--- ticker: ETR company: Entergy Corporation filing_type: 10-K year_current: 2026 year_prior: 2025 risks_added: 1 risks_removed: 1 risks_modified: 6 risks_unchanged: 35 source: SEC EDGAR url: https://riskdiff.com/etr/2026-vs-2025/ markdown_url: https://riskdiff.com/etr/2026-vs-2025/index.md generated: 2026-05-10 --- # Entergy Corporation: 10-K Risk Factor Changes 2026 vs 2025 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-05-10 > All data extracted directly from official filings. No hallucinated content. > **[AI-Generated Summary]** The paragraph below was produced by a language > model and may contain errors. All other content on this page is deterministically > extracted from the original SEC filing. > Entergy's risk disclosures shifted focus from operational challenges specific to Entergy New Orleans's gas service to broader regulatory and cost recovery uncertainties across all utility operating companies. Six substantive modifications to existing risks - particularly around insurance costs, fuel/purchased power cost volatility, tax legislation impacts, and commodity/interest rate hedging - indicate heightened attention to macro-level financial pressures and regulatory execution risk. The net addition of one risk reflects a consolidation of gas-specific concerns into more comprehensive regulatory recovery frameworks affecting the entire utility portfolio. --- ## Summary | Status | Count | |--------|-------| | New risks added | 1 | | Risks removed | 1 | | Risks modified | 6 | | Unchanged | 35 | --- ## New in Current Filing: The Utility operating companies recover fuel, purchased power, and associated costs through rate mechanisms that are subject to risks of delay or disallowance in regulatory proceedings, and sudden or 296 296 296 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy --- ## No Match in Current: The effect of higher purchased gas cost charges to customers taking gas service may adversely affect Entergy New Orleans's results of operations and liquidity. *This section from the 2025 filing does not have a high-confidence textual match in 2026. It may have been removed, merged, or substantially reworded.* Gas rates charged to retail gas customers are comprised primarily of purchased gas cost charges, which provide no return or profit to Entergy New Orleans, and distribution charges, which provide a return or profit to the utility. Distribution charges recover fixed costs on a volumetric basis and, thus, are affected by the amount of gas sold to customers. When purchased gas cost charges increase due to higher gas procurement costs, customer usage may decrease, especially in weaker economic times, resulting in lower distribution charges for Entergy New Orleans, which, given its relatively smaller size, could adversely affect results of operations. Purchased gas cost charges, which comprise most of a customer's bill and may be adjusted monthly, represent gas commodity costs that Entergy New Orleans recovers from its customers. Entergy New Orleans's cash flows can be affected by differences between the time when gas is purchased and the time when ultimate recovery from customers occurs. --- ## Modified: Entergy and the Registrant Subsidiaries are subject to risks associated with their ability to obtain adequate insurance at acceptable costs. **Key changes:** - Reworded sentence: "The availability of insurance capacity may decrease, and the insurance policies that Entergy or the Registrant Subsidiaries are able to obtain may have higher deductibles and more restrictive terms and conditions, including higher premiums." - Added sentence: "319 319 319 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy" **Prior (2025):** The global economic cost to insurers resulting from cyber attacks, natural disasters, wildfires, and other catastrophic events, in addition to an increased focus on climate issues, has had and may continue to have disruptive effects on insurance markets. The availability of insurance capacity may decrease, and the insurance policies that Entergy or the Registrant Subsidiaries are able to obtain may have higher deductibles, higher premiums, and more restrictive terms and conditions. Further, the insurance policies of Entergy or the Registrant Subsidiaries may not cover all of their potential exposures or actual amounts of losses incurred. **Current (2026):** The global economic cost to insurers resulting from cyber attacks, natural disasters, wildfires, and other catastrophic events, in addition to an increased focus on climate issues, has had and may continue to have disruptive effects on insurance markets. The availability of insurance capacity may decrease, and the insurance policies that Entergy or the Registrant Subsidiaries are able to obtain may have higher deductibles and more restrictive terms and conditions, including higher premiums. Entergy expects the recent pattern of increasing premiums to continue in the near and medium term. Further, the insurance policies of Entergy or the Registrant Subsidiaries may not cover all of their potential exposures or actual amounts of losses incurred. 