SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
______________________________________________
APPLICATION / DECLARATION
WITH RESPECT TO POWER BROKERING AND MARKETING ACTIVITIES
Under The
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
______________________________________________
Name of Company Filing This Statement And Address of
Principal Executive Offices:
Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
Entergy Power Marketing Corp.
900 South Shackleford Road, Suite 210
Little Rock, Arkansas 72211
Name of Top Registered Holding Company Parent of Appli
cant/Declarant:
ENTERGY CORPORATION
Name and Address of Agent for Service:
Frederick F. Nugent, Esq. Laurence M.Hamric
General Counsel General Attorney-- Corporate
Entergy Power Marketing Corp. and Securities
900 South Shackleford Road, Suite 210 Entergy Services, Inc.
Little Rock, Arkansas 72211 639 Loyola Avenue
New Orleans, Louisiana 70113
The Commission also is requested to send copies of all
notices, orders and communications to:
William S. Scherman
Kathleen A. Foudy
Skadden, Arps, Slate, Meagher & Flom
1440 New York Avenue, N.W.
Washington, D.C. 20005
ITEM 1: DESCRIPTION OF PROPOSED TRANSACTION
A. Introduction
Applicant/Declarant Entergy Power Marketing
Corporation ("EPMC"), a Delaware corporation, is a wholly-
owned subsidiary of Entergy Corporation ("Entergy"), a
registered public utility holding company as defined in
the Public Utility Holding Company Act of 1935 ("PUHCA").
EPMC hereby seeks authority, to the extent required, to
engage in a variety of power brokering and marketing
transactions, including traditional wholesale bulk power
transactions as well as the provision of innovative value-
added financial products and services designed to meet
the evolving needs of customers in competitive markets.
In addition, Entergy seeks authorization, to the extent
necessary, for its investment in EPMC and to provide
credit support, in the form of guarantees, for certain of
EPMC's proposed transactions.
B. Background
Entergy directly owns 100 percent of the common
stock of the following electric utilities, which operate
in the states of Arkansas, Louisiana, Mississippi, and
Texas: Entergy Arkansas, Inc., Entergy Gulf States,
Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc.,
and Entergy New Orleans, Inc.
Other Entergy subsidiaries include: Entergy
Services, Inc., a mutual service company that provides
financial, technical, administrative, corporate, and
other support services; System Energy Resources, Inc., a
corporation established to own the Grand Gulf nuclear
station; Entergy Operations, Inc., a corporation
established to operate the Entergy nuclear-fueled
electric generating units; System Fuels, Inc., a fuel
acquisition corporation; Entergy Power Development
Corporation, a corporation formed to hold certain Entergy
interests in non-utility generating facilities and
related ventures in the United States and overseas;
Entergy Power Development International Corporation, a
corporation owning a foreign utility company located in
Melbourne, Australia; Entergy Power Inc., a corporation
owning generating resources from which wholesale sales
are made to non-affiliated entities at market-based
rates; Entergy Enterprises, Inc. ("EEI"), a corporation
organized to market the expertise and capabilities of the
Entergy utility system to nonassociates and to investi
gate and develop investment opportunities in power-
related areas; and several exempt wholesale generators
and foreign utility companies in accordance with the
requirements of Sections 32 and 33, respectively, of
PUHCA.
C. Proposed Transactions
EPMC proposes to engage in a variety of power
brokering and marketing transactions, including
traditional wholesale bulk power transactions as well as
the provision of innovative value-added financial prod
ucts and services designed to meet the evolving needs of
customers in competitive markets. Like Energy Alliance
Partnership, a Consolidated Natural Gas Co. subsidiary
the Commission recently allowed to engage in power
marketing and brokering activities, EPMC will
provide choices to major customers with respect to
the purchase, sale, borrowing and lending of
electricity, natural gas and other fuels, and the
management of their operations. In connection with
these activities, [EPMC] will purchase, sell,
supply, market, broker, or otherwise trade electrici
ty, gas or other fuels,<FN1> provide electricity or fuel
management services, and engage in activities or
perform services, related to the foregoing.
Consolidated Natural Gas Company, Release No. 35-26512;
70-8631 (April 30, 1996), slip op. at 3 ("CNG"). In
addition, EPMC will
provide instantaneous supply and sales options to
electric generators; ... help customers manage price
changes in electricity and fuel relative to time and
location; and assist electric utilities and
nonutility generators by managing fuel supply and
transportation contracts, banking electricity until
needed and providing price and delivery flexibility.
Id. at 3 n.10.<FN2>
EPMC's activities will include traditional
power marketing and brokering activities. Traditional
power marketing transactions typically will involve the
purchase of electricity from and the sale of electricity
to utilities, non-utility generators and other power
marketers. In connection with such purchases and sales,
EPMC anticipates that it may arrange for transmission
capacity and services necessary to effectuate its sales
of electricity. EPMC also anticipates that it may engage
in fuel delivery, or fuel conversion, activities, whereby
EPMC would deliver fuel supplies to a utility or non-
utility generator for the conversion of such fuel into
electric energy which then would be delivered to EPMC for
resale. See Northeast Utilities Service Co., 60 SEC
Docket 93 (1995) (authorizing subsidiary of registered
holding company to engage in traditional power marketing
and "fuel-for energy" transactions). With respect to
traditional power brokering activities, EPMC will act as
an agent or broker for utilities, non-utility generators
and other power marketers, to effectuate such parties'
sales and purchases of electric energy at wholesale. See
id. (authorizing subsidiary of registered holding company
to engage in such brokering activities).
EPMC also intends to play a role in the
increasingly competitive and integrated energy market
described by the Commission in CNG. As the Commission
noted, "[i]t appears that the restructuring of the
electric industry now underway will dramatically affect
all United States energy markets as a result of the
growing interdependence of natural gas transmission and
electric generation, and the interchangability of
different forms of energy, particularly gas and
electricity." CNG, slip op. at 11. Thus, like other
power marketers, EPMC plans to deal in risk management
transactions, including swaps, options and futures
contracts that will assist its customers in hedging
against adverse price impacts. See id. at 6-7. Like
Energy Alliance Partnership, the Consolidated Natural Gas
Co. subsidiary, EPMC "will employ risk-reduction measures
to limit potential losses that could be incurred through
its activities. Through market hedging techniques,
matching of obligations to market prices, contractual
limitation of damages and volume limitations, and
relatively short-term contracts, [EPMC] will seek to
minimize the financial exposure of [Entergy] through its
guarantees. ... [EPMC] will not engage in speculative
trading in the energy market ... [and] will use market
hedging measures solely to minimize risk, and will limit
hedging activity to no more than the total amount of
commodities of [EPMC] that are subject to market price
fluctuation." Id. at 7. EPMC plans to offer flexible
and competitively packaged energy services, and to
provide its customers alternatives with respect to the
purchase, sale, borrowing and lending of electricity,
natural gas and other fuels.
Again like Energy Alliance Partnership, EPMC
may engage in the above-described energy transactions
with associate as well as nonassociate companies, includ
ing the Entergy system public utility companies, on the
same market terms that would be available to EPMC's
nonassociates. See CNG at 4. In addition, EPMC will
enter into a service contract with EEI, whereby EEI will
provide EPMC with administrative services, including
maintaining books and records and preparing corporate
filings. In accordance with PUHCA, and unless and until
the Commission approves two settlement agreements entered
into in 1992 by Entergy and its state regulators,<FN3> any
service contracts between EPMC and EEI will provide for
services to be rendered on an at-cost basis.
With respect to retail activities, EPMC
requests that the Commission reserve jurisdiction pending
completion of the record as it did in CNG. See CNG at 9.
As the Commission explained in CNG, "[p]ending the imple
mentation of plans or programs permitting retail wheeling
of electric power, the Commission is unable to determine
whether the requirements of section 11(b)(1) ... would be
satisfied." Id. at 9 n. 25. In accordance with the
Commission's ruling in CNG, EPMC requests that the Commis
sion be willing to "issue any supplemental order releas
ing jurisdiction following receipt of confirmation that
state approval of competition among suppliers at the
retail level has been granted." Id..
EPMC has received an order from the Federal
Energy Regulatory Commission ("FERC") determining that
EPMC is an exempt wholesale generator ("EWG") in
accordance with the requirements of Section 32 of PUHCA.
In accordance with Section 32, Entergy was free to invest
in EPMC without prior Commission approval, provided that
Entergy's investment complied with the requirements of
PUHCA and the Commission's rules implementing PUHCA, in
particular Section 32 of PUHCA and Rule 53. Entergy did
so comply. However, due to uncertainty surrounding the
requirement that exempt wholesale generators be engaged
solely and exclusively in the business of owning and/or
operating eligible facilities and selling electric energy
at wholesale, EPMC may elect not to maintain its status
as an EWG. Accordingly, Entergy and EPMC seek Commission
approval, if necessary, for the financing of EPMC's
proposed activities. In addition, Entergy seeks
Commission approval to serve as a guarantor for certain
of EPMC's power marketing activities. Specifically,
Entergy will hold 100% of the authorized and issued
common stock of EPMC. Entergy requests authority to
capitalize EPMC in an amount up to $20 million. At this
time, Entergy has committed $5 million towards EPMC's
capitalization, but requests authority for such
additional capitalization in light of the developing
nature of the power marketing industry. Entergy's invest
ment will constitute EPMC's total capitalization. In
addition, certain transactions in which EPMC proposes to
engage require that EPMC's participation be guaranteed.
