build confidence in our long-term outlook. As a reminder, we probability weigh potential industrial customers in our plans, except for very large businesses like hyperscale data centers, which we don't add to our plans until they are the signed electric service agreement.

Because of our vertical integration, natural Gulf Coast advantages, thoughtful regulation, a long history of successfully working with large industrial projects and now MISO's expedited connection mechanisms. We continue to see strong demand from businesses looking to locate in our service areas. This includes data centers, but also customers from traditional industrial segments. Our data center pipeline has continued to grow and now is setting to from 7 to 12 gigawatts. This is based on active conversations with customers for whom we reasonably could expect to sign agreements within the next year or 2. With line of sight on incremental opportunities, we've added 4.5 gigawatts to our agreement for the purchase of Power Island equipment, including steam turbines, combustion turbines and heat recovery steam generators.

This addition represents 6 units that will be delivered in time to support commercial operations in 2031 to 2032. In total, we now have secured more than 19 gigawatts of capacity which is accounted for due to growth or other supply needs. That leaves 8 gigawatts for additional growth. We secured other critical equipment, including transformers and breakers and we secured 90% of materials required for our planned transmission projects through 2030. We also have agreements with EPCs for the generation projects through mid-2029. We have line of sight for additional projects. We're also well positioned for solar projects. For our owned projects, we secured approximately 75% of our critical equipment, including generator step-up transformers, high-voltage breakers and solar modules. We also have clear line of sight to the remaining 25% through our existing supplier relationships.

In July, FERC approved MISO's expedited resource Edition study, or ARS process. We have since submitted 9 interconnection requests for 12 plants into the new process. Eight of these plants and our AR submission are in our plan and 4 are available for incremental growth. ARRIS has worked well to support speed to market for customers trying to come online as quickly as possible. as well as help us respond to the national security priority for rapid energy deployment to win the AI race. We expect to start receiving our first project approvals by the end of this year. The standardized designs for our generation projects and our transmission lines and our history of successful execution on large projects, we remain confident in our ability to manage our operations and execute on our capital plan. We're also well positioned to serve potential new customers above our current plan.

For the customer base that continues to grow, perhaps it is no surprise that our system as well as Entergy Arkansas and Entergy Texas hit new peak loads in July. Our system performed well during these high load periods. Responding to that customer growth Entergy Texas remains on track for the completion of the Orange County Advanced Power Station next spring. The plant decommissioning the plant commissioning, we're just getting started with that one. The plant's commissioning is underway and first fire is expected in December. Our other large generation and transmission projects are also on track.

Last week, Entergy Mississippi pro ground on the Vicksburg advanced power station. We'll also support customer growth, including the large customer that Entergy Mississippi signed this past February. Entergy Louisiana recently announced selections from its baseload generation RFP to support customer growth. And that includes 2 combined-cycle resources that will be self-built. For accelerated resilience, we expect to file Phase 2 plants in Louisiana and New Orleans within the next several months. This timing allows us to maintain operational momentum with our resilience investments. To date, our operating companies have invested about $580 million in approved resilience work. We completed 32 line hardening projects, upgrading more than 13,000 structures. And we have hired 10 existing substations to mitigate the impacts of both hurricane force winds and storm search.

In addition, Entergy Texas was recently awarded $200 million in grant funding by the PUCT from the Texas Energy Fund for resilience projects with no cost to customers. The grant will allow for the hardening of more than 8,000 distribution poles covering 338 miles, well hardening 16 transmission lines. We appreciate the proactive support from our state regulators and legislative bodies to improve the storm readiness of our system for the benefit of all customers. With the customer growth opportunity before us and excitement throughout our service areas, we continue to work with our stakeholders, including regulators, elected leaders, community leaders and local vendors to meet customers' needs and to improve their outcome.

In August, the Louisiana Public Service Commission approved the settlement for generation and transmission resources needed to serve meta. Meta's generational investment will bring significant benefits, including jobs, workforce development and state and local tax income. In addition, as the LPSC staff highlighted at the business and executive meeting, contracted minimum bills ensure that Meta is paying the incremental cost to serve them during the contract term without imposing costs on other customers. These features provide benefits to support keeping rates as low as possible for Louisiana customers. Last week, a Louisiana Public Service Commission also approved the 200-megawatt Bogalusa West solar project. which was the first project approved through Louisiana's accelerated solar approval process. In Arkansas, the Public Service Commission approved that generating Arkansas Jobs Act Rider.

This rider enabled by the legislation this past spring, allows recovery for new economic development related and other customer-critical generation and transmission investments outside of the formula rate plans 4% cap. Additionally, it includes recovery of carrying costs on CWIP during construction, thus lowering cost for customers. Under the new rider, Entergy Arkansas filed in early August for the Jefferson Power Station approval. Also under the new rider, Entergy Arkansas filed for approval in September for Cypress Solar, A solar and battery storage facility to support economic development via Google's recently announced data center.

Moving to Texas. In September, the Public Utility Commission approved the Legend combined cycle power station and Lone Star, a simple-cycle peaking unit. They will provide efficient, reliable power to support the rapid growth in our Southeast Texas service area. While the commission approved the generation, it also implemented a cost cap our filed cost estimates totaling $2.4 billion, including transmission, carrying costs and contingency. As I noted earlier, we have already contracted with the EPC and secured the long lead time equipment, which comprise a significant portion of the construction costs. The Texas Commission also recently approved to large transmission projects that serve growth and improve reliability and resilient on the system CTEC, the Southeast Texas area reliability project at $1.4 billion 500 kV line and the Legend sanding 230 kV line, which will serve industrial customers in Port Arthur, including Phase 2 of the Sempra LNG project.

Separately, Entergy Texas filed for an increase in its DCRF rider. We expect a decision from the PUCT by the end of the year. These are exciting times in Entergy and exciting times for our industry. We are delivering unprecedented growth for our region and economic development that benefits the customers and communities we serve. At the same time, we are answering the call to support our national security through our rapid response to the energy needs of companies working to win the global AI race. All that while keeping rates as low as possible for our customers. The EEI Financial Conference is in a couple of weeks and we'll share additional color regarding the strong foundations underpinning our differentiated growth story.

Notably, our long-term customer sales growth outlook is robust including continued support from both traditional industrial and data center customers. We are well positioned to support speed to market through our supply chain positioning, design choices stakeholder engagement and strong balance sheet. And we are successfully executing on critical issues that our existing customers care about, including keeping rates as low as possible and deploying resilience and reliability investments. We look forward to continuing this conversation with you at the EEI Financial Conference in a couple of weeks.

I'll now turn the call over to Kimberly who will review our financial results for the quarter.

Thank you, Drew. Good morning, everyone. We had another great quarter I'll now walk through our financial results as well as our guidance and outlook, and I'll provide a look ahead to EEI. Starting with earnings. Our adjusted EPS for the quarter was $1.53 as shown on Slide 4. Primary drivers were strong sales growth and the effects of investments made for our customers partially offset by higher other O&M and other operating expenses and an increase in our share count from settling equity forward. Earnings contribution from sales growth was positive even with weather being milder this quarter compared to last year.

Weather adjusted sales for the quarter were once again very strong increasing approximately 4.5%. Industrial sales were the largest contributor with more than 7% growth, primarily from new and expansion customers that continue to ramp up their operations.

Slide 5 summarizes our credit ratings and affirms that our credit metric outlooks remain better than rating agency thresholds. In the quarter, S&P issued credit reports on each of our operating companies and Entergy Corp. Moody's also issued reports on Entergy Mississippi and Entergy New Orleans. Both agencies affirmed all ratings and outlooks. Last quarter, we discussed the nuclear tax credits earned in 2024. Since then, we have completed transactions to monetize these which netted more than $535 million after transaction costs. We continue to work with our regulators on how and over what time period we will provide these benefits to customers. We expect this to happen over an extended period of time. As a reminder, because the value of nuclear PTCs is highly dependent on average revenue per megawatt hour, we do not include cash benefits in our cash flow or credit metric outlook beyond 2025.