319 319 319 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy --- ## Modified: prolonged increases in fuel and purchased power costs could lead to increased customer arrearages or bad debt expenses. **Key changes:** - Reworded sentence: "Because regulatory review can result in the disallowance of incurred costs found not to have been prudently incurred or not reflected in rates as permitted by approved rate schedules and accounting rules, including the cost of replacement power purchased when generators experience outages or when planned outages are extended, with the possibility of refunds to ratepayers, there exists some risk to the ultimate recovery of those costs, particularly when there are substantial or sudden increases in such costs, including due to inflation or as a result of changes to governmental policies and programs, including tariffs, tax incentives or tax credits, loans, grants, guarantees, and other subsidies." **Prior (2025):** The Utility operating companies recover their fuel, purchased power, and associated costs from their customers through rate mechanisms subject to periodic regulatory review and adjustment. Because regulatory review can result in the disallowance of incurred costs found not to have been prudently incurred or not reflected in rates as permitted by approved rate schedules and accounting rules, including the cost of replacement power 290 290 290 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy purchased when generators experience outages or when planned outages are extended, with the possibility of refunds to ratepayers, there exists some risk to the ultimate recovery of those costs, particularly when there are substantial or sudden increases in such costs, including due to inflation or increased tariffs or as a result of changes to governmental policies and programs, including tax incentives or tax credits, loans, grants, guarantees, and other subsidies. Regulators also may initiate proceedings to investigate the continued usage or the adequacy and operation of the fuel and purchased power recovery clauses of the Utility operating companies and, therefore, there can be no assurance that existing recovery mechanisms will remain unchanged or in effect at all. The Utility operating companies' cash flows can be negatively affected by the time delays between when gas, power, or other commodities are purchased and the ultimate recovery from customers of the costs in rates. On occasion, when the level of incurred costs for fuel and purchased power rises dramatically, some of the Utility operating companies may agree to defer recovery of a portion of that period's fuel and purchased power costs for recovery at a later date, which could increase the near-term working capital and borrowing requirements of those companies. The Utility operating companies also may experience, and in some instances have experienced, an increase in customer bill arrearages and bad debt expenses due to, among other reasons, increases in fuel and purchased power costs, especially in a rising cost environment, whether due to inflation or increased tariffs and/or in periods of economic decline or hardship. For a description of fuel and purchased power recovery mechanisms and information regarding the regulatory proceedings for fuel and purchased power cost recovery, see Note 2 to the financial statements. **Current (2026):** The Utility operating companies recover their fuel, purchased power, and associated costs from their customers through rate mechanisms subject to periodic regulatory review and adjustment. Because regulatory review can result in the disallowance of incurred costs found not to have been prudently incurred or not reflected in rates as permitted by approved rate schedules and accounting rules, including the cost of replacement power purchased when generators experience outages or when planned outages are extended, with the possibility of refunds to ratepayers, there exists some risk to the ultimate recovery of those costs, particularly when there are substantial or sudden increases in such costs, including due to inflation or as a result of changes to governmental policies and programs, including tariffs, tax incentives or tax credits, loans, grants, guarantees, and other subsidies. Regulators also may initiate proceedings to investigate the continued usage or the adequacy and operation of the fuel and purchased power recovery clauses of the Utility operating companies and, therefore, there can be no assurance that existing recovery mechanisms will remain unchanged or in effect at all. The Utility operating companies' cash flows can be negatively affected by the time delays between when gas, power, or other commodities are purchased and the ultimate recovery from customers of the costs in rates. On occasion, when the level of incurred costs for fuel and purchased power rises dramatically, some of the Utility operating companies may agree to defer recovery of a portion of that period's fuel and purchased power costs for recovery at a later date, which could increase the near-term working capital and borrowing requirements of those companies. The Utility operating companies