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Entergy System Strategic Supply Resource Plan Plan Description

The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006. 2. Overview. Planning FrameworkStrategic OverviewCurrent

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Entergy System Strategic Supply Resource Plan Plan Description

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    1. Entergy System Strategic Supply Resource Plan Plan Description (For the planning period 2006 – 2015)

    2. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 2 Overview Planning Framework Strategic Overview Current Portfolio Load Forecast Retirement Strategy Overview of Plan for 2006 – 2015

    3. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 3 Supply Objectives

    4. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 4 Planning Horizon

    5. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 5 Steps in Determining Supply Resource Needs Determine the type of generation needed by the System to serve load shapes at the lowest reasonable cost given current expectations and supply options.

    6. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 6 Load shape determines functional requirements.

    7. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 7 Principles and Process for Participation Decisions Resource acquisitions during the operating year are generally for system reliability or production cost benefits. Because the Annual Plan provides for adequate resources to meet the expected system needs, additional resources acquired during the operational year generally will be shared based on responsibility ratio.

    8. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 8 Factors in Operating Company Participation Operating company participation decisions consider the following factors.

    9. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 9 Strategic Initiatives Dependence on purchased power required to meet reliability requirements should not exceed amounts that could practically be built and financed within a three to five year periods. Purchases for economic reasons are not limited. Implement a “portfolio approach” limited-term purchase power procurement program. “Laddering” of contract expiration dates. Mix of supply roles.

    10. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 10 Purchase Power Strategy Overview Dependence on purchased power required to meet reliability requirements should not exceed amounts that could practically be built and financed within a three to five year period. Excludes long-term controlled (LOU) capacity. Purchases for economic reasons are not limited. Implement a “portfolio approach” limited-term purchase power procurement program. Mix of short-term products with varying contract durations resulting in a “laddering” of contract expiration dates (multi-year contracts expire at various times over three year period.) Mix of products that support needs for base load and load following supply roles.

    11. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 11 Anticipated Reliance on Purchase Power A significant portion of the resources in the plan will be provided by short-term purchases. Depending on the particular year in the SSRP, the System expects to acquire approximately 800 to 1600 megawatts (MW) of resources from short-term power purchases consisting of a variety of products. Each year the System expects to purchase several hundred MW of dispatchable load-following generation unit capacity from combined cycle gas turbine (“CCGT”) or combustion turbine (“CT”) generators, pursuant to multi-year unit capacity purchase agreements (“MUCPAs” or “MUCCOs”) with terms of one to three years. In addition to multi-year unit capacity purchases, the System expects to make seasonal and annual power purchases utilizing products such as call options, firm block-energy or liquidated damages products, or other purchased power resources through the use of multiple procurement processes including formal Requests for Proposals (“RFPs”).

    12. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 12 Energy Mix reflects reliance on purchase power. Reliance on purchased power is reflected in the changing energy mix over recent years.

    13. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 13 Changing Energy Sources

    14. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 14 Self-supply Options In order to mitigate the exposure of the Operating Companies to purchase power supply risks and cost volatility, the System plans to identify and evaluate real executable resource proposals that would allow for the possibility to construct , if needed and economically justified, new capacity through self-build options Such self-supply options would be executable within a three to five year window. These self-build options include participation in new CCGT/cogeneration capacity, unit repowering and/or upgrades at existing generation sites. Self-supply options will be compared against market alternatives that provide comparable functionality.

    15. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 15 Portfolio Mix for Long-term Resource Additions The life-of-unit (LOU) resources, whether PPA or acquisition, that will be added over the ten-year planning horizon are expected to consist primarily of CCGT and solid fuel resources. CCGT resources are anticipated for all OPCOs and each planning region to address load-following needs. Several OPCOs will require additional CCGT or solid fuel LOU resources to address long-term base load supply needs. Near term LOU resources are expected to be provided primarily from resources that are already operational or nearly complete The System will develop self-supply projects to provide “options” that could be implemented within normal construction periods, if necessary, to limit exposure to power purchases or address potential long-term reliability issues within particular locations such as Amite South or WOTAB.

    16. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 16 Overview of Major Resource Additions

    17. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 17 Strategy for Stable Fuel Resources The SSRP seeks to provide each Entergy Operating Company with long-term controllable stable fuel price capacity resources that should move each Entergy Operating Company toward the objective of having resources that could provide its base load firm energy requirements from resources with highly predictable fuel prices. Stable fuel price capacity resources are expected to include solid fuel (i.e. coal or nuclear) capacity, renewable generation resources, or highly efficient gas-fired generation with fixed price gas price contracts with a term of at least ten years.

    18. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 18 Entergy System 2006 Resource Requirements and Capability The following chart compares 2006 functional requirements for the Entergy System with long-term controlled resources.

    19. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 19 Entergy Arkansas, Inc. 2006 Resource Requirements and Capability The following chart compares 2006 functional requirements for EAI with long-term controlled resources.

    20. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 20 Entergy Gulf States, Inc. 2006 Resource Requirements and Capability The following chart compares 2006 functional requirements for EGSI with long-term controlled resources.

    21. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 21 Entergy Louisiana, LLC 2006 Resource Requirements and Capability The following chart compares 2006 functional requirements for ELL with long-term controlled resources.

    22. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 22 Entergy Mississippi, Inc. 2006 Resource Requirements and Capability The following chart compares 2006 functional requirements for EMI with long-term controlled resources.

    23. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 23 Entergy New Orleans, Inc. 2006 Resource Requirements and Capability The following chart compares 2006 functional requirements for ENO with long-term controlled resources.

    24. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 24 Gas Correlation

    25. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 25 Age of Fleet

    26. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 26 Annual Peak Load Forecast

    27. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 27 Retirement Strategy The operating companies have evaluated and continue to evaluate potential unit retirements on an on-going basis. The decision whether to retire an existing unit is an economic one that requires comparison of the forward cost of the existing unit with the forward cost of alternatives. Many of the System’s older gas and oil-fired units run at low capacity factors. At the same time these units require relatively low forward spending to keep available. Consequently, these units serve the peaking / reserve role in an economic manner. They provide economic sources of capacity.

    28. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 28 Overview of Plan Plan identifies preliminary expectations regarding timing and location (planning region) for new long-term resources, and expected participation in each resource (to be finalized by the Operating Committee at the time commitment to resource is made). Amounts and timing reflect the Entergy System needs. Preliminary resource participation based upon consideration of Operating Company supply requirements to meet load shape and expected business risks and conditions.

    29. The statements contained in this Appendix are made subject to the Reservation of Rights set forth in the RFP and subject to the terms and acknowledgements set forth in the Proposal Submission Agreement. 2006 LONG-TERM RFP - April 17, 2006 29 Summary of Plan Resources

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