NEW ORLEANS, Sept. 30 /PRNewswire-FirstCall/ -- After back-to-back
strikes by catastrophic hurricanes in less than two weeks left nearly 1.7
million customers without electricity in four states, Entergy Corporation
(NYSE: ETR) announced today its utilities had restored power to all of the
705,400 customers affected by Hurricane Ike who can take power.
Entergy's utilities' Ike restoration record was on par with Hurricane
Gustav, the fastest and safest storm restoration effort in the company's
history. Crews restored power to 85 percent of all customers within seven
days of Hurricane Ike and within eight days in Texas. By comparison, it
took 13 days to reach that level for Hurricane Rita and 16 days following
Hurricane Katrina in 2005, excluding extended restoration customers.
Hurricane Ike generally ranks as the third or fourth most destructive
hurricane across a range of measures in the 95-year history of Entergy's
four-state utility system. Ike also heavily damaged coastal communities
served by Entergy Texas, Inc., including approximately 7,300 homes and
businesses that were damaged, destroyed or flooded by the storm and will
require significant reconstruction.
Total restoration costs for the repair and/or replacement of the
electrical facilities damaged by Hurricane Ike are estimated to be in the
range of $525 million to $625 million. While Entergy also expects to report
lower utility revenues primarily due to temporary power outages associated
with the hurricanes, Entergy believes its total liquidity is sufficient to
meet its current obligations; nevertheless, each utility company is
responsible for its restoration cost obligations and for recovering its
storm- related costs.
Entergy's utilities are considering all reasonable avenues to recover
storm-related costs from Gustav and Ike, including -- but not limited to --
accessing funded storm reserves, federal and local recovery on an interim
and permanent basis, securitization and insurance, to the extent
deductibles are met.
Hurricane Ike Assessment
On Sept. 13, 2008, Hurricane Ike made landfall in Galveston, Texas.
Hurricane Ike traveled through Entergy's Texas service area, causing the
most outages in Entergy Texas' history, and also caused outages in
Louisiana and Arkansas. Ike's path included five non-nuclear generation
plant sites, with the Sabine plant sustaining damage from flooding that
spread throughout portions of Texas and Louisiana. The storm also caused
extensive damage to the transmission and distribution system. Hurricane Ike
affected 238 transmission lines, as well as 383 substations. Counted as
damaged or destroyed are 10,300 poles and 2,900 transformers. Entergy
expects that reported utility revenues will be lower during the third
quarter due to the temporary Ike power outages in the affected service
territories.
As of yesterday, 222 of the 238 affected transmission lines and 365 of
the 383 affected substations had been restored. The Sabine power plant
remains off-line, where cleanup and restoration work has begun. All other
generating units have been returned to service.
Preliminary Hurricane Financial Effects
Total restoration costs for the repair and/or replacement of the
electric facilities damaged by Hurricane Ike are estimated to be in the
range of $525 million to $625 million. Utility companies affected by
Hurricanes Gustav and Ike and estimated restoration costs are as follows:
Company Hurricane Ike Hurricane Gustav
(U.S. $ in millions) Restoration Costs Restoration Costs
Entergy Arkansas 14 - 20 10 - 15
Entergy Gulf States Louisiana 65 - 75 210 - 250
Entergy Louisiana 10 - 15 230 - 270
Entergy Mississippi - 10 - 15
Entergy New Orleans 1 - 5 40 - 50
Entergy Texas 435 - 510 -
Total 525 - 625 500 - 600
Entergy expects that reported utility revenues will be lower during the
third quarter due to the temporary Gustav and Ike power outages in the
affected service territories.
Recovery Initiatives
Entergy's utilities are considering all reasonable avenues to recover
storm-related costs from Gustav and Ike, including -- but not limited to --
accessing funded storm reserves, federal and local recovery on an interim
and permanent basis, securitization and insurance, to the extent
deductibles are met.
Entergy noted that it is unable to predict the degree of success it may
have in these initiatives and the amount of restoration costs it may
recover or the timing of such recovery, although Entergy believes that
utilities are entitled to recover prudently incurred storm costs in
accordance with applicable regulatory and legal principles.
Liquidity
Entergy believes its total liquidity is sufficient to meet its current
obligations; nevertheless, each utility company is responsible for its
restoration cost obligations and for recovering its storm-related costs.
Entergy had $2.7 billion of cash and cash equivalents on hand on a
consolidated basis as of Aug. 31, 2008 and additional financing authority,
subject to debt covenants. Under previously obtained authority, Entergy may
issue in the aggregate approximately $2.1 billion of new short-term debt
and $4.1 billion of new long-term debt, including undrawn revolving credit
facility capacity of $380 million at Entergy Corporation and $100 million
at Entergy Arkansas, subject to debt covenants. Entergy Corporation's
revolving credit facility requires it to maintain a consolidated debt ratio
of 65 percent or less of its total capitalization. Some of the utility
company credit facilities also have similar covenants.
