Entergy Responds to Hurricanes Katrina and Rita

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Entergy Responds to Hurricanes Katrina and Rita
Gone With the Wind?

• May 11, 2006

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Who is Entergy?

• Entergy Corporation is the only Fortune 500
  company based in New Orleans, Louisiana.
• Entergy owns and operates power plants with
  approximately 30,000 megawatts of electric
  generating capacity.
• Its five regulated utility companies in Arkansas,
  Louisiana, Mississippi and Texas deliver
  electricity to 2.7 million utility customers.
  Entergy also provides gas service in New Orleans
  and Baton Rouge, Louisiana, and owns one
  deregulated utility company in Texas.
• It is the second largest nuclear generator in the
  United States, with 11 owned or managed reactors
  in Arkansas, Louisiana, Massachusetts,
  Mississippi, Nebraska, New York and Vermont.
• Entergy has annual revenues of more than 10
  billion and approximately 14,000 employees.

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What Well Discuss

• Hurricanes Katrina and Rita storm impacts to
  Entergys service area
• Impacts of these storms on our ability to keep
  critical corporate business functions operating
• Business continuity activities and processes that
  were put in place to ensure continuation of all
  business functions
• Employee assistance programs
• Lessons learned for plan improvements

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We WerePrepared for the Storms
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Entergy has proven experience with storms

• Hurricane Georges (Sept. 1998)260,000 customers
  without power
• Hurricane Lili (Oct. 2002)243,000 customers
  without power
• Tropical Storm Cindy (July 2005)270,000 without
  power
• December Ice Storms (2000)1st - 236,200
  customers without power2nd - 246,800 customers
  without power

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The Impact To Entergys Service Territory
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Hurricanes Katrina Rita
HurricaneKatrina Category 4
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Unprecedented Impact on Entergy 1.1 million
Customers Out Severe Flooding
800,000 Louisiana outages
Katrina Storm surge approaches Michoud plant,
photo by Entergy Michoud plant manager Don
McCroskey
300,000 Mississippi outages
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and Hurricane Katrina proved to be an enormous,
unprecedented challenge

• Corporate HQ closed
• Phones, computers knocked out
• Problems reaching evacuated media
• Lodging/food/water destroyed
• Looting, violence in New Orleans area
• Serious gasoline shortages (6 refineries out of
  service)
• Mixed signals from politicians

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Safety
Safety is a core value and the top priority in
everything we do at Entergy
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For Entergy, How Bad was Katrina?

• 1.1 million outages quadruple the previous
  high (75 restored within 14 days)
• 262 electrical substations, 181 transmission
  lines and 1,560 feeders lost
• 2,970 miles of transmission lines and 28,552
  miles of distribution lines were damaged
• 2 Fossil plants flooded and 17 units were
  forced out of service
• 1,000 structures destroyed, 17,389 utility poles
  damaged
• Natural gas distribution lines in New Orleans
  badly flooded by billions of gallons of water
• Restoration costs 750 million to 1.1 billion

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then along came Rita

• Devastated us again
• Second worst storm in company history
• Heavy wind damage to transmission system and
  generation plants
• More serious gasoline shortages (7 refineries
  out of service)

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For Entergy, How Bad was Rita?

• 766,000 outages 75 were restored within 10
  days
• 436 electrical substations, 343 transmission
  lines lost. All transmission connections between
  Louisiana and Texas severed
• 3,800 miles of transmission lines and 43,858
  miles of distribution lines were damaged
• 12 of 14 generating units in the area offline
  due to damage
• 700 structures destroyed,11,503 utility poles
  replaced
• Three days of rolling blackouts for 142,000
  Texas customers
• Restoration costs estimated at 400 million to
  550 million