also may experience, and in some instances have experienced, an increase in customer bill arrearages and bad debt expenses due to, among other reasons, increases in fuel and purchased power costs, especially in a rising cost environment, whether due to inflation or increased tariffs and/or in periods of economic decline or hardship. For a description of fuel and purchased power recovery mechanisms and information regarding the regulatory proceedings for fuel and purchased power cost recovery, see Note 2 to the financial statements. --- ## Modified: U.S. tax legislation may materially adversely affect Entergy's financial condition, results of operations, and cash flows. **Key changes:** - Reworded sentence: "The One Big Beautiful Bill Act of 2025 made additional changes to the U.S." - Reworded sentence: "In addition, the retail regulatory treatment of the expanded tax credits and corporate alternative minimum tax included in the Inflation Reduction Act of 2022, the limitation of the use of certain tax credits in the One Big Beautiful Bill Act of 2025, or any other changes to or additional scaling back of such tax credits, could materially impact Entergy's future cash flows, and this legislation and pending interpretive guidance 308 308 308 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy could result in unintended consequences not yet identified that could have a material adverse impact on Entergy's financial results and future cash flows." - Reworded sentence: "See Note 3 to the financial statements for discussion of the effects of the Tax Cuts and Jobs Act on 2025, 2024, and 2023 results of operations and financial condition, the provisions of the Tax Cuts and Jobs Act, and Note 2 to the financial statements for discussion of the regulatory proceedings that have considered the effects of the Tax Cuts and Jobs Act." **Prior (2025):** The Tax Cuts and Jobs Act of 2017 significantly changed the U.S. Internal Revenue Code, including taxation of U.S. corporations, by, among other things, reducing the federal corporate income tax rate, limiting interest deductions, and altering the expensing of capital expenditures. The Inflation Reduction Act of 2022 further significantly changed the U.S. Internal Revenue Code by, among other things, enacting a new corporate alternative minimum tax and expanding federal tax credits for clean energy production. The interpretive guidance issued by the IRS and state tax authorities may be inconsistent with Entergy's own interpretation and the legislation could be subject to amendments, which could lessen or increase certain impacts of the legislation. Further, changes in tax legislation or guidance, or uncertainties regarding the repeal, continuation, or interpretation of such tax legislation or guidance, could impact interpretation of and negotiations around certain contractual arrangements with counterparties, which could result in unfavorable changes to such arrangements or delays. In addition, the retail regulatory treatment of the expanded tax credits and corporate alternative minimum tax included in the Inflation Reduction Act of 2022, or any other changes to or repeal of such tax credits, could materially impact Entergy's future cash flows, and this legislation and pending interpretive guidance could result in unintended consequences not yet identified that could have a material adverse impact on Entergy's financial results and future cash flows. Based on current IRS guidance and current internal forecasts, Entergy and the Registrant Subsidiaries may become subject to the corporate alternative minimum tax included in the Inflation Reduction Act of 2022 beginning in the next two to four years. The tax rate decrease included in the Tax Cuts and Jobs Act required Entergy to record a regulatory liability for income taxes payable to customers. Such regulatory liability for income taxes is described in Note 3 to the financial statements. See Note 3 to the financial statements for discussion of the effects of the Tax Cuts and Jobs Act on 2024, 2023, and 2022 results of operations and financial condition, the provisions of the Tax Cuts and Jobs Act, and Note 2 to the financial statements for discussion of the regulatory proceedings that have considered the effects of the Tax Cuts and Jobs Act. For further discussion of the effects of the Inflation Reduction Act of 2022, see the "Income Tax Legislation and Regulation" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis and Note 3 to the financial statements. **Current (2026):** The Tax Cuts and Jobs Act of 2017 significantly changed the U.S. Internal Revenue Code, including taxation of U.S. corporations, by, among other things, reducing the federal corporate income tax rate, limiting interest deductions, and altering the expensing of capital expenditures. The Inflation Reduction Act of 2022 further significantly changed the U.S. Internal Revenue Code by, among other things, enacting a new corporate alternative minimum tax and expanding federal tax credits for clean energy production. The One Big Beautiful Bill Act of 2025 made additional changes to the U.S. Internal Revenue Code