# Entergy Corporation (ETR) — Narrative, Q3 2026

Business, risk factors and the full-year discussion come from the 2025 Form 10-K (fiscal year ended December 31, 2025; accession 0000065984-26-000174). The current-quarter story and subsequent events come from the Form 10-Q for the quarter ended September 30, 2026 (accession 0000065984-26-000325) and the third-quarter earnings release furnished on Form 8-K on November 2, 2026 (accession 0000065984-26-000322).

## Business

*Source: 2025 Form 10-K, Part I Item 1 and MD&A (accession 0000065984-26-000174).*

Entergy is a regulated electric utility holding company. Through five retail utilities it generates, transmits, distributes and sells electricity to about 3.1 million customers in Arkansas, Louisiana, Mississippi and Texas, including the City of New Orleans. Rates are set by state commissions (and, in New Orleans, the City Council) on a cost-of-service, return-on-rate-base model, so earnings grow mainly with the capital Entergy invests and gets into rates. It owns and operates about 25,000 MW of generating capacity, had revenues of $12.9 billion in 2025 and employed 12,233 people at year-end 2025.

Entergy reports a single segment, **Utility**; everything else (the parent company's debt, a small remaining non-utility business, eliminations) sits in "Parent & Other." The Utility consists of:

- **Entergy Louisiana** — the largest, with 1.115 million customers (36% of the total) and 10,853 MW of owned or leased capacity, including the Waterford 3 and River Bend nuclear plants.
- **Entergy Arkansas** — 738,000 customers (24%), 5,542 MW, including Arkansas Nuclear One.
- **Entergy Texas** — 538,000 customers (18%), 3,275 MW.
- **Entergy Mississippi** — 459,000 customers (15%), 3,031 MW.
- **Entergy New Orleans** — 209,000 customers (7%), 669 MW.
- **System Energy** — owns or leases 90% of the Grand Gulf nuclear plant (1,251 MW) and sells its output at wholesale only to Entergy Arkansas, Entergy Mississippi and Entergy New Orleans under FERC regulation.

The fleet totals 24,621 MW of owned and leased capability: 10,579 MW of combustion turbines and combined-cycle gas units, 6,115 MW of legacy gas/oil steam units, 5,113 MW of nuclear, 1,981 MW of coal, 759 MW of solar and 74 MW of hydro. Entergy sold its Louisiana and New Orleans natural gas distribution businesses on July 1, 2025, so the company is now essentially all electric.

Industrial customers take the largest share of volume but a smaller share of revenue. In 2025 they took 42.9% of electric sales volume and paid 28.2% of electric revenue, against 26.2% of volume and 37.7% of revenue for residential customers. Commercial customers took 20.1% of volume and paid 24.4% of revenue. Historically the industrial base has been petroleum refining and chemicals. The growth story is now large data-center loads backed by a small number of technology companies. Entergy Louisiana serves a Meta Platforms data center in north Louisiana and in 2026 signed a second agreement with a Meta subsidiary. Entergy Arkansas has a special rate contract with a Google subsidiary for a data center in West Memphis. Entergy Mississippi has supply agreements for Amazon Web Services data-center campuses in Madison and Warren counties, and in 2026 added Hinds County. Under these contracts the customer pays the incremental cost of serving it, through upfront contributions, minimum bills and early-termination payments, while Entergy builds and rate-bases the generation and transmission.

Each utility recovers fuel and purchased power through pass-through riders, so those revenues largely offset in earnings. Base rates are mostly reset through annual formula rate plans: at Entergy Arkansas (forward test year), Entergy Louisiana, Entergy Mississippi and Entergy New Orleans. Entergy Texas uses rate cases plus capital riders for transmission, distribution and generation. The 2025 Form 10-K shows rate base, measured on differing test-year bases, of about $11.4 billion at Entergy Arkansas (2026 test year), $16.7 billion at Entergy Louisiana (December 31, 2024 test year), $4.6 billion at Entergy Mississippi (2025 forward test year), $4.4 billion at Entergy Texas, $1.2 billion at Entergy New Orleans and $1.79 billion at System Energy. Authorized returns on equity ranged from 8.85%–9.85% at Entergy New Orleans to 10.25%–12.26% at Entergy Mississippi.