We'll talk more about our credit and EEI, but I'll give you a quick preview. Our credit metric outlooks are strong with FFO to debt above our thresholds throughout the outlook period, achieving our 15% target during the period. Our financial health is bolstered by all the work we've done including the structure of our new large customer ESAs to protect existing customers and our credits; improvement in our pension funded status, constructive regulatory mechanisms, and conservative planning assumptions. All of these have strengthened our balance sheet and created benefits for our customers. We continue to see strong underlying fundamentals and flexibility to meet our objectives.

We are rolling forward our outlook to 2029, shifting our 4-year capital and equity plans forward, as you can see on Slide 6. Our updated capital plan for 2026 through 2029 is $41 billion. The equity associated with that plan is $4.4 billion within the 10% to 15% range of the total capital plan. Our capital and equity plans include alternative financing assumptions, which shifts the capital outlay for some projects beyond our 2029 outlook. This better aligns the cash outflow with when assets are placed in service. We have been proactive in addressing our equity needs, selling forward contracts through our ATM as well as the block transaction we executed in March. We've taken significant price risk off the table and have ample time to raise capital, including through our ATM program.

For our 2026 through 2029 equity need, about 45% is already contracted, which takes us well into 2027. Through the third quarter, we have settled approximately $800 million of equity forwards. In October, after quarter end, we settled an additional approximately $330 million or about 5.7 million shares. We are using these funds to continue to invest for the benefit of our customers.

Our adjusted EPS guidance and outlook are shown on Slide 7. As Drew mentioned, with solid results through the third quarter, we are narrowing our 2025 guidance range, raising the bottom by $0.10 higher-than-planned revenue from weather as well as other planning updates have enabled us to manage the business and flex spending in areas that benefit our customers. Our Flex program helps us ensure that we deliver predictable adjusted EPS growth year in and year out while meeting our customer needs. Looking beyond 2025, we continue to see very strong growth driven by our customer-centric capital plan. Our adjusted EPS through 2028 remains unchanged. And as we add 2029 to our outlook period, our long-term compound annual growth remains strong at greater than 8%.

Drew and I, along with our operating company leaders will be in Florida in less than 2 weeks, where we will talk about our strong customer growth story as well as our plans to invest in reliability and resilience to better serve our customers. We have a solid base plan consistent with our strategic objectives. As Drew discussed, we have a strong customer pipeline, including 7 to 12 gigawatts of data center opportunities, and we have secured critical equipment to bring additional customers online. Today, we have provided our adjusted earnings per share outlook and a high-level view of our preliminary capital and equity plans through 2029. At EEI, we will provide more details on these outlooks. We are excited about the opportunities before us and look forward to talking with you at EEI. And now the Entergy team is available for questions.

[Operator Instructions] It looks like our first question today comes from the line of Shar Pourreza with Wells Fargo.

It's actually Constantine here for Shar. Congrats on a great quarter. Maybe starting off on the updated CapEx plan and kind of the 4.5 gigawatts of the power island equipment. Is that directly associated with some of the more visible load in the current pipeline, you anticipate any incremental CapEx needs that would require regulatory approval before making into the '29 plan? Just how should we be thinking about the upside here?

Constantine, it's Kimberly. The $41 billion includes capital that's needed to support the load that is in the forecast. The 4.5% incremental watts that Drew referenced would support additional customers that could come online. So we referenced 7 to 12 gigawatts in the data center, that's up from 5 to 10 in the last quarter. And we've added, as you noted, additional power island equipment in order to support that. To the extent that those customers in that pipeline reach agreement, we would expect that you would need supplemental capital to support that, and that's what we plan ahead for here. .

Okay. Perfect. And then maybe shifting to the longer-term outlook, kind of with the large load growth solidifying and under contract, you're locking in kind of the CapEx plans and the associated equipment. Do you see any opportunity to potentially guide on the longer-term EPS growth outlook beyond 2030, just as you kind of gain that visibility?

As you know, we added 2029 here. Certainly, good visibility through that period. If we're able to land additional customers that will provide you that visibility there. But going beyond that, I think we'll just -- this good visibility here, including individual outlooks by year, but we do think we have long-term opportunity over beyond this period.

Okay. Perfect. And just a quick follow-up on kind of the generation needs kind of more broadly, do you see customers agnostic to the resource mix? Or is there still a push for some renewable components as we've kind of seen with hyperscalers demanding for nuclear SMR and other technologies?

We talk to our customers about all kinds of supply. Certainly, we've lined up here, Drew referenced both gas resources as well as renewable resources. We do have a pipeline of opportunity around renewables based on customer needs, but we also continue to look for ways to meet their needs to ensure that we are speed to market as well as meeting clean needs. So we think it's an all above the approach over time.

And Constantine, I'll just add that we are building this gas generation, but we have expectations that we will also do carbon capture at some point. And we are working on that actively. We have RFPs out in -- for some of our assets in Mississippi and in Texas to test that. We still have FEED studies going on at our Lake Charles Partition in Louisiana. And we're exploring various options to figure that out. And we're supported by our data center customers that are wanting to achieve those same objectives. So we think we're well positioned to figure that out over time, but we don't have anything specific to announce today. .

Our next question today comes from the line of Jeremy Tonet with JPMorgan.

Just wanted to dive in maybe a little bit more on the forward outlook as well. I think the commentary might have highlighted the capital shifting out closer to plant COD and maybe that kind of spills over into past the plan period. So just wondering if you could talk a bit, I guess, on the momentum across the plan and where -- how that looks after the plan, given I think you've said in the past how this accelerate since the end of the decade?

Jeremy, it's Kimberly. I guess, just to clarify, $4 million through 2029. I referenced some plant that closes outside the period. Some of that is alternate finance. So you don't see the spend in this period and all the end would go out when that closes. So that was that reference there. But certainly, with the additional equipment that we've secured in the pipeline that we see, we would expect investment to continue well beyond this period.

Yes. And we do have turbine slots that are delivering for commercial operations in '29 and '30 that still have not been announced as overall projects. So there are so opportunities that could add additional capital in the out part of our current outlook period.

Got it. That's helpful. And maybe just putting to Arkansas here, if you could comment a little bit more, I guess, on the ramp for Google there, the project there? And just wondering any more color you might be able to provide as well as local stakeholder views and, I guess, commission priorities, how that all kind of fits together at this point.

Yes. That project is obviously in early stages. It was filed in September, but the customer is continuing to move forward with the ramp as we would expect. As you know, there are minimum bills associated with all of these large customers that help support during the construction period. But I don't see anything different on that ramp than where we have been similar to all of our other customers.

Yes. And people are excited in Arkansas for that project. At Google's groundbreaking last month, the governor was there and numerous local leaders, including the Mayor of West Memphis. And there's also the 600-megawatt solar facility and the 350-megawatt battery that are going to be part of supporting Google. And that investment is traveling through the Arkansas commission's docket as well. So we'll we expect to work through that process with the various stakeholders, but they're -- at this point, there's a lot of support in Arkansas for the economic development that this opportunity brings.

Got it. And maybe just taking a step back, overall, I guess, commercial discussions with hyperscalers. At this point, I guess, how would you describe the tone or pace of discussions here? Is there more or less urgency to sign up incremental load at this point given the success that you've had so far?

Well, certainly, I would point to the raise of the -- from 5 to 10 to 7 to 12 gigawatts around our increased customer conversations. Those conversations cover all the things that we do before speed to market, getting to clean and also how the stakeholders bringing the stakeholders along. As Drew said, in Arkansas very excitement very great about that transaction in Arkansas. So we think the conversations continue to be strong and continue to support our incremental increase in that pipeline.

Got it. One last quick one, if I could, on the transmission side. Just given some of the load shed events due to storm at earlier in the year. Wondering how you think about the opportunity to deploy more transmission, enhance flexibility such as increasing connectivity into Mississippi. Just wondering how you see the opportunity set at this point?

Yes. We do still see a robust transmission opportunity, but it will be customer-driven based on how the grid needs to adapt to continued growth in our service territory. Right now, we have a very robust over 400 miles of 500,000 kV line. We have a lot of 230 kV transmission that we are also building. We're getting ready to file in Louisiana, the [indiscernible] line. I think I talked about that last quarter, which is -- which part of that 500 kV system, and we have approval spending in Texas and in Louisiana on transmission right now. So there is the possibility for significantly more. We have quite a bit coming through the MTEP process that's seeking MISO approval by the end of this year. And then depending on the growth, there could be additional investment opportunities out there. So we are expecting continued significant transmission aspect going forward.

