Entergy (NYSE:ETR) Chairman and CEO Leo Denault on April 26 said that the company is making progress towards the deployment of advanced meters in its service territory.
“Our advanced metering infrastructure project and associated regulatory approvals remain on schedule,” he said during the company’s 1Q17 earnings call.
“Working with vendors, we are in the early stages of implementing the IT infrastructure needed to support meter deployment and developing a logistical plan for that deployment,” he said. “Regulatory filings were made in 2016 in four jurisdictions. Procedural schedules are now set and hearings are scheduled for the third quarter of this year.”
Denault also noted that legislation has been introduced in Texas “to clarify the applicability of existing advanced meter regulation to Entergy Texas [Inc., or ETI]. We expect to file our deployment plan with the [Public Utility Commission of Texas, or] PUCT by the fourth quarter. Following regulatory decisions and initial implementation of the communications network starting in 2018, we anticipate initiating meter deployment in 2019.”
Discussing regulatory matters, he noted that Entergy Mississippi, Inc., continues to utilize its formula rate plan with forward looking features, and made its annual filing in March, reflecting no changes in rates, with an earned return on equity (ROE) of 9.72% – within the allowed range, he said.
The final order on that filing is expected before the end of 2Q17, he said.
Also in March, Texas regulators approved a $19m annual increase to ETI’s transmission cost recovery factor, Denault said.
“The settlement reflects $286m in incremental transmission investment since ETI’s last rate case proceeding,” he said. “Use of this rider, along with the distribution cost recovery factor, provides greater financial flexibility to support the needs of customers in Texas.”
Denault also addressed the “recent executive order around promoting energy independence, which includes a review of carbon regulation,” which President Donald Trump signed in March.
Denault said, “While it is too early to comment on the specific impacts of the recent executive order, we remain committed to developing an electric generating and delivery system that is well positioned for operations in a carbon-constrained economy, whatever that may look like.”
As TransmissionHub reported, the executive order calls for, among other things, the heads of agencies to review all existing regulations, orders, guidance documents, policies, and any other similar agency actions that potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources. For purposes of the order, “burden” means to unnecessarily obstruct, delay, curtail, or otherwise impose significant costs on the siting, permitting, production, utilization, transmission, or delivery of energy resources, according to the executive order.
During the call, Denault said that the principle objective of Entergy’s strategy is to remain an environmentally sustainable fleet for the communities it serves, as well as to continue to prepare the company for operations under any type of carbon emission costs it may accrue in the future.
He noted that according to a 2016 report, Entergy produces fewer CO2 emissions per megawatt hour (MWh) than 78 of the top 100 power producers. Denault also noted that Entergy’s emissions rates for 2015 and 2016 across its entire fleet were 540 and 590 pounds per MWh, respectively.
“[W]e consider our environmental strategy to be aligned both with global ambitions for a transition to a low-carbon economy, and with our commitment to provide reliable, low-cost electricity to our customers,” he said, adding that in 2016, Entergy’s CO2 emissions were about 20% below its year 2000 emissions.
Due to the challenging economics of relying on renewable resources in its geographic footprint, Entergy is meeting its goals through a combination of methods, including replacing older, less efficient legacy units with cleaner, more efficient resources, he said.
Among other things, he noted that nuclear generation is also an important source of clean and reliable baseload power; Entergy’s planned investments in new technologies to modernize the grid, such as advanced meters, will further improve efficiency and reliability; and the company is actively working to deploy and incorporate cost-effective opportunities to expand its use of renewables, including distributed energy resources.
Entergy on April 26 reported 1Q17 earnings per share of 46 cents on an as-reported basis (as-reported earnings: $82.6m) and 99 cents on an operational basis, including an estimated negative (16) cents effect from unusually mild weather.