File No. 70-8911
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form U-l
___________________________________
APPLICATION-DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
___________________________________
Entergy Gulf States, Inc.
350 Pine Street
Beaumont, Texas 77701
(Name of company filing this statement and address
of principal executive offices)
___________________________________
Entergy Corporation
(Name of top registered holding company parent of each
applicant or declarant)
___________________________________
William J. Regan, Jr.
Vice President and Treasurer
Entergy Gulf States, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
(Names and addresses of agents for service)
___________________________________
The Commission is also requested to send copies of any
communications in connection with this matter to:
Laurence M. Hamric, Esq.
Ann G. Roy, Esq.
Entergy Services, Inc.
639 Loyola Avenue
New Orleans, LA 70113
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Item 1. Description of the Proposed Transactions
Item 1 is amended in its entirety as follows:
1.1 Entergy Gulf States, Inc. (the "Company") is an
electric and gas public utility company operating in the
States of Louisiana and Texas, and is a subsidiary of
Entergy Corporation, which is a registered holding company
under the Public Utility Holding Company Act of 1935, as
amended (the "Act"). Exxon Corporation ("Exxon") is a
corporation organized under the laws of the State of New
Jersey and is a non-utility entity not affiliated with the
Company or any of the Company's affiliates.
1.2 Since the 1930's the Company's cogeneration facility,
Louisiana Station No. 1 ("La. St. 1") has provided steam
and associated by-product electric energy to the Exxon
refining and petrochemical manufacturing facilities that
surround and are contiguous to, the Company's cogeneration
facility located in East Baton Rouge Parish, Louisiana
(the "Exxon Facility").
1.3 La. St. 1 was originally constructed to serve the
steam and electrical require-ments of the Exxon Facility
and has been dedicated primarily to that purpose since its
construction, although, at one time, La St. 1 did supply
steam and electricity to other industrial customers
adjacent to the facility. Pursuant to the arrangement,
Exxon supplies fuel to La. St. 1, which is then converted
into steam and passed through a turbine, which
simultaneously reduces the pressure of the steam and, as a
by-product, produces electricity. The steam and
electricity produced is then delivered to the Exxon
Facility. The Company converts Exxon's fuel in such a
manner as to match the Exxon Facility's requirements for
steam; the amount of electricity produced is dependent
upon the amount of steam produced. Normally, the amount
of electricity produced from this process is not
sufficient to meet Exxon's requirements and Exxon
purchases additional electricity from the Company pursuant
to the existing Contract for Electric Service (the
"Electric Agreement").
1.4 The Company and Exxon desire to modernize La. St. 1
and subject to Commission approval, will enter into the
transactions described herein. Exxon will invest a
significant amount of capital in La. St. 1 in order, among
other things, to improve its reliability and efficiency,
and potentially increase its capacity, for the continued
provision of steam and associated electric energy produced
by Exxon's fuel.
1.5 The Company, pursuant to the Agreement for Lease of
Generating Facilities, will lease to Exxon La. St. 1
certain real property located within and surrounding La.
St. 1, upon which Exxon proposes to construct a new gas-
fired turbine and associated facilities to provide for a
more reliable generation of steam and additional electric
energy for use by the Exxon facility (the "Lease"). All
capital and other costs incurred to modernize La. St. 1
and to construct the new gas-fired turbine will be borne
by Exxon. If Exxon does not appropriate at least X for
improvements or the required funds for the new gas fired
turbine within one year from the date the last regulatory
approval is obtained, the parties shall meet to negotiate
a mutually acceptable increase in rent; if the parties
fail to agree, the Company has a one-time right to
terminate the Lease. In addition to describing the
facilities leased, the Lease sets forth provisions
relating to the use of common facilities and services by
both Exxon and the Company.
1.6 The Lease has an initial term in excess of twenty
years with two possible extension terms of ten years each.
The initial term of the Lease is divided into two stages:
Phase 1 and 2. Generally, Phase 1 is the period during
which Exxon is to complete the modernization of La. St. 1,
which duration should not exceed thirty (30) months from
the date the Company secures all necessary regulatory
approvals. Phase 2 is the twenty (20) year period
thereafter.