Accordingly, EPMC and Entergy request that Entergy be
permitted to provide up to $150 million in credit
support, i.e., guarantees or other similar commitments,
to EPMC. At this time, Entergy has committed $50 million
in credit support to EPMC. Entergy requests the
additional authorization because, as noted in CNG, with
respect to energy marketing companies, "parent companies
often guarantee their [subsidiary marketing company's]
contractual obligations to provide financial stability
and to enable them to compete effectively." CNG at 6
n.20. Both Entergy's proposed investment and credit
support are de minimis in relation to Entergy's
consolidated assets, as of December 31, 1995, of approxi
mately $22.5 billion.
D. Discussion
EPMC's participation in the marketing and
brokering activities discussed above may be construed as
the acquisition of an interest in a business pursuant to
Section 9(a) of PUHCA, and, therefore, be subject to
Commission approval pursuant to Section 10 of PUHCA.
Section 10 requires that the Commission approve an
acquisition of an interest in a business only if such
acquisition complies with Section 11 of PUHCA. Section
11, in turn, requires that the operations of a registered
holding company system be limited to a single integrated
public utility system and to such other businesses as are
reasonably incidental or economically necessary or
appropriate to the operations of such integrated public
utility system. Pursuant to Section 11(b), the Commis
sion also may permit, as reasonably incidental or economi
cally necessary or appropriate to the operations of one
or more integrated public utility systems, the retention
of an interest in any business which the Commission finds
necessary or appropriate in the public interest or for
the protection of investors or consumers and not
detrimental to the proper functioning of such public
utility system.
The activities, discussed above, in which EPMC
plans to engage as a power marketer and broker satisfy
the standards of Section 11. EPMC's proposed
transactions are reasonably incidental and economically
necessary and appropriate to the operations of Entergy's
integrated public utility system and are in the public
interest. Moreover, allowing EPMC to engage in the
transactions proposed above is in accord with Commission
precedent and policy.
As noted above, in CNG, the Commission recently
granted an application allowing the subsidiary of a
registered utility holding company to engage in power
marketing and brokering activities similar to EPMC's
proposed transactions. In doing so, the Commission found
that such transactions "would not be 'detrimental to the
carrying out of the provisions of section 11' and so
require an adverse finding under section 10(c)(1)." CNG
at 14. The Commission also
"note[d] that the transactions would appear to
be within the plain meaning of the statute,
viz, the proposed brokering and marketing and
related activities are reasonably incidental,
or economically necessary or appropriate on a
finding that they are necessary or appropriate
in the public interest or for the protection of
investors or consumers and not detrimental to
the proper functioning of the [integrated
public-utility] system."
Id. (citation omitted). Similarly, in Northeast
Utilities Service Co., 60 SEC Docket 93 (1995), the Com
mission also allowed a subsidiary of a registered holding
company to engage in power marketing, including fuel
conversion, and power brokering transactions, recognizing
that the proposed marketing and brokering activities
"would not be 'detrimental to the carrying out of the
provisions of section 11.'"
The Commission's recent Notice of Proposed
Rulemaking recognizes that the transactions proposed
herein are economically necessary and appropriate to the
operations of a public utility holding company system
like Entergy and are in the public interest. Exemption
of Acquisition by Registered Public Utility Holding
Companies of Securities of Nonutility Companies Engaged
in Certain Energy-Related and Gas-Related Businesses;
Exemption of Capital Contributions and Advances to Such
Companies, 59 SEC Docket 1490 (1995) (Notice of Proposed
Rulemaking). Recognizing that "the utility industry is
evolving toward a broadly based energy-related business
that is no longer focused solely on the traditional,
regulated, production and distribution functions of a
utility" and that "almost all utilities engage in a
variety of other energy-related activities that involve
applications of resources and capabilities developed in
the conduct of utility operations," the Commission has
proposed a new Rule 58. Id. Proposed Rule 58 would
allow a registered holding company to acquire the
securities of an "energy-related company" without prior
Commission approval. An energy-related company is
defined as a company that derives substantially all of
its revenues from certain categories of activities,
including: the "brokering and marketing of energy
commodities, including, but not limited to electricity or
natural or manufactured gas." Id. Proposed rule 58 also
would remove any geographic limits on such activities.
Id. Thus, through its proposed Rule 58, the Commission
has acknowledged the increasingly competitive and
integrated nature and economic realities of the energy
industry and recognized that in today's energy industry,
power marketing and brokering activities are "closely
related to a [public utility holding company] system's
core utility business." Id. And, as the Commission
stated in CNG, "[t]he participation of registered system
companies in these activities should promote greater
competition and thus further the public interest in a
sound electric and gas utility industry." Id. at 12.
Moreover, EPMC will offer several safeguards to
protect the customers of the Entergy subsidiaries from
harm. First, as noted above, Entergy's direct investment
in EPMC and its proposed provision of credit support are
quite limited, and are de minimis in relation to
Entergy's consolidated assets. Second, no Entergy
utility company will be compelled to enter into any
transaction with EPMC. Third, Entergy will not seek
recovery through higher rates to utility customers to
compensate Entergy for any loss it may sustain on its
investment in EPMC. And, like the risk reduction
measures proposed by Energy Alliance to limit its parent
holding company's exposure to contingent liabilities
resulting from its guarantees of Energy Alliance's
transactions, EPMC also will employ risk reduction mea
sures to limit the exposure of Entergy. In particular,
EPMC, like Energy Alliance, will employ "market hedging
techniques, matching of obligations to market prices,
contractual limitation of damages and volume limitations,
and relatively short-term contracts" as means to limit
Entergy's exposure in its role as guarantor of certain of
EPMC's transactions.
E. Financial Matters
1. EPMC is a direct, wholly-owned subsidiary of
Entergy. Entergy will own 100% of the authorized and
issued common stock of EPMC. Entergy requests authority
to capitalize EPMC in an amount up to $20 million. At
this time, Entergy has committed $5 million towards
EPMC's capitalization, but requests authority for such
additional capitalization in light of the developing
nature of the power marketing industry. In addition,
certain transactions in which EPMC proposes to engage
require that EPMC's participation be guaranteed.
Accordingly, EPMC and Entergy request that Entergy be
permitted to provide up to $150 million in credit
support, i.e., guarantees or other similar commitments,
to EPMC. At this time, Entergy has committed $50 million
in credit support to EPMC. As noted above, Entergy's
potential total investment in EPMC and the potential
aggregate amount of Entergy's guarantees of EPMC's
transactions are quite de minimis when compared to
Entergy's total consolidated assets of approximately
$22.5 billion.
ITEM 2: FEES, COMMISSIONS AND EXPENSES
A. It is estimated that the fees, commissions or
expenses paid or incurred, directly or indirectly,
in connection with the proposed transaction will not
exceed $30,000, consisting of the $2,000 filing fee
under PUHCA, $10,000 payable to EEI for services,
including regularly employed counsel, on a cost
basis for the preparation of this application-
declaration, $15,000 payable to non-affiliated
professionals, and $3,000 for miscellaneous other
expenses.
B. The fees to be paid to EEI for services, including
regularly employed counsel, on a cost basis for the
preparation of this application-declaration will be,
as discussed above, in connection with a service
agreement between EEI and EPMC for EEI's provision
of administrative services to EPMC.
ITEM 3: APPLICABLE STATUTORY PROVISIONS
A. The following sections of PUHCA are or may be
applicable to the proposed transaction: 9(a), 10, 11(b).
ITEM 4: REGULATORY APPROVAL
A. The Federal Energy Regulatory Commission ("FERC")
has jurisdiction over the rates and charges EPMC may
impose with respect to wholesale power marketing activi
ties. EPMC filed an application with the FERC for power
marketer status, including authority to sell electricity
at market-based rates, which was accepted by the
Commission on February 14, 1996, subject to EPMC's
accepting the conditions set forth in the FERC's order.
EPMC made its compliance filing with the FERC on February
29, 1996. Such compliance filing currently is pending.
ITEM 5: PROCEDURE
A. It is hereby respectfully requested that the
Commission issue an order with respect to the
transactions proposed herein at the earliest
possible date, but in any event not later than July
15.
B. Applicant/Declarant respectfully submits that a
recommended decision by a hearing or other
responsible officer of the Commission is not
necessary with respect to the proposed transactions.
The Office of the Division of Investment Management
may assist in the preparation of the Commission's
decision. There should not be any waiting period
between the issuance of the Commission's order and
the date on which it is to become effective.
ITEM 6: EXHIBITS AND FINANCIAL STATEMENTS
The following exhibits and financial statements
are made a part of this statement:
Exhibits
Certificate of Incorporation of Entergy Power
Marketing Corp.
By-laws of Entergy Power Marketing Corp.
