Entergy Corp., a major New Orleans-based power producer andutility company, will keep its wallet open for the foreseeablefuture as it unveiled a five-year $9.8 billion capital investmentplan yesterday. The company said it will use the cash influx tofuel growth in power development and nuclear operations businesses,while also improving the performance of its utility operations.

“The next five years will find Entergy through its transitionperiod and well into competition in most, if not all of our serviceterritory. This capital investment plan is one element of ourbusiness strategy that will reinforce Entergy’s financialintegrity, fulfill commitments to our customers and position thecompany for future growth,” said J. Wayne Leonard, Entergy’s CEO.

Entergy plans to spend $4.2 billion of the $9.8 billion at theutility to enhance customer service and reliability. Another $3.9billion is allocated to growth in wholesale operations (EWO) and$1.7 billion will be used to purchase and operate additionalnuclear plants. Carol Clawson, an Entergy spokeswoman, said thelast five-year plan dedicated $8 billion. The $1.8 billion additionin the latest plan will mainly be allocated to the regulatedoperations, Clawson said.

“While other companies are going full throttle with theirunregulated businesses, Entergy’s plan is a more two-prongedattack,” said Barry Abramson, an analyst at PaineWebber. “Althoughthe lion’s share of the money will go to unregulated operations,the regulated side is still getting a sizable chunk of the budget.Although I’d like to see more information concerning its plans forpower plant construction, overall I think it is an aggressive andpromising plan.”

The New Orleans-based company is in the process of forming a newdivision which will produce and market its power. Expected to formin the beginning of 2000, Entergy Wholesale Operations (EWO) willbe formed by combining Entergy Power Marketing (EPMC) and EntergyPower Group (EPG) into a single entity. EWO expects to focusmerchant plant construction in North America and Europe during thefive-year period. That would equate to more than 1,500 MW’s/yearbeginning in 2000. Currently, the company has varying levels ofinterest in more than 30,000 MW of production.

Spending is no stranger to Entergy, which has agreed to spend morethan $2 billion in gas turbine purchases over the course of thisyear. The largest transaction occurred last October, when Entergyspent $1.9 billion for 24 gas-fired turbines from General Electric(see Daily GPI, Oct. 12). In total thisyear, the company has entered into agreements to purchase 36turbines. The purchases will be finalized over the course of the nextfour or five years.

The company’s plan for the utility includes numerousdistribution and transmission projects that will support continuedreliability improvements and customer growth. In addition, severalphone centers, customer service offices and information systemswill be upgraded. Entergy’s utilities serve 2.5 million electriccustomers and 240,000 gas customers in the Gulf Coast area.

Initially the company’s growth businesses, Entergy Nuclear, Inc.and Entergy Wholesale Operations, will consume cash, consistentwith growth needs. However, over the entire forecast period,2000-2004, these businesses are expected to produce in excess of$1.1 billion of operating cash flow. Utility operating cash flow isexpected to continue to be strong as well, averaging $1.3 billionover the five-year plan.

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