including, among other things: (i) the further altering of interest deductibility and the expensing of capital expenditures, (ii) the adoption of new "foreign entity of concern" rules intended to reduce influence of certain "prohibited foreign entities" that could limit the use of certain federal tax credits for clean energy investment and production, and (iii) the further limiting of federal tax credits available for wind and solar facilities. The interpretive guidance issued by the IRS and state tax authorities may be inconsistent with Entergy's own expectation or interpretation and the legislation could be subject to amendments, which could lessen or increase certain impacts of the legislation. Further, changes in tax legislation or guidance, or uncertainties regarding the repeal, continuation, or interpretation of such tax legislation or guidance, could impact interpretation of and negotiations around certain contractual arrangements with counterparties, which could result in unfavorable changes to such arrangements or delays. In addition, the retail regulatory treatment of the expanded tax credits and corporate alternative minimum tax included in the Inflation Reduction Act of 2022, the limitation of the use of certain tax credits in the One Big Beautiful Bill Act of 2025, or any other changes to or additional scaling back of such tax credits, could materially impact Entergy's future cash flows, and this legislation and pending interpretive guidance 308 308 308 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy could result in unintended consequences not yet identified that could have a material adverse impact on Entergy's financial results and future cash flows. Based on current IRS guidance and current internal forecasts, Entergy and the Registrant Subsidiaries may become subject to the corporate alternative minimum tax included in the Inflation Reduction Act of 2022 beginning in the next one to three years. The tax rate decrease included in the Tax Cuts and Jobs Act required Entergy to record a regulatory liability for income taxes payable to customers. Such regulatory liability for income taxes is described in Note 3 to the financial statements. See Note 3 to the financial statements for discussion of the effects of the Tax Cuts and Jobs Act on 2025, 2024, and 2023 results of operations and financial condition, the provisions of the Tax Cuts and Jobs Act, and Note 2 to the financial statements for discussion of the regulatory proceedings that have considered the effects of the Tax Cuts and Jobs Act. For further discussion of the effects of the Inflation Reduction Act of 2022, and the One Big Beautiful Bill Act of 2025, see the "Income Tax Legislation and Regulation" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis and Note 3 to the financial statements. --- ## Modified: Entergy and its subsidiaries may not be adequately hedged against changes in commodity prices or interest rates, which could materially affect Entergy's and its subsidiaries' results of operations, financial condition, and liquidity. **Key changes:** - Added sentence: "Entergy and its subsidiaries have in the past, and may in the future, enter into financial arrangements that are subject to variable interest rates and transactions to hedge variable interest rate risk associated with such financing arrangements, such as interest rate swaps, caps or collars." - Added sentence: "Entergy's and its subsidiaries' use of such hedging strategies may not be effective and may adversely affect their business, results of operations, or financial position." - Added sentence: "Furthermore, no hedging strategy can completely mitigate exposure to variable interest rate risk, and such strategies may limit Entergy's and its subsidiaries' ability to participate in the benefits of lower interest rates." - Added sentence: "Entergy cannot predict the outcome or effectiveness of such hedging strategies to mitigate this risk." **Prior (2025):** To manage near-term and medium-term financial exposure related to commodity price fluctuations, Entergy and its subsidiaries, including the Utility operating companies, may enter into contracts to hedge portions of their purchase and sale commitments, fuel requirements, and inventories of natural gas, uranium and its conversion and enrichment, coal, refined products, and other commodities, within established risk management guidelines. As part of this strategy, Entergy and its subsidiaries may utilize fixed- and variable-price forward physical purchase and sales contracts, futures, financial swaps, and option contracts traded in the over-the-counter markets or on exchanges. However, Entergy and its subsidiaries normally cover only a portion of the exposure of their assets and positions to market price volatility, and the coverage will vary over time. In addition, Entergy also elects to leave certain volumes during certain years unhedged. To the extent Entergy and its subsidiaries have unhedged positions, fluctuating commodity prices can materially affect Entergy's and its subsidiaries' results of operations and financial position. Although Entergy and its subsidiaries devote a