Executive Summary / Key Takeaways

• Robust Growth Trajectory: Entergy Louisiana ($ELC) is poised for significant growth, driven by a burgeoning industrial sector in the Gulf South, including a rapidly expanding data center pipeline now spanning 7 to 12 gigawatts. This underpins a projected industrial sales compound annual growth rate of 12% to 13% from 2024 through 2028.
• Strategic Capital Deployment: The company plans substantial capital investments of approximately $41 billion from 2026 to 2029, targeting new generation (efficient gas, renewables, nuclear upgrades), transmission, and distribution infrastructure to support customer demand and enhance system resilience.
• Technological and Operational Edge: ELC leverages its vertically integrated model and commitment to advanced generation, including carbon capture-ready gas plants and nuclear capacity upgrades, to offer comprehensive, reliable, and increasingly sustainable energy solutions.
• Proactive Risk Management & Regulatory Support: ELC actively mitigates risks through supply chain diversification for tariffs, innovative financing for large projects, and strong regulatory partnerships that facilitate timely cost recovery and resilience investments, such as the Generating Arkansas Jobs Act rider and expedited storm securitization processes.
• Solid Financial Foundation: With a narrowed 2025 adjusted EPS guidance and a long-term adjusted EPS CAGR greater than 8% through 2029, coupled with strong credit metrics and strategic equity financing, ELC demonstrates a healthy financial position to execute its ambitious growth plans.

Powering the Gulf South: A Foundation for Growth

Entergy Louisiana, LLC ($ELC), a key subsidiary of Entergy Corporation (ETR), stands as a vertically integrated public utility company, generating, transmitting, distributing, and selling electric power across significant portions of Louisiana. Its formation on October 1, 2015, through the combination of Entergy Gulf States Louisiana and Old Entergy Louisiana, laid the groundwork for its current strategic focus. This historical consolidation enabled a unified approach to serving its diverse customer base, which includes a substantial and growing industrial segment.

The company's overarching strategy is deeply customer-centric, prioritizing economic development, enhancing reliability and resilience, and advancing decarbonization efforts. This approach is particularly critical in the Gulf South, a region experiencing a significant industrial renaissance. Broad industry trends such as the AI and data center boom, increasing electrification, and a resurgence in U.S. manufacturing (reshoring) are creating unprecedented demand for reliable and affordable energy. The region's natural advantages, including low power costs, robust energy and transportation infrastructure, access to diverse energy sources, and a business-friendly environment, position ELC as a crucial enabler of this growth.

In this dynamic landscape, ELC's competitive positioning is defined by its vertically integrated model, which allows it to act as a "one-stop shop" for large industrial customers. This structure enables the provision of complete technical solutions, from generation and transmission to green attributes and retail access, while fostering strong local relationships with critical stakeholders. Compared to larger, more diversified utilities like Southern Company (SO) or Duke Energy (DUK), ELC's regional expertise and localized responsiveness offer a distinct advantage, particularly in navigating Louisiana's specific regulatory and community needs. While companies like NextEra Energy (NEE) may lead in renewable-heavy strategies and American Electric Power (AEP) boasts a vast transmission network, ELC's integrated approach and deep regional ties provide a compelling value proposition for customers seeking comprehensive energy solutions. ELC's competitive offering is further strengthened by its ability to competitively support customer growth by building plants nearby, thereby avoiding customers having to carry generation capital on their own balance sheets.

Technological Edge and Operational Prowess

ELC's commitment to technological differentiation and innovation is central to its ability to meet escalating energy demands and decarbonization goals. The company's generation portfolio is evolving, with a focus on highly efficient gas units, strategic nuclear upgrades, and significant investments in solar and battery storage.