Order of Federal Energy Regulatory Commission
regarding Entergy Power Marketing Corp.'s
application for power marketer status
Compliance Filing submitted by Entergy Power
Marketing Corp. to the Federal Energy Regulatory
Commission
Opinion of counsel for Entergy Corporation(to be
filed by amendment), and Entergy Power Marketing Corp.
Draft of Notice
- ---------------------------------------------------------
Financial Statements
Financial statements are deemed unnecessary with
respect to the contents of this application and the
authorizations sought herein due to the nature of
the proposed transactions. However, Entergy
Corporation and Entergy Power Marketing Corp. will
attempt to furnish any financial information the
Commission requests.
ITEM 7: INFORMATION AS TO ENVIRONMENTAL EFFECTS
A. The proposed transactions do not involve major
federal action having a significant effect on the
human environment.
B. No federal agency has prepared or is preparing an
environmental impact statement with respect to the
proposed transactions.
<PAGE>
SIGNATURE:
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has
duly caused this statement to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: May 14, 1996 Entergy Power Marketing Corp.
By: /s/ Frederick F. Nugent
Frederick F. Nugent, Esq.
General Counsel
Entergy Corporation
By: /s/ Michael G. Thompson
Michael G. Thompson
Senior Vice President,
General Counsel and Secretary
<PAGE>
_______________________________
<FN1>Like Energy Alliance, EPMC anticipates that such
fuels will "include those likely to be involved in
transactions concerning natural gas, such as oil and
other hydrocarbons, wood chips, wastes and other
combustible substances." CNG at 3 n.9.
<FN2>In the future, EPMC may "help electric utilities
find the best way to met Clean Air Act requirements
through a combination of new gas technologies,
emission credits, cross-fuel management and
wholesale electricity purchases and sales." CNG at
3 n.10.
<FN3>Such approvals have been sought in Docket No. 70-
8529, but have not been granted by the Commission.
State of Delaware
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY "ENTERGY POWER MARKETING CORP."
IS DULY INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
AND IS IN GOOD STANDING AND HAS LEGAL CORPORATE EXISTENCE SO
FAR AS THE RECORDS OF THIS OFFICE SHOW, AS OF THE EIGHTEENTH
DAY OF APRIL, A.D. 1996.
AND DO HEREBY FURTHER CERTIFY THAT THE ANNUAL REPORTS
HAVE BEEN FILED TO DATE.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE
TAXES HAVE BEEN PAID TO DATE.
/s/Edward J. Freel
Edward J. Freel, Secretary of State
2422353 8300 AUTHENTICATION: 7911945
960111712 DATE: 04-18-96
<PAGE>
State of Delaware
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF "EP
YACYRETA, INC.", CHANGING ITS NAME FROM "EP YACYRETA, INC."
TO "ENTERGY POWER MARKETING CORP.", FILED IN THIS OFFICE ON
THE SEVENTEENTH DAY OF MAY, A.D. 1995, AT 11 O'CLOCK A.M.
/s/Edward J. Freel
Edward J. Freel, Secretary of State
2422353 8100 AUTHENTICATION: 7642863
950211020 DATE: 9-18-95
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
BEFORE PAYMENT OF CAPITAL OF
EP YACYRETA, INC.
I the undersigned being the incorporator of EP
YACYRETA, INC., a corporation organized and existing under
and by virtue of the General Corporation law of the State of
Delaware,
DO HEREBY CERTIFY:
FIRST: That Article First of the Certificate
of Incorporation be and it hereby is amended to read
as follows:
The name of corporation is Entergy Power
Marketing Corp.
SECOND: That the corporation has not received
any payment for any of its stock.
THIRD: That the amendment was duly adopted in
accordance with the provisions of section 241 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, I have signed this
certificate this 17th day of May 1995.
/s/James M. Saxton
James M. Saxton
<PAGE>
State of Delaware
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF "EP
YACYRETA, INC." FILED IN THIS OFFICE ON THE SECOND DAY OF
AUGUST A.D. 1994, AT 10 O'CLOCK A.M.
/s/Edward J. Freel
Edward J. Freel, Secretary of State
2422353 8100 AUTHENTICATION: 7198486
944142905 DATE: 08-02-94
<PAGE>
CERTIFICATE OF INCORPORATION
OF
EP YACYRETA, INC.
THE UNDERSIGNED, in order to form a corporation for the
purposes hereinafter stated, under and pursuant to the
provisions of the General Corporation Law of the State of
Delaware does hereby certify as follows:
FIRST: The name of the Corporation is EP Yacyreta Inc.
SECOND: The registered office of the Corporation is to be
located at 1209 Orange Street, in the City of Wilmington in
the County of New Castle, in the State of Delaware. The
name of its registered agent at that address is The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be
organized under the General Corporation Law of Delaware as
presently in effect or as may hereinafter be amended.
FOURTH: The total number of shares of capital stock which
the Corporation is authorized to issue is 1,000 shares of
capital stock having no par value per share and of one
class; such class is hereby designated as common stock.
FIFTH: No stockholder shall be entitled as a matter of right
to subscribe for, purchase or receive any shares of the
stock or any rights or options of the Corporation which it
may issue or sell, whether out of the number of shares
authorized by this Certificate of Incorporation or by
amendment thereof or out of the shares of the stock of the
Corporation acquired by it after the issuance thereof, nor
shall any stockholder be entitled as a matter of right to
purchase or subscribe for or receive any bonds. debentures
or other obligations which the Corporation may issue or sell
that shall be convertible into or exchangeable for stock or
to which shall be attached or appertain any warrant to
warrant or other instrument or instruments that shall confer
upon the holder or owner of such obligation the right to
subscribe for or purchase from the Corporation any share of
lt. capital stock, but all such additional issues of stock,
rights, options, or of bonds, debentures or other
obligations convertible into or exchangeable for stock or to
which warrants shall be attached or appertain or which shall
confer upon the holder the right to subscribe for or
purchase any shares of stock may be issued and disposed of
by the Board of Directors to such persons and upon such
terms as in their absolute discretion they may deem
advisable, subject only to such limitations as may be
imposed in this Certificate of Incorporation or in any
amendment thereto.
SIXTH: An annual meeting of stockholders shall be held for
the election of Directors and the transactions of such other
business as may properly come before said meeting Special
meetings of the stockholders of the Corporation shall be
held whenever called in the manner required by the laws of
the State of Delaware or for purposes as to which there are
special statutory provisions, and for other purposes
whenever called by resolution of the Board of Directors, or
by the Chairman of the Board, the President or the holders
of a majority of the issued and outstanding shares of the
common stock of the Corporations. Except as otherwise
provided herein, any such annual or special meeting of
stockholders shall be held on a date and at a time and place
as may be designated by or in the manner provided in the
By-Laws.
SEVENTH: The name and mailing address of the Incorporator is
James M. Saxton, 2000 First Commercial Building, 400 West
Capitol Avenue, Little Rock, Arkansas 72201.
EIGHTH:: The number of directors which shall constitute the
whole Board shall be not be less than one (1) nor more than
ten (10). Within such limits, the number of directors shall
be fixed and may be altered from time to time, as provide in
the By-Laws. Election of Directors need not be by ballot
unless the By-Laws so provide. Directors need not be
stockholders. Directors shall be elected at the annual
meeting of the stockholders of the Corporation, except as
herein provided, to serve until the next annual meeting of
stockholders and until the respective successors are duly
elected and have qualified. Vacancies occurring among the
Directors (other than in the case of removal of a Director)
shall be filled by a majority vote of the Directors then in
office with the consent of the holders of a majority of the
issued and outstanding common stock of the Corporation, or
by the sole remaining Director With the consent of the
holders of a majority of the issued and outstanding common
stock of the Corporation, or by resolution duly adopted by
the holders of a majority of the issued and outstanding
common stock of the Corporation, at a special meeting held
for such purpose, or by action taken in lieu of such
meeting, or at the next annual meeting of stockholders
following any vacancy. At any meeting of stockholders of
the corporation called for the purpose, the holders of a
majority of the issued and outstanding shares of the common
stock of the Corporation may remove from office, with or
without cause, any or all of the Directors and the successor
of any Director so removed shall be elected by the holders
of a majority of the issued and outstanding common stock of
the Corporation at such meeting or at a later meeting.
NINTH: All corporate powers shall be exercised by the Board
of Directors of the Corporation except as otherwise provided
by law or by this Certificate of Incorporation or by any
By-Laws from time to time passed by the stockholders
(provided, however, that no By-Law so created shall
invalidate any prior act of the Directors which was valid in
the absence of such By-Law). In furtherance and not in
limitation of the powers conferred by law, the Board of
Directors is expressly authorized (a) to make, alter, amend,
and repeal the By-Laws of the Corporation, subject to the
power of the stockholders, to alter, amend or repeal such
By-Laws) to authorize and cause to be executed mortgages and
liens upon all or any part of the property of the
Corporation; (c) to determine the use and disposition of any
surplus or net profits; and (d) to fix the times for the
declaration and payment of dividends.
TENTH: Directors, as such, shall not receive any stated
salary for their services, but, by resolution of the Board
of Directors, a fixed sum and expenses of attendance, if
any, may be allowed for attendance at each regular, special
or committee meeting of the Board, provided that nothing
herein contained shall be construed to preclude any Director
from serving the Corporation in any other capacity and
receiving compensation therefor.