considerable effort to these risk management strategies, they cannot eliminate all the risks associated with these activities. As a result of these and other factors, Entergy and its subsidiaries cannot predict with precision the impact that risk management decisions may have on their business, results of operations, or financial position. **Current (2026):** To manage near-term and medium-term financial exposure related to commodity price fluctuations, Entergy and its subsidiaries, including the Utility operating companies, may enter into contracts to hedge portions of their purchase and sale commitments, fuel requirements, and inventories of natural gas, uranium and its conversion and enrichment, coal, refined products, and other commodities, within established risk management guidelines. As part of this strategy, Entergy and its subsidiaries may utilize fixed- and variable-price forward physical purchase and sales contracts, futures, financial swaps, and option contracts traded in the over-the-counter markets or on exchanges. However, Entergy and its subsidiaries normally cover only a portion of the exposure of their assets and positions to market price volatility, and the coverage will vary over time. In addition, Entergy also elects to leave certain volumes during certain years unhedged. To the extent Entergy and its subsidiaries have unhedged positions, fluctuating commodity prices can materially affect Entergy's and its subsidiaries' results of operations and financial position. Entergy and its subsidiaries have in the past, and may in the future, enter into financial arrangements that are subject to variable interest rates and transactions to hedge variable interest rate risk associated with such financing arrangements, such as interest rate swaps, caps or collars. Entergy's and its subsidiaries' use of such hedging strategies may not be effective and may adversely affect their business, results of operations, or financial position. Furthermore, no hedging strategy can completely mitigate exposure to variable interest rate risk, and such strategies may limit Entergy's and its subsidiaries' ability to participate in the benefits of lower interest rates. Entergy cannot predict the outcome or effectiveness of such hedging strategies to mitigate this risk. Although Entergy and its subsidiaries devote a considerable effort to these risk management strategies, they cannot eliminate all the risks associated with these activities. As a result of these and other factors, Entergy and its subsidiaries cannot predict with precision the impact that risk management decisions may have on their business, results of operations, or financial position. --- ## Modified: The Utility operating companies and Entergy's non-utility business are exposed to the risk that counterparties may not meet their obligations, which may materially affect the Utility operating companies and Entergy's non-utility business, including the ability to meet debt obligations. **Key changes:** - Added sentence: "With respect to the obligations of counterparties to large customer electric service agreements, Entergy has heightened exposure to a 317 317 317 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy small number of large-scale data center customers which makes recovery of Entergy's significant investments in transmission and generation assets to power those new large-scale data centers subject to a significant degree to the success of those customers." - Added sentence: "The contractual and credit and collateral protections included in the agreements with these customers may prove insufficient to protect Entergy under certain circumstances, such as in the event of a bankruptcy of the customer or a guarantor of its obligations." - Added sentence: "If any such customer is unable to fulfill its contractual obligations, there is a risk that the associated Utility operating company may not be able to fully recover its investment in and/or a return on those assets or meet its debt obligations." **Prior (2025):** The risk management practices of the Utility operating companies and Entergy's non-utility business are exposed to the risk that counterparties that owe Entergy and its subsidiaries performance of certain obligations, money, energy, or other commodities will not perform their obligations. If counterparties to these arrangements, such as counterparties to large customer electric service agreements or hedging arrangements, fail to perform, Entergy or its subsidiaries may seek to enforce its contractual protections, but may be unsuccessful, such as in recovering proceeds adequate to cover the related obligations, which could materially affect the applicable Utility operating company or Entergy's non-utility business, despite any contractual protections. **Current (2026):** The risk management practices of the Utility operating companies and Entergy's non-utility business are exposed to the risk that counterparties that owe Entergy and its subsidiaries performance of certain obligations, money, energy, or other commodities will not perform their obligations. If counterparties to these arrangements, such