File No. 70-8511
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
_________________________________
Post-Effective Amendment No. 7
to the
Form U-1/A
__________________________________
APPLICATION - DECLARATION
Under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
_________________________________
System Energy Resources, Inc. Entergy Corporation
1340 Echelon Parkway P.O. Box 61005
Jackson, Mississippi 39213 New Orleans, Louisiana 70161
Telephone: 601-368-5000 Telephone: 504-529-5262
Entergy Arkansas, Inc. Entergy Louisiana, Inc.
P.O. Box 551 639 Loyola Avenue
Little Rock, Arkansas 72203 New Orleans, Louisiana 70113
Telephone: 501-377-4000 Telephone: 504-576-4000
Entergy Mississippi, Inc. Entergy New Orleans, Inc.
P.O. Box 1640 639 Loyola Avenue
Jackson, Mississippi 39205 New Orleans, Louisiana 70113
Telephone: 601-969-2311 Telephone: 504-576-4000
(Names of companies filing this statement and addresses
of principal executive offices)
__________________________________
ENTERGY CORPORATION
(Name of top registered holding company
parent of each applicant or declarant)
_________________________________
Steven C. McNeal
Vice President, Corporate Finance
Entergy Services, Inc.
639 Loyola Avenue
New Orleans, LA 70113
(504) 576-4363
(Name and address of agent for service)
_____________________________________
The Commission is also requested to send copies
of communications in connection with this matter to:
Laurence M. Hamric, Esq.
Ann G. Roy, Esq.
Entergy Services, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
(504) 576-2095
The Application-Declaration is amended as follows:
Item 1. Description of Proposed Transactions.
Section B. Issuance of First Mortgage Bonds and
Debentures and Related Matters.
Section B, Issuance of First Mortgage Bonds and Debentures
and Related Matters, Paragraph 19 is restated in its
entirety as follows:
System Energy further proposes to use the net proceeds
derived from the issuance and sale of the Bonds and the
issuance and sale of the Debentures for general corporate
purposes, including, but not limited to, the repayment of
outstanding securities when due and/or the possible
redemption or the acquisition of outstanding First Mortgage
Bonds, the payment of construction costs and nuclear fuel
costs, the repayment of short- and long-term borrowings and
for other working capital needs.
Section C. Issuance and Sale of Tax-Exempt Bonds and
Related Matters.
Section C, Issuance and Sale of Tax-Exempt Bonds and
Related Matters, Paragraph 2 is restated in its entirety
as follows:
The proceeds of the sale of Tax-Exempt Bonds, net of
any underwriters' discounts or other expenses payable from
proceeds, will be applied to refinance certain Pollution
Control Revenue Bonds that were previously issued to
finance pollution control facilities at the Grand Gulf
Nuclear Station ("Facilities"). Pursuant to the terms of
each Facilities Agreement, the Issuer will pay to or
provide for the benefit of System Energy the total amount
of the proceeds of the Tax-Exempt Bonds and System Energy
will agree to pay amounts sufficient to pay the principal
or redemption price of, premium, if any, and interest on
the Tax-Exempt Bonds. Such payments will be made by
System Energy directly to the Trustee pursuant to the
Indenture. If the Facilities Agreement is in the form of
an installment purchase agreement, the Facilities may be
transferred by installment sale between the Issuer and
System Energy. Under the Facilities Agreement, System
Energy may also be obligated to pay (i) the fees and
charges of the Trustee and any registrar or paying agent
under the Indenture, and, if any, a Remarketing Agent and
a Tender Agent as hereinafter referred to, (ii) all
expenses incurred by the Issuer in connection with its
rights and obligations under the Facilities Agreement,
(iii) all expenses necessarily incurred by the Issuer or
the Trustee under the Indenture in connection with the
transfer or exchange of Tax-Exempt Bonds, and (iv) certain
other fees and expenses.
Section D. Other.