Additional preliminary statistics on hurricanes Gustav and Ike and
details on restoration progress achieved to date are included in appendix A
to this release, as well as comparative statistics to hurricanes Katrina
and Rita. Entergy's consolidated cash position and financing authority is
outlined in appendix B.
Entergy Corporation is an integrated energy company engaged primarily
in electric power production and retail distribution operations. Entergy
owns and operates power plants with approximately 30,000 megawatts of
electric generating capacity, and it is the second-largest nuclear
generator in the United States. Entergy delivers electricity to 2.7 million
utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy
has annual revenues of more than $11 billion and approximately 14,300
employees.
Additional investor information can be accessed online at
http://www.entergy.com/investor_relations
In this news release, and from time to time, Entergy Corporation makes
certain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Except to the extent required by
the federal securities laws, Entergy undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
Forward-looking statements involve a number of risks and uncertainties.
There are factors that could cause actual results to differ materially from
those expressed or implied in the forward-looking statements, including (a)
those factors discussed in (i) Entergy's Form 10-K for the year ended
December 31, 2007, (ii) Entergy's Form 10-Q for the quarterly periods ended
March 31 and June 30, 2008 and (iii) Entergy's other reports and filings
made under the Securities Exchange Act of 1934, (b) the uncertainties
associated with efforts to remediate the effects of Hurricanes Gustav and
Ike and recovery of costs associated with restoration, and (c) the
following transactional factors (in addition to others described elsewhere
in this news release and in subsequent securities filings): (i) risks
inherent in the contemplated spin-off, joint venture and related
transactions (including the level of debt to be incurred by Enexus Energy
Corporation and the terms and costs related thereto), (ii) legislative and
regulatory actions, and (iii) conditions of the capital markets during the
periods covered by the forward-looking statements. Entergy cannot provide
any assurances that the spin-off or any of the proposed transactions
related thereto will be completed, nor can it give assurances as to the
terms on which such transactions will be consummated. The transaction is
subject to certain conditions precedent, including regulatory approvals and
the final approval by the Board of Directors of Entergy.
Appendix A provides Hurricane Outage Restoration Statistics
Table 1: Outage Restoration Statistics - Retail Electric Customers and
Distribution-Related
Current Status
Number Ike(a) Gustav(a) Katrina Rita
Retail electric customers
(in thousands) 705 964 1,091 800
Distribution poles 10,300 10,476 17,400 11,500
Distribution transformers 2,900 4,349 3,478 2,301
Distribution circuit miles 31,819 53,185 28,500 43,800
(a) Work in progress estimates subject to final reconciliation following
completion of storm restoration.
Table 2: Outage Restoration Statistics - Transmission Lines and
Substation Outages
Current Status vs Storm Peak
Ike Ike Gustav Gustav Katrina Rita
Total Total Total Total Total Total
Number of as of as of as of as of as of as of
Outages 9/29/2008 Storm Peak 9/29/2008 Storm Peak Storm Peak Storm Peak
Transmission
lines 16 238 8 241 182 344
Substations 18 383 5 354 263 443
Appendix B provides Entergy's Consolidated Cash Position and Financing
Authority
Table 3: Financing Authority (subject to debt covenants)
Short-term Long-term
Cash and Available FERC/ Available
Cash as of State as of
Equivalents Authority 8/31/08 Authority 8/31/08
($ in millions)
Entergy Corporation 43 3,500 380(b) - -
Entergy Arkansas 134 250 250 450(c) 150
Entergy Gulf States
Louisiana 143 200 200 750 275
Entergy Louisiana 176 250 250 2,140 1,640
Entergy Mississippi 3 175 125 400 400
Entergy New Orleans 130 100 100 230(c) 230
Entergy Texas 75 200 200 1,300 1,200
Entergy Nuclear 995 - - - -
Other 1,037 920 618 275 180
Total 2,736 5,595 2,123 5,545 4,075
(b) As of Sept. 15, 2008, the available amount had been reduced further to
$230 million.
(c) Authority granted by local regulator.
SOURCE Entergy Corporation
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Related links:
http://www.entergy.com
CONTACT:
News Media, Yolanda Pollard, +1-504-576-4238,
ypollar@entergy.com, or Investor Relations, Michele Lopiccolo,
+1-504-576-4879, mlopicc@entergy.com, both of Entergy Corporation
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