Entergy (ETR) Q4 FY25 earnings call: guidance and Q&A

Clarification on whether Hut 8's Phase 1 was already in the plan and if Phase 2 would create upward pressure on rate base growth, or if other projects are weighted for 2026-2027.

Hut 8 and similar data centers are included in probability-weighted industrial growth. While Phase 1 doesn't add to the capital plan, incremental growth from such customers would likely require additional capital for capacity.

“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.”

asked by Shar Pourreza · answered by Kimberly Fontan

Inquiring about the level of comfort, collateral requirements, and protections in place for large load projects, especially given instances of data centers walking away from signed ESAs in other states.

Entergy has significant credit requirements for large load customers, including termination fees and minimum bills, which are backstopped by parent companies. The forecast only includes minimum bill levels, providing upside potential.

“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.”

asked by Shar Pourreza · answered by Kimberly Fontan

Asking if any of the 4.5 GW of power equipment previously noted for potential upside has been spoken for, and if Cottonwood added to that number.

Entergy has about 8 GW of turbines and plant island equipment available for growth, not yet tied to specific ESAs. Cottonwood, an existing capacity acquisition, does not replace any of these turbines but provides additional space in Louisiana.

“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.”

asked by Shar Pourreza · answered by Kimberly Fontan

Seeking clarification on the $5 per month customer bill savings from data centers and ways to think about potential future savings from the data center pipeline.

The $5 per month represents the data centers' contribution to embedded fixed costs, essentially spreading fixed costs over more kWh. There isn't a simple rule of thumb, as it depends on the data center's size, but it also includes benefits like fuel efficiency and improved reliability.

“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.”

asked by Paul Zimbardo · answered by Kimberly Fontan

Inquiring about specific updates expected at the upcoming Investor Day in June, such as data center contracting clarity or capital project approvals.

The Investor Day will provide more color on data centers, a longer 5-year outlook, and opportunities to interact with more leaders. While the timing of new contracts is uncertain, the event aims to provide more comfort around the existing plan.

“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.”

asked by David Arcaro · answered by Andrew Marsh

Seeking to reconcile the perceived discrepancy between Meta's 4-year subcontract leases with Blue Owl and Entergy's description of a 15-year ESA, and potential risks for investors or ratepayers.

Entergy's 15-year electric service agreement (ESA) with a Meta subsidiary is a separate transaction, backstopped by Meta's parent, and includes termination fees and minimum bills. Meta's arrangements with Blue Owl are for structuring their capital spend and are distinct from Entergy's ESA.

“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.”

asked by Andrew Weisel · answered by Kimberly Fontan

Asking about the flexibility in the delivery period for the 8 GW of gas turbine availability, specifically how open slots in the 2028-2030 period would be managed if new announcements don't materialize.

Entergy fully expects to utilize the ordered turbines on schedule, with customers eager to move them forward. If contractual arrangements are not in place, reimbursement agreements from customers are likely to prevent financial issues, maintaining the turbine timeline.

“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.”

asked by David Paz · answered by Andrew Marsh