ELEVENTH: When and as authorized by the affirmative vote of
the holders of a majority of the common stock of the
Corporation, issued and outstanding, given at a
stockholders' meeting duly called for that purpose, or when
authorized by the written consent of the holders of a
majority of the common stock of the Corporation issued and
outstanding, the Board of Directors may cause the
Corporation to sell, lease or exchange all or substantially
all, of its property and assets, including its good will and
its corporate franchises, upon such terms and conditions
and for such consideration, which may be whole or in ,part
shares of stock in, and/or other securities of, any other
corporation or corporations, as the Board of Directors
shall deem expedient and for the best interests of the
Corporation.
TWELFTH: The Board of Directors may not cause the
Corporation to merge or consolidate with or into any other
corporation or corporations, unless such merger or
consolidation shall have been authorized by the affirmative
vote of the holders of a majority of the common stock of the
Corporation, issued and outstanding, given at a
stockholders' meeting called for that purpose, or authorized
by the written consent of the holders of a majority of the
common stock of the Corporation issued and outstanding.
THIRTEENTH: To the fullest permitted by the laws of the
state of Delaware, or any other applicable law presently or
hereafter in affect, a Director of the Corporation shall not
be liable to the Corporation or its stockholders for
monetary damages for or with respect to any acts or
omissions in the performance of his duties.
Any repeal or modifications of the foregoing paragraph
by the stockholders of the Corporation shall not adversely
affect any right or protection of a Director of the
Corporation existing at the time of such repeal or
modification.
FOURTEENTH: If after the date of adoption of this
Certificate of Incorporation any provision of this
Certificate of Incorporation is invalidated on any grounds
by any court of competent jurisdiction, then only such
provision shall be deemed inoperative and null and void and
the remainder of this Certificate of Incorporation shall not
be affected thereby.
FIFTEENTH: The Corporation reserves the right to amend,
alter, change or repeal any provision contained in this
Certificate of Incorporation in the manner now or hereafter
prescribed by law, and all rights and powers conferred
herein on stockholders, Directors and officers are subject
to this reserved power.
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day
of, August 1994.
Incorporator:
/s/James M. Saxton
James M. Saxton
2000 First Commercial Bldg.
400 W. Capitol Ave.
Little Rock, Arkansas 72201
In the presence of:
/s/Pat Soret
BY-LAWS
OF
ENTERGY POWER MARKETING CORP.
ARTICLE I
Offices
The registered office of the Corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware. The
Corporation also may have offices at such other places, both
within and without the State of Delaware as from time to time may
be designated by the Board of Directors.
ARTICLE II
Books
The books and records of the Corporation may be kept (except as
otherwise provided by the laws of the State of Delaware? outside
the State of Delaware and at such place or places as from time to
time may be designated by the Board of Directors
ARTICLE III
Meetings of Stockholders
Section l Annual Meetings Each annual meeting of the stockholders
shall be held (i) at a time fixed by the Board of Directors on
the third Friday in May if not a legal holiday; ii) if a legal
holiday, then at the same time on the next business day which is
not a legal holiday; or (iii) at such date and time during such
calendar year as shall be stated in the notice of the meeting, or
in a duly executed waiver of notice thereof. The annual meeting
of the stockholders shall be held at the principal business
office of the Corporation or at such other place or places either
within or without the State of Delaware as may be designated by
the Board of Directors and stated in the notice of the meeting.
At each such meeting, the stockholders shall elect by a plurality
vote a Board of Directors and transact such other business as
may come before the meeting.
Written notice of the time and place designated for the
annual meeting of the stockholders of the Corporation shall be
delivered personally or mailed to each stockholder entitled to
vote thereat not less than ten (10) and not more than sixty (60)
days prior to said meeting, but at any meeting at which all
stockholders shall be present, or of which all stockholders not
present have waived notice in writing the giving of notice as
above described may be dispensed with. If mailed, said notice
shall be directed to each stockholder at his address as the same
appears on the stock ledger of the Corporation unless he shall
have filed with the Secretary of the Corporation a written
request that notices intended for him be mailed to some other
address, in which case ,it shall be mailed to the address
designated in such request.
Section 2. Special Meetings. Special meetings of the
stockholders of the Corporation shall be held whenever called in
the manner required by the laws of the State of Delaware for
purposes as to which there are special statutory provisions, and
for such other purposes as required or permitted by the
Certificate of Incorporation or otherwise, whenever called by
resolution of the Board of Directors, or by the Chairman of the
Board, the President. or the holders of a majority of the issued
and outstanding shares of the common stock of the Corporation.
Any such special meeting of stockholders may be held at the
principal business office of the Corporation or at such other
place or places either within or without the state of Delaware,
as may be specified in the notice thereof. Business transacted
at any special meeting of stockholders of the Corporation shall
be limited to the purposes stated in the notice thereof. except
as otherwise expressly required by the laws of the State of
Delaware or the Certificate of Incorporation, written notice of
each special meeting, stating, the day, hour and place, and in
general terms the business to be transacted thereat, shall be
delivered personally or mailed to each stockholder entitled to
vote thereat not less than ten (l0) and not more than sixty (60)
days before the meeting. If Mailed, said notice shall be
directed to each stockholder at his address as the same appears
on the stock ledger of the (corporation unless he shall have
filed with the Secretary of the Corporation a written request
that notices intended for him be mailed to some other address, in
which case it shall be mailed to the address designated in said
request. At any special meeting at which all stockholders shall
be present, or of which all stockholders not present have waived
notice in writing, the giving of notice as above described may be
dispensed with.
Section 3. Quorum. At any meeting of the stockholders of
the Corporation, except as otherwise expressly provided by the
laws of the State of Delaware or the Certificate of
Incorporation. there must be present, either in person or by
proxy, in order to constitute a quorum, stockholders having a
majority of the issued and outstanding shares of the common stock
of the Corporation entitled to vote at said meeting. At any
meeting of stockholders at which a quorum is not present, the
holders of, or proxies for, a majority of the common stock which
is represented at such meeting, shall have power to adjourn the
meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present or represented.
At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. If the
adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 4. Voting. Each holder of record of the common stock
of the Corporation shall, at every meeting of the stockholders of
the Corporation, be entitled to one (l) vote or each share of
common stock standing in his name on the books of the
Corporation, and such votes may be cast either in person or by
proxy, appointed by an instrument in writing, subscribed by such
stockholder or by his duly authorized attorney, and filed with
the Secretary before being voted on, but no proxy shall be voted
after three (3) years from its date, unless said proxy provides
for a longer period. Except as otherwise required by the laws of
the State of Delaware or the Certificate of Incorporation, the
holders of the common stock of the Corporation shall exclusively
possess all voting power for the election of Directors and for
all other purposes and are entitled to vote on each matter to be
voted on at a stockholders' meeting.
The vote on all elections of Directors and other questions
before the meeting need not be by ballot except upon demand by
the holders of the majority of the shares of the common stock of
the Corporation present in person or by proxy.
When a quorum is present at any meeting of the stockholders
of the Corporation. the vote of the holders of a majority of the
shares of the common stock of the Corporation and present in
person or represented by proxy shall decide any question brought
before such meeting, unless the question is one upon which, under
any provision of the laws of the State of Delaware or of the
Certificate of Incorporation, a different vote is required, in
which case such provision shall govern and control the decision
of such question.
Whenever the vote of the holders of the common stock of the
Corporation at a meeting thereof is required or permitted to be
taken in connection with any corporate action by any provision of
the laws of the State of Delaware or of the Certificate of
Incorporation, such corporate action may be taken without a
meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by
the holders of outstanding common stock of the Corporation having
not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice
of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those
stockholders who have not consented thereto in
writing.
Section 5. List of Stockholders. The officer of the
Corporation who shall have charge of the stock ledger of the
Corporation shall prepare and make at least ten (l0) days before
every meeting of stockholders, a complete list of the
stockholders entitled to vote at said meeting, arranged in
alphabetical order and showing the address of each stockholder
and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during
ordinary business hours for a period of at least ten (l0) days
prior to the meeting either at a place within the city where the
meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list also shall be produced
and kept at the time and place of the meeting during the whole
time thereof and may be inspected by any stockholder who is
present.
Section 6. Organization. The Chairman of the Board or the
President, or in their absence; any Vice President, shall call to
order meetings of the stockholders and shall act as chairman of
such meetings. The Board of Directors or the stockholders may
appoint any stockholder or any Director or officer of the
Corporation to act as chairman of any meeting in the absence of
the Chairman of the Board, the President and all of the Vice
Presidents. The Secretary of the Corporation shall act as
secretary of all meetings of the stockholders, but in the absence
of the Secretary the presiding officer may appoint any other
person to act as secretary of any meeting.
ARTlCLE IV
Directors
Section 1. Powers. The business and affairs of the
Corporation shall be managed by the Board of Directors which may
exercise all such powers and do all such acts and things as may
be exercised or done by the Corporation; subject, nevertheless,
to the provisions of the laws of the State of Delaware, the
Certificate of Incorporation, and any By-Laws from time to time
passed by the stockholders, provided, however. that no By-Law so
created shall invalidate any prior act of the Directors which was
valid in the absence of such By-Law.