And our next question comes from the line of David Arcaro with Morgan Stanley.

I was wondering, let's see, you might have said before, but I may have missed it, what's the time frame for the 4.5 gigawatts of the power equipment that you secured? And I guess I was wondering, is this a stepping stone -- are you still actively working to secure additional power equipment in a similar way?

The timing for the extra 6 units would support commercial operations in 2031 and 2032. So that's about using our standard design of 750 megawatts, that's what comes out to a little bit or 4 gigawatts. So that's the plan. And I can't remember the last part of your question, David, remind me.

Yes. Curious if this is a stepping stone -- are you still actively in discussions and working to increase your access to gas turbine supply beyond that $4.5 million?

Right now, it matches what we see as our customer needs. So if there continues to be growth, then we may continue to go into the market and seek additional turbine access. But I think that's where I would put it right now. It's meeting our expectations of potential growth that we see in the near term. We're also looking at a number of other things. We continue to monitor new nuclear and look into that and talk to our customers about that.

We are also -- as you saw with the Google transaction, there's potential for solar and battery and then we're also looking at a number of upgrades on our system to provide incremental supply. So there's several things that are out there that could still drive incremental generation capacity even beyond just gas turbines.

And I was curious just to get your latest thoughts on the potential to expand nuclear capacity in your service territory and any reaction or impacts to your thinking from the recent Westinghouse and U.S. government announces -- announcements that we've seen.

Yes, thank you for that question. We're actually excited to see that there is some investment going in. What the industry really needs is to get into the kind to manage the construction risk, and we're excited to see someone moving forward. And so we certainly applaud the work that Brookfield and Westinghouse and Cameco are doing with the Feds to figure this out. Obviously, there's still a lot of details that need to come out about that. So we're anxious to get into that conversation with them at some point about what exactly they're doing and how they're shaping all that up.

But we are excited to see that it's moving forward and has an opportunity to really move the industry forward. So with all that being said, we still have a lot of interest in our service territory from our stakeholders to bring new nuclear into Texas, Louisiana, Mississippi and Arkansas. Each state has some sort of commission or task force or something like that, looking at how we bring new nuclear in, and we're a member of all of them. So we continue to actively look at it. We haven't -- as we've said in the past, we haven't figured it out yet. And -- but there is a lot of interest from our stakeholders and so we continue to explore it.

And our next question comes from the line of Angie Storozynski with Seaport. .

I was just wondering, we've all read about the Manhattan sized data center in our Louisiana service territory from Meta. So how much of that is currently covered by ESAs and reflected in your pipeline?

So right now, the only thing that we have in our outlook is the signed ESA that we previously announced basically about a year ago almost now. So that project has been publicly said by Meta to be 2 gigawatts of compute. And so anything beyond that is not currently reflected in our outlook. And we wouldn't comment on any specifics of the size or timing of any project just like for that potential opportunity, even though we know that they've been posting about it.

But we wouldn't comment on it consistent with our ongoing policy for not commenting on specific customer opportunities.

And it's -- but again, is it because it's -- the ESA hasn't been signed? Is it because it's beyond the planning horizon when this investment would need to happen?

Well, it's not necessarily because the ESA hasn't been signed. We wouldn't comment generally about ongoing negotiations with anybody. But as it relates to putting large data center projects into our capital plan, we would need a signed ESA to do that. That's been our policy because these projects are so large, they have such an impact it doesn't really fit with our probability weighting methodology that we've had forever. So we still use that methnology with our more traditional industrial projects like steel mills and LNG terminals and petrochem facilities and the like.

But for these really large data centers, it's either all in or all out. So we haven't included anything in our outlook to support any large data centers at this time.

And our next question comes from the line of Sophie Karp with KeyBanc Capital Markets.

A couple of questions for me. On the regulatory front, given all of the demand and from large customers and [indiscernible] do you envision that you will [indiscernible] beyond your regular core plan proceeding [indiscernible] accommodate that growth and recovery?

I didn't catch all of that. Sophie, you're breaking up a little bit. Do we need something beyond what exactly we...

Yes. Do you think that you need a regulatory proceeding that goes like beyond regular 400 plans reused to accommodate all the growth that you have on the system?

Yes. It depends on the jurisdiction. Thank you for clarifying. It depends on the jurisdiction. In Mississippi, they have a law that allows for very large economic development projects to move forward with the presumption of the certificate, the effectively the presumption of the certificate of convenience and necessity. Of course, we still ultimately have to go back through regulatory approval for formula rate plans and the like in Mississippi. So it's not like the commission is not involved.

But you'd be able to kind of move forward there. And in the Louisiana and in Arkansas. Arkansas just passed the generating Arcosa Jobs Act, which allows for an expedited process. And so we're actually using those processes right now. So we still continue to go through the process in Arkansas, and we'd expect the same in Louisiana. So I think we'd be using the same processes that we have today, both in Louisiana, Arkansas and I guess, in [indiscernible] Mississippi is very different for those large economic development projects that we've used in the past. And -- but they would all be somewhat expedited given what we've seen and the interest from the various stakeholders in each jurisdiction.

Got it. Got it. And then my other question was the 12 gigawatt pipeline, could you help us and break it down by, I guess, the stage it's in like how much of that is in a ESA stage versus the slightly earlier maybe in the process?

Sophie, it's Kimberly. I would not think of that as signed ESAs. That is opportunity in the pipeline. It's in various stages, but not all the way to the end. As Drew mentioned earlier, we don't include in our forecast until we get to certainty around the signed ESA. So that would not be in that 7 to 12 gigawatts that we gave.

Okay. Got it. This is all incremental to ESAs that you have in your plan?

That's right.

Yes. And I would just add that our actual pipeline goes well beyond that. I think these are ones that we feel like we could reasonably see come to fruition in the next year or 2.

And our next question comes from the line of Paul Zimbardo with Jefferies.

I had a clear fine question following up on David's a little bit. Could you explain the comment on the 8 gigawatts for additional growth from the power commitments above the plan. Do I recall it was 7 gigawatts from the second quarter call. And I know you said you added 4.5 gigawatts. So does that mean you execute against some of that incremental opportunity? I was just a little confused on that piece, if you could clarify.

Sure, Paul. We think about in the second quarter call, we said 15 gigawatts within the forecast through 287 was for growth. We now have 19.5 gigawatts compared to that 15% and 8% is for growth. So that delta is what I was referencing earlier around it's either in the forecast or it's in the forecast, but that capital closes outside the period. So you're not necessarily seeing that. So that's how you get to that 8 gigawatts of incremental growth.

That's what I thought. And then I know you talked a lot about the renewable side today, and obviously, Google is doing solar and storage. Are there any and we focus on the turbines, of course, are there any commitments in megawatts, gigawatts on the renewable side, solar and storage that we should be thinking about also as kind of upside opportunities to the plan to serve hyperscalers?

Yes. I think we would expect that there would be additional renewables associated with large hyperscaler deployment in some way. We've certainly seen that with each of our announcements thus far, AWS had, I think, 600 megawatts of solar associated with Google similarly and then Meta also had 1,500 megawatts of solar. So I would expect that there would be some solar out there commitments as well. .

Okay. Great. So we should think of that as kind of upside to the gas gigawatts that you talk about?

Yes, potentially. I mean there's also -- there's a lot of solar projects out there. So there is also still the potential for PPAs. But we would want to try and compete to land some of those projects ourselves for our own capital deployment.

And our next question comes from the line of Anthony Crowdell with Mizuho.

I think one, just maybe a follow-up. On the 4.5 gigawatts, I guess, of the additional power equipment. Is that incremental to what's on Slide 14 of, I guess, you have 7 CCGTs listed, that is incremental to that?

Yes, it would be. I'm looking -- okay, we've got Slide 14 pulled up here in the room and yet there would be incremental to the ones that are there. There are other ones that we that are part of our overall 19 gigawatts that aren't on that page before you get to the 4.5% that we added. But yes, the 4.5% would be incremental to what's on that page.

