8-KEarnings & ResultsRegulation FDOther Events+1

ENTERGY CORP /DE/ 8-K Report, Financial Results (Oct 30, 2023)

Filed October 30, 2023For Securities:ETR

Summary

Entergy Corporation (ETR) has filed an 8-K report detailing a settlement in principle between its subsidiary, Entergy Arkansas, LLC, and the Arkansas Public Service Commission. This settlement resolves certain retail ratemaking matters, with Entergy Arkansas agreeing to forgo recovery of costs associated with the 2013 "ANO Stator Incident" at the Arkansas Nuclear One plant. As a result of this agreement, Entergy Arkansas will record write-offs of $68.9 million for its regulatory asset for deferred fuel and $9.5 million for the undepreciated capital costs related to the incident in its third quarter 2023 results. Importantly, these write-offs are treated as adjustments to GAAP net income and are expected to have no impact on Entergy's adjusted earnings per share (non-GAAP) or its credit metric outlooks, according to the company. Investors should note that while the GAAP net income will be affected, the operational and financial outlook from a non-GAAP perspective remains unchanged.

Key Highlights

  • 1Entergy Arkansas enters settlement in principle with Arkansas Public Service Commission to resolve retail ratemaking matters.
  • 2Entergy Arkansas will forgo recovery of costs related to the 2013 "ANO Stator Incident" at Arkansas Nuclear One.
  • 3Third quarter 2023 results will include write-offs of $68.9 million for deferred fuel regulatory asset.
  • 4Third quarter 2023 results will include write-offs of $9.5 million for undepreciated capital costs from the ANO Stator Incident.
  • 5These write-offs are treated as adjustments to GAAP net income and do not affect adjusted earnings per share (non-GAAP).
  • 6The settlement is not expected to materially impact Entergy Corporation's adjusted earnings per share outlook or credit metric outlooks.

Frequently Asked Questions

The settlement will result in write-offs of $68.9 million for deferred fuel and $9.5 million for capital costs related to the ANO Stator Incident in Entergy Arkansas's third quarter 2023 GAAP net income. However, these are considered adjustments, and Entergy Corporation's adjusted earnings per share (non-GAAP) and its outlook for adjusted EPS and credit metrics are not expected to be materially affected.

Entergy Arkansas has committed to forgoing recovery of all incremental fuel and purchased energy expenses, capital costs, incremental non-fuel operations and maintenance costs, and any judgment costs not covered by insurance that resulted from the ANO Stator Incident.

The ANO Stator Incident occurred in March 2013 during a scheduled refueling outage at Arkansas Nuclear One. It involved the collapse of a contractor-owned and operated heavy-lifting apparatus while moving the generator stator out of the turbine building.

This settlement specifically addresses the costs related to the 2013 ANO Stator Incident. The filing does not provide information on the impact on recovery of costs for other potential incidents, but it does note general risks related to cost recovery through rate proceedings and other mechanisms.