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March 8, 2007

Hurricane Katrina: The Entergy Experience. Robert D. Sloan Executive Vice President & General Counsel Entergy Corporation. March 8, 2007. August 26: Forecast for Katrina’s 2 nd Landfall Shifted 310 Miles to New Orleans. CAT 4. Forecast Track on August 26 at 3:00 a.m.

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March 8, 2007

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  1. Hurricane Katrina: The Entergy Experience Robert D. SloanExecutive Vice President & General Counsel Entergy Corporation March 8, 2007

  2. August 26: Forecast for Katrina’s 2nd Landfall Shifted 310 Miles to New Orleans CAT 4 Forecast Track on August 26 at 3:00 a.m. After crossing lower Florida peninsula, Panhandle hit was expected… Forecast Track on August 26 at 9:00 p.m. Aug. 25 Forecast Track Aug. 26 CAT 5 Forecast Track …but track abruptly moved much farther west.

  3. August 29: Hurricane Katrina Made Its Second Landfall as Strong Category 4 CAT 4 CAT 5 CAT 3 Sustained Winds 138-150 mph 46-58 mph Wind Field Image Map on August 29 at 4:00 a.m. Louisiana Mississippi Alabama Tornado activity within thestorm Mobile, AL Biloxi, MS Gulfport, MS Baton Rouge, LA New Orleans, LA 196 miles 115 miles 126 miles

  4. August 30: Levees Broke and Floodwaters Inundated New Orleans and Vicinity Katrina Storm Surge Approaches Entergy’s Michoud Plant Post-Katrina Flooding in New Orleansand Surrounding Areas Photo by Entergy’s Michoud plant manager Don McCroskey

  5. Outages Peaked at More Than One Million Customers Peak Outage Map for Louisiana and Mississippi Due to Hurricane Katrina Flooding Out of Service (Red) Not Affected (Green)

  6. Damage Exceeded Anything Entergy Had Ever Experienced Outages at Peak Due to Hurricane Katrina Extensive flooding and wind damage affected Entergy’s generation, transmission and distribution infrastructure. Customer outages peaked at over one million customers, more than any previous storm in Entergy’s history.

  7. …and our largest city flooded.

  8. New Orleans elevation cross-section

  9. Early Estimates: 123,000 Will Be Unable to Accept Service for an Extended Period Storm Surge Customers affected by flood waters New Orleans East Lake Pontchartrain East Orleans Network 64,000 Orleans Network23,000 Lakeview Mid-City Chalmette Network 30,000 Lower 9th Ward CBD St. Bernard West Bank Network (not depicted) 6,000

  10. Challenges Faced by Entergy New Orleans The first priority is the safe restoration of service following the destruction to infrastructure caused by Hurricane Katrina. 1 Massive restoration costs for Entergy New Orleans, Inc. (ENOI) and only partial return of customers could more than double electricity rates. 2 ENOI’s customers, over 20% of which were below poverty-level before Katrina, cannot absorb higher rates of this magnitude. 3 Federal assistance is required soon to protect customers from this severe cost burden. 4 The level of rates required absent Federal assistance will stifle business development and the repopulation of New Orleans, which in turn will cripple the opportunity for economic recovery in this region. 5

  11. Katrina’sunique challenges… • Corporate HQ evacuated • Employees’ homes destroyed • Resources pre-dedicated to Florida • Security threats in New Orleans • Flooded gas facilities • Contractors’ bankruptcy fears • Inoculations for workforce • Severe substation flooding • Communications knocked out • Massive scale/logistics challenge • Gasoline/Diesel shortages • Inaccessibility • DOE/DHS coordination & reporting

  12. Entergy New Orleans’ Restoration CostsAre Highest Relative to Company Size Estimated Restoration Costs Due to Hurricane Katrina $ Million In comparing expected costs across the three most affected jurisdictions, the potential costs at Entergy New Orleans represent a substantial portion of the entity’s net plant, compared to 10% or less at Entergy Louisiana and Entergy Mississippi. This places a substantial burden on New Orleans customers. 3,700 Total Expected Cost Total Net Plant 1,600 480 480 325-375 260-325 75-90 % of Plant 54% - 68% 9% - 10% 5% - 6% % of Equity 149% - 186% 30% - 35% 13% - 15%

  13. Interrelated Factors Will Shape ENOI’s Future – All Options Are Being Considered Key Factors in ENOI Bankruptcy Process Outcome of Today’s Uncertainties Determines Rate Levels And Shapes ENOI’s Exit from Bankruptcy • Includes: • Regional economic recovery • Repopulation of city • Utility service level desired and ability to pay for it • Insurance proceeds • Federal assistance • Regulatory recovery mechanisms • Factors: • Number of customers and load • Cost structure of business • Sustainable capital structure • Outcomes: • Entergy operates ENOI • Entergy sells ENOI • ENOI municipalized

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