Earnings Call Transcript
ENTERGY MISSISSIPPI, LLC (EMP)
Earnings Call Transcript - EMP Q3 2021
Operator, Operator
Ladies and gentlemen, thank you for standing by and welcome to the Entergy Corporation, Third Quarter 2021 Earnings Release and Teleconference. At this time, all participants are in listen-only mode. After the speakers presentation, there will be a question-and-answer session. During the session will need to press star one on your telephone. If you require any further assistance, please press star 0. I would now like to turn the call over to your host, Bill Abler, Vice President Investor Relations. You may begin.
Bill Abler, Vice President, Investor Relations
Good morning. And thank you for joining us. We will begin today with comments from Entergy's Chairman and CEO, William Renault, and then Drew Marsh, our CFO, will review results. In an effort to accommodate everyone who has questions, we request that each person ask no more than two questions. In today's call, management will make certain forward-looking statements. Actual results could differ materially from those forward-looking statements due to a number of factors which are set forth in our earnings release, our slide presentation, and our SEC filings. Entergy does not assume any obligation to update these forward-looking statements. Management will also discuss non-GAAP financial information, reconciliations to the applicable GAAP measures are included in today's press release and slide presentation, both of which can be found on the Investor Relations section of our website. And now I will turn the call over to Leo Denault.
Leo Denault, Chairman and CEO
Thank you, Bill. And good morning, everyone. Today, we're reporting quarterly results that keep us firmly on track to meet our financial commitments. Third quarter adjusted earnings were $2.45 per share. With good visibility into the rest of the year, we are narrowing our 2021 guidance range to $5.90 through $6.10 per share and expect to achieve 2022 and 2023 results in line with our outlooks. Further, we are extending our outlooks to include 2024 and see our steady predictable growth of 5% to 7% continuing through this period. Additionally, we achieved the milestone of raising our dividend by 6% and aligning it with our earnings growth. This was done on the schedule we previously communicated and represents another commitment met. We have developed a more resilient business, and despite $65 million of non-fuel revenue losses in the third quarter due to Hurricane Ida, we are maintaining our financial commitments. Our resiliency provides stability that is valuable to all of our stakeholders, particularly customers and owners. The quarter was heavily impacted by Hurricane Ida, which made landfall as a strong category four hurricane, bringing powerful destructive winds across New Orleans, Baton Rouge, and beyond. Our coastal communities were particularly hard hit by both strong winds and storm surge. Ida disrupted the lives and businesses of many of our customers and communities, and Entergy was there to help when they needed us. We gathered a restoration force of 27,000, our largest ever, representing Entergy employees, contractors, and mutual assistance crews from 41 states across the country. I would like to take a moment to personally thank our employees and the crews who answered the call to restore power to our impacted customers, further gratitude goes to our employees who worked restoration despite their own homes being damaged by Ida. They epitomize what it means to put our customers first. I never cease to be amazed by the dedication and effectiveness of the many restoration workers who step away from their lives for weeks at a time to help our customers and communities get their lives and livelihoods back up and running again. Despite Ida's winds creating significant damage and destruction across our power grid, with close to a million peak outages, our team restored customers at a rapid pace. In just over a week, we had roughly half of all customers restored. Metro areas like New Orleans and Baton Rouge saw restoration essentially completed by day 10. Within three weeks, more than 98% of all affected customers were restored. And it's easy to lose sight of the fact that this restoration was successfully accomplished while dealing with the effects of the pandemic. Entergy also helped our customers and communities throughout the recovery process by deploying 165 commercial-scale generators to power critical community infrastructure like medical facilities, gas stations, grocery stores, municipal water systems, and community cooling centers in advance of power being restored. In addition to restoration work, Entergy's employees contributed countless hours to their communities and Entergy's shareholders committed $1.2 to $5 million to help affected communities rebuild and recover. While power has been restored to customers who can safely take it, our job is not finished. We are committed to minimizing the effects of Ida on our customers' bills. We will work with our regulators to seek securitization of Ida storm costs, which is a proven and low-cost means of recovery. Further, we are coordinating with key officials and stakeholders, including Louisiana Governor Edwards, the City Council of New Orleans, Louisiana Public Service Commission, Louisiana congressional delegation, and the Biden administration to seek federal support that could offset the cost to our customers for Ida and the 2020 storms. There is widespread alignment