Great. And then just on -- and I think you touched on it in your prepared remarks on EPC availability. It doesn't seem like there's any issue getting craft labor contracts to build all the generation. Just to provide any color where as we've seen other large projects that maybe have struggled in the size of all of these projects, it's kind of tremendous but yet no issues on labor. I just wonder if you give any color on that.

Well, I would say that there are real challenges with labor. I don't think that it's certainly not easy to get the labor lined up. There is a real need for skilled craft of all types, and that hasn't changed. And the result has been that there are increasing costs associated with these combined cycle projects. And so -- that's -- we've been hearing about that trend. It is very real. Our projects aren't immune to that, but we're working through it with the EPCs. .

Congrats on a great update.

And our next question comes from the line of Andrew Weisel with Scotiabank.

If I can first piggyback on Anthony's question about the massive data center build-outs. I don't neither expect you to comment specifically on Meta's Hyperion project. But how are you thinking about the potential these data centers to build on-site power generation themselves. Have you been talking to them about their interest in self-generating versus buying power from your utilities? I know your CapEx and earnings outlooks are based on real signed contracts, but -- how are you thinking about that going forward?

Well, I would say that in order to manage transmission costs, we are actually building generation in many cases, very close to where the customer is located. So maybe it's not on site or behind the meter, but it's very close. So you can see that with the meta project and stuff like that. So I think there's -- in some ways, there's a tension without a difference from a physical grid perspective. And then secondly, I would say that these customers they certainly have the wherewithal to do their own generation. They prefer to put their capital into something else. And so even see that with, I would say, Meta's recent financing of their facility where they're leasing it back in North Louisiana, they have a lot of capital needs.

So if they could avoid putting capital into generating stations. I think they would probably prefer to do that. So while it is possible that they go behind the meter, I think competitively, we are well positioned to support their growth by putting our own plants nearby getting essentially the same benefits and supporting the capital that's not making the capital element somewhere else to support them on our books rather than having them to carry it on their own balance sheet.

Okay. Then in Arkansas, I believe you're planning to file a rate case early next year. You talked about the hyperscalers helping with customer affordability and paying their fair share. Can you maybe preview the filing a little bit in terms of customer bill impacts and what roles Google might play in that case?

Yes. I don't -- I can't give you an update today. The team is still working on the case. So I don't want to get out in front of them. But I think in Arkansas, as we look out over time, you see similar types of things that you've seen in the other jurisdictions where the benefits associated with the large new customer help out the existing customers. And so we expect to lay that out as part of the rate case going forward. And frankly, within the ongoing conversation that we're having right now with the existing processes over the formula special rate contract that we filed for in Arkansas for Google.

Our next question comes from the line of [indiscernible] with BTIG. .

Just maybe trying to tie around this 4.5 gigawatts of incremental. I was just wondering if you could maybe tie that with the comments maybe a little bit earlier on the IRS Q as well. Is that 4.5 gigawatts? Is that tied to those extra incremental, I feel like 4 projects in the Q? And then maybe more broadly, if the IRS process right now is working as intended and seemingly should be able to kind of help for the forward needs.

Yes. The 4.5 gigawatts of extra 6 turbines are not yet represented in the IRS Q. Those are the things that are in the IRS Q would be much more near term than those. Those projects are, as I said earlier, are searching for COD in the 2031, 2032 time frame and the projects that we have in the IRS Q would be coming in much earlier than that. So hopefully, that answers your question.

Got it. So in some ways, then those extra turbines in the Q would represent incremental nearer-term demand if the opportunity arises?

That's correct.

And our next question comes from the line of Steve D'Ambrisi with RBC Capital Markets.

Kimberly, just kind of again on some of this discussion around the dispatchable generation. Can you talk a little bit more about the alternative financing agreements that you guys are using? And just can I extrapolate what that is, the sizing of that, if you've gone from 8 gigawatts that I think was committed in the Q to now implied 11 gigawatts in -- does that 3 gigawatt increase? Is that basically what's being turned to the finance and falls outside of the plan? Just can you give a flavor of the timing around that and the magnitude because it seems like that would be $6 billion to $7.5 billion of spend that could come in $30 million or $31 million, which would look like it would drive an outsized amount of growth?

Steve, it's Kimberly. I wouldn't think of it as a direct correlation between that alternative financing and that 3 gigawatts that you referenced. First, we added an extra year. So you rolled forward to 2029. And you can see the run rate of that is consistent with where we've been in each of the prior years before that. So that's your biggest piece. There is some alternate financing. We talked about that actually in our legend filing in Texas as a way to help with the overall cost, but also time that closing with when that asset goes into service and throws off cash.

So we haven't sized that. We'll have a little more visibility into that at EEI, but I think your numbers are a bit outsized relative to what you have here, and I would think more about the 2029 addition.

Sorry, Steve, just to add to that, all of these projects that we are bringing on that we've contracted for these turbines we expect to achieve commercial operations by 2032. So they're all coming pretty fast, and you could see a number of them on that Page 14 that we were referencing earlier. But there's a whole bunch more in the next few years, just beyond that, if everything comes together on the schedule that we've laid out with the turbine orders. So there is quite a bit of capital just over the horizon from 2029 to support that kind of potential build-out.

And it looks like there are no further questions. So at this time, I will now turn the call back over to Liz Hunter for closing comments. Liz? .

Thank you, Greg. Thanks to everyone for participating this morning. Our quarterly report on Form 10-Q is due to the SEC on November 10, and provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10-Q 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 web page 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.

Thanks, everyone. Again, this concludes today's conference call. You may now disconnect.

Good morning. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to Entergy's Second Quarter 2025 Earnings Conference Call. [Operator Instructions]

I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation. Liz?

Good morning. Thank you, Greg, and thanks to everyone for joining this morning. We will begin today with comments from Entergy's Chair and CEO, Drew Marsh, and then Kimberly Fontan, our CFO, will review results.

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. Entergy 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, and good morning, everyone. Today, we are reporting second quarter adjusted earnings per share of $1.05. Our progress through the first half of the year keeps us firmly on track to achieve 2025 results in line with our guidance, and we are raising our outlook driven by our higher capital plan to meet customer expectations. We aspire to be the premier utility and to create sustainable value for each of our key stakeholders, our customers, employees, communities and owners. Our customers are listed first, so I'll start there.

We have over 3 million customers, and most of them are residential. For the first time since we began tracking Net Promoter Score, we achieved a result that ranks in the first quartile for utility residential service over the past 12 months, across our enterprise and using J.D. Power data. We are not first quartile in every jurisdiction or in every category. Still, we are excited about our progress, and we are energized by the opportunity ahead to further improve our service to our customers.

Our industrial growth opportunities remain robust. We continue to work with state and local leaders to attract businesses to our service area, with our economic development model driven by our vertically integrated, customer-focused electric company of welcoming communities and the economic advantages of the Gulf South. We provide one-stop shop technical solutions, while we bring key parties together to rapidly meet the needs of new customers. At the same time, we ensure strong protections for our existing 3 million customers and maintain our credit.

Today, we are pleased to announce that we have secured significant new growth in Arkansas that will bring benefits to existing customers as well as communities in the state itself. With this addition, we expect our 4-year industrial sales growth rate to be approximately 13%. Consistent with our practice, we aren't commenting further on specifics or customers, although we anticipate making regulatory filings soon, which will include additional details.

We are updating our 4-year capital plan to $40 billion, which will enable us to serve increased load and grow our renewable portfolio across our jurisdictions. As a point of reference, we have signed roughly 8 gigawatts of electric service agreements since the beginning of last year. As a result, our 4-year capital plan includes significant investments for customer-driven generation, including approximately 3 gigawatts of solar, 1.4 gigawatts of battery storage and 8 gigawatts of highly efficient gas units. Some of these resources are planned to come online beyond our 4-year plan period.

