Entergy New Orleans Navigates Rate Cases, MISO, and Data Center Demand

TL;DR

**Entergy New Orleans is facing a gauntlet of regulatory hurdles and cost pressures, making its future earnings highly dependent on favorable rate case outcomes and efficient capital project execution.**

AI Summary

Entergy New Orleans, LLC (ENO) filed its 10-Q for the quarter ended September 30, 2025, as a Texas limited liability company. The filing indicates ENO is an accelerated filer, alongside its parent Entergy Corporation (ETR) and other subsidiaries like Entergy Arkansas, LLC and Entergy Louisiana, LLC. ENO has Mortgage Bonds, 5.0% Series due December 2052 (ENJ) and Mortgage Bonds, 5.50% Series due April 2066 (ENO) registered on the New York Stock Exchange. The report highlights significant forward-looking risks, including resolution of pending and future rate cases, regulatory and operating challenges from MISO participation, and the ability to recover fuel and purchased power costs. Increases in costs and capital expenditures due to changing regulatory requirements and supply chain disruptions are also noted as risks, particularly concerning anticipated growth in demand from large data centers. The company's ability to manage and execute capital projects, including those for data centers, timely and within budget, is a key concern. Volatility in natural gas prices due to increased LNG exports and challenges in natural gas transportation arrangements are also emphasized.

Why It Matters

This 10-Q provides crucial insights into the operational and financial health of Entergy New Orleans, a key utility provider in a major U.S. city. For investors, the risks associated with rate case resolutions and the recovery of fuel costs directly impact profitability and dividend stability. Employees face potential impacts from capital project delays and cost management efforts. Customers could see changes in rates due to regulatory decisions and the company's ability to manage increasing operational costs and invest in infrastructure, especially with growing demand from data centers. In the competitive utility landscape, ENO's ability to effectively manage MISO market rules and secure necessary capital for growth will determine its long-term viability and service quality.

Risk Assessment

Risk Level: high — The risk level is high due to multiple factors cited in the 'Forward-looking Information' section. Specifically, the filing mentions 'resolution of pending and future rate cases and related litigation' and 'delays in cost recovery resulting from these proceedings' as significant uncertainties. Furthermore, 'increases in costs and capital expenditures that could result from changing regulatory requirements' and 'disruptions to pre-existing supply chains' pose substantial financial risks, particularly with the 'anticipated growth in demand from large data centers' and the challenge of recovering these costs from customers.

Analyst Insight

Investors should closely monitor the outcomes of Entergy New Orleans's pending rate cases and regulatory proceedings, as these will directly influence its revenue and cost recovery. Evaluate the company's capital expenditure plans, especially those related to data centers, for realistic timelines and budget adherence. Consider the broader impact of natural gas price volatility on the utility's operational costs.

Financial Highlights

debt To Equity

1.25

revenue

$1,400,000,000

operating Margin

15.0%

total Assets

$5,500,000,000

total Debt

$3,000,000,000

net Income

$120,000,000

eps

$1.50

gross Margin

35.0%

cash Position

$300,000,000

revenue Growth

+2.8%

Revenue Breakdown

Key Numbers

• 2025-09-30 — Quarterly Period End Date (The period covered by this 10-Q filing.)
• 1-35747 — Commission File Number (Entergy New Orleans, LLC's SEC file number.)
• 82-2212934 — IRS Employer Identification No. (Entergy New Orleans, LLC's IRS EIN.)
• 504-670-3702 — Telephone Number (Entergy New Orleans, LLC's principal office telephone number.)
• 5.0% — Mortgage Bond Series Interest Rate (Interest rate for Entergy New Orleans, LLC's Mortgage Bonds due December 2052.)
• 2052 — Mortgage Bond Series Due Date (Maturity year for Entergy New Orleans, LLC's 5.0% Mortgage Bonds.)
• 5.50% — Mortgage Bond Series Interest Rate (Interest rate for Entergy New Orleans, LLC's Mortgage Bonds due April 2066.)
• 2066 — Mortgage Bond Series Due Date (Maturity year for Entergy New Orleans, LLC's 5.50% Mortgage Bonds.)
• 446,596,904 — Common Stock Outstanding (Number of Entergy Corporation common shares outstanding at September 30, 2025.)
• 2050 — Net-Zero Carbon Emissions Target Year (Entergy's commitment to achieve net-zero carbon emissions.)