among state and local leaders on the compelling case that Louisiana has to obtain federal support. We are fully aligned with this perspective. To be clear, any federal funding that Entergy utilities obtain will reduce the customer obligation, dollar for dollar. We're also committed to mitigating the impacts of future storms. Entergy has made significant transmission and distribution investments, nearly $10 billion over the last five years, which made our system more resilient. We've seen those new investments perform well under the most challenging conditions. Wind damage to our transmission structures, for example, has occurred almost exclusively to older structures built to prior standards. It has become clear that major weather events of all types are occurring more frequently and with greater intensity. Hurricane Laura made landfall as the strongest storm to hit the Louisiana Coast since 1856. Then exactly 12 months later, Hurricane Ida hit with almost equal force. Our resilient standards and asset programs have never been static, and we've continued to evolve them. And as I mentioned, our investments are working as designed. However, the uptick in severity and frequency of storms is compelling us to take a fresh look at how we can make our system more resilient, including the pace at which we can achieve it. Even prior to Ida, we're actively deploying multiple options along our resiliency scale, particularly for our service area south of I10 and I12, which has the greatest exposure to hurricane-strength winds and flooding. Evaluating these resiliency options needs to be done under future climate scenarios, and we're taking into account important considerations, such as customer affordability and sufficiency of materials and skilled labor. This customer-driven investment will be significant, and we will work collaboratively with our regulators and other stakeholders to determine the optimal path forward. Coming back to the quarter, I would like to highlight that despite dealing with a major storm, the business continued to run well without missing a beat. We've made great progress in several open proceedings. First, Entergy Arkansas filed a unanimous settlement for its formula rate plan, and the Arkansas Commission has agreed to cancel the hearing and take up the settlement based on the filed testimony, which is positive. New rates in Arkansas will be implemented in January. In New Orleans, we recently implemented rates at the level that reflected all adjustments proposed by the council's advisors, so there are no further proceedings there. We also are pleased to note that Entergy Arkansas reached a settlement with key customers of its green promise tariff filing. If approved, this tariff will enable us to offer green solutions to meet the growing sustainability demands of our customers. We're making progress on other open proceedings as well. Entergy Louisiana's FRP rates went into effect, Entergy Arkansas received approval for the West Memphis solar project, Entergy Texas reached an unopposed settlement on its 2020 storm costs filing, and Entergy Texas also filed for approval of the Orange County advanced power station. The Louisiana 2020 storm recovery and securitization process remains on track. We continue to make progress on decarbonizing our fleet. We've announced 5 gigawatts of solar in our supply plan through 2030 with a goal of doing more. An update to our supply plan regarding renewables growth will be provided next week at EEI. In addition to helping meet decarbonization goals, the cost of renewable resources relative to conventional resources continues to trend favorably, and renewable resources provide an important edge against rising and volatile natural gas prices. We'll provide more details around our latest resource plans at EEI. Last quarter, I discussed ways in which Entergy can help our industrial customers meet their sustainability goals. While many have expressed long-term goals like net zero by 2050, even more have developed shorter-term interim goals that will require action by the end of the decade. Clean electrification is one of several important tools that our industrial customers have to achieve their objectives. Clean electrification provides a great opportunity for load growth, and we will require significant capital investment in renewable generation, transmission, and distribution. The load growth that comes with electrification will help pay for incremental customer-centric investments. We'll have more to discuss regarding the opportunity we have to help our customers meet their sustainability objectives next week at EEI. While it is important to discuss these longer-term growth opportunities, I want to make sure we don't lose sight of the very solid base investment plan that we have in front of us. Over the next three years, we have a $12 billion capital plan designed to deliver reliability, resilience, improved customer experience, and environmental and cost efficiency benefits to our customers. When paired with our well-defined regulatory constructs, this plan will deliver 5% to 7% adjusted EPS growth for our owners over the next three years. That's a very solid base plan. Beyond this strong foundation, these other opportunities in renewable generation, clean electrification, and resilience acceleration will serve to extend our runway of growth throughout the rest of the decade. We look forward to continuing the conversation with you at the EEI Financial Conference. Now, Drew will review the quarterly results.