A key technological differentiator is the configuration of all new combined cycle gas plants to be carbon capture and sequestration (CCS) enabled. While current capital plans do not include specific dollars for CCS, this forward-looking design provides a clear pathway for future decarbonization, aligning with customer demand for green attributes. A FEED (Front-End Engineering Design) study is currently underway at the Lake Charles Power Station, with a decision expected in 2025, signaling tangible progress toward deploying this critical technology. This capability offers a significant competitive advantage, positioning ELC to meet stringent environmental standards and serve customers with evolving sustainability requirements.

In its nuclear fleet, ELC is pursuing capacity upgrades and incremental 20-year license extensions. For instance, the Waterford 3 refueling outage, completed in June 2025, included the replacement of low-pressure turbine rotors, which is expected to increase the unit's capacity by an estimated 40 megawatts by fall 2026. Similar assessments are underway at other nuclear plants, potentially adding approximately 275 megawatts system-wide. These upgrades represent a cost-effective way to enhance clean energy output and improve grid reliability, contributing to ELC's competitive moat by extending the life and efficiency of existing carbon-free assets. The company also intends to renew its NRC early site permit for a potential new nuclear facility at Grand Gulf, maintaining a viable long-term option.

ELC is also making substantial strides in renewable energy and battery storage. The Louisiana Public Service Commission (LPSC) recently approved the 200 MW Bogalusa West Solar facility, expected in service by 2028, marking the first project approved through Louisiana's accelerated solar approval process. Additionally, Entergy Arkansas has filed for approval of the 600 MW Arkansas Cypress Solar facility with a 350 MW battery energy storage system to support Google (GOOGL)'s data center. These projects demonstrate ELC's ability to integrate diverse energy sources and provide green attributes, which are increasingly important for hyperscale data center customers. The company has secured approximately 75% of critical equipment for its owned solar projects, with clear line of sight for the remainder, ensuring efficient execution.

The "so what" for investors is clear: these technological advancements and operational strategies contribute directly to ELC's competitive moat by enhancing reliability, managing long-term costs, and positioning the company as a leader in sustainable energy solutions. This proactive approach to technology ensures ELC can meet the complex and evolving demands of its industrial and residential customers, driving sustained financial performance and market positioning.

Financial Performance and Operational Momentum

Entergy Louisiana has demonstrated strong financial and operational performance, reflecting its strategic investments and robust customer growth. For the three months ended September 30, 2025, the Utility segment's operating revenues increased to $3.80 million from $3.34 million in the prior year period. For the nine months ended September 30, 2025, operating revenues rose to $9.94 million from $9.08 million in the same period of 2024. This growth was primarily fueled by an increase in industrial and residential usage, alongside the recognition of $15 million in liquidated damages from a purchased power agreement termination for Entergy Mississippi.

Industrial usage, a key driver, saw increased demand from large customers in the primary metals, chlor-alkali, and industrial gases industries. The sale of the natural gas distribution businesses of Entergy Louisiana and Entergy New Orleans on July 1, 2025, for a base purchase price of $203 million and $288 million respectively, resulted in a $17 million gain for Entergy Louisiana ($13 million net-of-tax). This divestiture allows ELC to sharpen its focus on its core electric business.

Operational expenses saw some increases, with other operation and maintenance expenses rising due to higher power delivery costs (including vegetation maintenance), increased compensation and benefits, and expensed project costs for the canceled Bayou Power Station project ($10.80 million). However, these were partially offset by the gain from the natural gas distribution business sale. Depreciation and amortization expenses also increased due to additions to plant in service and higher nuclear depreciation rates at Entergy Louisiana.

Liquidity and capital resources remain robust. Entergy's debt to capital ratio improved to 64.3% as of September 30, 2025, from 65.3% at December 31, 2024. The company's $3 billion credit facility had $2.997 billion available, and its commercial paper program had $1.398 billion outstanding at a weighted-average interest rate of 4.64% for the nine months ended September 30, 2025.

Net cash flow provided by operating activities increased by $823 million for the nine months ended September 30, 2025, driven by higher customer collections, $405 million from nuclear and solar production tax credits (PTCs) sales, and $313 million in advance payments from customer agreements. This strong cash generation supports the company's significant capital investment program.