During the last quarter, we disclosed that we entered into an exclusivity agreement for power island equipment, including 15 combined cycle combustion turbines and 2 simple-cycle combustion turbines, as in addition to the Orange County, Delta Blues and Legend projects. Collectively, these turbines provide 15 gigawatts of capacity, that leaves 7 gigawatts for future customer growth needs with deliveries for commercial operations between 2029 and 2031. Our strategy to use standardized equipment and designs helps us effectively manage costs and schedule for our customers.

Our customer pipeline continues to be robust, including our data center pipeline, which remains in the 5 to 10 gigawatt range, and significant interest remains in our traditional industrial segments as well. Our economic development model attracts large new customers that contribute to our communities, growing jobs and tax base. They also share in costs that would otherwise be covered by existing customers. The economic impact of these projects on our communities is substantial, and yet another sign to existing customers and potential customers that great things are happening in Entergy's service area.

While we've made progress on our customer service, storms create moments that matter. We spoke to you at our Analyst Day last summer about our plans to better manage storms. One year removed from that conversation and in the hardest storm season, take a moment to review our progress. To start, we are executing Phase 1 of our accelerated resilience program. We have more than $2 billion approved, mostly in Entergy Louisiana. To date, we've invested roughly $400 million, and that includes energizing 9 new substations designed to sustain both flooding and hurricane force winds, stalling over 8,000 hardened poles, while another 10,000 pole upgrades are in process, which is on top of the average annual run rate of 75,000 poles replaced system [indiscernible]. And in the coastal region of Texas, we've rebuilt 2 short transmission lines to harden standards.

Earlier this month, Entergy Texas submitted its application for the Texas Energy Fund to support $200 million of resilience projects. We expect to complete about 30% of our Phase 1 projects by year-end. As a reminder, we prioritize projects with the highest benefits, so these earlier projects will have a relatively higher impact. We plan to file later this year for the next phase of accelerated resilience to support continued progress.

In addition to our accelerated resilience program, new transition investments built to today's more stringent standards also improved the resilience of our grid. For example, we have several large 500 KV transmission projects in front of regulators in Louisiana and Texas that will provide resilience benefits while also supporting growth. The Mount Olive to Sarepta line in North Louisiana, aligned along the West Bank of the Mississippi River in Louisiana through a growing industrial corridor, the Southeast Texas Area Reliability Project, or SETEX, and the Cypress to Legend line that will support strong growth in the Port Arthur area.

These projects and the babble to weather line in Louisiana to be filed later this year, total 460 miles, and will represent about 20% of our 500 KV system once completed. These projects will also loop existing transmission lines, such that if an event occurs at any point in the loop, power will be automatically diverted in another direction, avoiding customer outages. Altogether, we are planning $8 billion of transmission investment in our 4-year capital plan, including $5.6 billion reviewed through MISO's MTEP process.

In addition to system improvements, we ensure that we are prepared for storms through planning, drills and vegetation maintenance. Technology is also part of the journey, and we've been experimenting with cameras and information systems on planes and drones and soon, helicopters, that fly power lines to gather data with a plan to ultimately feed AI, more quickly assess damage and optimize the productivity of our teams on the ground.

Capital deployment is critical, but it takes more than that to be premier. To that end, our power delivery team is launching PD Strong, short for power delivery strong, to transform our power delivery team. This includes everything from work management and capability building to behaviors and culture, all with an eye towards better serving our customers every day, but especially in moments that matter, like storms.

Our regulators are also supporting our storm response improvement efforts. In addition to approving resiliency investment, Louisiana and Texas implemented new processes to expedite storm securitization, allowing operating companies to request recovery based on estimated storm costs and accelerated commission time lines for decisions. Those commissions, of course, retain their authority to determine the prudence of utility storm costs, and estimated costs would be trued up to actual costs once available.

Louisiana's expedited process for 2025 storm costs includes a commitment to review the storm cost related financing order request at the subsequent commission meeting after the utilities filing. Accelerating storm cost recovery reduces carrying costs for our customers and supports the operating company's credit, which also keeps the cost for capital lower for our customers. This new process also gives confidence to vendors and mutual assistance partners to support storm recovery.

Finally, as we deploy our capital plan throughout our service area, a smaller and smaller percentage of our infrastructure is exposed to storms along the coast, reducing our relative financial risk, which benefits our customers as well as our owners. These actions continue to build on our improved balance sheet and strong liquidity. We have made good progress over the last year reducing storm risk through accelerated resilience, hardening of our grid, financial readiness and regulatory changes to improve outcomes for customers, and we have more plans for improvement still ahead. Meanwhile, you stand ready to respond for anything that comes our way.

We have some other operational achievements that I'd like to also highlight. On July 1, we completed the sale of our gas LDC businesses to Delta Utilities. The transition for customers was smooth because of the hard work and planning by many employees, including those who have moved to Delta Utilities. We are extremely grateful for their efforts. The sale of that business allows us to focus on our core electric business.

Safe and effective nuclear operations also remain a cornerstone for all stakeholders. This year, Waterford 3 and Grand Gulf are proudly celebrating 40 years of operations. The Waterford 3 refueling outage wrapped up in June on time and on budget. Work included replacement of all 3 low-pressure turbines, which will improve reliability and pave the way to increase the capacity of the unit by an estimated 40 megawatts in the fall of 2026. We've already filed the upgrade request with the LPSC. Additionally, planned turbine rod replacements in ANO 1 in the fall of this year will set us up for future upgrades there.

We continue to engage with customers, regulators, vendors and others regarding new nuclear. So we don't have any updates to report at this time.

Turning to regulatory. We are making progress on important matters to meet customers' growing needs and drive improved customer outcomes. In early July, we reached a stipulated settlement with the Louisiana Public Service Commission staff and a number of parties recommending approval of our request to invest in assets to support adding Meta's transformational Hyperion data center to our system. The hearing was held in mid-July, and we presented extensive evidence of the significant benefits to our customers and communities are making these investments as well as through bringing Meta online as a customer. These benefits are in addition to the transformative benefits that Meta will create through its billions of dollars of investment in Louisiana and the high-paying good quality jobs it will provide. The procedural schedule supports commission decision no later than October of this year.

The Mississippi Public Service Commission approved Entergy Mississippi's, following the rate plan settlement, which does not result in a rate change. Also, Entergy Louisiana and Entergy New Orleans filed their annual formula rate plans, and new rates are expected in September. Entergy Arkansas filed its annual formula rate plan, with new rates expected to be in place at the beginning of next year. This is the tenth and final projected year in the current cycle. And in February '26, we will file a base rate case, which will include a proposal for a new formula rate plan tariff.

At the federal level, FERC approved MISO's Expedited Resource Edition study, or ERE's proposal last week. We appreciate FERC's work to temporarily facilitate customer growth across MISO, while we all work together to improve MISO's existing due processes.

Last quarter, we covered Arkansas legislation that allows for a rider to support investment for economic development. This quarter, the Texas legislature passed, and the governor signed 3 bills to provide benefits to our customers and communities. One accelerates storm securitization, which I mentioned earlier. Another allows rider recovery, a MISO-related capacity costs that are currently included in base rates. The rider may be filed annually beginning in 2026. The third is a wildfire bill that provides a potential path to improve wildfire liability. Our likelihood of experiencing wildfires is lower than in other parts of the state. We take the risk seriously and intend to use the new tools that are available.

Finally, our communities are a key stakeholder, and actively supporting them beyond economic development is an important part of our strategy. Entergy has once again been named a top 50 most community-minded company and the leader in the utility sector by the Civic 50, an initiative of Points of Light. In 2024, our employees and retirees attributed more than 122,000 volunteer hours across our service area valued at over $4 million.

Before I wrap up, I'd like to highlight that Lewis Ropp has been elected to our Board of Directors. A Louisiana Native, Lewis brings extensive investment experience from its years of work at Barrow Hanley, historically one of our largest active investors. At Barrow Hanley, he worked as their lead equity portfolio manager and also served on the executive committee. Combined with his prior work experience, Lewis' tremendous familiarity with utilities as well as industrial companies, many of which are part of our customer base. We are very excited to have Lewis join our Board.

It's been an exciting quarter. We continue to make progress on creating value for our customers, communities, employees and owners. Our teams are working very hard to foster community and economic growth and customer growth in our states, while also delivering on commitments made to improve resilience and reliability.