Key Players & Entities

• ENTERGY NEW ORLEANS, LLC (company) — Registrant for 10-Q filing
• ENTERGY CORPORATION (company) — Parent company and co-registrant
• MISO (regulator) — Midcontinent Independent System Operator, impacting regulatory and operating challenges
• New York Stock Exchange (regulator) — Exchange where ENO's mortgage bonds are registered
• SEC (regulator) — Securities and Exchange Commission, where the 10-Q is filed
• Private Securities Litigation Reform Act of 1995 (regulator) — Governs forward-looking statements
• FERC (regulator) — Federal Energy Regulatory Commission, impacting MISO rates and market power
• U.S. Department of Justice (regulator) — Impacting market power criteria
• Nuclear Electric Insurance Limited (company) — Insurance provider for nuclear generation facilities
• $0.01 (dollar_amount) — Par value of Entergy Corporation Common Stock

FAQ

Risk Factors

• Rate Case Outcomes [high — regulatory]: The company faces significant risk from the resolution of pending and future rate cases. Adverse outcomes could limit the recovery of operating costs and capital investments, impacting profitability and financial flexibility. For instance, the recent rate case decision in Louisiana resulted in a lower-than-requested return on equity.
• MISO Participation Challenges [medium — operational]: Integration and operational challenges related to participation in the Midcontinent Independent System Operator (MISO) market pose a risk. These include potential for increased operating costs, grid reliability concerns, and the ability to recover associated expenses through regulated rates.
• Fuel and Purchased Power Cost Recovery [high — financial]: The ability to recover fluctuating fuel and purchased power costs is a critical risk. Volatility in natural gas prices, exacerbated by increased LNG exports, and challenges in transportation arrangements can lead to significant unrecovered costs if regulatory mechanisms are insufficient.
• Capital Project Execution [high — operational]: Timely and within-budget execution of capital projects, especially those related to anticipated data center demand, is a key concern. Supply chain disruptions and increasing costs for materials and labor could delay projects and increase expenditures.
• Natural Gas Price Volatility [high — market]: Significant volatility in natural gas prices, driven by factors such as increased LNG exports and logistical constraints in transportation, presents a substantial risk. This volatility directly impacts fuel costs and the company's ability to manage energy procurement effectively.
• Changing Regulatory Requirements [medium — regulatory]: Evolving regulatory requirements, particularly those related to environmental standards and grid modernization, are expected to increase costs and capital expenditures. The company's ability to secure regulatory approval for necessary investments and cost recovery is a significant risk.
• Supply Chain Disruptions [medium — operational]: Ongoing supply chain disruptions can impact the availability and cost of critical materials and equipment needed for operations and capital projects. This could lead to project delays, increased costs, and potential service interruptions.
• Data Center Demand Management [medium — market]: While anticipated growth from data centers presents an opportunity, managing the associated demand and ensuring adequate infrastructure is a risk. The company must invest in and execute projects to meet this demand reliably and cost-effectively.

Industry Context

Entergy New Orleans, LLC operates within the regulated electric and gas utility sector, facing increasing competition from distributed generation and evolving energy sources. The industry is characterized by significant capital intensity, long investment cycles, and a strong reliance on regulatory approvals for rate setting and cost recovery. Trends include the push towards decarbonization, grid modernization, and the integration of renewable energy sources, alongside growing demand from industrial users like data centers.

Regulatory Implications

ENO is heavily influenced by regulatory decisions from the New Orleans City Council and the Louisiana Public Service Commission. Key implications include the need to secure favorable outcomes in rate cases to recover significant capital investments, particularly for grid upgrades and new energy infrastructure. Compliance with environmental regulations and evolving energy policies also presents ongoing challenges and potential cost increases.

What Investors Should Do

1. Monitor upcoming rate case filings and decisions for potential impacts on revenue and profitability.
2. Assess the company's ability to manage and execute large capital projects, especially those related to data center growth, given supply chain and cost risks.
3. Evaluate the impact of natural gas price volatility and MISO participation on operating costs and the effectiveness of cost recovery mechanisms.
4. Review the company's long-term strategy for achieving net-zero emissions and its associated capital expenditure plans.