as counterparties to large customer electric service agreements or hedging arrangements, fail to perform, Entergy or its subsidiaries may seek to enforce its contractual protections, but may be unsuccessful, such as in recovering proceeds adequate to cover the related obligations, which could materially affect the applicable Utility operating company or Entergy's non-utility business, despite any contractual protections. With respect to the obligations of counterparties to large customer electric service agreements, Entergy has heightened exposure to a 317 317 317 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy small number of large-scale data center customers which makes recovery of Entergy's significant investments in transmission and generation assets to power those new large-scale data centers subject to a significant degree to the success of those customers. The contractual and credit and collateral protections included in the agreements with these customers may prove insufficient to protect Entergy under certain circumstances, such as in the event of a bankruptcy of the customer or a guarantor of its obligations. If any such customer is unable to fulfill its contractual obligations, there is a risk that the associated Utility operating company may not be able to fully recover its investment in and/or a return on those assets or meet its debt obligations. --- ## Modified: Environmental and regulatory obligations intended to combat the effects of climate change, including by compelling greenhouse gas emission reductions or reporting, increasing clean or renewable energy requirements, or placing a price on greenhouse gas emissions, or efforts to achieve climate goals could materially affect the financial condition, results of operations, and liquidity of Entergy and Entergy's subsidiaries, including the Utility operating companies and System Energy. **Key changes:** - Reworded sentence: "Federal, state, and local authorities periodically propose and enact laws and regulations intended to address known or suspected causes of climate change." - Reworded sentence: "For example, in 2021, the City Council of New Orleans promulgated a renewable and clean portfolio standard that sets a goal of net-zero emissions by 2040 and absolute zero emissions by 2050." - Reworded sentence: "Developing and implementing plans for compliance with greenhouse gas emissions reduction or reporting or clean/renewable energy requirements, or for achieving a climate goal can lead to additional capital, personnel, and operation and maintenance expenditures and could significantly affect the economic position of existing facilities and proposed projects." - Reworded sentence: "Similarly, increased load growth and the natural gas generation required to meet that increased demand is expected to result in an increase in Entergy's absolute greenhouse gas emissions." - Reworded sentence: "Violations of such requirements may subject the Utility operating companies to enforcement actions, capital expenditures to bring existing facilities into compliance, additional operating costs or operating restrictions 314 314 314 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy to achieve compliance, civil penalties, and exposure to third parties' claims for alleged health or property damages or for violations of applicable permits or standards." **Prior (2025):** In an effort to address climate change concerns, some federal, state, and local authorities have been calling for additional laws and regulations aimed at known or suspected causes of climate change. For example, the EPA, various environmental interest groups, and other organizations have focused considerable attention on CO2 emissions from power generation facilities and their potential role in climate change. The EPA has promulgated regulations controlling greenhouse gas emissions from certain vehicles, and has proposed regulations for new, existing, and significantly modified stationary sources of emissions, including electric generating units. Such regulations continue to evolve. Various states and regions of the U.S. have taken action to establish greenhouse gas limitations and trading programs. In Louisiana, the former Office of the Governor announced in 2020 the creation of a Climate Initiatives Task Force and issued an executive order that established a path to net-zero emissions by 2050, while in 2021, the City Council of New Orleans passed a renewable and clean portfolio standard that sets a goal of net-zero emissions by 2040 and absolute zero emissions by 2050. The impact that continued changes in the governmental response to climate change risk and any judicial interpretation thereof will have on existing and pending environmental laws and regulations related to greenhouse gas emissions currently is unclear. Developing and implementing plans for compliance with greenhouse gas emissions reduction or reporting or clean/renewable energy requirements, or for achieving voluntary climate commitments can lead to additional capital, personnel, and operation and maintenance expenditures and could significantly affect the economic position