Entergy (ETR) says repair and / or replacement costs for electrical installations damaged by Hurricane Ida are estimated at $ 2.1-2.6 billion

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In the aftermath of Hurricane Ida that made landfall near Port Fourchon, Louisiana on August 29, Entergy Corporation (NYSE: ETR) announced today that its utilities have restored power to approximately 932,000 customers, or 98% of customers affected by the storm. Entergy continues to make significant progress in the hardest hit areas of southeast Louisiana. The crews restored power to all affected Entergy customers in Mississippi.

In response to the extensive damage from the storm, Entergy deployed a workforce of approximately 27,000 workers from 41 states.

“We are grateful to the thousands of men and women who have worked tirelessly to restore power safely to our customers,” said Rod West, president of the Entergy Utilities Group. “Hurricane Ida inflicted extensive damage on Entergy’s power system that resulted in 948,000 outages at its peak. Our work is not yet finished and despite the extent of the damage, the teams have made significant progress. We anticipate that all remaining customers who can safely take power should be restored by September 29.

Damage assessment

The historic intensity of Hurricane Ida caused enormous damage to Entergy’s distribution and transmission systems in southeast Louisiana. Storm damage to Entergy’s system included:

  • more than 30,500 distribution poles,
  • nearly 6,000 transformers,
  • nearly 36,500 spans of distribution wires,
  • around 500 damaged or destroyed transmission structures,
  • more than 225 substations, and
  • more than 210 transmission lines.

Over the past five years, Entergy’s operating companies have invested $ 9.5 billion in transmission and distribution assets that have met or exceeded resilience standards then in effect. Ida has demonstrated the resilience benefits of these investments. Along a transmission route from Port Fourchon, where Ida made landfall, only three of the 387 newer and more resistant structures were destroyed. In contrast, a seven-mile transmission line with pre-1997 design structures along that same path was destroyed by Ida, with more than half of the line’s structures destroyed.

Hurricane Ida presented a severe wind load event that caused significant damage to the distribution system. With strong Category 4 winds on landing and sustained hurricane-force winds through New Orleans and beyond, Ida caused much more damage to distribution poles than previous storms. On key lines in coastal areas, the poles are replaced with stronger Class 1 distribution poles that can be configured to withstand winds of over 130 miles per hour, exceeding current requirements. To cope with the intensity of future weather events, Entergy recognizes the need for accelerated system hardening, as well as continuing to advance its preventive maintenance programs, including vegetation management and pole inspections.

As part of the recovery efforts, Entergy has strived to provide support to its communities as they recover from Ida. The company has deployed 165 commercial-scale generators to power critical community infrastructure such as medical facilities, gas stations, grocery stores, municipal water systems and community cooling centers before their electricity runs out. be restored. In addition, Entergy shareholders have pledged $ 1.25 million in financial support to help affected communities rebuild and recover from the storm.

For more information on Entergy’s recovery efforts after Hurricane Ida, visit entergy.com/hurricaneida.

Financial implications

Total restoration costs for repairing and / or replacing electrical installations damaged by Hurricane Ida are estimated to be between $ 2.1 and $ 2.6 billion. Most of the costs associated with the storm were incurred by Entergy Louisiana and Entergy New Orleans. The preliminary estimate for Entergy Louisiana is $ 2.0-2.4 billion, and the preliminary estimate for Entergy New Orleans is $ 120-150 million.

Entergy also expects utility revenues in 2021 to be negatively affected, primarily due to power outages resulting from the hurricane. The company’s initial estimate of non-fuel revenue loss is around $ 75-85 million, with most of this impact occurring in the Entergy Louisiana and Entergy New Orleans service areas, $ 65 million to $ 70 million and $ 10 million to $ 15 million, respectively. The financial impact of lost revenue is expected to be partially offset by lower operating and maintenance expenses.

Company says 2021 adjusted earnings per share range of $ 5.80 to $ 6.10 and 2022 and 2023 adjusted earnings per share outlook of $ 6.15 to $ 6.45 and $ 6.55 at $ 6.85, respectively.

Entergy believes that it has sufficient liquidity to meet its current obligations. As of August 31, 2021, Entergy’s liquidity of $ 4.2 billion consists of cash and cash equivalents ($ 1.0 billion), available gun capacity ($ 4.1 billion) and escrow deposits ($ 72 million), less outstanding commercial paper ($ 1.0 billion). The company plans to seek accelerated recovery of its hurricane-related hurricane-related expenses using securitization finance. Assuming Entergy receives the proceeds from these securitization financings in 2022, the company expects to achieve key credit metrics from S&P Global Ratings and Moody’s Investors Services by the end of 2022 sufficient to maintain ratings of current credit.

The company has a long history of working with its regulators to recover costs associated with storms. Entergy Louisiana and Entergy New Orleans are considering all available means to recover costs associated with the storm Hurricane Ida in a manner that will minimize the effects on clients, including federal government assistance and securitization funding . There are well-established mechanisms for recovering prudently incurred storm costs, in accordance with applicable regulatory and legal principles. In addition, Entergy coordinated with Governor Edwards and the Louisiana Congressional delegation to seek disaster recovery funds for community development and other funding options from the federal government. President Biden, who has been a strong advocate for supporting the Gulf region’s recovery, recently sent Congress a $ 24 billion request for additional disaster credit, including $ 10 billion for impacts Ida nationwide. If approved, a portion of these funds could be allocated to Entergy to, in turn, reduce the burden on the customer dollar for dollar.

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