Dr. Feelgood

Hurricane Katrina Impact on Entergy (ETR)

"...and there has to be doubt as to when ETR may ever recover the cash costs of these efforts."

Really? ETR's shareholders may have to eat the costs of repairing and rebuilding?

48% of ETR's customers are in MS and LA. Of the 996k LA customers, approx. 350k are in N.O. There is already a regulatory mechanism in place in MS and LA to recover storm costs. Certainly recovery may be delayed, in which case we can reasonably expect storm cost securitization, but is there a threat of no recovery?

Sure N.O. is unique. There is no storm cost recovery in place at this moment, plus how can you recover cash from a smaller (and probably poorer) area. Look for federal assistance here. But there's no way policymakers are going to let investors hold the bag on this.

ETR will take a short-term hit, and cash and profitability metrics will suffer. But there's no long-term threat. The company had $2.9 billion in cash flow last year. $65 million came from N.O. And approx. 30% of of cash flows are from its non-reg nuke fleet, which is printing money.