Climate Change - Entergy’s Strategy to Manage Risk

1. Climate Change - Entergy’s Strategy to Manage Risk Carbon Disclosure Project Workshop February 27, 2007 Jeff Williams Mgr, Corporate Environmental Initiatives

2. Climate Change is the Defining Issue of Our Time • The Science is compelling • Man is changing the climate in an unprecedented way • We are seeing consequences today … left unchecked it will get much worse • Manage Regulatory Risk • Investors, Insurers and credit agencies want to know exposure • Manage Physical Risk Exposure to service territory, Adaptation • flooding from sea level rise & more intense storms • Health impacts, spread of tropical diseases • Impact on low income customers • Shape Policy Mitigation • Need price signals that internalize cost of carbon • Impending emission limitations on other pollutants; need for integrated approach • Create Opportunity in a carbon constrained economy • Invest wisely & grow shareholder equity

3. All Investments Expected to Contribute to Long-Term Value Creation Coastal Erosion The Business Case • As a company serving the Gulf Coast, Global Climate Change effects put at risk: • Billions of dollars of investment • Our customer base • Welfare of our employees, their families and our communities 1870 1839 Two Broad Climate Change Strategies 1993 2020 • Take Action to Reduce our impact on Global Climate Change • Aggressively advocate positive actions on Global Climate Change at all levels of government and within our communities Louisiana coast line loses 24 square miles a year.

4. Entergy’s Voluntary Greenhouse Gas Reduction Commitments • 2001, Entergy became the first electric generating company to establish a voluntary target to stabilize CO2 emissions at 2000 levels through 2005 • 2006 Entergy made second commitment to stabilize CO2 emissions at 20% below 2000 levels through 2010

5. Greenhouse Gas Reduction CommitmentProgress vs. Targets: 2001 - 2006 • 2001- 2006 exceeded goals by 20% • emissions now at or below 1990 levels

6. We Need Mandatory Climate Change Legislation • Demand for energy projected to increase by 50% over next 25 years; • Generation industry will need to place bets on long lived assets in next 5-10 years; • Price signals that internalize the cost of carbon are needed influence investment decisions in long lived assets

7. SUMMARY & CONCLUSIONS • Managing Regulatory risk by reducing CO2 emissions and intensity • Investing in efficiency improvements, • Increasing production from non-emitting nuclear units through capacity up-rates and increased capacity factors, • Increasing production from more efficient, low emitting combined cycle gas turbines; • Use of external offsets is critical to help meet GHG reduction targets • Shaping Policy to achieve meaningful Mitigation and correct price signals • Working with community to mitigate physical risks • Coastal wetlands restoration • Energy efficient rebuild of New Orleans • Communicate Strategy & Progress with Stakeholders

8. IPCC “Best Estimate” 2090 - 2099 Probability 95% 95% -1 0 1 2 3 4 5 6 7 8 Probability Distribution – Global Average Surface Temperature Surface Temperature (o C) Adapted from IPCC AR4 Fig SPM 5

9. Probability Distribution – Sea Level Rise Excludes Land Ice Melt “Best Estimate” based on 3.4o temp. rise SLR double IPCC estimates & Land Ice Melt could add an additional 3-16 ft 2090 - 2099 Probability Included Land Ice Melt potential impact 36” per Oppenheimer 196” per Hanson 95% 95% 14 28 35 41 48 57 67 Sea Level Rise (inches) AR4 IPCC report without land ice melting = 7” –23” (TAR 4” – 35” from the land ice melt) Adapted from IPCC AR4 Fig SPM 5 – Using Rahmstorf Empirical Formula (Rahmstorf, et al 2007)

10. Areas Impacted by Storms Entergy Nuclear Utility HurricaneKatrina Category 4 Hurricane Rita Category 3

11. Recent hurricanes put a face on what life will be like if we fail to address Climate Change -

12. ETR restoration costs ~ $1.5 billionfor Katrina & Rita. Katrina – 1.1 million left without power, 800,000 Louisiana outages Over 300,000 Mississippi outages