Section D , Compliance with Rules 53 and 54, is hereby
deleted in its entirety and restated as follows:
Entergy hereby represents that, pursuant to Rule 54
under the Act, (1) for the reasons discussed below, the
condition set forth in Rule 53(a)(1) that Entergy's
"aggregate investment" in "exempt wholesale generators"
("EWGs") and "foreign utility companies" ("FUCOs") not
exceed 50% of Entergy's "consolidated retained earnings" is
not currently satisfied, and (2) all of the other criteria
of Rule 53(a) and (b) are satisfied.<FN1>
Entergy's "aggregate investment" in EWGs and FUCOs is
equal to approximately 54% of Entergy's "consolidated
retained earnings" as of March 31, 1998. Entergy's
"aggregate investment" currently exceeds the 50% limitation
in Rule 53(a)(1) as a result of certain charges against
Entergy's consolidated retained earnings, including a net
decrease of approximately $140 million in Entergy's
consolidated retained earnings from the quarter ended June
30, 1997 to the quarter ended September 30, 1997. This $140
million net decrease was attributable primarily to the
recording in July 1997 of a one-time "windfall profits tax"
imposed by the British government on London Electricity plc
("London Electricity"), an indirect subsidiary of Entergy
and a FUCO, and other privatized companies in the United
Kingdom. This tax, which was approximately US$234 million
for London Electricity, was made payable in installments,
the first of which was paid on December 1, 1997, and the
second which will be due on December 1, 1998. The first
installment was paid by London Electricity, without need for
additional investment by Entergy, and it is not anticipated
that there will be a need for any additional investment by
Entergy to fund London Electricity's payment of the second
installment. Entergy states that, but for the windfall
profits tax aggregate earnings from EWGs and FUCOs would
have made a positive contribution to Entergy's retained
earnings for the year ended December 31, 1997.
Following the July 2, 1997 announcement by the Labor
Government of the proposed windfall profits tax, a Standard
& Poor's Ratings Group report listed 13 British utilities,
including London Electricity, on "CreditWatch with negative
implications". However, as of March 31, 1997, London
Electricity's senior debt ratings have not changed due to
the enactment of the windfall profits tax. Moreover, as
noted below, after Entergy announced its intent to acquire
London Electricity, Standard & Poor's Ratings Group affirmed
its outstanding ratings on the Entergy's operating
companies' senior secured debt.
Entergy currently is not rated by Standard & Poor's
Ratings Group. However, all of Entergy's operating
companies have debt ratings of at least investment grade,
except that Entergy Gulf States, Inc.'s ("Gulf States") debt
ratings for all debt other than senior secured debt is below
investment grade. Currently, Gulf States has $904.7 million
in long term debt below investment grade consisting of
preferred stock, quarterly income preferred securities,
debentures, and tax-exempt bonds. However, as of July 1,
1998, $50 million in debentures will be retired and $21.6
million in tax-exempt bonds will be redeemed resulting in
$833.1 million of long-term debt remaining outstanding below
investment grade for Gulf States.
On March 20, 1995, Standard & Poors ("S&P"), lowered
the ratings of Entergy Gulf States, Inc. ("GSU", formerly
Gulf States Utilities Company) as follows:
Senior Secured Debt to triple `B' minus from triple `B'
Senior Unsecured Debt and Preferred Stock from double
`B'from triple `B'
minus
Preference Stock to double `B' from double `B' plus
S&P's stated reasons for the downgrade were as follows:
"The downgrade results from decision by the Public
Utilities Commission of Texas (PUCT) to reduce GSU's
rates by $52.9 million. The reduction is less than the
$93 million originally proposed by the hearing
examiner. The rate change includes reductions
associated with calculating rates based on "actual
taxes paid methodology", the premium paid for the power
purchased from the Nelson Plant, a small disallowance
of certain River Bend operation and maintenance costs,
and certain amount associated with allocation of costs.