Section 2. Number of Directors. The number of Directors
which shall constitute the whole Board shall be not less than one
(1) nor more than ten (10). Within such limits, the number of
Directors may be fixed from time to time by vote of the
stockholders or of the Board of Directors at any regular or
special meeting. Directors need not be stockholders. Directors
shall be elected at the annual meeting of the stockholders of the
Corporation, except as herein provided, to serve until the next
annual meeting of stockholders and until their respective
successors are duly elected and have qualified.
Section 3. Vacancies. Vacancies occurring among the
Directors (other than in the case of removal of a Director) shall
be filled by a majority vote of the Directors then in office with
the consent of the holders of a majority of the issued and
outstanding common stock of the Corporation; or by the sole
remaining; Director with the consent of the holders of a majority
of the issued and outstanding common stock of the Corporation, or
by resolution duly adopted by the holders of a majority of the
issued and outstanding common stock of the corporation, at a
special meeting held for such purpose, or by action taken in lieu
of such meeting, or at the next annual meeting of stockholders
following any vacancy.
Section 4. Removal. At any meeting of stockholders of the
Corporation called for the purpose, the holders of a majority of
the issued and outstanding shares of the common stock of the
Corporation may remove from office, with or without cause, any or
all of the Directors and the successor of any Director so removed
shall be elected by the holders of a majority of the issued and
outstanding common stock of the Corporation at such meeting or at
a later meeting.
Section 5. Meetings. The first meeting of each newly elected
Board of Directors shall be held immediately following the annual
meeting of stockholders and at the same place at which regular
meetings of the Board of Directors are held, or at such other
time and place as may be provided by resolution of the Board of
Directors. and no notice of such meeting shall be necessary to
the newly elected Directors in order legally to constitute a
meeting, provided a quorum is present. In the event that such
first meeting of the newly elected Board of Directors is not held
at the time and place authorized by the foregoing provision, the
meeting may be held at such time and place as shall be specified
in a notice given as hereinafter provided for special meetings of
the Board of Directors, or as shall be specified in a written
waiver signed by all the Directors. Regular meetings of the
Board of Directors may be held without notice at such time and
place, either within or without the State of Delaware, as shall
from time to time be determined by resolutions of the Board of
Directors. Special meetings of the Board of Directors may be
called by the Chairman of the Board or by the President on
reasonable notice as provided in these By-Laws, and such meetings
shall be held at the principal business office of the Corporation
or at such other place or places, either within or without the
State of Delaware, as shall be specified the notice thereof.
Directors present thereat, by majority vote, may adjourn the
meeting from time to time, without notice other than an
announcement at the meeting, until a quorum shall be present.
Except as may be otherwise specifically provided by the laws of
the State of Delaware, the Certificate of Incorporation or these
By-Laws, the affirmative vote of a majority of the Directors
present at the time of such vote shall be the act of the Board of
Directors if a quorum is present.
Section 6. Notice of Meeting. Notice of any meeting of the
Board of Directors requiring notice shall be given to each
Director by personal delivery or by mail or by telegram, in any
case at least forty-eight (48) hours before the time fixed for
the meeting. At any meeting at which all Directors shall be
present, or at which all Directors not present have waived notice
in writing, the giving of notice as above described may be
dispensed with. Attendance of a Director at a meeting shall
constitute waiver of notice of such meeting, except when such
Director attends such meeting for the express purpose of
objecting, at the beginning of such meeting, to the transaction
of any business because such meeting is not lawfully called or
convened.
Section 7. Action by Consent. Unless otherwise restricted by
the Certificate of Incorporation or these By-Laws, any action
required or permitted to be taken at any meeting of the Board of
Directors may be taken without a meeting, if all members of the
Board consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board.
Section 8. Telephonic Meetings. Unless otherwise restricted
by the Certificate of Incorporation or these By-Laws, members of
the Board of Directors may participate in a meeting, of the Board
by means of conference telephone or similar communications
equipment by means of which all persons participating in such
meeting can hear each other, and participation in a meeting
pursuant to this Section 8 of Article IV shall constitute
presence in person at such meeting.
Section 9 Resignations. Any Director of the Corporation may
resign at any time by giving written notice to the Board of
Directors or to the Chairman of the Board, the president or the
Secretary of the Corporation. As may such resignation shall take
effect at the time specified therein, or, if the time be not
specified, upon receipt thereof; and unless otherwise specified
therein acceptance of such resignation shall not be necessary to
make it effective.
ARTICLE V
Executive Committee and Other Committees
Section 1. Executive Committee. The Board of Directors may,
by resolution passed by a majority of the whole Board of
Directors, appoint an Executive Committee of not less than two or
more than five members, to serve during the pleasure of the Board
of Directors, to consist of the Chairman of the Board, and such
additional Director(s) the Board of Directors may from time to
time designate. The Chairman of the Board of the Corporation
shall be Chairman of the Executive Committee.
Section 2 Procedure. The Executive Committee shall meet at
the call of the Chairman of the Executive Committee or of any two
members. A majority of the members shall be necessary to
constitute a quorum and action shall be taken by a majority vote
of those present.
Section 3, Powers and Reports During the intervals between
the meetings of the Board of Directors, the Executive Committee
shall possess and may exercise, to the fullest extent permitted
by law, all the powers of the Board of Directors in the
management and direction of the business and affairs of the
Corporation, may authorize the seal of the Corporation to be
affixed to all papers which may require it. The taking of action
by the Executive Committee shall be conclusive evidence that the
Board of Directors was not in session when such action was taken.
The Executive Committee shall keep regular minutes of its
proceedings and all action by the Executive Committee shall be
reported to the Bard of Directors at its meeting next following
the meeting of the Executive Committee and shall be subject to
revision or alteration by the Board of Directors; provided, that
no rights of third parties shall be affected by such revision or
alteration.
Section 4. Other Committees. From time to time the Board of
Directors, by the affirmative vote of a majority of the whole
Board of Directors, may appoint other committees for any purpose
or purposes, and such Committees shall have such powers as shall
be conferred by the resolution of appointment. In the absence or
disqualification of a member of any committee (including the
Executive Committee), the member or members thereof present at
any meeting and not disqualified from voting, whether or not he
or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in place
of any such absent or disqualified member.
ARTICLE VI
Officers
Section 1 Number Election and Term of Office. The Board of
Directors may elect a Chairman of the Board, a Chief Executive
Officer, and/or a Chief Operating Officer, and shall elect a
President, a Secretary, a Treasurer, and in their discretion, one
or more Vice Presidents. The Chief Executive Officer or, if no
Chief Executive Officer is elected, the President. subject to the
direction of the Board of Directors, shall have direct charge of
and general supervision over the business and affairs of the
Corporation. The officers of the Corporation shall be ejected
annually by the Board of Directors at its meeting held
immediately after the annual meeting of the stockholders (other
than the initial officers elected by unanimous consent of the
initial Board of Directors), and each shall hold his office until
his successor shall have been duly elected and qualified or until
he shall have died or resigned or shall have been removed by
majority vote of the entire Board of Directors. Any number of
offices may be held by the same person. The Board of Directors
may from time to time appoint such other officers and agents as
the interest of the Corporation may require and may fix their
duties and terms of office.
Section 2. Chairman of the Board. The Chairman of the Board
shall be a member of the Board of Directors. He shall preside at
all meetings of the Board of Directors. and shall have such other
duties as from time to time may be assigned to him by the Board
of Directors, by the Executive Committee or, if the President
shall have been designated chief executive officer of the
Corporation, by the President
Section 3. President The President shall perform all duties
incident to the office of a president of a corporation and such
other duties as from time to time may be assigned to him by the
Board of Directors or by the Executive Committee, or if the
Chairman of the Board shall have been designated chief executive
officer of the Corporation. by the Chairman of the Board. At any
time when the office of the Chairman of the Board shall be
vacant or if the Board of Directors shall not elect a Chairman of
the Board, the President of the Corporation shall be the chief
executive officer of the Corporation.
Section 4 Vice Presidents. Each Vice President shall have
such powers and shall perform such duties incident to the office
of a vice president of a corporation and such other duties from
time to time may be conferred upon or assigned to him by the
Board of Directors or as may be delegated to him by the Chairman
of the Board (if chief executive officer of the President
Section 5 Secretary The Secretary shall keep the minutes of
all meetings of the stockholders and other Board of Directors in
books provided for the purpose, shall see that all notices are
duly given in accordance with the provisions of the law and these
By-Laws; shall be custodian of the records and of the corporate
seal of the Corporation shall see that the corporate seal is
affixed to all documents the execution of which under the seal is
duly authorized and when the seal is so affixed may attest the
same, may sign, with the Chairman of the Board (if chief
executive officer, the President or a Vice President,
certificates of stock of the Corporation; and in general, shall
perform all duties incidental to the office of a secretary of a
corporation, and such other duties as from time to time may be
assigned by the Chairman of the Board (if chief executive
officer), the President or the Board of Directors.