Andrew Marsh, CFO
Thank you, Leo. Good morning, everyone. Today we're reporting solid results even with the challenges from Hurricane Ida. Summarized on slide five, our adjusted earnings per share was $2.45, slightly higher than a year ago. We continue to execute our strategy and we are firmly on track to meet our commitments. In fact, with three quarters of the year behind us, we are narrowing our guidance range to $5.90 to $6.10. We're also affirming our outlooks and extending the outlook period through 2024, and we recently raised our dividend to align with our adjusted EPS growth rates. Turning to slide six, our investments to improve customer outcomes continue to drive growth. That includes rate changes to recover those investments, as well as associated new operating expenses. Industrial build sales were 10% stronger than a year ago. We saw increases across most segments, with the largest increases in primary metals, petrochemicals, transportation, industrial gases, and Chlor Alkali. This reaffirms the strength of our industrial customer base. In a world with supply chain constraints and higher energy prices, our industrial customers' businesses remained strong and competitive. These industrial sales were strong despite Hurricane Ida. Overall, across all classes, we estimate that third quarter revenues were approximately $65 million lower as a result of Ida. Hurricane Laura's impact on third quarter 2020 was approximately half of that. Other O&M was higher this quarter as planned. This is partly due to higher costs for distribution operations, including reliability costs, higher expenses in our power generation function, and higher health and benefit costs. Moving to EWC on slide seven, you'll see results were slightly lower than a year ago. The key driver was the shutdown and sale of Indian Point. Operating cash flow for the quarter, as shown on slide eight, is about $300 million higher than last year. The increase is due largely to improved collections from customers, including collections associated with investments to benefit customers and Winter Storm Uri. This was partially offset by expenditures related to higher natural gas prices. Slide nine summarizes our credit and liquidity. We expect to maintain our current credit ratings, and we continue to expect to achieve targeted rating agency credit metrics as storm restoration spending is securitized and we retire storm-related debt. We'll take a minute to discuss our balance sheet, beginning with a quick update on Hurricane Ida on slide 10. Over the past several weeks, we've refined our cost estimates and we've shaved $100 million off the upper end of the range. The total cost is now expected to be $2.1 to $2.5 billion. We've also updated our estimate of the non-fuel revenue loss to $75 to $80 million, the lower half of our previous range. While our net liquidity, including storm reserves, remains strong at $4 billion, we are also working to ensure timely storm cost recovery. That starts with the successful restoration effort and proceeds through two avenues. First, Entergy Louisiana amended its 2020 storm filing to request an additional $1 billion to provide early liquidity for Hurricane Ida costs. In Texas, we reached a settlement on the 2020 storm costs filing, and that is now before the PUCT. Second, we have improved the efficiency of our storm invoice processing to accelerate our filings and ultimately cost recovery. We plan to complete financing for the 2020 storms by early next year and Ida by the end of next year. Our work isn't over; we will continue to identify ways to further reduce business risk. As Leo highlighted, we're looking forward to a conversation with our customers, retail regulators, and other stakeholders about how we best accelerate and implement a strong resilience plan. We have already hardened more than half of our critical transmission and distribution structures along the Gulf Coast to standards implemented after Katrina, and Ida. We continue to move the bar higher by reevaluating current standards using the latest weather data. In addition, a comprehensive resilience plan needs to include the strategic placement of assets to allow higher-risk communities to recover more quickly. For example, microgrids, distributed energy resources, and deployment of generators, as Leo highlighted, to certain critical customers, could be very helpful in supporting communities as they recover. We'll go into more depth on this in our conversations at EEI. In addition to physical resilience, our regulators know the importance of a healthy credit at the operating companies to support customers. They have put in place time-tested cost recovery mechanisms such as securitization and storm reserves to support that need. We're fortunate that in looking to recover the 2020 and 2021 storm costs, we're starting with some of the lowest rates in the country. We have significant electrification growth potential that could help pay for incremental customer-centric investments and future storm costs. All of these will support our credit with regulators and key stakeholders aligned with us around a strong resilience acceleration plan. In addition, we continue to execute on the exit of EWC, and we're less than a year from