## Risk factors

*Source: 2025 Form 10-K, Risk Factors Summary and Part I Item 1A (accession 0000065984-26-000174). The Q3 2026 Form 10-Q reports no material changes to these risk factors.*

The risks that bear most on the investment case:

- **Regulatory recovery.** Rates, returns and the recovery of capital, fuel and storm costs are all set in lengthy proceedings that can be appealed. Regulators can disallow costs as imprudent, and the industry-wide rise in spending makes rate cases more frequent and more contested. Recent examples in the 10-K: the Arkansas commission set a cost benchmark for Jefferson Power Station $90 million below Entergy's estimate, and the Arkansas commission denied the requested ratemaking treatment of Google's upfront payments.
- **Data-center concentration.** A few large customers account for much of the planned growth and the related generation and transmission build. If AI-driven demand slows, a customer builds its own supply, or a customer's finances weaken, revenue could fall short. The termination provisions in the contracts "do not fully protect against these risks." Once the plants are running, these customers are expected to be a high percentage of the affected utilities' sales, revenue and cash flow. The utilities are taking on significant debt to build for them.
- **Storms and weather.** The Gulf Coast service area is exposed to hurricanes and severe winter weather. Restoration costs must be recovered or securitized, and if recovery is delayed or denied, credit ratings and capital plans suffer. Winter Storm Fern in January 2026 is the latest example.
- **MISO market design.** All five utilities operate in the MISO regional market. Changes to its capacity accreditation and resource-adequacy rules, a reliability-based demand curve that has raised auction prices, and congested interconnection queues all affect costs and the capacity the utilities must procure.
- **Nuclear operations.** Entergy Arkansas, Entergy Louisiana and System Energy depend on four nuclear plants. The risks are high capacity factors, outage duration, fuel supply (Entergy has contracts and inventory it considers substantially adequate through 2029), NRC oversight, decommissioning-trust adequacy and retrospective industry insurance assessments.
- **Capital access and credit ratings.** The capital plan depends on large, continuing debt and equity issuance. A ratings downgrade would raise funding costs and could trigger collateral calls.
- **Tax policy.** The 2025 One Big Beautiful Bill Act cut short solar and wind tax credits for projects that do not meet placed-in-service or construction-start safe harbors, and added foreign-entity-of-concern restrictions. Entergy also says it may become subject to the 15% corporate alternative minimum tax within one to three years.
- **System Energy and Grand Gulf.** System Energy's only revenue comes from affiliate purchases of Grand Gulf output under the Unit Power Sales Agreement. That agreement has a long litigation history and is still before FERC over prepaid and accrued pension costs. Effective October 1, 2025, Entergy Louisiana was removed from the agreement as part of a settlement.
- **Holding-company structure.** Entergy Corporation has no operations of its own. It relies on subsidiary dividends, which are subject to regulatory and contractual limits, to pay its debt and its common dividend. Those limits could tighten as subsidiaries borrow for data-center projects.
- **Tariffs and supply chain.** Trade actions have already raised costs for some equipment and raw-material inputs. The 10-K says the increases had not yet materially affected capital plans.

## Management's discussion — full year 2025

*Source: 2025 Form 10-K, MD&A (accession 0000065984-26-000174).*

Net income attributable to Entergy rose to $1,758 million in 2025 ($3.91 per diluted share) from $1,056 million in 2024 ($2.45). Most of the jump is the absence of large 2024 charges:

- a $320 million ($253 million after tax) pension settlement charge from a group annuity purchase;
- $151 million ($112 million after tax) of charges for Entergy Louisiana's formula-rate-plan settlement;
- a $132 million ($97 million after tax) write-off after an adverse Entergy Arkansas opportunity-sales decision;
- a $78 million ($57 million after tax) regulatory charge at Entergy New Orleans.

Utility net income was $2,280 million versus $1,827 million. The Parent & Other loss narrowed to $521 million from $771 million.

Utility operating revenue rose to $12,888 million from $11,806 million. Fuel, rider and other pass-through revenue that does not significantly affect earnings accounted for $620 million of the increase. Higher volume and weather added $235 million, mainly industrial growth in primary metals, refining, chlor-alkali and technology plus favorable residential weather. Higher retail prices from formula-rate-plan and rider increases across the utilities added $164 million, and the return on construction work in progress funded by customer advances added $48 million. The gas-business sale took away $77 million. Retail electric sales rose 4% to 128,960 GWh, with industrial up 7%. Utility operation and maintenance expense rose to $3,013 million from $2,851 million, driven by vegetation management, loss provisions, bad debt and plant-outage work. Interest expense rose with a series of utility mortgage bond issues. The effective tax rate fell to 21.9% from 26.4%.

