Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 81

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 1A
Chunk 81
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’s Financial Discussion and Analysis for Entergy Louisiana for additional discussion of this filing and the investments proposed in connection with new service to this data center facility.

In addition, some of the Utility operating companies are engaged in discussions with other prospective customers concerning potential service to other data center projects.  Because of the significant demand and energy needs associated with these facilities, which generally require power at levels near their maximum level of demand for sustained periods throughout the day and throughout the year, extending service to these facilities often requires investment in incremental generation and transmission facilities, with a resulting risk of stranded costs if expected demand does not materialize, although this risk can potentially be mitigated through appropriate commercial terms subject to negotiations with the customer.  Often it is therefore necessary and appropriate for the Utility operating companies, in the electric service agreements negotiated with these customers, to include terms that provide for the 

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Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energy

prospective customer to contribute significant funds toward the cost of these incremental investments and that include other terms and safeguards to balance reasonably the interests of existing customers with the interests of the prospective customer.  Such safeguards take many forms but may include minimum payment obligations, lengthy contract durations, customer advances for construction, and credit and collateral requirements, among other terms.  Extending service to large data center customers also may carry significant potential benefits to the Utility operating companies’ existing customer base as well as significant economic development benefits for the states and communities in which the new data centers are sited.  These benefits include the potential for substantial contributions to the Utility operating companies’ fixed costs, which may have the effect of reducing electricity rates for all customers, as well as creating new jobs, tax revenues to local governments, indirect economic benefits, and similar benefits.  Investments in significant new generation and transmission assets, such as those necessary to serve proposed large-scale data center customers, are often subject to the requirement of receiving applicable regulatory approvals from the APSC, the LPSC, the MPSC, the City Council, or the PUCT, depending on applicable regulatory rules and laws and the circumstances of the proposed investments.

Large-scale data center customers often have sustainability goals and commitments that require the sourcing of power for these facilities from renewable or emissions-free resources, such as solar, wind, or nuclear resources, or installation of carbon capture or other technologies to reduce emissions.  Many of these data center customers are willing to contribute a significant portion of the cost of these facilities in order to access these sustainable or emissions