SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 1, 1994
(May 25, 1994)
GULF STATES UTILITIES COMPANY
(Exact name of registrant as specified in charter)
TEXAS
(State or other jurisdiction of incorporation)
1-2703 74-0662730
(Commission file number) (IRS Employer Identification No.)
350 Pine Street, Beaumont, Texas 77701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (409) 838-6631
<PAGE>
Item 5. Other Materially Important Events
On May 25, 1994 , The Court of Appeals for the Third District of Texas (
the "Court of Appeals") withdrew, and entered a substitute for, its
opinion of September 15, 1993, in the appeal of a 1991 Texas District
Court ruling relating to the decision of the Public Utility Commission of
Texas ("PUCT") in 1988 to hold in abeyance its judgment on the prudency of
$1.4 billion of Gulf States Utilities Company's ("GSU") company-wide costs
associated with the River Bend Steam Electric Generating Station ("River
Bend"). Pertinent details concerning the PUCT's decision in GSU's 1988
rate case, the 1991 District Court ruling, the September 1993 opinion
of the Court of Appeals that has been withdrawn and related matters are
contained in the respective Annual Reports of GSU and its parent, Entergy
Corporation, on Form 10-K for the year ended December 31, 1993, and their
respective Quarterly Reports on Form 10-Q for the quarter ended March 31,
1994.
Contrary to its earlier opinion, the Court of Appeals affirmed the
District Court's conclusion that there was substantial evidence to support
the PUCT's 1988 decision not to include the $1.4 billion of company-wide
River Bend construction costs in GSU's rate base. While acknowledging
that the PUCT had exceeded its authority when it attempted to defer a
decision on the inclusion in rate base of the $1.4 billion of River Bend
costs in order to allow GSU a further opportunity to demonstrate the
prudency of those costs in a subsequent proceeding, the Court of Appeals
found in its substituted opinion that GSU had suffered no harm or lack of
due process as a result of the PUCT's error. Accordingly, the Court of
Appeals held that the PUCT's action had the effect of disallowing the
$1.4 billion of costs for ratemaking purposes.
The Court of Appeals' substituted opinion also held that the PUCT's
decision in the 1988 GSU rate case permitting rate base treatment of
deferred carrying costs and operating expenses associated with River Bend
should be reversed and remanded because it did not comply with the Court
of Appeals' most recent holding in City of El Paso v. Public Utility
Commission ( the "El Paso Case" referred to in the Annual and Quarterly
Reports of GSU and Entergy referred to above). The El Paso Case held that
only deferred operating costs, and not deferred carrying costs, were
allowable in rate base. The remand to the PUCT was limited to this issue.
The Court of Appeals' substituted opinion was entered by two judges, with
a third judge dissenting. The dissenting opinion states that the result
of the majority opinion is, among other things, to deprive GSU of due
process at the PUCT because the PUCT never reached a finding on the $1.4
billion of costs.
The Texas retail portion of the $1.4 billion of GSU's company-wide River
Bend costs that the Court of Appeals found had been effectively disallowed
by the PUCT, when adjusted for the effect of taxes and depreciation, and
the related cost deferrals, totaled $298 million and $170 million,
respectively, as of March 31, 1994.
It is anticipated that GSU will seek a reconsideration by the Court of
Appeals of its substituted opinion and, barring further review by the
Court of Appeals, will appeal the decision to the Texas Supreme Court.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
GULF STATES UTILITIES COMPANY
BY: /s/ Lee W. Randall
Lee W. Randall
Vice President , Chief Accounting
Officer and Assistant Secretary
Dated: June 1, 1994