I'll now turn the call over to Kimberly, who will review our financial results for the quarter.

Thank you, Drew. Good morning, everyone. Today, I will review our financial results for the quarter, our capital plan update and our guidance and outlook. I will also cover effects from the final budget reconciliation bill.

Starting with earnings. Our adjusted EPS for the quarter was $1.05. This result keeps us firmly on track for our guidance for the year. Adjusted EPS is shown on Slide 5. Primary drivers were the net effect of investments made for our customers, higher retail sales volume and higher other income. These increases were partially offset by higher other O&M, consistent with the estimate we provided last quarter, and higher MISO capacity cost at Entergy Texas, which are currently recovered in base rates. New legislation allows those costs to be recovered through a rider beginning in 2026.

Earnings contribution from retail sales volume was positive despite weather being milder than second quarter of last year. Weather-adjusted retail sales growth for the quarter was very strong at 4.5%. Industrial sales were the largest contributor with close to 12% growth, primarily from new and expansion customers that continue to ramp up their operations.

Slide 6 summarizes our credit ratings and affirmed that our credit metric outlooks remain better than agency thresholds. Over the past several years, we have strengthened our balance sheet to support our operations and the growth opportunity before us. Our liquidity as of June 30 is very strong, including $2.3 billion of unsettled equity forwards, which are available, if needed.

Turning to tax credits. With the passage of the most recent budget reconciliation bill, we now have better clarity on renewable tax credits, and we have adjusted our cash flow forecast accordingly. Our forecast includes updates to the timing of monetization of investment tax credits associated with projects that we expect to safe harbor. The changes include shifting our expected tax credits out 1 year. We now have approximately $175 million of cash benefit in 2028 and additional cash benefit beyond our outlook period.

We continue to monitor for treasury guidance that could affect these cash flows. As you may recall, we previously had not included the cash benefits from nuclear PTCs in our forecast. However, based on our current analysis, in the quarter, we recorded nuclear tax credits of approximately $570 million across our 5 nuclear units. We treated the recognition of these credits as an uncertain tax position, pending either guidance from the treasury department on the calculation or final determination on audit. We expect to monetize the nuclear PTCs and receive the cash benefit later this year. We are working with our regulators on how and over what time period we provide this benefit to customers.

As you can see from the chart on Slide 7, the nuclear PTCs are highly dependent on the average revenue per megawatt hour, which includes both capacity and energy revenues, and therefore, we are not counting on these credits for future years in our outlook. Our credit outlook provided include these changes, and our estimated Moody's metric continues to grow to 15% over the forecast period.

As Drew noted and as shown on Slide 8, we are increasing our 4-year capital plan by $3 billion, including new renewables and battery storage to meet customer needs. We're also providing updates on retail sales growth, rate base, credit metrics and operating cash flow as well as operating company capital plans in the appendix of our presentation.

As you can see on Slide 9, our equity needs are unchanged despite the higher capital investment. Higher operating cash flow, including monetization of nuclear PTCs and utilization of Arkansas's new infrastructure rider allows us to maintain our financial metrics and current equity needs. As a reminder, we've contracted approximately 2/3 of our equity needs through 2028. In the second quarter, we settled approximately $800 million of equity forwards or about 15.6 million shares, and we are using those funds to continue to invest for our customers.

As shown on Slide 10, we are affirming our adjusted EPS guidance and updating our longer-term outlook. For 2025, we're firmly on track. Positive year-to-date results allow us to flex other O&M to manage the business. Looking ahead to the third quarter, we expect other O&M to be roughly $0.05 higher than the third quarter of last year, partly due to the timing of vegetation maintenance and nonnuclear plant outages. And we expect Entergy Texas to have higher MISO capacity costs in July and August, totaling approximately $0.06. We remain confident that we will deliver on our 2025 guidance.

Looking past 2025 at our longer-term outlook, we continue to see growth as evidenced by our higher capital plan. Our adjusted EPS for 2026 remains unchanged, and we are increasing 2027 by $0.05 and 2028 by $0.10, while maintaining strong credit metrics throughout the forecast period.

Our results in the first half of this year have been solid, and we are once again raising our capital plan to support our growing customer needs. We still have significant opportunities before us, and we remain well positioned to execute and deliver successful outcomes.

And now the Entergy team is available for questions.

[Operator Instructions] All right. It looks like our first question today comes from the line of Jeremy Tonet with JPMorgan.

Exciting update there. A lot of interest in this new Arkansas customer and appreciate somewhat limited what you can say at this point, but just wondering if there's any color you could share with regards to the industry of the customer or even the ramp. And so it seems like not a lot of change to sales growth through '28, but just curious, any shades of color you could provide on the post '28 ramp, what that might look like?

Yes. Well, I don't think we can talk specifically about the customer or any customers, I guess. It's consistent with where we've been, Jeremy and our previous announcements. We are sticking with the filings, and the filings should be out in the next 2 to 3 weeks is where we're aiming. And that will have a lot of the kind of detail I think that you would be looking forward with that question.

Got it. Makes sense there. And I just want to pivot, I guess, to the gas generation picture that you have there. And I think you referenced 7 gigawatts of gas generation available for new load. Is this after the Arkansas project or some of this be dedicated to Arkansas? Just trying to understand how that falls out.

So that is related to projects that we have not announced to date or that you aren't aware of. So if you think about the projects that are out there, yes, we have 3 projects in Texas, 2 in Arkansas, 3 in Louisiana, 2 in Mississippi. And then I think there's 1 more that's in our capital plan that isn't publicly announced. So the 7 gigawatts would be other projects beyond those that are not in our capital plan, but are out there and available for us to serve new customer growth that we anticipate will be an opportunity for us going forward given our strong pipeline.

And our next question comes from the line of Nicholas Campanella with Barclays.

A lot of stuff here. Yes. Just wanted to ask just -- you talked about Meta a little bit in the prepared remarks. Have you already started the regulatory approval process for the upsizing of Hyperion to the 5 gigs like they've been talking about? Or is that still on the come?

We haven't started any process. And we couldn't comment on that anyway. You have to ask Meta on their exact plans. The filings that we have are related to the previous announcements that we've already made starting last fall. So that's where we sit overall today.

We are excited that Meta is talking publicly about the potential for expansion at that Hyperion site. That's one of the reasons why they chose that site. And so we're excited to hear -- and not just us, I'm sure [indiscernible] is excited to hear that, State of Louisiana is excited to hear that. But we don't have anything else to say about the potential for expansion today.

Okay. No, I appreciate that. And then just on the new nuclear side, just outside of the upgrades, I know you said no major updates, but just has the conversation pulled back a little? Or where would you kind of put that now or frame that now if you have to kind of mark to market it? And like what is the ideal framework in your mind if you were to kind of move forward with this? Are you expecting a hyperscaler or a large load customer to take on construction risk before this could be transferred to rate base? Or just how do you kind of think about the ability to grow this generation while keeping the risk profile acceptable to the various constituents?

That's a great question, Nick. I mean the way that we're thinking about it is that our operating companies aren't big enough to take on the kind of risk that may occur during construction of the nuclear units. And so we are looking for ways to manage that risk. It could be in part from the customers, but the customers don't want to take on a whole lot of uncertainty either. So we're working through that.

There's a potential for state or vendor or federal support to help with the risk profile there. There's even some conversations that we've been a part of about sovereign funds and others picking up some of those risks. But that's -- you get the idea that you need a really large balance sheet in order to make that happen. And there are people that are thinking about it. And so we're working through those conversations, but it's taken a while to put it all together.

And our next question comes from the line of Julien Dumoulin-Smith.

Nicely done again. Maybe to follow up on the earlier question Jeremy was kind of posing to you. I mean it seems like you have these 15 combined cycles and 2 CTs secured with deposits seems versus what's in the plan. Maybe to press a little bit further, there's upside outside of the plan that you're alluding to, but it seems like you guys have made tangible actions. So if you can elaborate maybe as best you understand and see it from your customers, the timing and magnitude of some of these opportunities. It does seem as if you're certainly advanced. I appreciate why you would be advanced considering the commercial needs of your customers back decisively. But I'd love to hear how you think about this coming together, if you will.