completing our plan. The resulting improvements were recognized by S&P last fall through our improved business risk profile and by Moody's just this past quarter through changes to our rating thresholds. Those changes remain in place, and our ratings reflect future storm risk. As a result, we were able to reduce our 2021 to 2024 equity need. Combined with our ATM transactions, our future equity need is more than 50% lower than the $2.5 billion communicated on Analyst Day last year. Moving to slide 11, we have a clear line of sight on the remainder of the year. For the third year in a row, we are narrowing our adjusted EPS guidance. In this case for 2021 to $5.90 to $6.10. We're also affirming our longer-term outlooks of 5% to 7% adjusted EPS growth and extending to 2024. Our confidence in our solid base plan continues to grow. That key expression, that confidence is the dividend. For the last several years we've discussed our goal to align our dividend growth with our adjusted EPS growth. Our Board of Directors recently declared a $0.06 increase in our quarterly common dividend, which is now $1.01 per share. That's a 6% increase as planned. We expect to continue this growth trend going forward, obviously subject to board approval. That's good news for our owners who provide the capital needed to meet our customers' evolving needs. Today, we're executing on key deliverables and we have a solid base plan to meet or exceed our strategic and financial objectives. In less than a week, Rod and I will be returning to meet with many of you in person for the first time in almost two years. We'll provide our typical updates on considerations for next year's earnings expectations and will provide our preliminary three-year capital plan, including a positive update on our expectation for renewables. We will also talk about the significant long-term customer-centric investments beyond our current outlooks from renewables, clean electrification, and acceleration of our system resilience. We're excited about these opportunities ahead and look forward to talking to you about all of it at EEI. Now the Entergy team is available to answer questions.
Operator, Operator
Ladies and gentlemen, if you have a question or comment at this time, please follow the operator's instructions on your touchtone telephone. If your question has been answered and you wish to leave the queue, please press the pound key. We also ask that you limit yourself to two questions. Our first question comes from Shar Pourreza with Guggenheim.
Shar Pourreza, Analyst
Hey! Good morning, guys. How are you doing?
Everyone, Respondents
Good morning, Shar.
Shar Pourreza, Analyst
I have a quick question. At a high level, Leo, can you share your thoughts on the regulatory complaints from New Orleans? Do you have an understanding of how the council intends to move forward? They seem to be seeking input on everything from operational responses to the ultimate ownership of the assets. Do you foresee a scenario where you wouldn't own the assets? Alternatively, is there a potential for negotiation where the city permits additional spending, such as more transmission interconnection funded by E&O customers, to alleviate their concerns?
Leo Denault, Chairman and CEO
Thanks, Shar. I would say, first of all, obviously, what we've been doing recently with the Council is we've gone through the formula rate plan and got those rates in effect. Both the council as well as the LPSC and others, as I had mentioned, are all aligned on approaching the federal government for offsets to customer costs through potentially CDBG funds and then even in the future in terms of storm hardening as it relates to infrastructure. That's really where we are in terms of what's been going on recently. All focus has been on how do we get the next steps done in what's logical progression to what we want to do. And that is to support the credit below the line. As it relates to those other items, they are still out there, and we plan to cooperate with the Council as they go forward. In most of those instances, we are still wanting to hear from them regarding their objectives in terms of whether it's the ownership structure or what have you. So those are processes that they have begun, and to the extent they can meet those objectives, we will work collaboratively with them. We think that however it works out, it will work out fine for us and for them.
Shar Pourreza, Analyst
Just lastly, for me, I know you sort of touched on that a little bit regarding your prepared comments, and there's been obviously immediate questions with investors around the storms and maybe the expenses that were incurred. Could we just maybe get an update on some of the other mitigating factors for customer bill headroom? We talked about volume metric growth and the macro backdrop, but there's also work you're doing with the LPSC in New Orleans to get federal support. How are you thinking about other charges rolling off and potentially having the bill headroom to continue investing in capex, especially as we're seeing your 2024 numbers in line with the 6% midpoint growth in 2024? So, could we assume this run rate remains healthy despite some near-term concerns around bill pressure and escalating storm issues?