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The Power of People
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Lots of praise for Katrina recovery
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More Katrina praise
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We built morale and esprit de corps by projecting
our linemen as heroes
Our employees often perform heroically but rarely
is it portrayed in the media
Courtesy of cartoonist Marshall Ramsey, The
Clarion-Ledger and the Copley News Service
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And now well discuss the Business Continuity
Challenges we faced

• Senior Management decided immediately after
  Katrina hit to separate completely
• Customer service restoration
• from
• Keeping the business running
• Business Continuity Teams role
• Restore business systems processes
• Get IT systems up
• Etc.
• Re-engage over 1,500 employees and 400
  contractors who had no place to work and/or live

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Objective of Business Continuity Team

• Ensure Effective Continuation of Company Business
  Processes and Productivity of New Orleans
  Employees in the Aftermath of Hurricanes Katrina
  Rita

Now Mike and his troops will go to bed each night
and wake each morning basing their success on how
many barriers they break, how many walls they
tear down, how many challenges they remove from
the path of our storm team
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Business Continuity Team
Leader assigned August 31st. Team formed Sept.
1 Key personnel set-up as subject matter
experts. Knew the business, the people and the
organization. Established a liaison team member
from the organization of each OCE member.
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Key Messages to Rally Our Employees

• Everyone still has a job, a paycheck and full
  benefits
• We are trying to find all employees to make sure
  they are safe
• In restoring power, no employee will be put in
  harms way
• Assistance is at hand for everything from
  financial aid and stress counseling to filling
  prescriptions, replacing clothing and filing
  insurance claims and finding housing
• Entergy has established The Power of Hope Fund
  and other assistance programs

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Getting it Done
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Business Continuity Response

• Secured and built-out office space
• Secured interim housing, and then temporary
  housing in eight different cities
• Made arrangements for furniture and utilities
• Developed and implemented policies for expenses,
  per diem, lump sums, telecommuting, etc.
• Managed the reclamation effort for the Entergy
  and Mobil buildings and move-out from the Mobil
  Building
• Additionally, Hurricane Rita resulted in a
  second redeployment of some employees, and
  additional needs for housing

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Redeployment and Reassignment of N.O. Area
Employees

• Most Headquarters employees were redeployed to
  alternate work locations
• Jackson, MS Area 420
• Houston, TX Area 180
• Little Rock, AR 85
• Beaumont, TX 120
• Baton Rouge, LA Misc. 90
• Some remain in the New Orleans Area
• Gretna Data Center 200
• Telecommuting 70
• N.O. Area temporary offices 180
• A number of employees left the company
• 30 employees declined the redeployment assignment
• 10 interns assignments were terminated

• Approximately 2900 Entergy employees work in the
  New Orleans area
• 1500 in the Headquarters buildings
• 1400 support utility businesses
• Of these, 900-1000 employee homes were initially
  uninhabitable.
• Approximate numbers

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Redeployment and Reassignment (continued)
While awaiting redeployment assignments employees
worked virtually and in clusters as assigned from
day one. Virtually all employees at assigned work
locations by October 10th. All in assigned
housing by October 24th.

• Redeployment Timeline
• Assigned groups to cities 1 week after Katrina
• Developed processes and policies 2 weeks after
  Katrina
• Office and housing assignments issued 3 weeks
  after storm
• Move-in staged based on apartment availability
• Offices built out
• Clinton Little Rock September 19th
• Houston September 26th
• Beaumont October 10th
• Hammond Kenner October 31st

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Redeployment and Reassignment (continued)
Around 1400 employees who support the local
utility businesses remained in the New Orleans
area. Banks were closed, employees were either
working or evacuated, so Western Union offices
were used to issue cash for employees who
normally receive paper checks or who could not
access normal bank accounts.