Well, I mean the timing of that would be such that we would have plans online with that additional -- I mean the 8 gigawatts of the 15 is very clear. That's in our capital plan. You can see that. The additional 7 gigawatts would be [ 4 ] COD between 29 and 31. And that's consistent with the disclosures that we had previously made. The turbine deliveries themselves will be a little bit before that. And then the plants would come online, 9 to 12 months after the turbine deliveries. So that sort of gives you a framework for what we're talking about. So you could see incremental capital, should all this stuff come together as we are aiming for near the back end of our forecast period.

Excellent. And just to reconcile, I know you guys are updating here on the nuclear PTC benefits, and that seems to go hand in glove with some of the updates you're providing here. How do you think about that fitting into the financing plan, if you can speak to it, not just in terms of what you're recognizing here with the [ 5 70 ], but it large across the opportunity of the PTCs, how that fits into the pie chart that you show about equity needs.

Julien, it's Kimberly. As you know, we have worked to use a variety of ways in order to manage the equity that we need. And as we add capital, we would look to do the same thing. So we've done that through incrementing cash flows, through mechanisms that, for example, to cash out there in construction that actually save costs for customers over the longer run, but also support our credit in that period. We've done that with customer support as they ramp up, and there are a variety of ways that we've done that. But we will continue to look to do that and manage our equity needs, but we'll evaluate each of the finances as we add capital and see what we need to do there. Our plan does continue for what we have here to target that same 10% to 15% run rate that we've had for the last couple of years.

Got it. Yes. Understood. All right. Well, look, I'll leave it there. Nicely done. Congrats again. Incredible. Looking forward to more.

And our next question comes from the line of Bill Appicelli with UBS.

Just following up on that equity needs question. I mean, as we think through the [ update ] today and the CapEx increase, there's no additional equity. I mean, how much additional headroom would you say you have before you would need to contemplate issuing equity in terms of the CapEx upside?

Yes, Bill, again, I would -- we have assumed in the base plan that run rate that I referenced about 10% to 15% in any additional capital that we would increment. We would look at what that means relative to the cash flows that are throwing off any other mechanisms and then what that equity need is. So I think about it less as what specific room and more about that's the framework and how we think about our equity, and we'll continue to think about it that way.

Okay. And then on the tariff structure in Arkansas for the new large load customer, maybe you could just speak to that -- the structure of that relative to the customers and the tariffs work in Louisiana? Maybe just any color there in terms of -- you spoke to the favorable mechanisms in Arkansas.

Yes. We won't speak specifically to customers. But as it relates to the infrastructure rider that may be what you're asking about, the Arkansas legislation did issue legislation around a new infrastructure rider that provides for timely recovery of large transmission and generation. It provides for good credit support during the period, and it also enables Arkansas to continue to grow from an economic development perspective beyond its 4% cap. So really nice mechanism there for all parties as we think about how to use that.

Okay. Great. And then just on the -- mentioned on nuclear, but specific to the [ upgrade ], just remind us if there's anything in the plan for that? And what would be the magnitude of in terms of megawatts or CapEx opportunity associated with the upgrades?

Yes. The Waterford upgrade is not significant capital dollars in those capital -- or you can assume those are in the forecast.

Okay. But anything in terms of beyond that, I mean, what is sort of the opportunity set that's out there?

Yes. As we said, each of those upgrades needs to stand alone from a business case perspective and to the extent that they are some are more expensive than others, and to the extent that there are significant capital investments. If the decision is made to move forward, there could be some incremental capital there.

Yes. And I'll add to that, Bill, that we are talking with potential customers about those upgrades. And so we would be looking for customer support for them as we go forward at the same time.

And our next question comes from the line of David Arcaro from Morgan Stanley.

I was wondering if you could elaborate on what boosted the cash flow -- the operating cash flow outlook cumulatively through 2028? Was that all the Arkansas rider and the nuclear BTC 1 year of that?

Yes, David. Those are the primary drivers in riders or mechanisms that enable good credit support in the construction period and then obviously, the large nuclear credits that were earned in '24 and we expect to monetize this year. Those are the 2 primary drivers.

Okay. Great. And then maybe just looking ahead a little bit in Arkansas as you think about the next rate case filing. Would you anticipate major changes at this point in terms of what you'd be requesting for the next kind of iteration of formula rate plans? Any reflection on the current plan? And how it's worked, and if anything, major needs to be changed looking ahead?

Yes. So we are starting to gear up for that. I don't think we're in a spot to start talking about it just yet. The teams are thinking through what our needs are going to be moving forward. But I will say generally, the formula rate plan that we have in Arkansas has been pretty successful. And so we've been -- and then these latest legislative changes that support economic growth have really helped us out in ways that weren't really contemplated in the original order.

But I think those are the -- those are probably the starting points for us, a pretty good mechanism, again, with it's forward-looking. And then the component that we've recently added through legislation to support economic development within the state. So -- but more to come on that one.

And our next question comes from the line of Ross Fowler with Bank of America.

Drew, you highlighted a lot of transmission CapEx in the plan that's moving through that MISO MTEP process. Can you remind us what the next phase of that process is? And when we get updates on that? Kind of some color around what the CapEx upside could be there?

The next submit will be this fall. And so we probably have some updates on what we put in at that point. I think there's probably an approval coming up, but I don't have that timing off the top of my head from previous filings. But our next to the middle would probably be this fall.

Okay. Perfect. And then following on to Nick's earlier question a little bit. The Meta approval process in Louisiana, you're expecting that decision to come in October. As we look to not necessarily Hyperion, although that would be great if that's out there. But as you look to other large loan opportunities in the state, can you kind of just contextualize, give us some color around what were, from your perspective, the main intervenor concerns through that process?

The main intervenor concerns are the traditional ones, right? What are the impacts on customer bills? And are there going to be reliability impacts or resilience impacts associated with that. When we look at Meta project, and I made these comments in my earlier remarks, we see strong benefits for existing customers that come from a number of different places.

First of all, just from a cost perspective, these are standard tariffs. So they're picking up a big chunk of cost that our existing customers have already otherwise pick up, costs associated with storms, cost associated with some of the MTEP transmission that I was talking about, costs associated with overheads. Those things are going to be helpful for our existing customers.

And then the other thing that I wanted to make sure that we were pointing out was the resilience benefits that come from the building of these new assets particularly, we talked about the [ C Tech ] and the battle to [ Weaver ] lines. That's a 500 kV system that basically is going to come from the north side of Baton Rouge across Louisiana into Texas and then basically down into the north side of Houston, the Conroe area. And that is a big one, 500 kV, so it could carry a lot of capacity, that's going to be built to monitor standards. It's going to loop all the transmission that's along the coast that's traditionally been pretty exposed to hurricanes and will give -- it will create a very robust grid for our customers along the Gulf Coast. So we're excited to get that. And it's a really big benefit for our existing customers. But those are the kinds of questions that our customers have been asking in the regulatory processes pretty much across the board.

One other thing -- I'll just add one more thing to that, Ross. The -- in our various regulatory approval processes, no one is disputing the need for new capacity or really the need for new transmission. In the transmission space, the risk -- or not even a risk, the conversation is around what's the best route to pick. That's where the -- that's what most of the conversation has been about in the generation space. It's about who is actually picking up the costs and what are the benefits associated with that investment. So there is a strong agreement that these assets are needed. It's more of a question around how we're going to manage them, where they're going to go. Those are the primary questions.

More about the how and the where than the what we need.

And our next question comes from the line of Steve Fleishman with Wolfe Research.

So just could you -- Drew, you went quickly through the changes on the storm recovery. And I guess, particularly the Louisiana. Could you just kind of go through that again quick and also just is it something that the rating agencies have said anything on in terms of kind of further risk reduction?

I'll defer the question about ready agencies to Kimberly. But the -- in terms of the things that in Louisiana, so I think it was maybe last month or the month before, there was an order from the bench that did not go through a regular process. We have a request out there for regular -- through sort of regular order to consider a long-term solution for more rapid securitization.