of existing facilities and proposed projects. The operations of low or non-emitting generating units (such as nuclear units and solar facilities) at lower than expected capacity factors could require increased generation from higher emitting units, thus increasing Entergy's greenhouse gas emission rate. Similarly, increased load growth and the natural gas generation required to meet that increased demand could result in an increase in Entergy's absolute greenhouse gas emissions. Moreover, long-term planning to meet environmental requirements can be negatively impacted and costs may increase to the extent laws and regulations change prior to full implementation. These requirements could, in turn, lead to changes in the planning or operations of balancing authorities or organized markets in areas where Entergy's subsidiaries, including the Utility operating companies or System Energy, do business. Violations of such requirements may subject the Utility operating companies to enforcement actions, capital expenditures to bring existing facilities into compliance, additional operating costs or operating restrictions to achieve compliance, civil penalties, and exposure to third parties' claims for alleged health or property damages or for violations of applicable permits or standards. Further, real or perceived violations of environmental regulations, including those related to climate change, or inability to meet Entergy's voluntary climate commitments, could negatively impact Entergy's reputation or inhibit Entergy's ability to pursue its decarbonization objectives. To the extent Entergy believes any of these costs are recoverable in rates, however, additional material rate increases for customers could be resisted by Entergy's regulators and, in extreme cases, Entergy's regulators might attempt to deny or defer timely recovery of these costs. Future changes in regulation or policies governing the reporting or emission of, or government programs relating to, CO2 and other greenhouse gases or mix of generation sources could (i) result in significant additional costs to Entergy's Utility operating companies, their suppliers, or customers; (ii) make some of Entergy's electric generating units uneconomical to maintain or operate; (iii) result in the early retirement of generation facilities and 307 307 307 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy stranded costs if Entergy's Utility operating companies are unable to fully recover the costs and investment in generation; (iv) increase the difficulty that Entergy and its Utility operating companies have with obtaining or maintaining required environmental regulatory approvals; and (v) cause the financing needs of Entergy and its subsidiaries to increase should such changes result in a repeal or limitation on government tax credits, loans, grants, guarantees, or other subsidies incentivizing the development or utilization of alternative sources of generation , each of which could materially affect the financial condition, results of operations, and liquidity of Entergy and its subsidiaries. In addition, lawsuits have occurred or are reasonably expected against emitters of greenhouse gases alleging that these companies are liable for personal injuries and property damage caused by climate change. These lawsuits may seek injunctive relief, monetary compensation, and punitive damages. In March 2019, Entergy voluntarily set a climate goal to achieve a 50 percent reduction in its carbon emission rate from the year 2000 by 2030. In September 2020, Entergy voluntarily committed to achieving net zero carbon emissions by 2050. In November 2022, Entergy voluntarily set a climate goal to achieve 50 percent carbon-free energy capacity by 2030. Due to stronger than initially expected sales growth, likely necessitating the development of new generation capacity that is not carbon-free, Entergy expects that achievement of the 50% carbon-free energy generating capacity goal will be delayed for a period beyond 2030 that has not yet been determined. In addition, achievement of the 2030 emission rate goal could also be challenged as a result of the forecasted and future sales growth. Further risks to achieving the 2030 and 2050 goals include, among other things, the ability to execute on renewable resource plans, regulatory approvals, customer demand for carbon-free energy that exceeds Entergy's or its Utility operating companies' ability to add lower carbon or carbon-free capacity, load growth, potential tariffs, carbon policy and regulation at the federal or state level, including mandates related to reliability standards, and supply chain costs and constraints. Technology research and development, innovation, and advancements in carbon-free generation are also critical to Entergy's ability to achieve its 2050 commitment. Entergy cannot predict the ultimate impact of achieving these objectives, or the various implementation aspects, on its system reliability, or its results of operations, financial condition, or liquidity. **Current (2026):** Federal, state, and local authorities periodically propose and enact laws and regulations