1.7 During Phase 1, pursuant to the Base Facility
Sublease and Lease of Additions and Betterments, (the
"Sublease"), the Company will sublease La. St. 1 including
any additions or improvements back from Exxon, in order
that the Company may continue to use those facilities to
fulfill its obligations to satisfy Exxon's steam and
associated energy requirements pursuant to the existing
Contract for Steam and Cogenerated Electric Service which
agreement will expire in 1997. By structuring the
transaction to include both the Lease and the Sublease,
Exxon immediately can commence modernization and
construction, and at the same time, the Company can
continue to fulfill its contractual obligations to Exxon.
1.8 During Phase 1, Exxon shall pay the Company a monthly
rent of X pursuant to the Lease. Co-extensively with
Phase 1, the Company shall pay Exxon a monthly rent of X
pursuant to the Sublease. Steam and electric service
rendered by the Company to Exxon during Phase 1 shall be
paid for at rates set forth in the Amended and Restated
Steam Contract and any additional electricity shall be
provided to Exxon pursuant to the Electric Agreement.
During Phase 2, Exxon shall pay Company a monthly fixed
rent of X and a monthly variable rent of up to a maximum
amount of X depending upon the quantity of steam generated
by La. St. 1.
1.9 Pursuant to the Operating and Maintenance Service
Agreement (the "Service Agreement"), the Company will
provide equipment, personnel and services required for the
operation and maintenance of La. St. 1 during Phase 2 of
the initial term and any extension term, or until
discharged by Exxon. Exxon may discharge the Company,
only if the Company demonstrates a pattern of substandard
performance as defined in the Service Agreement. Exxon
shall compensate Company for its service under the Service
Agreement by a fee structure that includes, in addition to
reimbursement of the Company's expenses, the payment of an
overhead fee and an incentive fee. The overhead fee will
be initially X per year and will not be subject to
renegotiation more than every two years. The incentive
fee is set at a maximum of X per year based upon Company's
attainment of certain performance goals. In addition, the
Company has the opportunity to earn other incentives based
on cost savings.
1.10 The Reconfiguration Agreement describes modifications
to certain transmission facilities that transmit
electricity from La. St. 1 to the Exxon facility that will
be necessary after the improvements contemplated by the
Lease are completed. In addition, the Reconfiguration
Agreement sets forth Exxon's responsibility for
reconfiguration costs.
1.11 The transaction also includes a letter agreement that
summarizes the terms to be included in a new contract for
electric service to be effective upon the expiration of
the Electric Agreement at the end of Phase 1.
1.12 The original investment of La. St. 1 as of June 30,
1996 was $71.7 million, and the net book value of such
investment (as reduced by accumulated depreciation) at
that date was $14.6 million.
Item 2. Fees, Commissions and Expenses
Item 2 is amended in its entirety as follows:
The fees, commissions and expenses are not expected to
exceed the following:
*Fees of Company Counsel Monroe & Lemann $ 90,000.00
*Fees of Orgain, Bell & Tucker L.L.P. $ 6,000.00
*Fees of Entergy Services, Inc. $ 40,000.00
*Miscellaneous Fees $ 6,000.00
TOTAL $142,000.00
* Estimated
Item 3. Applicable Statutory Provisions
Item 3 is amended in its entirety as follows:
The Company believes that Sections 9(a), 10 and 12(d) of
the Act and Rules 23, 24 and 44 thereunder apply to the
proposed transaction.
In the event that the Commission deems any other section
of the Act or rules thereunder to be applicable, the
Company requests that the Commission's order or orders
herein also be issued under and with respect to such other
section or rule.
Item 4. Regulatory Approval
Item 4 is amended in its entirety as follows:
No state regulatory body or agency and no federal
commission or agency other than this Commission has
jurisdiction over the transactions proposed herein.
Neither the Louisiana Public Service Commission nor the
Public Utility Commission of Texas exercises jurisdiction
over the transactions for which approval is sought herein.
