Executives focused on Entergy’s booming industrial load growth during a year-end earnings call Feb. 22.
Entergy CEO Drew Marsh said that Entergy companies signed 61 new electric service agreements in 2023, representing 1.3 GW in capacity.
“Data centers are a hot topic and, as you know, we’ve seen interest in our service area,” Marsh said, noting Amazon’s $10 billion arrival in Mississippi and Gov. Tate Reeves’ (R) signing bills in late January to authorize the data center investment along with $44 million in state incentives.
Entergy has framed the Amazon Web Services data centers as a win for the state and touted its role in recruiting the company to the location.
Marsh predicted “very strong growth” among Entergy companies going forward, due in part to new natural gas, blue hydrogen and EV battery production projects.
“In addition to the data centers, our growth story continues to develop and diversity,” Marsh said, adding that Entergy has a “unique industrial growth opportunity in front of us.”
Entergy’s load growth has been responsible in part for an unprecedented number of expedited project requests to MISO for transmission facilities. (See MISO to Re-examine Schedule for Reviewing Expedited Tx Projects.)
Marsh said Entergy companies are pursuing loans and grants from the U.S. Department of Energy to offset the costs of much-needed grid upgrades. He said Entergy companies have applied for loans totaling $4.7 billion “for a variety of projects related to the clean energy transition” and have submitted eight preliminary proposals under DOE’s Grid Resilience and Innovation Partnership program.
Entergy plans to invest $20 billion over the next three years to “make our fleet cleaner, to make our system more reliable and resilient,” Marsh said. That amount includes $11 billion in transmission construction, including big-ticket projects from MISO’s 2023 Transmission Expansion Plan. (See MTEP 23 Catapults to $9.4B; MISO Replaces South Reliability Projects.) It also includes $8 billion in new generation, including the more-than-$1 billion, 1.2-GW Orange County Power Station in southeast Texas and $2 billion for solar installations.
Marsh said despite record-breaking heat last summer, Entergy achieved its lowest forced outage rate since 2011.
“Not only did we meet our customers’ demands, but we also exported power to other utilities in MISO in the moments that mattered,” Marsh said.
Marsh said Entergy’s year-end earnings of $1.4 billion ($6.77/share) signified “steady, predictable results.” Earnings over 2023 were slightly higher than 2022’s $1.3 billion ($6.42/share).
Entergy CFO Kimberly Fontan said, “weather was a benefit for the year,” with an exceptionally hot summer boosting financial performance.
Fontan said 2023’s retail sales volume was relatively flat overall, with industrial growth offset by a decline in residential and commercial demand.
However, she said, industrial sales were not as “robust” as Entergy anticipated in the fourth quarter, although the utility remains optimistic about growth propelled by large industrial customers specializing in metals, gases and petrochemicals.
“We continue to be confident in our industrial growth expectations, as sector margins and commodity spreads remain strong. And we continue to grow our backlog of signed electric service agreements,” she said.