The Secretary shall also keep or cause to be kept. a stock
book containing the names, alphabetically arranged, if all
persons who are stockholders of the Corporation, showing their
places of residence, the number of shares }held by them
respectively and the time when they respectively became owners
thereof.
Section 6. Treasurer. The Treasurer shall have charge of and
be responsible for all funds, securities, receipts and
disbursements of the Corporation, and shall deposit, or cause to
be deposited, in the name of the Corporation, all monies or
other valuable effects in such banks, trust companies or other
depositories as shall. from time to time be selected by the
Board of Directors or by the Treasurer if so authorized by the
Board of Directors; may endorse for collection on behalf of the
Corporation, checks notes and other obligations, may sign
receipts and vouchers for payments made to the Corporation;
singly or jointly with another person as the Board of Directors
shall authorize, may sign checks on the Corporation and pay out
and dispose of the proceeds under the direction of the Board,
shall render or cause to be rendered to the Chairman of the
Board (if chief executive officer), the President and the Board
of Directors, whenever requested, an account of the financial;
condition of the Corporation, may sign, with the Chairman of the
Board (if chief executive officer), the President or a Vice
President, certificates of stock of the Corporation; and in
general, shall perform all the duties incident to the office of
a treasurer of a corporation, and such other duties as from time
to time may ~e assigned ~y the Chairman of the Board (if chief
executive officer), the President or the Board of Directors.
Section 7. Subordinate Officers. The Board of Directors may
appoint such assistant secretaries, assistant treasurers and
other subordinate officers as it may deem desirable. Each such
officer shall hold office for such period, have such authority
and perform such duties as the Board of Directors may prescribe.
The Board of Directors may from time to time, authorize the chief
executive officer to appoint and remove subordinate officers and
to prescribe the powers and duties thereof.
Section 8 Transfer of Duties. The Board of Directors in its
absolute discretion may transfer the powers and duties in whole
or in part, of any officer. to any other officer, or persons,
notwithstanding the provisions of these By-Laws, except as
otherwise provided by the laws of the State of Delaware.
Section 9 Vacancies Absences. If the office of Chairman of the
Board, President, Vice President, Secretary or Treasurer, or of
any other officer or agent becomes vacant for any reason, the
Board of Directors may, but is not required to, choose a
successor to hold office for the remainder of the unexpired term.
Except when the law requires the act of a particular officer, the
Board of Directors whenever necessary may, in the absence of any
officer, designate any other officer or properly qualified
employee, to perform the duties of the one absent for the time
being, and such designated officer or employee shall have, when
so acting, all the powers herein given to such absent officer.
Section 10. Removals. At any meeting of the Board of
Directors called for the purpose, any of officer or agent of the
Corporation may be removed from office, with or without cause, by
the affirmative vote of a majority of the entire Board of
Directors
Section 11. Resignations. Any officer or agent of the
Corporation may resign at any time by giving written notice to
the Board of Directors, the Chairman of the Board, the President
or the Secretary of the Corporation. Any such resignation shall
take effect at the time specified therein or, if the time is not
specified upon receipt thereof, and unless otherwise specified
therein, acceptance of such resignation shall not be necessary to
make it effective.
Section 12. Compensation of Officers. The officers shall
receive such salary or compensation as may be determined by the
affirmative vote of the majority of the Board of Directors. No
officer shall be prevented from receiving such salary or
compensation by reason of the fact that he is also a Director of
the Corporation.
Section 13 Delegation of Powers. Each officer may delegate
to any other officer and to any official, employee or agent of
the corporation, such portions of his powers as he shall deem
appropriate, subject to such limitations and expirations as he
shall specified, and may revoke such delegation at any time.
ARTICLE VII
Contracts , Checks and Notes
Unless the Board of Directors shall otherwise specifically
direct, all contracts, checks, drafts! bills of exchange and
promissory notes and other negotiable instruments of the
corporation shall be executed in the name of the Corporation by
the Chairman of the Board. the President. a Vice President,
Secretary or Treasurer or any officer as may be designated by the
Board of Directors
ARTICLE VIII
Capital Stock
Section 1. Certificates of Stock. The certificates for
shares of the stock of the corporation shall be in such form, not
inconsistent with the Certificate of Incorporation, as shall be
prepared or approved by the Board of Directors, Every holder of
stock in the Corporation shall be entitled to have a certificate
signed by, or in the name of the Corporation by the Chairman of
the Board if chief executive officer), the President or a vice
President, and by the Treasurer or the Secretary certifying the
number of shares owned by him and the date of issue, and no
certificate shall be valid unless so signed. All certificates
shall be consecutively numbered and shall be entered in the books
of the corporation as they are issued.
All signatures on the certificates may be facsimile. In case
any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
Section 2. Transfer of Stock. Upon surrender to the
Corporation or the transfer agent of the Corporation of a
certificate for shares endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, the
Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction
upon its books.
Section 3. Registered Stockholders. The Corporation shall be
entitled to treat the holder of record of any share or shares of
stock as the holder in fact thereof and, accordingly shall not
be bound to recognize any equitable or other claim to, or
interest in, such share or shares on the part of any other
person, whether or not it shall have express or other notice
thereto, save as expressly provided by the laws of the State of
Delaware.
Section 4. Lost Certificates Any person claiming a
certificate of stock to be lost or destroyed shall make an
affidavit or affirmation of the fact and advertise the same in
such manner as the Board of Directors may require, and the Board
of Directors. in its discretion, may require the owner of the
lost or destroyed certificate, or his legal representative. to
give the Corporation a bond in a sum sufficient in the opinion.
of the Board of Directors, to indemnify the Corporation against
any claim that may be made against. it on account of the alleged
loss of any such certificate. A new certificate of the same
tenor and for the same number of shares as the one alleged to be
lost or destroyed may be issued without requiring any bond when,
in the judgment of the Directors, it is proper so to do.
Section 5. Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a
meeting, or to receive payment of any dividend or other
distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock
or for or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a record date. which shall not
be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any
other action. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of tile meeting, provided, however, that the
Board of Directors may fix a new record date for the adjourned
meeting.
ARTICLE IX
Dividends
Dividends upon the common stock of the Corporation may be
declared by the Board of Directors at any regular or special
meeting. pursuant to law. Dividends may be paid in cash, in
property, or in shares of the common stock of the Corporation,
subject to the provisions of the Certificate of Incorporation.
Before payment of any dividend, there may be set aside out
of any funds of the Corporation available for dividends such
sums as the Directors from time to time, in their absolute
discretion think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other
purpose as the Directors shall think conducive to the interest to
the Corporation, and the Directors may modify; or abolish any
such reserve in the manner in which it was created.
ARTICLE X
Waiver of Notice
Whenever any notice whatever is required to be given by
statute or under the provision, of the Certificate of
Incorporation or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be equivalent
thereto, unless expressly provided otherwise in such statute,
Certificate of Incorporation or these By-Laws
ARTICLE XI
Seal
The corporate seal of the Corporation shall have inscribed
thereon the name of the Corporation the year of its organization
and the words "Corporate Seal, Delaware", or shall be in such
other form as the Board of Directors may prescribe
ARTICLE XII
Fiscal Year
The fiscal year of the Corporation shall be the calendar year,
ARTICLE XIII
Indemnification, Advancement of Expenses,
Insurance and Other Funding Arrangements
Section I Mandatory Indemnification - Third Party Actions.
The Corporation shall indemnify any person who was or is a
party, or is threatened to be made a party to any threatened,
pending or completed action suit or proceeding ("Action"),
whether civil, criminal, administrative or investigative (other
than an Action by or in the name of the Corporation) by reason
of the fact that he is or was a Director, officer or employee of
the Corporation, or is or was serving at the request of the
Corporation as a Director, officer or employee of another
corporation, partnership joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgments. fines and amounts and in settlement actually and
reasonably incurred by him in connection with such Action if he
acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Corporation, and,
with respect to criminal Action, had no reasonable cause to
believe his conduct was unlawful. The termination of any Action
by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent. shall not, of itself, create
a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interest of the Corporation, and, with respect to ally
criminal Action, had reasonable cause to believe that his
conduct was unlawful, The right to indemnification under this
Section I of Article XIII shall be a contract right that may be
enforced in any lawful manner by a person entitled to such
indemnification.
Section 2. Mandatory Indemnification - Derivative, ,Actions.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending
or completed .action by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is
or was a Director, officer, or employee of the Corporation, or
is or was serving at the request of the Corporation as a
Director, officer; or employee of another corporation.
partnership, joint venture, trust or other enterprise, against
expenses (including, attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of
such Action if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Corporation and except that no indemnification.
under these By-Laws shall be made in respect of any claim issue
or matter as to which such person shall have been adjudged to be
liable to the Corporation, unless and only to the extent that the
(Court of Chancery of the State of Delaware or the court in which
such Action was brought, shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of
Chancery of the State of Delaware or such other court shall deem
proper. The right to indemnification under this Section 2 of
Article XII shall be a contract right that may be enforced in any
lawful manner by a person entitled to such indemnification.