Item 5. Procedure
Item 5 is amended in its entirety as follows:
1. The Company requests that the Commission's notice of
proposed transactions published pursuant to Rule 23(e) be
issued by September 20, 1996, or as soon thereafter as
practicable. The Company further requests that the
Commission's order authorizing the transactions proposed
in this proceeding be entered by November 13, 1996 or as
soon thereafter as practicable.
2. The Company hereby waives a recommended decision by a
hearing officer or any other responsible officer of the
Commission; consents that the Division of Investment
Management may assist in the preparation of the
Commission's decisions and/or order in this matter; and
requests that there be no waiting period between the
issuance of the Commission's order and the date it is to
become effective.
Item 6. Exhibits and Financial Statements
Item 6, Section A. Exhibits, is amended as follows:
F. Opinion of Counsel
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly
caused this Application/Declaration to be signed on its
behalf by the undersigned thereunto duly authorized.
ENTERGY GULF STATES, INC.
By: /s/William J. Regan, Jr.
William J. Regan, Jr.
Vice President and Treasurer
Dated: October 31, 1996
Exhibit F
New Orleans, Louisiana
October 28, 1996
Securities and Exchange Commission
450 5th Street
Washington, D.C. 20549
Ladies and Gentlemen:
Entergy Gulf States, Inc., a Texas Corporation (the
"Company") is an electric and gas public utility company
conducting business in the States of Louisiana and Texas and
is a subsidiary of Entergy Corporation, a Delaware
Corporation, which is a registered holding company under the
Public Utility Holding Company Act of 1935, as amended, (the
"Act"). The Company proposes to enter into a transaction
with Exxon Corporation ("Exxon") involving the long-term
lease of its cogeneration facility, Louisiana Station Number
1, and surrounding properties that are contiguous to and
surround Exxon's refining and petrochemical manufacturing
facilities in East Baton Rouge Parish, Louisiana. As part
of the proposed transaction, the Company also plans to enter
into a sublease for the same facilities for a period not to
exceed thirty (30) months, as well as an operating and
service maintenance agreement, a reconfiguration agreement,
and several other related agreements.
In this connection, I have examined the Certificate of
Incorporation of the Company, the Bylaws of the Company and
the documents relating to the proposed transaction,
including but not limited to the Agreement of Lease and
Generating Facilities, the Operating and Maintenance Service
Agreement, the Base Facility Sublease and Lease of Additions
and Betterments, the Reconfiguration Agreement, the Amended
and Restated Steam Contract, the Contract for Electric
Service and the Letter Agreement (collectively, the
"Agreements"). I have also examined other such documents,
certificates, corporate records and matters of law as I have
deemed necessary for the purposes of rendering this opinion.
Based on the foregoing, I am of the opinion that:
1. The Company is a corporation validly organized and
existing under the laws of the State of Texas.
2. All actions necessary to make valid the consummation of
the proposed transaction by the Company described above will
have been taken when:
(a) the Application-Declaration shall have been granted
and permitted to become effective in accordance with
the applicable provisions of the Act; and
(b) all appropriate final action shall have been taken
by the Board of Directors, or duly appointed
committee thereof, and/or an authorized officer of
the Company with respect to the proposed transactions.
3. When the foregoing steps have been taken and assuming
(i) the proposed transaction is consummated in accordance
with the Application-Declaration and related orders of the
Commission, (ii) the Board of Directors of the Company, or
duly appointed committee, and/or an authorized officer,
shall have authorized the consummation of the proposed
transaction in accordance with the above referenced
documents:
(a) all state laws that relate or are applicable to the
transaction (other than so called "blue sky laws" or
similar laws, upon which I do not pass herein) will
have been complied with; and
(b) the consummation of the transaction by the Company
will not violate the legal rights of the holders of
any securities issued by the Company.
I consent to the filing of this opinion as an
exhibit to the Application-Declaration.
Very truly yours,
/s/ Ann G. Roy
Ann G. Roy
