most important customer, The

Electric Perspectives, Sep/Oct 2002 by Leonard, J Wayne, Nixon, Walter, Wagoner, Mary H

Entergy's perspective on low-income

customers is grounded in the economic reality

of the region in which it does business.

THE MOST IMPORTANT CUSTOMER

ONE THING I'VE LEARNED in 30 years in this business is that the people who produce and deliver electricity genuinely care about the customers they serve. They take pride in providing something that is critically important to the quality of life we Americans enjoy today.

Our utility employees at Entergy serve-and live in-states that contain some of the nation's most poverty-stricken areas. These employees v-iew Entergy's territory as their community. I learned early on that many of them are anguished every time we shut off or deny service to customers in their community-especially when those customers are low-income and working-poor people who on occasion simply lack the dollars to pay their bills on time.

At Entergy we believe we have failed any time we have to disconnect a customer who is unable to pay the utility bill. And when we look at the costs of providing electric service, the numbers tell us that usually there are better business solutions than disconnecting and reconnecting the same customers over and over. If we don't help customers find those better solutions, some desperate ones will attempt solutions with our wires that pose safety risks to themselves and potentially our employees. Since safety is Entergy's number-one priority, this is an additional reason for finding ways to keep the power on in the first place.

This spring, I told Entergy's shareholders that the most important customers we have are the ones who don't have service. It doesn't matter whether it's due to failed equipment, a stormrelated event, or customers' inability to pay their bills at this moment in time.

I believe that no one in this country should have to worry about whether he can afford electricity for his home. To live in the richest country in the world and sit idly by as if it isn't our problem that some families must choose between food and heat is criminal.

Our employees are setting a national standard by proving that a corporation-a utility-can serve all its customers (including those having difficulty paying their bills) with dignity, respect, and compassion and still earn a fair profit. Some people will tell you, "Your only responsibilities are to the shareholder and to obeying the law. The law defines morality when it comes to your obligations to the environment and the impoverished." These attitudes are widespread in this country, particularly in the corporate world.

At Entergy, we don't accept this either/or approach to our responsibilities. In fact, we've proven that whole idea wrong. Growing returns to shareholders have gone hand in hand with social responsibility and improved service to customers. Since mid-1998, Entergy has had 16 straight quarters of earnings growth exceeding the markets' expectations, average annual earnings growth of 16 percent per year for four years, and 18 percent average annual shareholder return over that period. That gives me confidence that we're on the right track in viewing profitability as an output of serving our stakeholders well and not an input that constrains our day-to-day decisions that affect real people's lives.

Why Act Aggressively for

Low-Income Customers?

Entergy's perspective on low-income customers is grounded in reality-the reality of the region in which we live and do business.

We serve one of the most povertystricken areas of the nation-the Mississippi River Delta. According to statistics released by the Children's Defense Fund, three of the nation's ten counties with the highest child poverty rates are in Louisiana and Mississippi, states that Entergy serves. Eleven of the thirty-eight counties with child poverty rates higher than even the poorest U.S. cities are rural counties in Arkansas, Louisiana, and Mississippi-all in Entergy's service area. New Orleans, Entergy's headquarters city, has the third-highest child poverty rate in the nation. More than 40 percent of New Orleans children (51,707 out of 127,566 persons under age 18) live in poverty.

We have made it a priority to provide solutions to our low-income customers because, quite simply, it's the right thing to do. It's also the smart thing. Right now, approximately 25 percent of Entergy's 2.6 million customers fall below the poverty line. On a daily basis, many of our customers worry about whether they will be able to provide basic necessities to their family. Somehow, most of them manage to get by and pay their utility bills on time, in full. So there is a simple business basis for Entergy's low-income strategymore than $631 million. That's what low-income customers and the working poor contribute annually to Entergy's revenue.

Social, Cultural, and Economic Myths

Like the bumper sticker that says, "Question Authority," we need to question what we "know" about the poor.

Over the past three years, Entergy did that kind of questioning by studying our low-income customers. Though the research is far from complete, our current findings reveal that the whole debate about customers "at or below the federal poverty level" suffers from a series of myths and misconceptions about the poor.