Entergy sees growth ahead despite lower oil prices

OREANDA-NEWS. February 06, 2015. Entergy, whose Louisiana utilities are among the fastest growing in the US, today played down the prospect of a slowdown in electricity demand as a result of a steep decline in crude prices and the resulting potential slowdown in oil-producing areas.

"There will be some affect on our state economies, particularly on the Louisiana and Texas businesses that support the oil and gas services industry. However, the outlook for our core growth" sectors of large industrial facilities "remains robust," chief financial officer Andrew Marsh said today on an earnings call.

Entergy last November projected 1,600MW of new demand through 2019 as large petrochemical complexes and LNG export terminals start operations. The projected load growth is almost twice the estimated demand growth in all of New England in the same period.

Load projections made before crude prices started falling may seem optimistic at present. Some Texas utilities already are playing down growth prospects. Sasol has delayed its final investment decision on building a gas-to-liquids complex and BG likewise postponed its decision on the Lake Charles LNG export facility, both in Louisiana.

But Entergy shrugged off those decisions. "We have seen some pullback in specific sectors like gas-to-liquid facilities, which compete directly with crude. ... These customers are not key to our growth expectation through 2017. In fact, through 2017, the vast majority of our anticipated new or expanding large industrial customers have passed their final investment decisions or they are under construction," Marsh said.

Entergy's Louisiana utilities have proposed \\\$187mn in transmission upgrades in southwest Louisiana to serve the Cameron LNG export facility and Sasol's new ethane cracker. Both projects already have made final investment decisions.

Entergy plans to spend \\\$8bn in 2015-17 in its utility territories that span parts of Arkansas, Louisiana, Mississippi and Texas, including \\\$3.3bn planned for this year.