Andrew Marsh, CFO
This is Drew. I'll address that first, and then Rod and Leo can add their thoughts. To start, we are advancing our securitization efforts in Texas and Louisiana related to the recent storms. Additionally, several older securitizations are set to roll off soon. This includes costs tied to the ICC and Hurricane Ike, which are expected to end next year, and in Louisiana, costs from previous storms like Ike and Isaac may start to roll off around 2024. These upcoming changes could alleviate some pressure from our securitization costs. Regarding natural gas prices, there's been extensive discussion, and many are facing increased costs in this area. This situation underscores the investments we've made in high-efficiency combined cycle gas turbines which diversify our fleet alongside nuclear, and it strengthens the business case for solar energy. The forward curve for natural gas is somewhat backwardated, indicating that prices are predicted to decrease significantly. In fact, our internal forecasts suggest that prices will be higher than what the NYMEX curve indicates as we look towards 2024. Thus, we don't see this as a long-term issue. It does present challenges for our customers, particularly following Winter Storm Uri, but we have already recouped those costs and continue to progress. Lastly, in terms of growth capital, we emphasize three areas with substantial investment potential. First, enhancing our resilience and accelerating our resilience initiatives serves as a way to mitigate future securitization needs. Our planning in this area could help offset those future costs and represents a different aspect of our financial strategy. Additionally, with renewables, we are focused on fuel costs and associated operational and maintenance expenses. If you review our capital plan, which we will discuss at EEI, you’ll see a notable shift towards renewables. Finally, clean electrification, as Leo pointed out, includes potential for incremental sales, creating capacity for further investment. We are confident that there are opportunities for all these initiatives to advance, potentially even accelerating, in the coming years.
Shar Pourreza, Analyst
Got it. I think that was helpful. Thank you for that. I appreciate it, guys. So I'll leave it at that.
Leo Denault, Chairman and CEO
Thanks, Shar.
Operator, Operator
The next question comes from Jeremy Tonet with JP Markets.
Brandon Travis, Analyst
Hi, this is actually Brandon Travis on for Jeremy. Thanks for having me. First question, can you just comment on the Build Back Better framework and the implications that may have on Entergy in its current form? And then just particularly as it relates to nuclear, hydrogen, renewables ahead of your plan refresh at EEI.
Leo Denault, Chairman and CEO
Sure, there's a lot in there. As we look for support for things like hydrogen and support for existing nuclear, we view all of that, in addition to continued support for renewables, as positive towards our ability to keep a low-cost profile of the future benefits associated with our capital plan. I'm cautiously optimistic that there will be infrastructure bills passed. Every day, there's new news one way or the other in terms of how that’s going. But as you know, we're pretty well-positioned in the hydrogen space. We have a significant fleet of existing nuclear plants. We're deploying a lot of new renewables. So all of that focus on tax credits, particularly production tax credits, is highly supportive of what we're already planning. Looking forward, we anticipate having the capability to utilize as much of that as we can for the benefit of our customers. But again, as you know, we're excited about the hydrogen space. As I mentioned in my remarks, we made the filing associated with getting the Orange County advanced power station, which will be hydrogen capable, approved in Texas with all the hydrogen infrastructure that's around us. That will be very important for not only us but for the industry as we look to utilize long-duration storage, a critical factor in anyone's ability to achieve net zero by 2050. Also, all of that is well supported by the fact that the industrial gas customers in our service territory are all exploring green, blue, and pink hydrogen as well. I think we will have to see exactly where everything ends up if it gets done. We see it as a nearly a way for us to accelerate what we're already trying to do.
Brandon Travis, Analyst
That's helpful. Thank you. We are curious about what drove the delay on the Sunflower solar project. Was it supply chain-related, or is there anything else specific that you can point to?
Andrew Marsh, CFO
Yeah. It wasn't really supply chain-related; it was just some onsite challenges that our partner ran into. But we expect it to be constructed early next year. And then we'll proceed on with it.
Leo Denault, Chairman and CEO
Thank you.
Operator, Operator
Next question comes from Julien Dumoulin-Smith with Bank of America.
Julien Dumoulin-Smith, Analyst
Good morning, team. Thanks for the time. Just first off, I'll leave some of the bigger details for EEI, but just following up here on the opportunities around renewables and the reconciliation ability. To the extent in which direct pay happens here, how meaningful could this be, especially given the prospective acceleration that you are all talking about coming with it?
Andrew Marsh, CFO
You're talking about refundable PTC?