• New Orleans Area Utility Employees
• Employees could not leave to take care of homes
  and/or families therefore, BCT assisted
  employees and their families
• Reassigned to undamaged Company facilities
  (offices and staging areas)
• 340 employee homes uninhabitable
• Assigned to Company-secured apartments, trailers
  or living with relatives

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Essential Business Processes
All functional areas had Business Continuity
Plans prior to the storm. Virtually all plans
required mid-course adjustments, e.g., payroll
issued on schedule 4 days after the storm hit
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Information Technology Managementand Recovery

• Data backup tapes prepared two days before
  disaster is declared on August 28.
• Gretna Data Center loses commercial and backup
  power at 3 a.m. August 29. Major system failure
  begins before sunrise.
• Two days later, as New Orleans flooding
  increases, recovery begins using backups in
  Little Rock, Philadelphia and Las Colinas.
• Generator power restored on Aug. 31, while
  search begins in Jackson for interim headquarters
  building.
• Disaster recovery completed by Sept. 5 focus
  shifts to planning for normal operations

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then along came Rita

• Hurricane Rita did not significantly impact
  Business Continuity
• Offices in Texas and southwest LA were not
  damaged, so operations were not disrupted
• Although back-up Operation Centers were staffed
  and ready if needed
• All Company facilities available for use when
  civil authorities reopened the areas

Although damage to transmission, distribution,
and substations was extensive and fossil plants
experienced significant damage
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Hurricane Rita Business Continuity (continued)

• However, some employees were impacted
• Evacuation, restoration, apartment condition
  assessment and repair delayed redeployment of 123
  employees to Beaumont
• Evacuation interrupted (slightly) redeployment of
  some of the 184 employees to the Houston area
• Again, some employees homes were uninhabitable
• Beaumont Area 38
• Lake Charles Area 22
• Most are short-term assigned to Company-secured
  housing or living with relatives

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Services Provided to Employees Families

• Accounted for employees
• All located by September 14th No Casualties
• IE StormNet set-up (to supplement internal
  company articles) to provide information to
  employees/families
• Continued employee salaries and benefits
• Spousal support initiative by executive spouses
• Made cash advances available
• Allowed up to 2 days off with pay to secure
  home/autos/belongings

The company provided numerous services to support
employees and their families following the storm.
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Services Provided to Employees Families
(continued)

• Sponsored FEMA seminars throughout the System
• Power of Hope Fund (provides )
• Operation Restore Hope (provides material items)
• Employee Assistance Program counseling offered at
  worksites over 1,200 employees and counting!
• Housing, furniture, and utilities paid for
  redeployed employees

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Services Provided to Employees Families
(continued)

• Housing support provided for up to 6 months for
  N.O., SW LA and SE Texas employees with
  uninhabitable homes throughout the
  Entergy utility system
• Redeployment Coordinators helped with
  schools, child and elderly care, etc.
• Most coordinators were recently retired employees
  who knew about company policies and procedures
• Proved to be a valuable resource for employees
  locating to new work sites and company-provided
  housing

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Business Continuity

• Analysis, including risk mitigation plan for
  long-term office locations
• Implementing Primary office locations
• Unwinding the Redeployment
• Implement Relocation to Primary Office model
• Update Business Continuity Plan to incorporate
  lessons learned

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More Lessons Learned

• Prepare for the worst (but hope for the best)
• Pre-deploy resources when you have advanced
  warning for an event such as a hurricane
• Advance preparation for logistics
• Information is as important as electricity
  service
• Toll free lines and key phones needed with
  out-of-region area codes
• Anticipate significant emotional strain
• More dispersion of corporate functions reduces
  risk

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Summary

• Business continuity has been maintained, but
  obviously not without some lost productivity
• High priority activities have continued along
  with the many added operational, financial, and
  support activities necessitated by Hurricanes
  Katrina and Rita
• Significant economic, informational, and
  emotional support is being provided to employees
• There is much business continuity work remaining

• BC requires the same ingredients as utility
  service restoration
• planning
• execution
• a knowledgeable and dedicated staff, and
• excellent teamwork!!
• Investment in and support of our employees
  ensures these ingredients for Entergy in the
  future.

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Questions?