The rate reduction coupled with the financial pressures
resulting from the Cajun Electric bankruptcy filing
with rate of recovery of the utility from financial
stress resulting from large debt burden incurred from
the construction of River Bend
Nuclear Station. Funds from operations interest
coverage is projected to be weak for the rating in the
near term. The utility is expected to aggressively
control costs during the recovery period and reduce
dividends of to Entergy Corp., to mitigate the effects
of the rate reductions."
March 31, 1995, Moody's Investors Service ("Moody's")
downgraded GSU's First Mortgage Bonds to Baa3 from Baa2;
debentures and senior unsecured pollution control bonds to
Ba1 from Baa3; and preferred stock to ba1 from baa3.
Moody's stated reasons for the downgrade were as follows:
On Monday, March 20, the PUCT ordered an annual rate
reduction of $52.9 [sic] million in GSU's Texas service
territory. Moody's believes that this rollback, when
combined with the prior rate rollbacks of $20 million in
1993 and $20 million in 1994, hinders substantially the
financial flexibility of GSU going forward. In addition,
Moody's notes that GSU is facing a myriad of other
uncertainties, including the ultimate resolution of the
Cajun lawsuit, ramifications of the Cajun bankruptcy on
River Bend operations, potential River Bend asset write-
downs, merger related write-offs and regulatory proceeds
with negative implications in its Louisiana service
territory. Final arguments in the Cajun lawsuit were heard
on March 17, 1995, and it is unclear as to how long the
judge, who is also the bankruptcy judge in the Cajun Chapter
11 filing will take to issue a decision. Moody's believes
that even a dismissal of the lawsuit will result in at least
a write-off of the operating and maintenance expenses owed
to GSU for River Bend."
Section E. Capitalization Ratios.
Section E, Capitalization Ratios is deleted in its entirely
and restated as follows:
Entergy states that as of March 31, 1998, Entergy's
consolidated capitalization consisted of 42.9% equity
(including mandatorily redeemable preferred securities) and
57.1% debt, (including long-term debt, currently maturing
long-term debt, preferred stock of subsidiaries with sinking
fund, and preference stock of subsidiaries). On a pro forma
basis, taking into consideration the transaction
contemplated in this filing, the ratios would be 42.2% to
57.8%, respectively, for equity and debt. Entergy states
that, its consolidated capitalization ratio, will not be
materially effected by this transaction. Entergy further
states that as of September 30, 1992, before the original
investment by Entergy in EWGs or FUCOs, Entergy's
consolidated debt to total capital ratio was 54.6% and its
capitalization ratio was 45.4%, and as of March 31, 1998,
Entergy's debt to total capital ratio was 57.1% and its
capitalization ratio was 42.9%.
Item 6. Exhibits and Financial Statements
Item 6, Exhibits and Financial Statements is amended to
include the following:
Section A. Exhibits
H-3 Amended revised suggested form of Notice
of proposed transactions for publication in the
Federal Register (deleted and restated in its
entirety).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this amendment to be signed on their behalf by the undersigned
thereunto duly authorized.
SYSTEM ENERGY RESOURCES, INC.
ENTERGY CORPORATION
ENTERGY ARKANSAS, INC.
ENTERGY LOUISIANA, INC.
ENTERGY MISSISSIPPI, INC.
ENTERGY NEW ORLEANS, INC.
By: /s/ Louis E. Buck
Louis E. Buck
Vice President, Chief Accounting Officer and
Assistant Secretary
Dated: July 30, 1998
_______________________________
<FN1> The terms "aggregate investment" and "consolidated retained
earnings" are used herein as defined in Rule 53.
EXHIBIT H-3
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- ; 70-8511)
SYSTEM ENERGY RESOURCES, INC., ET AL.