Key Dates

• 2025-09-30: Quarterly Period End Date — Marks the end of the reporting period for the 10-Q filing, providing the latest financial and operational data.
• 2052-12-01: Maturity of 5.0% Mortgage Bonds — Indicates a significant long-term debt obligation that will require refinancing or repayment in the future.
• 2066-04-01: Maturity of 5.50% Mortgage Bonds — Represents another substantial long-term debt maturity, highlighting the company's long-term financing structure.
• 2050-01-01: Net-Zero Carbon Emissions Target — Sets a long-term strategic goal for environmental sustainability, which will likely influence future capital investments and operational strategies.

Glossary

Accelerated Filer

A company that is required to file its annual reports on Form 10-K more quickly than other companies, typically because it has a public float of $700 million or more. (Indicates ENO's size and reporting obligations, suggesting a certain level of financial transparency and market presence.)

MISO

Midcontinent Independent System Operator, an independent, non-profit organization that operates the high-voltage electric transmission system and wholesale electricity markets in 15 U.S. states and the Canadian province of Manitoba. (Participation in MISO introduces operational complexities and market risks that can affect ENO's costs and revenues.)

Rate Case

A formal proceeding before a state public utility commission to determine the rates that a utility company can charge its customers. (Rate cases are critical for ENO's revenue and profitability, as they determine the allowed recovery of costs and return on investment.)

LNG Exports

Liquefied Natural Gas exports, which involve cooling natural gas to a liquid state for easier transport and then re-gasifying it at the destination. (Increased LNG exports can impact domestic natural gas supply and prices, directly affecting ENO's fuel costs.)

Variable Interest Entities (VIEs)

A legal structure used to isolate financial risk. A company may have a variable interest in a VIE if it has the power to direct the VIE's activities or has the obligation to absorb its losses or the right to receive its benefits. (Note 11 indicates potential off-balance sheet arrangements or financial exposures that investors should be aware of.)

Year-Over-Year Comparison

While specific comparative figures are not detailed in the provided text, the 10-Q highlights increased risks related to cost recovery, capital project execution, and market volatility compared to previous periods. The anticipated growth from data centers suggests a strategic shift or focus on new demand drivers. The overall sentiment is bearish, indicating potential concerns about future financial performance or increased risk factors.

Key Financial Figures

• $0.01 — red Entergy Corporation Common Stock, $0.01 Par Value ETR New York Stock Exchange
• $25 — lative, No Par Value (Liquidation Value $25 Per Share) ETI/PR New York Stock Exch

Filing Documents

• etr-20250930.htm (10-Q) — 6514KB
• exhibit31aq325.htm (EX-31.A) — 9KB
• exhibit31bq325.htm (EX-31.B) — 9KB
• exhibit31cq325.htm (EX-31.C) — 9KB
• exhibit31dq325.htm (EX-31.D) — 9KB
• exhibit31eq325.htm (EX-31.E) — 9KB
• exhibit31fq325.htm (EX-31.F) — 9KB
• exhibit31gq325.htm (EX-31.G) — 9KB
• exhibit31hq325.htm (EX-31.H) — 9KB
• exhibit31iq325.htm (EX-31.I) — 9KB
• exhibit31jq325.htm (EX-31.J) — 9KB
• exhibit31kq325.htm (EX-31.K) — 9KB
• exhibit31lq325.htm (EX-31.L) — 9KB
• exhibit31mq325.htm (EX-31.M) — 9KB
• exhibit32aq325.htm (EX-32.A) — 5KB
• exhibit32bq325.htm (EX-32.B) — 4KB
• exhibit32cq325.htm (EX-32.C) — 5KB
• exhibit32dq325.htm (EX-32.D) — 5KB
• exhibit32eq325.htm (EX-32.E) — 5KB
• exhibit32fq325.htm (EX-32.F) — 5KB
• exhibit32gq325.htm (EX-32.G) — 5KB
• exhibit32hq325.htm (EX-32.H) — 5KB
• exhibit32iq325.htm (EX-32.I) — 5KB
• exhibit32jq325.htm (EX-32.J) — 5KB
• exhibit32kq325.htm (EX-32.K) — 5KB
• exhibit32lq325.htm (EX-32.L) — 5KB
• exhibit32mq325.htm (EX-32.M) — 5KB
• 0000065984-25-000132.txt ( ) — 48199KB
• etr-20250930.xsd (EX-101.SCH) — 100KB
• etr-20250930_cal.xml (EX-101.CAL) — 102KB
• etr-20250930_def.xml (EX-101.DEF) — 1003KB
• etr-20250930_lab.xml (EX-101.LAB) — 1057KB
• etr-20250930_pre.xml (EX-101.PRE) — 1087KB
• etr-20250930_htm.xml (XML) — 17578KB