But from the bench, to get it in front of 2025, they created a mechanism that would allow us to recover our securitization costs more quickly. And the mechanism will allow us to submit estimated costs for securitization in -- prior to our NA meeting, make a filing and then the filing would be considered by the commission at the subsequent meeting. So very fast turnaround is what the expectation is. And the point of that is to create benefits for customers because that reduces the carrying costs for our customers because the full weighted average cost of capital would not be the carrying costs anymore, it would be the securitization rate, which, of course, is a AAA rate, which is going to be a much lower rate.

And then the other benefits that I mentioned were the potential for a lower cost of capital because the agencies should see that as very positive. And then lastly, we have a lot of vendors, particularly for a large storm that may be concerned about the creditworthiness of the company. But this should give them a lot of confidence that the company is going to be able to stand behind whatever the storm costs are.

So I'll turn it over to Kimberly. She can comment about the credit piece.

Yes. As we talk to the rating agencies about the improvements in the financial space regarding storms, they view that as very positive and the ability to return that cash quicker, much quicker than what we have had previously. So a positive outlook there.

It should also help us with our credit metrics, too, because, as you know, Steve, historically, when we've had a very long time between the time of the storm and the time of the securitization, our credit metrics will dip. And this should shorten that quite a bit.

Great. And then one other question just on the gas build. I mean, you're probably going to be the largest builder of new gas plants late this decade. So just in addition to the turbines that you've locked up, how are you feeling about the EPC and just overall ability to get all these projects done on time and budget?

Yes, that's a great question, Steve. So we've been working hard to be prepared for that. A couple of things that we've done. Certainly, we have strong relationships with EPCs and we have actual working experience with them given the building that we have done recently with the [ J. Wayne Liner plant, Lake Charles plant, Montgomery County plant ]. And of course, the Orange County project is under construction right now, expected to be online, hopefully next spring, certainly before next summer. And so we have a lot of good existing relationships. We have a lot of working experience on getting this stuff built and online, so we're leveraging that.

We are also utilizing a simpler standard design. So we're using -- we were building 2 on 1 stations. We simplified it to one-on-one. We're using Mitsubishi's larger turbines, which allows us to do that. So there are probably more projects, but they're easier to build. And so we expect to -- as we go through, we expect to learn more and pick up speed and find ways to lower cost at the same time.

And then the last piece I'll mention is we are working hard through the supply chain. So we have access to other critical equipment, things like transformers, large high-voltage breakers and other pieces of equipment that are critical for us to maintain our time lines. So we have line of sight on all of that. The things that we don't have 100% locked up generally are available to us in many different ways. So we have confidence that we'll be able to get that done. So those are just a few of the things that we're thinking about, but we have confidence that we can manage through making all this happen.

And our next question comes from the line of Sophie Karp with KeyBanc Capital Markets.

Congrats on a great update here. My question is about -- I guess, how storms and data center customers are going to coexist in your territory? Clearly, there doesn't seem to be a huge concern for them because [indiscernible] that we're in to -- come in to your territory. But is there an incremental opportunity for you to address here because presumably, they would need very [indiscernible] power right maybe or are the interruptible maybe? Like how do you think about it? How do your customers think about that? Is there an incremental opportunity for storm hardening or some backup generation that you might be providing for them?

Thanks, Sophie. Yes, it's a great question. I think the customers themselves start by locating further away from the coast. So where these data center customers are showing up, and we have 2 examples at this point, Meta and Amazon in Mississippi. They're further away from the coast. So the Meta project is in Northeast Louisiana and the Amazon project's on the north side of Jackson, Mississippi in 2 locations. And so they are further away from the coast. And then, of course, we're building generation to support them, which is further away from the coast as well, along with some of these 500 KV lines that we're talking about, which are further away from the coast. I gave you the example of the [ C Tech ] and the [indiscernible] line. Those are further away from the coast.

So that's really the strategy right now. It's to use modern more, I guess, modernized equipment that is built to the more stringent standards that we have for storms and wind loadings and things like that. And to build it just simply further away from the coast where the risk is going to be reduced.

And our next question comes from the line of Anthony Crowdell with Mizuho.

Drew, I just have a follow-up from Nick's question, probably very easy. I think Nick had asked about like a new nuclear deal and you mentioned the importance of a bigger balance sheet throughout maybe a state solution a federal solution or maybe the hyperscale or even sovereign wealth. If you had to pick of those options or the options you spoke about, which ones in the leader, which one do you think is more likely to go ahead with a new nuclear deal? Like what builds the next nuclear plant in your jurisdictions?

I wish I knew I could give you a good answer for that. We are talking with all of the above on that stuff. But I do not have one that I would lean on at this point. We're looking for one of them to come through for us is basically the conversations that we're having. But we're stretching the boundaries in order to see if we can find somebody that can step up to help us with that particular risk by bringing other kinds of folks that have the kind of balance sheet that we would need to make sure that this happens. But we haven't cracked it. Not yet. So I don't have a good answer for you, Anthony. We're still working on it.

And our next question comes from the line of Angie Storozynski from Seaport Research Partners.

So 2 questions. One, about residential sales being weak, weather normalized residential sales being weak this quarter and basically flattish year-to-date despite some uptick in the customer account count. And I'm just wondering if we're seeing this from other companies as well. The residential sales typically have a higher margin. And so I'm just asking, is it a weakening economy? Do you incorporate that in your future earnings trajectory?

And then secondly, just wondering, we're seeing this inflation in the cost of new build for gas plants. You have this basically a framework of an agreement for the equipment supplier with the witness supplier. And I'm just wondering how you're managing the cost and its reflection in any future data center deals.

Angie, I'll start with your residential sales question. You may recall in the first quarter, our residential sales were really strong. And when we saw that, we looked at how those came out over the course of the year and what you've seen is a little bit of that coming back a little softer in the second quarter, but over the full year, we're about flat. And so I think you're just seeing some volatility in the data, not a real pattern. Nothing that we have baked in or expect to see over a long time. So you're just seeing some variances month-over-month. That isn't an indicator of an overall weakness.

As it relates to inflation on the cost of new build, we certainly have continue to work to manage the cost of increases related to all of our investments. We have a lot of continuous improvement efforts, both on the capital and on the O&M side to try to manage those costs. And we have mechanisms within various contracts that enable us to manage those costs. It depends by customer. But obviously, we are very focused on affordability for our customers and working to manage the overall cost, and we continue to be quite competitive on our new build cost relative to what you're seeing as sort of the industry estimates.

Great. And just one quick follow-up. I'm just looking at the rerating of your stock and how it should have impacted your dilution math in your growth rate. And I'm just wondering if you've already captured it in this updated plan for the EPS growth, the fact that you're basically issuing equity at a much higher pace than likely initially anticipated?

Well, Angie, as you know, we've sold forward into 2027. So we've got what we -- what our forward contracts are assumed and then what we need in '27 and '28, we have a price assumption. But certainly, to the extent that the price moves in a positive direction, that's helpful relative to dilution on an ongoing basis.

And our final question today comes from the line of Paul Patterson with Glenrock Associates.

Just following up on your comments about safe harboring and the way the bill is currently constructed. And just on the July 7 executive order, have you guys had any sense as to what we might see coming out of that? And if you have, could you share it with us? And also, what -- how do you think about any potential changes that the executive order might cause? How are you guys managing that? Or how you're thinking about that in terms of going forward and your activities?

We're certainly engaged, Paul, with our industry partners and other companies around understanding what could come out, but I don't have any specific insights that I can share on that.

As far as safe harboring, we have worked within the existing rules to do what we need on the projects in order to safe harbor those. If the executive order and the outcome of that changes that, we'll obviously need to make adjustments, but we'll have what those are specifically. But we've been working for the last couple of months to make sure that we could meet as much of our renewables could be safe harbored as possible under the rules that we have. And we continue to watch for what else may change there, and we'll adjust as we need to, Paul.

And that does conclude our Q&A session today. So at this time, I will turn the call back over to Liz. Liz?

Thank you, Greg, and thanks to everyone for participating this morning. Our quarterly report on Form 10-Q is due to the SEC on August 11, and provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10-Q 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 web page 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.

Thanks, Liz. And again, this concludes today's conference call. You may now disconnect.