Ike, Gustav to cost Entergy at least $1 billion

updated 6:23 p.m. ET Sept. 30, 2008

NEW ORLEANS - Entergy Corp. estimated Tuesday that damage from hurricanes Ike and Gustav cost the power provider $1 billion to $1.2 billion.

Of Entergy’s six regulated power utilities in Louisiana, Texas and Mississippi, Entergy Texas took the most damage during Ike — an estimated $435 million to $510 million. Entergy said that storm cost a total ranging from $525 million to $625 million.

Earlier, Entergy estimated the cost of repairs and restoring electricity following Gustav to range from $500 million to $600 million.

New Orleans-based Entergy also said it expects a yet-to-be determined drop in utility revenue for the third quarter because of the storm outages. The company noted that each utility unit would be responsible for its costs and recovering those costs.

How much might be passed on to ratepayers depends upon storm reserves and insurance payments, among other factors, Entergy said.

Customers of two Entergy units — Entergy Gulf States Louisiana and Entergy Louisiana — are paying about $1 billion over 10 years to cover hurricane repair costs from hurricanes Katrina and Rita and set up a storm reserve fund.

Another Entergy utility, Entergy New Orleans, filed for federal bankruptcy reorganization in October 2005 after Katrina wiped out almost its entire customer base. The company emerged 20 months later with a plan that paid off all creditors. The utility also received $200 million in federal funding for part of its storm recovery costs.

Entergy said all of the 705,400 Entergy system customers who can take power had been restored to service following Ike, which blew ashore on the Texas coast on Sept. 13.

Entergy Gulf States Louisiana and Entergy Louisiana took the brunt of the damage from Gustav’s arrival on Sept. 1, sustaining a combined damage total of $440 million to $520 million.

Entergy shares rose $4.19, or 5 percent, to close at $89.01 on Tuesday. The shares have traded in a 52-week range of $83.78 to $127.48.

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