Section 2. Mandatory Indemnification - Successful Party. To
the extent that a Director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in
defense of any Action referred to in Sections 1 or 2 of this
Article in or in defense of any claim issue or matter therein,
he shall be indemnified against expenses including attorneys'
fees, actually and reasonably incurred by him in connection
therewith. The right to indemnification under this Section 3 of
Article XIII shall be a contract right that may be enforced in
any lawful manner by a person entitled to such indemnification.
Section 4. Permissive Indemnification. Except as otherwise
expressly provided in Section 2 of this Article XIII the
Corporation ;may also indemnify any; person who is or was a
party or is threatened to be made a party to any Action by reason
of the fact that he is or was a Director, officer, employee or
agent of the Corporation is or was serving at the request of the
Corporation as a Director, officer, employee or agent of any
other corporation, partnership, joint venture trust or other
enterprise, against all or part of any expenses including
attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
Action if it shall be determined in accordance with the
applicable procedures set forth in Section 5 that such person is
fairly and reasonably entitled to such indemnification.
Section 5. Permissive Indemnification.. Any indemnification
under the foregoing provisions of this Article XIII (unless
ordered in a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that
indemnification of the Director, officer; employee or agent is
proper in the circumstances because he has met the applicable
standards of conduct set forth in Sections 1 or 2, or is entitled
to indemnification under Section 4. of this Article XIII. Such
determination shall be made (i) by the Board of Directors by a
majority vote of a quorum, as defined in the Certificate of
Incorporation or these By-Laws. consisting of Directors who are
not or were not parties to any pending or completed Action
giving rise to the proposed indemnification, or (ii) if such a
quorum is not obtainable or, even if obtainable, a quorum of
disinterested Directors so directs, by independent legal counsel
in a written opinion, or (iii) by the stockholders.
Section 6 Advance Payments. Expenses including attorneys'
fees) incurred or reasonably expected to be incurred by a
Director or officer of the Corporation in defending any Action
referred to in Sections 1 or 2 of this Article XIII shall be paid
by the Corporation in advance of the final determination whereof
upon receipt by, the Corporation of his written request therefor
and his written promise to repay such amount if it shall
ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized or required by this
Article XIII. The right of Directors or officers to advancement
of expenses under this Section 6 of Article XIII shall be a
contract light that may be enforced in any lawful manner by a
Director or officer of the Corporation. Such expenses incurred
by other employees and agents may be paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.
Section 7. Provisions Not Exclusive. The indemnification and
advancement of expenses provided by, or granted pursuant to, this
Article shall not be deemed exclusive of any other rights to
which any person. seeking indemnification and advancement of
expenses, may be entitled under any law, by-law, agreement, vote
of stockholders or disinterested Directors or otherwise, both as
to action in his official capacity and as to action in another
capacity while holding such office, and shall continue as to a
person who has ceased to be a Director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 8. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a
Director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a Director,
officer employee, or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the
Corporation would have the powe to indemnify him against such
liability under the provisions of this Article XIII.
Section 9. Other Arrangements The Corporation also may
obtain a letter of credit, act as a self-insurer, create a
reserve, trust, escrow, cash collateral or other fund or
account, enter into indemnification agreements, pledge or grant
security interest in any assets or properties of the
Corporation, or use any other mechanism or arrangement
whatsoever in such amounts, at such costs, and upon such other
terms and conditions as the Board of Directors shall deem
appropriate for the protection of any or all such persons.
Section 10. .Severability. If this Article XIII or any
portion hereof shall be invalidated on any ground by any court
of competent jurisdiction then the Corporation shall
nevertheless indemnify each parson as to whom the Corporation has
agreed to grant indemnity as to liabilities and expenses, and
amounts paid or to be paid in settlement with respect to any
proceeding, including an action by or in the right of the
Corporation, to the full extent permitted by any applicable
portion of this Article XIII that shall not have been
invalidated any to the full extent permitted by applicable law.
Section 11. Miscellaneous. (a) For the purposes of this Article
XIII, references to "the Corporation" include all; constituent
corporations absorbed in a consolidation or merger, as well as
the resulting or surviving corporation, so that any person who
is or was a Director, officer, employee or agent of such a
constituent corporation or is or was serving at the request of
such constituent corporation as a Director, officer, employee or
agent of another corporation partnership, joint venture, trust or
other enterprise, shall stand in the same position under the
provisions of this Article XIII with .respect to the resulting or
surviving corporation as he would if he had served the resulting
or surviving corporation in the same capacity.
(b) For purposes of this Article XIII, references to "other
enterprises" shall include employee benefit plans, references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving
at the request of the Corporation" shall include any services as
a Director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such Director,
officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries, and a person who acted
in good faith in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to
in this Article XIII.
(c) The indemnification and advancement of expenses provided
by or granted pursuant to, this Article XIII shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Director, officer. employee or
agent and shall inure to the benefit of the heirs, executors and
administrators of such person.
Article XIV
General Provisions
Section 1. The Chairman of the Board, the President, any
Vice President or the Treasurer of the Corporation may attend
any meeting of the holders of stock or other securities of any
other corporation, any of whose stock or other securities are
held by the Corporation, and cast the votes which the
Corporation is entitled to cast as a stockholder or otherwise at
such meeting, or may consent in writing to any action by any such
corporation, and may execute on behalf of the Corporation and
under its corporate seal, or otherwise. such written proxies,
consents, waivers or other instruments as he may deem necessary
or appropriate. Any of the foregoing acts or functions may also
be performed by any one or more of such persons as shall from
time to time be authorized by the Board of Directors or by a
writing executed by the chief executive officer of the
Corporation.
Section 2. The moneys of the Corporation shall be deposited
in the name of the Corporation in such bank or banks or trust
company or trust companies as the Board of Directors shall from
time to time designate, and shall be drawn out only by signed
checks or by telephonic or other electronic advice given and
subsequently confirmed by means which the bank or trust company
may require, by persons designated in a resolution or
resolutions of the Board of Directors or by such other persons
designated by a writing executed by persons authorized to so
designate in a resolution or resolutions of the Board of
Directors.
Section 3. Notices to Directors and stockholders shall be in
writing and delivered personally or mailed to the Directors or
stockholders at their addresses appearing on the books of the
Corporation, notice by mail shall be deemed to be given at the
time when the same shall be mailed. Notice to Directors may also
be given by telegraph, and any such notice shall be deemed to be
given when delivered to an office of the transmitting company
with all charges prepaid
Section 4. Alterations, amendments or repeals of these
By-Laws, or any of them, may be made by a majority of the
stockholders entitled to vote at any meeting thereof, if the
notice of such meeting contains a statement of the proposed
alteration, amendment or repeal, or by the Board of Directors by
a majority vote of the whole Board of Directors at any meeting
thereof, provided notice of such alteration, amendment or repeal
has been given to each Director in writing. No notice of any
alteration, amendment; or repeal need be given if adopted by
action taken at a meeting duly held on waiver of notice.
[Letterhead Entergy Power Marketing Corp.]
May 13, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Entergy Power Marketing Corp.
Ladies and Gentlemen:
Entergy Corporation, a Delaware corporation ("Entergy"), a
registered holding company under the Public Utility Holding
Company Act of 1935, as amended (the "Act"), proposes to finance
a subsidiary, Entergy Power Marketing Corp. ("EPMC"), a Delaware
corporation, which will engage in a variety of power brokering
and marketing transactions, including traditional wholesale bulk
power transactions as well as the provision of innovative value-
added financial products and services designed to meet the
evolving needs of customers in competitive markets. EPMC seeks
authority, to the extent necessary, to engage in such
transactions. Entergy's investment in EPMC will constitute
EPMC's total capitalization. Entergy seeks authority to
capitalize EPMC in an amount up to $20 million and to provide up
to $150 million in credit support, i.e. guarantees or other
similar commitments, to EPMC.
This opinion letter is in reference to the actions to be
taken by EPMC. In this connection, and in accordance with the
requirements of Exhibit F to Form U-1, I have examined the
Certificate of Incorporation of EPMC, the bylaws of EPMC, each as
amended, and such other documents, certificates and corporate
records, and such matters of law as I have deemed necessary for
the purpose of rendering this opinion. Based upon the foregoing,
I am of the opinion that:
1. EPMC is a corporation validly organized and existing under
the laws of the State of Delaware.
2. All actions necessary to make valid Entergy's investment in
EPMC and provision of credit support for EPMC and EPMC's
participation in the power brokering and marketing transactions
described in the Application-Declaration 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;
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 Entergy and of EPMC with
respect to the proposed transactions.
3. When the foregoing steps have been taken and assuming that
the proposed transaction is consummated in accordance with the
Application-Declaration and related orders of the Commission,
a. EPMC will have complied with all state laws applicable
to the proposed transactions;
b. Entergy will legally acquire the common stock of EPMC;
EPMC's common stock will be validly issued, fully paid and
nonassessable; and Entergy will be entitled to the rights
and privileges appertaining thereto set forth in EPMC's
Articles of Incorporation;
c. The consummation of the proposed transactions will not
violate the rights of the holders of any securities issued
by EPMC or any associate company thereof.
I consent to the filing of this opinion as an exhibit to the
Application-Declaration.
Very truly yours,
/s/Fredrick F. Nugent
Frederick F. Nugent
General Counsel
Entergy Power Marketing Corp.
