Entergy Corporation’s (ETR) utility subsidiary Entergy Arkansas announced yesterday that it will reduce its retail electricity rates from September 1, 2009.
New Orleans-based Entergy is primarily engaged in electric power production and retail distribution operations. The company owns and operates power plants with approximately 30,000MW of electricity generating capacity. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. With a cumulative capacity of 8,000MW, the company is the second largest nuclear power generator in the U.S.
The curtailment in rates is for passing on the benefits of recent fall in natural gas prices to its customers. The company filed with the Arkansas Public Service Commission notifying the reduction of 0.346 cents per kilowatt-hour usage in the fuel-cost portion of electric bills to 1.206 cents.
As per company estimates this will reduce the average monthly bill of a typical residential customer with monthly consumption of 1,000 kilowatt-hours from $110.17 to $106.71, a decrease of $3.46 per month.
Natural Gas Spot Prices have witnessed a steep fall from $5.41 per Million British Thermal Units (mmBtu) at the inception of the fiscal to only $3.61 per mmBtu as on August 5, 2009, at the Henry Hub market center in Southern Louisiana. Natural gas prices are expected to slide further in the remainder of the year.
We currently rate Entergy shares as Neutral, expecting the stock to perform in-line with the broader market.
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