Rod West, Executive
Yeah, the refundability and how that improves your credit metrics that hopefully.
Andrew Marsh, CFO
Yeah, that would certainly help and also potentially change some of the investment profile that we have. Because right now, we're assuming tax equity partners for all of our own transactions to facilitate the investment tax credit today. To the extent that there are refundable PTCs available and it's more economic for our customers, then I think we would be moving more towards 100% ownership. Something that looks like 70, 75% ownership of each facility.
Julien Dumoulin-Smith, Analyst
Got it right. So it's both a capital opportunity and credit metric enhancing, or you're saying it's not decisively credit enhancing because of the higher capital and you haven't updated the equity component yet either.
Andrew Marsh, CFO
Yes, it might provide some benefit, but I wouldn't expect it to have a significant impact; it seems more neutral for us at this moment.
Julien Dumoulin-Smith, Analyst
Got it. Okay. That's good color. Thank you. And then separately, a little bit further afield here. Any progress on transmission here in Sirius? I know that's been out there for a bit. Obviously, we've got some others in the sector resolving or settling their issues here. Any thoughts?
Rod West, Executive
This is Rod. Good morning. The short answer is no. The litigation matters that have been ongoing for some time do not have a specified timeline. We are hopeful that between the end of this year and the beginning of 2022, we will start to see some resolution, likely beginning with the ROE cap structure matter. However, there are no material changes at this point since it is all under FERC's jurisdiction.
Julien Dumoulin-Smith, Analyst
All right, excellent. I look forward to EEI to follow further, guys. Customer OCC.
Andrew Marsh, CFO
Thank you.
Operator, Operator
Our next question comes from Durgesh Chopra with Evercore ISI.
Durgesh Chopra, Analyst
I will cede it back to someone else. My questions have already been asked and answered. Thank you.
Leo Denault, Chairman and CEO
Thank you.
Operator, Operator
Our next question comes from Steve Fleishman with Wolfe Research.
Steve Fleishman, Analyst
Good morning.
Leo Denault, Chairman and CEO
Morning, Steve.
Steve Fleishman, Analyst
By the way, Rod, my team is putting in a good word for the forest. We've got two graduates. So just first on the support from the federal government. Could you just talk a little bit more about the path to this? Are there certain bills? Is this just going to be an executive action? Can you just elaborate on how we'll learn about this?
Leo Denault, Chairman and CEO
Sure. So I'll start and let Rod jump in because Rod has actually been down this path before post-Katrina as it relates to the CDBG funds required for New Orleans. As you know, Governor Edwards has made an appeal to the government for funds to support recovery for a variety of reasons, as it relates to 2020 storms, as well as Hurricane Ida. In those requests of the administration, he's put in play about $1.2 to $1.3 billion for utility restoration offsets for our customers. The process for us has been to work with our congressional delegations, the LPSC, the state council, and the governor to effectively convince the federal government to appropriate dollars. These dollars would go through HUD to the state in the form of community development block grants. We're also positioning for HUD to provide an opportunity for a waiver so the governor can allocate those dollars to investor-owned utilities in addition to municipals, co-ops, and housing, and other important areas. We're working through that process right now. A lot of us have spent time with our delegations, we've spent time at the White House, and we’re spending time with agency secretaries. So all of that is in place to try and work towards offsetting costs associated with not only Hurricane Ida but also the 2020 storms, which were included in the Governor's request. Rod, if you have anything to add?
Rod West, Executive
Yeah, and I guess the only thing that remains uncertain is the timing. Just like I made reference to FERC and some of the series things before, there is no specific timetable for the administration, Congress, or HUD to act on the Governor's request. It's now in their hands. I think the most significant development from our vantage point is that we have clear alignment among the delegation and express support from the White House, and our governor for the utility customers. That’s a big deal. As we think back to our experiences during Katrina, it took a while to get that alignment. The objective of offsetting the regulatory compact impact of storms on customer bills is there, and there is no lack of alignment around that desire to achieve it, so that part we've been able to close the gap on quicker than in prior storm disaster events. Now comes the ultimate decision-making process of allocating those funds and getting them to the states so that the governor can allocate them to the industry. The timeline remains uncertain, Steve.
