Entergy Arkansas, Inc. 1M BD 4.875%66

What they do

Entergy Arkansas is an electric utility that generates, transmits, distributes and sells electricity, operating as a regulated subsidiary within the Entergy system. Its operations are conducted under cost-of-service regulation by the Arkansas Public Service Commission and include utility plant such as nuclear and non-nuclear generation assets, with participation in the MISO wholesale market. The company is one of several Entergy operating companies, alongside Entergy Louisiana, Entergy Mississippi, Entergy New Orleans and Entergy Texas.

Revenue drivers

• Regulated retail electricity sales — Revenue comes from electricity sales to retail customers under rates approved by the Arkansas Public Service Commission, with recovery of fuel and purchased power costs pursued through formula rate plan filings.
• Wholesale and other regulated electric revenue — Additional revenue derives from regulated electric activity, including sales and cost recovery mechanisms tied to the MISO market and formula rate proceedings, as reflected in Entergy's utility segment reporting.
• Generating Arkansas Jobs Act rider — A dedicated rider mechanism; the APSC approved Entergy Arkansas's rider rate update in the second quarter of 2026, which adjusts customer rates for generation-related investment.

Recent performance

For second quarter 2026, Entergy Corporation reported consolidated as-reported and adjusted earnings of $483 million, or $1.03 per share, versus $468 million, or $1.05 per share, in second quarter 2025. The Utility business reported earnings attributable to Entergy Corporation of $626 million, or $1.34 per share, compared with $599 million, or $1.34 per share, a year earlier. The quarterly increase was driven primarily by the net effect of regulatory actions across several operating companies, return on construction work in progress for certain utility plant investments, higher retail sales volume and higher other income, partly offset by higher interest expense, O M and depreciation and amortization. Second quarter 2026 revenue was $3.52 billion versus $3.33 billion for the same quarter in 2025. Year-to-date 2026 as-reported earnings were $868 million, or $1.87 per share, compared with $829 million, or $1.87 per share, in 2025.

Strategy

Entergy Arkansas and its affiliates continue to pursue formula rate plan mechanisms, including the company's filing of its 2025 historical year formula rate plan netting adjustment and the APSC's approval of its Generating Arkansas Jobs Act rider rate update. Parent Entergy Corporation completed a $2.175 billion common stock offering with a forward component, supporting utility funding needs across the operating companies. Entergy Texas was awarded an approximately $200 million Texas Energy Fund grant for electric reliability, and Entergy's utility companies continue planning investments to serve load growth, including large-scale data centers, as noted in the risk factors. Enterprise-wide, Entergy highlighted customer, operational, regulatory and financial progress at its June investor day.

Risks

• Rate case and cost recovery outcomes — Pending and future rate cases, formula rate proceedings and delays in fuel and purchased power cost recovery could affect Entergy Arkansas's allowed revenues and cash flows.
• MISO participation and market rules — Regulatory and operating uncertainties associated with MISO participation, market design, transmission upgrade cost allocation and interconnection queue delays could raise costs or delay resource additions.
• Load growth and data center demand — Risk factors cite the ability to recover net utility assets and stranded costs if large-scale data center customer growth does not materialize as expected.
• Nuclear operations and regulation — Changes in regulation or oversight of Entergy's nuclear generating facilities, nuclear materials and fuel, including new or existing safety and environmental concerns, could affect operations and costs.

Outlook

Management said the company remains solidly on track to achieve its objectives for 2026 and beyond, affirming guidance and outlooks. Entergy highlighted steady progress across customer, operational, regulatory and financial areas during the second quarter. No separate quantitative outlook specific to Entergy Arkansas was provided in the excerpted release.