Strategic Initiatives and Future Outlook

Entergy Louisiana's future is defined by an ambitious capital investment plan and a clear growth outlook. The Utility segment anticipates investing approximately $41 billion from 2026 through 2029, with annual investments ranging from $8 billion to $12 billion. These funds are earmarked for modernizing and diversifying generation, enhancing the nuclear fleet, and improving transmission and distribution infrastructure. The equity associated with this plan is approximately $4.4 billion, with about 45% already contracted through forward sale agreements, extending well into 2027.

The company's adjusted EPS guidance for 2025 has been narrowed, with the bottom raised by $0.10, reflecting solid year-to-date results. The long-term adjusted EPS compound annual growth rate remains strong at greater than 8% through 2029. This growth is underpinned by a robust industrial sales compound annual growth rate of 12% to 13% from 2024 through 2028, with 2025 industrial sales expected to be 11% to 12%.

A significant driver of this growth is the expanding data center pipeline, which has grown from 7 to 12 gigawatts, representing active discussions for potential agreements within the next one to two years. To support this, ELC has secured over 19 gigawatts of power island equipment capacity, with 8 gigawatts available for additional growth opportunities. The FERC-approved MISO Expedited Resource Addition Study (ERAS) process is also facilitating speed to market for new generation, with first project approvals expected by year-end 2025.

Regulatory support is crucial for ELC's strategic execution. The Arkansas Public Service Commission (APSC) approved the Generating Arkansas Jobs Act rider, which allows for timely recovery of financing costs during construction of economic development-related generation and transmission investments, bypassing the formula rate plan's 4% cap. Similarly, Texas legislation has established a capacity cost recovery rider for MISO-related costs and accelerated storm securitization review to 150 days, benefiting customers through lower carrying costs. ELC's earned return on equity (ROE) is projected to improve from 9% to 9.5% over the forecast period.

Risks and Challenges

Despite a compelling growth story, Entergy Louisiana faces several risks. Tariff impacts are estimated to affect approximately 1% of the $37 billion 4-year capital plan, primarily in the later part of the forecast. ELC is mitigating this through alternative supply sourcing and cost management. Labor challenges for large construction projects, particularly for skilled craft, are also a concern, potentially leading to increasing costs for combined cycle projects.

The pursuit of new nuclear generation, while strategically important, carries significant construction risk that ELC's operating companies are not structured to bear alone. The company is actively seeking state, federal, vendor, or sovereign fund support to manage this risk. Furthermore, while ELC is committed to achieving net-zero greenhouse gas emissions by 2050, stronger-than-expected sales growth and changes to tax credits may delay the achievement of its carbon intensity and carbon-free energy capacity goals beyond 2030.

Conclusion

Entergy Louisiana ($ELC) is firmly positioned for a period of robust growth, driven by an expanding industrial base and the insatiable demand from hyperscale data centers across the Gulf South. The company's strategic capital plan, totaling $41 billion through 2029, is meticulously designed to meet these needs through a diversified portfolio of efficient gas generation (carbon capture-ready), nuclear upgrades, and significant renewable energy and storage projects. ELC's vertically integrated model, coupled with its technological advancements and strong regional stakeholder relationships, provides a distinct competitive advantage in delivering comprehensive and reliable energy solutions.

With a solid financial foundation, evidenced by strong credit metrics, a narrowed 2025 EPS guidance, and a long-term EPS CAGR exceeding 8%, ELC is well-equipped to execute its ambitious agenda. Proactive risk management, including innovative financing for large projects and supportive regulatory frameworks, further strengthens its investment thesis. While challenges such as tariff impacts and labor costs persist, ELC's commitment to operational excellence and strategic growth initiatives positions it as a compelling investment opportunity, poised to deliver sustainable value to its customers, communities, and shareholders in the evolving energy landscape.