8-KRegulation FD

ENTERGY CORP /DE/ 8-K Report, Regulation FD Disclosure (Mar 23, 2021)

Filed March 23, 2021For Securities:ETR

Summary

Entergy Corporation (ETR) announced via an 8-K filing on March 23, 2021, that Arkansas Governor Asa Hutchinson has signed HB1662 into law. This new legislation clarifies and reaffirms key aspects of Entergy Arkansas, LLC's (Entergy Arkansas) existing 2015 formula rate plan (FRP). Specifically, it addresses authorized return on equity (ROE), extends the FRP, clarifies debt and equity levels, and reinforces customer protections, including the cap on annual rate changes to ensure rate stability. Entergy Arkansas views this development positively, expecting it to provide greater certainty regarding its FRP terms and renewal. The company is prepared to work with the Arkansas Public Service Commission (APSC) Staff and other stakeholders for timely implementation. Notably, Entergy Arkansas has indicated a willingness to consider a 10 basis point reduction in ROE as a concession to expedite this implementation, contingent on stakeholder agreement and potential amendment to pending legislation. This move is aimed at fostering continued investment in Arkansas and benefiting its customers and economy.

Key Highlights

  • 1Arkansas Governor signs HB1662 into law, clarifying Entergy Arkansas' Formula Rate Plan (FRP).
  • 2The new law provides certainty on authorized return on equity (ROE), FRP extension, debt/equity levels, and customer rate protections.
  • 3Entergy Arkansas is pleased with the law and anticipates it will facilitate future investments in the state.
  • 4Entergy Arkansas is willing to consider a 10 basis point ROE reduction to expedite FRP implementation.
  • 5Implementation will involve APSC action to revise the 2021 rate change and amend Entergy Arkansas' FRP tariff.
  • 6The company believes the clarification and certainty will benefit customers and Arkansas' overall economy.

Frequently Asked Questions

HB1662 clarifies and reaffirms key aspects of Entergy Arkansas' existing Formula Rate Plan (FRP), enacted in 2015. This includes details on authorized return on equity (ROE), the extension of the FRP, and customer protections like rate caps, providing increased regulatory and financial certainty.

Yes, Entergy Arkansas has indicated it would be willing to consider a 10 basis point reduction in its authorized Return on Equity (ROE) for the term of the FRP extension. This concession is intended to help secure timely implementation of the new law, contingent on stakeholder agreement and the potential amendment of pending legislation.

The next steps involve Entergy Arkansas working collaboratively with the Arkansas Public Service Commission (APSC) Staff and stakeholders. This process will likely include APSC action to substitute a revised 2021 FRP rate change and amendments to Entergy Arkansas' FRP tariff to incorporate the provisions of HB1662. Prompt implementation in rates is expected upon completion of these regulatory processes.

Entergy Arkansas believes that the clarification and certainty provided by HB1662 will allow it to continue investing in the State of Arkansas, benefiting its customers and the state's overall economy. The law also reaffirms customer protections, including the cap on annual FRP rate changes, which ensures stable and reasonable overall rates.