Item 8.01. Other Items
As of September 21, 2021, total restoration costs for the repair and/or replacement of the electrical facilities damaged by Hurricane Ida are estimated to be in the range of $2.1 billion to $2.6 billion. Most of the storm costs were incurred by Entergy Louisiana and Entergy New Orleans. The preliminary estimate for Entergy Louisiana is $2.0 billion to $2.4 billion and the preliminary estimate for Entergy New Orleans is $120 million to $150 million.
Entergy also expects utility revenues in 2021 to be adversely affected, primarily due to power outages resulting from the hurricane. The company’s initial estimate of lost non-fuel revenue is approximately $75 million to $85 million, with most of this impact occurring in Entergy Louisiana’s and Entergy New Orleans’s service areas, $65 million to $70 million and $10 million to $15 million, respectively. The financial impact of the lost revenue is expected to be partly offset by lower operation and maintenance expenses.
Entergy believes its liquidity is sufficient to meet its current obligations. As of August 31, 2021, Entergy’s liquidity of $4.2 billion consists of cash and cash equivalents ($1.0 billion), available revolver capacity ($4.1 billion), and storm escrows ($72 million), less commercial paper outstanding ($1.0 billion).
Entergy has a long history of working collaboratively with its regulators to recover storm costs. Entergy Louisiana and Entergy New Orleans are considering all available avenues to recover storm-related costs from Hurricane Ida in a manner that will minimize the effects on customers, including federal government assistance and securitization financing. There are well-established mechanisms for recovery of prudently incurred storm costs in accordance with applicable regulatory and legal principles. Further, Entergy has been coordinating with Governor Edwards and the Louisiana congressional delegation to seek Community Development Block Grant disaster recovery funds and other funding options from the federal government. President Biden, who has been a vocal advocate of support for the recovery of the Gulf region, recently sent a $24 billion request to Congress for supplemental disaster appropriations, which includes $10 billion for Ida impacts nationwide. If approved, a portion of these funds could be allocated to Entergy to, in turn, reduce the customer burden dollar-for-dollar.
Forward-Looking Statements
In this Item 8.01, and from time to time, Entergy Corporation, Entergy Louisiana, LLC and Entergy New Orleans, LLC (collectively, “Entergy”) make certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among other things, statements regarding Entergy’s expectations around loss of revenues; restoration timing, costs and recovery; and other statements of Entergy’s plans, beliefs, or expectations included in this Item 8.01. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Item 8.01. Except to the extent required by the federal securities laws, Entergy 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 are subject to a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking
statements, including (a) those factors discussed elsewhere in this Current Report on Form 8-K and in Entergy’s most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q, and Entergy’s other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with rate proceedings, formula rate plans, and other cost recovery mechanisms, including the risk that costs may not be recoverable to the extent or on the timeline anticipated by the utilities; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; (e) effects of changes in federal, state, or local laws and regulations and other governmental actions or policies, including changes in monetary, fiscal, tax, environmental, or energy policies; (f) the direct and indirect impacts of the COVID-19 pandemic on Entergy and its customers; and (g) the effects of technological change, including the costs, pace of development and commercialization of new and emerging technologies.