Steve Fleishman, Analyst
Okay. You've mentioned focusing on improved resiliency. I understand that your newer poles have performed well during the two storms, but it seems that a significant amount of replacement may be necessary. As we consider this, will this likely be addressed through a rate base mechanism or some other approach?
Rod West, Executive
If we were to speed up the capital program, my short answer is yes. We are aware of affordability in this discussion. However, if we were to accelerate resilience efforts, we would anticipate seeking some form of agreement from regulators for a recovery rider that might be separate from the existing formula rate plan or involve adjustments to it to address specific risk assets and resilience initiatives. This would vary by region, as you know. In summary, the answer is yes, it would function as a rate base initiative, but at an accelerated pace outside the usual ratemaking process.
Steve Fleishman, Analyst
Okay, that's helpful. Regarding the equity financing need, you reduced it by more than half during the update a month or two ago. Do you have a better understanding of the timing, and are you still considering options beyond just equity issuance to address that?
Andrew Marsh, CFO
Yeah, Steve, this is Drew. We haven't updated anything except what we've said before. That's through 2024, and we've also said that we could accomplish all of this through the ATM program. That doesn't mean that we aren't looking at blocks or preferreds; those are still out there. But we would look to do those opportunistically depending on market conditions. We've been executing successfully with the ATM over the last several months. We will continue to do that unless, like I said, an opportunity comes along, and we can execute with a block. But otherwise, we'll just continue to complete with our ATM, and we should get it done fairly quickly, would be my guess.
Steve Fleishman, Analyst
Okay, great. Thank you very much.
Leo Denault, Chairman and CEO
Thanks, Steve.
Operator, Operator
Our last question comes from Jonathan Arnold with Vertical Research.
Jonathan Arnold, Analyst
Good morning, guys.
Leo Denault, Chairman and CEO
Good morning, Jonathan.
Jonathan Arnold, Analyst
From your comment, Leo, about the ongoing issue with the New Orleans City Council, I was pleased to hear it. I remember that at one point they were preventing you from effectively implementing the formula rate decision last week. Can you clarify what you meant?
Rod West, Executive
Yes. Rod. Yes. The decision to implement the FRP basically obviates the conversation around any push-back on the normal operation of the Formula Rate Plan as we had settled with the Council. So that is net positive for the continuing discussions with the Council.
Jonathan Arnold, Analyst
Great. Thank you, Rod. Just more broadly, there seems to be some noise around the cost-benefit of Entergy's membership in MISO in some of your jurisdictions. I'm curious whether you have any perspective as to whether we might see any changes, and what kind of venue sort of forum.
Leo Denault, Chairman and CEO
Jonathan, obviously, our participation in MISO today has been very valuable to our customers. We've saved about $1.75 billion over the time since 2014 when we joined. Certainly, there have been benefits to MISO. Where we see our regulators taking issue is in ensuring that we get the allocation of costs of major transmission projects done correctly. We would like to see that the people who benefit from major transmission upgrades are the ones who actually bear the costs, rather than those who don't get any benefit bearing that cost. So, we're aligned with our regulators in that concept and the theory. We're certainly not in a position where we're looking to exit MISO at any point in time. We entered MISO because of the benefits, and we've seen those benefits. But as the world evolves and our capital plans evolve, particularly the transition to renewables, we just need to ensure we continue to evolve the cost allocation process in a thoughtful way.
Jonathan Arnold, Analyst
Great. Thank you there.
Leo Denault, Chairman and CEO
Thank you.
Operator, Operator
I'll now turn the call back over to Bill for closing remarks.
Bill Abler, Vice President, Investor Relations
Thank you, Kevin. And thanks to everyone for participating this morning. Our quarterly report on Form 10-Q is due to the SEC on November 5th and provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10-Q filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected in our financial statements in accordance with generally accepted accounting principles. Also, as a reminder, we maintain a webpage as part of Entergy's Investor Relations website called Regulatory And Other Information, which provides key updates on regulatory proceedings and important milestones on our strategic execution. While some of this information may be considered material information, you should not rely exclusively on this page for all relevant Company information. And this concludes our call. Thank you very much.
Operator, Operator
Ladies and gentlemen, that concludes today's presentation. You may now disconnect and have a wonderful day.