intended to address known or suspected causes of climate change. A particular focus at the federal level is the regulation of CO2 emissions from new, existing, and significantly modified stationary emission sources, including electric generating units. Such regulations continue to evolve. Various states and regions of the U.S. have taken action to establish greenhouse gas limitations and trading programs. For example, in 2021, the City Council of New Orleans promulgated a renewable and clean portfolio standard that sets a goal of net-zero emissions by 2040 and absolute zero emissions by 2050. The impact that continued changes in the governmental response to climate change risk and any judicial interpretation thereof will have on existing and pending environmental laws and regulations related to greenhouse gas emissions currently is unclear. Developing and implementing plans for compliance with greenhouse gas emissions reduction or reporting or clean/renewable energy requirements, or for achieving a climate goal can lead to additional capital, personnel, and operation and maintenance expenditures and could significantly affect the economic position of existing facilities and proposed projects. The operations of low or non-emitting generating units (such as nuclear units and solar facilities) at lower than expected capacity factors could require increased generation from higher emitting units, thus increasing Entergy's greenhouse gas emission rate. Similarly, increased load growth and the natural gas generation required to meet that increased demand is expected to result in an increase in Entergy's absolute greenhouse gas emissions. Moreover, long-term planning to meet environmental requirements can be negatively impacted and costs may increase to the extent laws and regulations change prior to full implementation. These requirements could, in turn, lead to changes in the planning or operations of balancing authorities or organized markets in areas where Entergy's subsidiaries, including the Utility operating companies or System Energy, do business. Violations of such requirements may subject the Utility operating companies to enforcement actions, capital expenditures to bring existing facilities into compliance, additional operating costs or operating restrictions 314 314 314 Table of ContentsPart I Item 1A, 1B, and 1CEntergy Corporation, Utility operating companies, and System Energy Table of Contents Part I Item 1A, 1B, and 1C Entergy Corporation, Utility operating companies, and System Energy to achieve compliance, civil penalties, and exposure to third parties' claims for alleged health or property damages or for violations of applicable permits or standards. Further, real or perceived violations of environmental regulations, including those related to climate change, or challenges meeting any climate goals Entergy might set or be required to achieve, could negatively impact Entergy's reputation or inhibit Entergy's ability to pursue its long-term decarbonization objectives. To the extent Entergy believes any of these costs are recoverable in rates, however, additional material rate increases for customers could be resisted by Entergy's regulators and, in extreme cases, Entergy's regulators might attempt to deny or defer timely recovery of these costs. Recent or future changes in regulation or policies governing the reporting or emission of, or government programs relating to, CO2 and other greenhouse gases or mix of generation sources could (i) result in significant additional costs to the Utility operating companies, their suppliers, or customers; (ii) make some of Entergy's electric generating units uneconomical to maintain or operate; (iii) result in the early retirement of generation facilities and stranded costs if the Utility operating companies are unable to fully recover the costs and investment in generation; (iv) increase the difficulty that Entergy and its Utility operating companies have with obtaining or maintaining required environmental regulatory approvals; and (v) cause the financing needs of Entergy and its subsidiaries to increase should such changes result in a repeal or limitation on government tax credits, loans, grants, guarantees, or other subsidies incentivizing the development or utilization of alternative sources of generation, each of which could materially affect the financial condition, results of operations, and liquidity of Entergy and its subsidiaries. In addition, lawsuits have occurred or are reasonably expected against emitters of greenhouse gases alleging that these companies are liable for personal injuries and property damage caused by climate change. These lawsuits may seek injunctive relief, monetary compensation, and punitive damages. The capital plan of certain Utility operating companies includes significant investments in generation facilities to serve the rapid growth in load demand from large customers and large-scale data centers, which facilities will emit CO2 or other greenhouse gases and amplify these risks for Entergy and those Utility operating companies. --- *Data sourced from SEC EDGAR. Last updated 2026-05-10.*