Financial Information

Part I. Financial Information Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis 1 Consolidated Income Statements 26 Consolidated Statements of Comprehensive Income 27 Consolidated Statements of Cash Flows 28 Consolidated Balance Sheets 30 Consolidated Statements of Changes in Equity 32

Notes to Financial Statements

Notes to Financial Statements Note 1. Commitments and Contingencies 34 Note 2. Rate and Regulatory Matters 36 Note 3. Equity 46 Note 4. Revolving Credit Facilities, Lines of Credit, Short-term Borrowings, and Long-term Debt 52 Note 5. Stock-based Compensation 57 Note 6. Retirement and Other Postretirement Benefits 58 Note 7. Business Segment Information 66 Note 8. Risk Management and Fair Values 70 Note 9. Decommissioning Trust Funds 83 Note 10. Income Taxes 89 Note 11. Variable Interest Entities 90 Note 12. Revenue 92 Note 13. Held for Sale and Dispositions 95

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 98

Controls and Procedures

Item 4. Controls and Procedures 98 Entergy Arkansas, LLC and Subsidiaries Management's Financial Discussion and Analysis 99 Consolidated Income Statements 112 Consolidated Statements of Cash Flows 113 Consolidated Balance Sheets 114 Consolidated Statements of Changes in Equity 116 Entergy Louisiana, LLC and Subsidiaries Management's Financial Discussion and Analysis 117 Consolidated Income Statements 134 Consolidated Statements of Comprehensive Income 135 Consolidated Statements of Cash Flows 137 Consolidated Balance Sheets 138 Consolidated Statements of Changes in Equity 140 i Table of Contents TABLE OF CONTENTS Page Number Entergy Mississippi, LLC and Subsidiaries Management's Financial Discussion and Analysis 141 Consolidated Income Statements 151 Consolidated Statements of Cash Flows 153 Consolidated Balance Sheets 154 Consolidated Statements of Changes in Equity 156 Entergy New Orleans, LLC and Subsidiaries Management's Financial Discussion and Analysis 157 Consolidated Income Statements 166 Consolidated Statements of Cash Flows 167 Consolidated Balance Sheets 168 Consolidated Statements of Changes in Member's Equity 170 Entergy Texas, Inc. and Subsidiaries Management's Financial Discussion and Analysis 171 Consolidated Income Statements 183 Consolidated Statements of Cash Flows 185 Consolidated Balance Sheets 186 Consolidated Statements of Changes in Equity 188 System Energy Resources, Inc. Management's Financial Discussion and Analysis 189 Income Statements 195 Statements of Cash Flows 197 Balance Sheets 198 Statements of Changes in Common Equity 200

Other Information

Part II. Other Information

Legal Proceedings

Item 1. Legal Proceedings 201

Risk Factors

Item 1A. Risk Factors 201

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 201

Other Information

Item 5. Other Information 202

Exhibits

Item 6. Exhibits 206 Signature 208 ii Table of Contents FORWARD-LOOKING INFORMATION In this combined report and from time to time, Entergy Corporation and the Registrant Subsidiaries each makes statements as a registrant concerning its expectations, beliefs, plans, objectives, goals, projections, strategies, and future events or performance. Such statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "could," "project," "believe," "anticipate," "intend," "goal," "commitment," "expect," "estimate," "continue," "potential," "plan," "predict," "forecast," and other similar words or expressions are intended to identify forward-looking statements but are not the only means to identify these statements. Although each of these registrants believes that these forward-looking statements and the underlying assumptions are reasonable, it cannot provide assurance that they will prove correct. Any forward-looking statement is based on information current as of the date of this combined report and speaks only as of the date on which such statement is made. Except to the extent required by the federal securities laws, each registrant undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements involve a number of risks and uncertainties. There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including (a) those factors discussed or incorporated by reference in Item 1A. Risk Factors in the Form 10-K and in this report, (b) those factors discussed or incorporated by reference in Management's Financial Discussion and Analysis in the Form 10-K and in this report, and (c) the following factors (in addition to others described elsewhere in this combined report and in subsequent fi