Entergy President and CEO Haley Fisackerly spoke to a packed house at the Stennis Institute Press Forum this week at Hal & Mal's in downtown Jackson.
After the end of his speech, he answered questions from the press. Below is an AI generated transcript of his talk.
Introduction
Thank you for the opportunity to speak with you today. I especially appreciate the chance to address the media, as you play a crucial role in helping us communicate important information to our customers. This is a great opportunity to discuss some of the developments happening in our business.
The Value of Our Industry
As Emily mentioned, there is significant interest in AWS, economic growth, and the changes occurring in our industry. I want to provide some context to help you understand the tremendous value these changes bring to our communities and customers. It’s wonderful to see so many friends and familiar faces here today.
Our industry is over a century old. Entergy Mississippi has been operating in the state for just over 102 years, having been founded in 1923. When our industry began, electricity was considered a novelty, and many people hadn’t fully grasped its potential. Today, electricity is no longer a novelty—it is a necessity. Our tagline, “We power life,” reflects how everything we do depends on electricity.
Historical Growth and Recent Trends
The most significant growth in electricity usage occurred after World War II, as manufacturing expanded and the economy grew. During the 1950s and 1960s, electricity demand grew at a compound annual rate of 8–10%. In the 1970s, economic challenges and other factors caused growth to plateau, with consumption dropping to about 4–5% and continuing to decline into the 2000s, when growth became nearly flat year over year.
However, the pandemic and post-pandemic period have ushered in a new era of growth in the electric utility market. Many experts predict that, over the next five years, electricity demand could grow by nearly 16%. This surge is driven by onshoring, electrification, and the increasing presence of data centers.
Current Challenges
We are facing several challenges in our business:Increased Weather and Storm Events: The frequency and intensity of storms have changed dramatically. For example, tornado activity has expanded into the Mid-South, affecting areas like Arkansas, Mississippi, and North Louisiana. We already contend with hurricane risks on the coast, but the number and severity of storms in Mississippi have increased significantly in recent years.
Aging Infrastructure: Our infrastructure is aging, and the cost of materials—everything from poles and wires to transformers—is rising. Supply chain constraints and labor costs are also increasing.
New Regulations and Standards: We must comply with new regulations regarding grid reliability, resilience, and cybersecurity, all of which drive up costs.
Changing Customer Expectations: Nearly everything in our homes requires electricity, and the way we work has changed, with more people working from home and the rise of electric vehicles.
Storm and Vegetation Management
Recent years have seen severe droughts and storms that have damaged millions of trees, increasing the risk of wildfires and power outages. We manage over 18,000 miles of distribution wires and more than 2,000 miles of transmission wires across the state. Managing vegetation is a significant expense, and we have removed tens of thousands of “danger trees” that threaten our infrastructure. However, challenges remain, especially in older neighborhoods with large, aging trees.
Impact of Extreme Weather
Events like Hurricane Katrina set new benchmarks for storm damage. In June 2023, over an 18-day period, we experienced 13 storms, three of which had winds equivalent to a Category 1 hurricane. These storms caused as much damage as Katrina did 20 years ago. If current trends continue, we are on track to see unprecedented damage from extreme weather events.
Financial Pressures and Customer Impact
The rising costs in our business directly impact our customers. Distribution spending, which covers the wires serving homes and businesses, has become one of our largest areas of increased investment. Transmission spending also remains significant, especially with new standards requiring major upgrades.
A third of our generating capacity is scheduled to retire in the next five years, necessitating further investment to maintain reliability and resilience. Historically, Entergy Mississippi’s growth has been flat, and about 20% of our customers live below the national poverty level, with over 40% struggling to make ends meet. Managing costs and rates is therefore a top priority.
Rate Management and Economic Development
We have worked hard to keep operating and maintenance spending flat over the past five years. Our rates have historically been below the national and state averages, but post-pandemic inflation and supply chain issues have caused costs to rise. If a new rate plan is approved, there may be a slight decrease in rates for the first time in nearly six years.
To stabilize or reduce rates, we must grow the denominator in the rate-setting formula—kilowatt hours consumed. Aggressive economic development is essential. By attracting large customers, we can spread costs over a larger base, helping to manage rates for everyone.
Attracting Transformative Projects
Entergy Mississippi has always played a role in economic development, but about a decade ago, we realized we needed to change our approach. We began partnering with the state and local economic development groups to identify and prepare sites for new businesses.
Seven years ago, we started focusing on attracting data centers. After learning what was required to make our sites competitive, Madison County stepped up to prepare a site that ultimately attracted AWS. In January 2024, AWS announced a minimum investment of $10 billion and 1,000 jobs, with average salaries now reported to be over $80,000. The total indirect jobs tied to the project exceed 2,700.
The AWS Project
AWS is building two data center campuses in Mississippi—one in Canton, west of the Nissan facility, and another on County Line Road. These projects are already underway, with multiple buildings and substations constructed ahead of schedule. The campuses will be developed in phases over the next three years, ultimately comprising 16 buildings.
This investment is transformative for Mississippi, bringing new jobs, increased tax revenue, and positioning the state as a tech leader. The AWS project is expected to generate at least $80 million in additional ad valorem taxes for Madison County over 20 years, with half going to the school district.
Impact on Rates and Infrastructure
A common question is whether these data centers will cause residential rates to increase. Rates are already rising due to necessary investments, but the addition of a large customer like AWS helps stabilize and potentially lower rates by increasing the denominator in the rate formula. AWS is also paying the incremental costs for the transmission upgrades and substations required to serve their campuses, which benefits the broader grid by improving reliability and resilience.
Replacing Retiring Generation
With a third of our generating capacity set to retire, we are investing in new facilities, including a 754-megawatt plant near Greenville and a 750-megawatt combined cycle plant in Ridgeland. These investments are being made at a lower cost, thanks in part to the AWS project, which helps share the financial burden.
Rate Structure and Confidentiality
Large industrial customers like AWS receive a different rate due to their high, predictable usage and the fact that they are served directly from the transmission grid. These special rate contracts are common in the industry and are necessary to attract major investments. The specifics of these contracts are confidential, but the overall effect is to benefit all customers by spreading costs more broadly.
Conclusion
These are exciting and transformative times for our industry. The growth and opportunities coming to our area are unprecedented. We are proud to work with the state, local partners, and companies like AWS to bring new investment, jobs, and economic prosperity to Mississippi. Our goal is to provide reliable, affordable electricity while supporting the communities we serve. Thank you for your attention, and I am happy to answer any questions.