**Cash flow and capital.** Operating cash flow rose to $5,150 million from $4,488 million. The increase came from higher collections, $547 million from selling 2024 nuclear and solar production tax credits, and $401 million more in customer advance payments. Investing outflows rose to $7,109 million, with non-nuclear generation spending up $2,154 million. That was partly offset by $484 million of gas-sale proceeds and $359 million received when investors bought the in-process Legend Power Station under a build-to-suit lease. Debt to capital was 64.3% at year-end, or 62.6% on a net-debt basis excluding securitization bonds. Of total debt, 20.4% sat at the parent. Cash dividends paid were $1,074 million.

**Capital plan and funding.** The 10-K's 2026–2029 capital plan totaled $43.5 billion:

| Year | Total | Generation |
|---|---|---|
| 2026 | $11.6 billion | $6.35 billion |
| 2027 | $13.0 billion | $8.01 billion |
| 2028 | $10.7 billion | $6.33 billion |
| 2029 | $8.2 billion | $4.22 billion |

Most of the plan is new combined-cycle gas plants, solar and transmission, much of it tied to data-center load:

- Franklin Farms Units 1 and 2 (about $2.4 billion) and Waterford 5 for the Meta project;
- Delta Blues, Traceview and Vicksburg (754 MW each) in Mississippi for AWS;
- Legend (754 MW) and Lone Star (453 MW) in Texas;
- Jefferson (754 MW) and Ironwood (446 MW) in Arkansas;
- Arkansas Cypress Solar (600 MW plus 350 MW of storage, $1,602 million) for Google;
- Waterford 6 and Westlake (754 MW each, about $4.1 billion combined), filed in February 2026;
- 500 kV transmission lines including Southeast Texas ($1.36 billion) and Babel–Webre ($1,238 million).

Entergy Louisiana also agreed to buy the 1,263 MW Cottonwood combined-cycle plant in Texas for about $1.5 billion plus $309.3 million of upgrades. At the time of the 10-K it expected about $4.4 billion of new equity through 2029, of which about $1.9 billion was already contracted under forward sale agreements.

**Winter Storm Fern.** In January 2026, after year-end, Winter Storm Fern damaged infrastructure mainly in Louisiana and Mississippi. It also pushed January 2026 natural gas purchases to $483 million, from $207 million a year earlier. Those costs go through the fuel recovery mechanisms.

## Current quarter — Q3 2026

*Source: Q3 2026 Form 10-Q, MD&A and financial statements (accession 0000065984-26-000325); Q3 2026 earnings release (Form 8-K, accession 0000065984-26-000322); Form 8-Ks of August 7, 2026 (accession 0001193125-26-339472) and September 2, 2026 (accession 0000065984-26-000312).*

**Results.** Net income attributable to Entergy was $940.3 million ($1.98 per diluted share) in Q3 2026, against $693.8 million ($1.53) a year earlier. There were no non-GAAP adjustments in either quarter, so adjusted EPS was also $1.98. The company estimates weather added $0.24 per share this quarter versus $0.06 a year earlier. The Utility earned $1,079 million ($2.28 per share), up from $810 million. The Parent & Other loss widened to $139 million from $117 million because of higher interest on junior subordinated debentures.

Utility operating revenue rose to $4,353 million from $3,797 million. Pass-through fuel and rider revenue accounted for $117 million of the increase. The other drivers:

- retail price, +$206 million: formula-rate-plan increases at Entergy Arkansas and Entergy Louisiana, the new Generating Arkansas Jobs Act rider from June 2026, higher interim facilities rate adjustment revenue in Entergy Mississippi's formula rate plan, and Entergy Texas transmission and distribution riders;
- volume and weather, +$196 million;
- return on construction work in progress funded by customer advances, +$52 million;
- absence of $15 million of purchased-power-agreement termination proceeds booked in Q3 2025.

Retail electric sales rose 7% to 39,864 GWh. Residential was up 13% on weather, and industrial was up 5%, led by data-center and primary-metals customers. Offsets included higher Utility operation and maintenance expense ($825 million versus $764 million), depreciation, and consolidated interest expense of $460.9 million versus $347.0 million, reflecting new utility mortgage bonds issued in 2026 and the parent debentures. The effective tax rate was 22.8%.