(DATE)
Entergy Corporation ("Entergy"), P. O. Box 61005, New
Orleans, Louisiana 70161, a registered holding company, and its
subsidiary companies System Energy Resources, Inc. ("SERI")
Echelon One, 1340 Echelon Parkway, Jackson, Mississippi 39213;
Entergy Arkansas, Inc. ("Entergy Arkansas"), P. O. Box 551,
Little Rock, Arkansas 72203; Entergy Louisiana, Inc., ("Entergy
Louisiana"), 639 Loyola Avenue, New Orleans, Louisiana 70113;
Entergy Mississippi, Inc. ("Entergy Mississippi"), P. O. Box
1640, Jackson, Mississippi 39205; and Entergy New Orleans, Inc.,
("Entergy New Orleans" and together with Entergy Arkansas,
Entergy Louisiana, and Entergy Mississippi, "Operating
Subsidiaries"), 639 Loyola Avenue, New Orleans, Louisiana 70113,
have filed a post-effective amendment to their application-
declaration pursuant to Sections 6(a), 7, 9(a), 10, 12(b) and
12(d) of the Act and Rules 44, 45 and 54 thereunder.
By orders dated April 7, 1995 (HCAR No. 26269), May 9,
1995 (HCAR No. 26287), August 18, 1995 (HCAR No. 26358), and
August 27, 1996 (HCAR No. 26561) (collectively the "Orders"), the
Commission authorized SERI, from time to time through December
31, 2000, to (a) issue and sell one or more series of its first
mortgage bonds ("Bonds") and one or more series of its debentures
("Debentures") in an aggregate principal amount not to exceed
$540 million, (b) enter into arrangements for the issuance and
sale of tax-exempt revenue bonds ("Tax-Exempt Bonds") in an
aggregate principal amount not to exceed $350 million, (c) issue
and pledge one or more new series of its first mortgage bonds
("Collateral Bonds") in an aggregate principal amount not to
exceed $395 million as security for the Tax-Exempt Bonds, and (d)
obtain one or more irrevocable Letters of Credit for an aggregate
amount up to $395 million, in order to obtain a more favorable
rating on series of Tax-Exempt Bonds. Pursuant to a
Reimbursement Agreement, SERI will reimburse the issuer of the
related Letter of Credit for any amount drawn on that Letter of
Credit, within a period not to exceed sixty months following the
date of the draw. Interest on unreimbursed amounts will not
exceed 200 basis points over the New York prime rate as published
in the Wall Street Journal. Each Reimbursement Agreement will
require the payment by SERI of up-front fees not to exceed 1%,
and annual fees not to exceed 1-1/4%, of the face amount of the
related Letter of Credit.
SERI proposes to increase its authorization to incur
obligations in connection with the issuance and sale of one or
more series of Bonds and/or Debentures in a combined aggregate
principal amount not to exceed $685 million, and the issuance and
sale of Tax-Exempt Bonds to an aggregate principal amount not to
exceed $515 million. All other terms and conditions authorized
in the Orders will remain. These terms and conditions include,
inter alia, assignments by SERI of conditional rights held by
SERI under certain agreements entered into among SERI, Entergy
and the Operating Subsidiaries as additional security for the
holders of any series of Bonds or in connection with the issuance
of Tax-Exempt Bonds, and the issuance and pledge of Collateral
Bonds as security for Tax-Exempt Bonds.
The application-declaration and any amendments thereto
are available for public inspection through the Commission's
Office of Public Reference. Interested persons wishing to
comment or request a hearing should submit their views in writing
by [_______, 1998], to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549 and serve a copy on the
applicants-declarants at the addresses specified above. Proof of
service (by affidavit or, in the case of an attorney-at-law, by
certificate) should be filed with the request. Any request for
hearing shall identify specifically the issues of fact or law
that are disputed. Any person who so requests will be notified
of any hearing, if ordered, and will receive a copy of any notice
or order issued in this matter. After said date, the application-
declaration, as filed or as it may be amended, may be granted and
permitted to become effective.
For the Commission, by the Division of Investment
Management, pursuant to delegated authority.
_______________________
Secretary