For the nine months, net income was $1,807.8 million ($3.86 diluted) versus $1,522.5 million ($3.40). Retail sales were up 5% and industrial up 10%. Adjusted EPS was $3.89. It excludes an $18 million ($14 million after tax) first-quarter impairment tied to the sale of the non-utility business's interest in the Independence power plant, which closed in April 2026. Nine-month operating cash flow rose to $4,957 million from $3,932 million. The increase was driven by $1,172 million more in customer advance payments, partly offset by smaller production-tax-credit sale proceeds: $224 million versus $405 million a year earlier.

**Guidance and capital plan.** Entergy narrowed its 2026 adjusted EPS guidance to $4.35–$4.45. The 10-Q previews a much larger 2027–2030 capital plan, excluding projects funded through customer advances:

| Year | Total | Generation |
|---|---|---|
| 2027 | $17.2 billion | $12.1 billion |
| 2028 | $16.4 billion | $11.7 billion |
| 2029 | $11.9 billion | $7.8 billion |
| 2030 | $9.3 billion | $6.2 billion |

The four years total about $54.8 billion. The equity need rises to about $5.2 billion over 2027–2030, of which about $2.2 billion was contracted under forward sales at September 30, 2026.

**Financing in the period.** On August 7, 2026, Entergy Corporation closed $1.5 billion of junior subordinated debentures in two $750 million series due 2056 and 2058, each at an initial 6.500% rate. Entergy Louisiana issued $1.0 billion of mortgage bonds in August. In equity, Entergy priced a 19.2 million-share forward offering in May 2026 at an initial forward price of $110.74. In June it settled the remaining ATM forwards for $126 million and part of the March 2025 forwards for $546 million. On September 2, 2026, it settled the rest of the March 2025 forwards (11.1 million shares) for about $913 million. At September 30, debt to capital was 63.5%, and 60.3% on a net-debt basis excluding securitization bonds. Cash was $4,205 million, commercial paper outstanding was $105 million, and the $3 billion parent credit facility (now extended to June 2031) was undrawn.

**Growth projects and regulation during 2026.** Developments disclosed in the 10-Q:

- **Second Meta data center (Evest).** In March 2026 Entergy Louisiana signed an electric service agreement with Evest LLC, a Meta Platforms subsidiary, for a second north Louisiana data center. It applied to certify seven combined-cycle units totaling 5,278 MW for about $12.9 billion (Richland Parish Units 1–4 and Pointe Coupee Units 1–3, in service 2030–2031), three battery systems, and a $1.4 billion 500 kV line. Evest's obligations are backed by collateral including a Meta Platforms guaranty.
- **Amazon Web Services.** AWS expanded its Madison County, Mississippi campuses, and Entergy Mississippi signed a new supply agreement for an AWS campus in Hinds County.
- **Arkansas approvals.** The Arkansas commission approved Arkansas Cypress Solar in March 2026 and approved recovery of Jefferson Power Station costs through the Generating Arkansas Jobs Act rider, while keeping the $90 million-below-estimate benchmark. In August, Entergy Arkansas filed to convert White Bluff Unit 1 from coal to natural gas at an estimated cost of $301.3 million.
- **Cottonwood.** The LPSC staff argued that data-center customers should bear the cost of the Cottonwood acquisition. The hearing is now set for February 2027, and closing is targeted for the first or second quarter of 2027.
- **Cypress Harvest Solar.** Iberville Parish passed a battery moratorium and twice denied the solar permit. Entergy Louisiana had spent about $30 million on the project by September 30.
- **Resilience plan Phase IA.** In September 2026 Entergy Louisiana applied for LPSC approval of Phase IA of its Future Ready resilience plan: about $600 million of additional distribution and transmission hardening over 2027–2030. The application asks to keep recovering the costs through the resilience plan cost recovery rider. A hearing is set for June 2027, and Entergy Louisiana has requested a decision by July 2027.
- **Winter Storm Fern costs.** Final restoration cost was about $450 million: $375 million capital and $75 million non-capital.
- **Nuclear oversight.** Grand Gulf and River Bend each received a "white" (low safety significance) NRC finding, placing them in Column 2 of the Reactor Oversight Process. Grand Gulf completed its NRC supplemental inspection in September 2026, and the NRC is expected to issue a report in the fourth quarter of 2026 documenting its return to Column 1, effective the third quarter of 2026. River Bend, whose white finding was finalized in August 2026, remains in Column 2 until it completes an NRC supplemental inspection.

## Subsequent events

*Source: Q3 2026 Form 10-Q (accession 0000065984-26-000325), MD&A and Notes 1, 2 and 4; Q3 2026 earnings release (accession 0000065984-26-000322).*

The 10-Q has no separately captioned subsequent-events note. The developments below are dated after September 30, 2026 in its MD&A and notes. No acquisition or divestiture closed after the quarter. The pending Cottonwood purchase (about $1.5 billion) is still targeted for the first half of 2027.

**Financing**

- **Waterford 6 build-to-suit lease (October 2026).** A consortium of investors bought the in-process Waterford 6 Power Station project from Entergy Louisiana for $167.5 million and will spend up to $1.875 billion, including that price, to build the 754 MW plant. Entergy Louisiana acts as construction agent. When the plant is ready to synchronize, expected in late 2029, it will lease the plant on a triple-net basis at SOFR plus a credit-based margin. Entergy Louisiana can buy the plant at the investors' total cost. As with the Legend Power Station lease, Entergy Louisiana will not carry the construction asset or a liability during construction.
- **Mississippi storm securitization (October 2026).** Entergy Mississippi asked the Mississippi commission for a financing order to securitize about $237.8 million of Winter Storm Fern costs through state-issued system restoration bonds. The total is $145.7 million of non-fuel restoration costs, $65.0 million of incremental fuel, $7.6 million of retired assets, $14.3 million of carrying costs and $5.2 million of issuance costs. A ruling is expected in December 2026.
- **Borrowing authority (October 2026).** FERC renewed short-term borrowing authority for all six registrant subsidiaries from November 2026 through October 2028. It also extended nuclear-fuel financing authority for Entergy Arkansas, Entergy Louisiana and System Energy through October 2028.

**Dividend and guidance**

- **Dividend (October 2026).** The Board declared a quarterly dividend of $0.68 per share, up from $0.64, which the company describes as a six percent increase.
- **Guidance (November 2, 2026).** Entergy narrowed its 2026 adjusted EPS guidance to $4.35–$4.45.

**Projects and data-center contracts**

- **Orange County Advanced Power Station (October 2026).** The 1,215 MW Entergy Texas plant entered service, and interim generation-rider rates took effect. Entergy Texas filed an unopposed settlement that allows all recoverable investment and cuts the rider's annual revenue requirement by $5.7 million.
- **Google expansion (October 2026).** Entergy Arkansas filed to amend its Google contract to expand and accelerate the West Memphis project. The amendment adds:
  - a 250 MW battery system at Driver Solar ($389.4 million);
  - a 100 MW battery system at Jones Mill ($161.2 million);
  - a 440 MW solar power purchase agreement from Big Island Solar;
  - related transmission.

  Both batteries are expected in service in 2028. The hearing is set for January 2027.
- **Evest certification.** The hearing on the Evest generation application took place in October 2026. Before it, Entergy Louisiana settled with the LPSC staff and one intervenor on terms that recommend certification. An LPSC decision is expected in December 2026.
- **Waterford 6 and Westlake.** The hearing was held in October 2026, and an LPSC decision is expected in the first quarter of 2027.
- **Babel–Webre (October 2026).** The LPSC approved the $1,238 million, 147-mile 500 kV transmission project.

**Rate cases and other regulatory matters**

- **Entergy Arkansas base rate case (October 2026).** Entergy Arkansas, the commission staff and an intervenor filed a settlement for approval. It provides no change in retail revenue, a 9.7% authorized ROE, 47.5% equity in the capital structure and revised depreciation rates.
- **Entergy New Orleans (October 2026).** The City Council extended Entergy New Orleans's electric formula rate plan for test years 2026 through 2029.
- **Entergy Texas (October 2026).** Entergy Texas filed to raise its transmission rider by $26.4 million a year. Parties to its application for a 14-year, 300 MW, $883 million purchase agreement with the Tenaska Frontier plant reached a settlement in principle.
- **Litigation (October 2026).** Entergy Louisiana sued Iberville Parish over its denial of the Cypress Harvest Solar permit. In Texas, landowners appealing the Cypress-to-Legend line approval asked the appeals court to bar eminent domain and construction on their land.