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
CERTIFICATION
I hereby certify that the attached 14 pages are true and correct copies of
a document on file with the Commission.
May 7, 1996
Date Custodian
I hereby certify that the Custodian, or his designee, which signature
appears above, is the official custodian of the records of the Federal
Energy Regulatory Commission which certification is made and was such
official custodian at the time of executing the above certification.
Lois A. Cashell, Secretary
<PAGE>
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Elizabeth Anne Moler, Chair;
Vicky A. Bailey, James J. Hoecker,
William L. Massey, and Donald F. Santa, Jr.
Entergy Services, Inc- ) Docket Nos. ER96-586-000
) ER95-112-001, and
) ER95-1001-000
Entergy Power Marketing Corp. ) Docket No. ER95-1615-000
ORDER ACCEPTING FOR FILING AND SUSPENDING
PROPOSED TRANSMISSION TARIFFS (AS MODIFIED),
ESTABLISHING HEARING PROCEDURES, ACCEPTING FOR FILING
(WITHOUT SUSPENSION OR HEARING) COMPLIANCE FILING,
CONDITIONALLY ACCEPTING FOR FILING MARKET-BASED RATES,
AND GRANTING WAIVERS AND AUTHORIZATIONS
(Issued February 14, 1996)
Entergy Services, Inc. (Entergy), on behalf of certain of its public
utility associates<FN1>, has filed in Docket No. ER96-586-000 revised open
access point-to-point and network transmission tariffs. Entergy explains
that the proposed tariffs are intended to revise the terms and conditions
of the (previously-accepted) tariffs which are the subject of an ongoing
hearing in Docket No. ER95-112-000 and to make them consistent with the pro
forma tariffs in the Commission's Open Access NOPR proceeding<FN2>.
In this order, as explained below, we will accept for filing and suspend
Entergy's revised transmission tariffs, as modified in one respect, and
make them effective subject to refund and (as to non-rate terms and
conditions) subject to the outcome of the final rule in the Open Access
NOPR proceeding. We will set the proposed tariff rates for hearing. In
addition, we will accept for filing, without suspension or hearing, the
compliance filing made by Entergy in Docket No. ER95-112-001 and consider
the related informational filing it made in Docket No. ER95-1001-000.
Finally, as explained below, we will conditionally accept for filing,
without suspension or hearing, the application by Entergy Power Marketing
Corp. (Entergy Marketing), Entergy's power marketer associate, filed in
Docket No. ER95-1615-000 for authorization to sell power at market-based
rates. In addition, we will conditionally grant certain requested waivers
and authorizations.
Backqround
A. Related Proceedings
In Docket No. ER91-569-000, the Commission authorized Entergy and its
associate, Entergy Power, Inc., to sell power at market-based rates. See
Entergy Services, Inc., 58 FERC Paragraph 61,234, reh'g denied, 60 FERC
paragraph 61,168 (1992). To meet the Commission's then-effective
requirements concerning transmission market power, Entergy filed a tariff
offering point-to-point transmission service. On appeal, the reviewing
court remanded certain issues to the Commission, including the impact of
stranded cost recovery on competition. See Cajun Electric Power
Cooperative Inc. v. FERC (Caiun), 28 F.3d 173 (D.C. Cir. 1994).
In Docket No. ER95-112-000, Entergy filed revised tariffs that were
intended to meet the Commission's current standards for open access
transmission tariffs, including network transmission service in addition to
point-to-point service, as well as to address issues the court had
identified in Cajun. The revised tariffs incorporate formula rates; among
other things, Entergy proposed that it would make informational filings
implementing the annual formula updates. In Entergy Services, Inc., et
al., 70 FERC paragraph 61,006 (1995), reh'g pendinq, the Commission set the
revised tariffs for hearing, but summarily directed Entergy to revise the
tariffs in certain respects, e.q., to eliminate a variable equity return.
B. Compliance Filinq/Informational Filinq
Entergy has made a compliance filing in Docket No. ER95-112-001 which
eliminates the variable equity return and adopts a stated return on equity
of 11% as directed by the Commission's order. Entergy also has made its
first annual informational filing in Docket No. ER95-1001-000.
C. Revised Transmission Tariffs
Entergy has filed revised transmission tariffs in Docket No.
ER96-586-000. The stated purpose of the filing is to make the tariffs
consistent with the terms and conditions of the pro forma tariffs in the
Open Access NOPR so that, under the Commission's recent guidance orders on
this subject,<FN3> there would be no need for a refund condition for
market-based rates. The tariffs adopt the same rates currently under
investigation in Docket No. ER95-112-000. Entergy requests that the
tariffs be made effective December 13, 1995, the date of the filing, and
the rates be made subject to the outcome of Docket No. ER95-112-000.<FN4>
D. Market-Based Sales Rates
Finally, Entergy Marketing has filed in Docket No. ER95-1615-000 an
application to transact as a power marketer at market-based rates. Entergy
Marketing explains that it satisfies all of the Commission's requirements
for market-based rate authorization (explained below), and that it seeks
the same waivers and authorizations as those afforded other power
marketers.
E. Notices. Interventions and Responsive Pleadinqs
Notice of Entergy's filing of revised transmission tariffs in Docket
No. ER96-586-000 was published in the Federal Register, 61 Fed. Reg. 409
(1996), with comments, protests and motions to intervene due on or before
January 12, 1996.<FN5>
The following entities filed the following pleadings in Docket No.
ER96-586-000 in response to Entergy's revised tariff filing: Sam Rayburn
Municipal Power Agency, motion to intervene; Northeast Texas Electric
Cooperative, Inc., motion to intervene and motion to consolidate; Cities of
Campbell and Thayer, Missouri, motion to intervene; Council of the City of
New Orleans, notice of intervention; Cities of Benton, North Little Rock,
Osceola, and Prescott, Arkansas, the Conway Corporation, the West Memphis
Utilities Commission and the Farmers Electric Cooperative Corporation
(Arkansas Cities and Cooperative), joint motion to intervene, request for
hearing, and motion for consolidation; Arkansas Electric Cooperative
Corporation (AECC), motion to intervene; Arkansas Public Service
Commission, notice of intervention; Ralph R. Mabey, Chapter 11 Trustee for
Cajun Electric Power Cooperative, Inc. (Cajun), motion to intervene and
protest; Electric Clearinghouse, Inc. (Electric Clearinghouse), motion to
intervene and comments; Municipal Energy Agency of Mississippi, the
Lafayette Utilities System and the Lafayette Public Power Authority
(Lafayette), joint motion to intervene, protest and motion for summary
disposition; Occidental Chemical Corporation (Occidental), motion to
intervene; Southwestern Electric Power Agency, motion to intervene; and
South Mississippi Electric Power Association (South Mississippi), motion to
intervene and protest.
Entergy subsequently filed answers to various motions to intervene,
motions to consolidate, and motions for summary disposition. (To the
extent the parties raise issues that require resolution in this order, we
discuss such matters below.)
Notice of Entergy's informational filing in Docket No. ER95-1001-000
was published in the Federal Register, 60 Fed. Reg. 27,500 (1995), with
comments, protests, and motions to intervene due on or before May 31, 1995.
The following entities filed the following pleadings in Docket No.
ER95-1001-000 in response to Entergy's informational filing: Arkansas
Public Service Commission, notice of intervention; Arkansas Cities and
Cooperative, joint motion to intervene; Noram Energy Services, Inc., motion
to intervene; South Mississippi, motion to intervene, protest, motion for
summary disposition and motion to consolidate; and Electric Clearinghouse,
late motion to intervene. Entergy subsequently filed in Docket No.
ER95-1001-000 an answer to the intervenors protests and requests for
summary action.
Notice of Entergy's compliance filing in Docket No. ER95-112-001 was
published in the Federal Register, 60 Fed. Reg. 8352 (1995), with comments,
protest, and motions to intervene due on or before February 21, 1995.
Cajun filed comments on the compliance filing, and South Mississippi filed
a protest.
Finally, notice of Entergy Marketing's application in Docket No.
ER95-1615-000 for market-based rates was published in the Federal Register,
60 Fed. Reg. 46,272 (1995), with comments, protests, and motions to
intervene due on or before September 14, l995. Southwestern Electric Power
Company (Southwestern) filed a late motion to intervene, raising no
substantive issues.
Discussion
Pursuant to Rule 214 of the Commission's Rule of Practice and
Procedure, 18 C.F.R. Section 385.214 (1995), the notices of intervention
and the timely, unopposed motions to intervene serve to make the movants
parties to the respective proceedings in which they intervened. We will
grant the untimely, unopposed motions to intervene of Southwestern in
Docket No. ER95-1615-000 and of Electric Clearinghouse in Docket No.
ER95-1001-000, given the interests the movants represent and the absence of
any prejudice or delay. Further, we will consider Entergy's responsive
pleadings to the extent they do not represent impermissible answers to
protests or to other answers; we do not see good cause to waive this
general rule. See 18 C.F.R. Section 385.213(a)(2) (1995).
A. Docket No. ER96-586-000 -- Transmission Tariffs
Entergy has generally modelled its open access transmission tariffs
after the terms and conditions of the pro forma tariffs in the Open Access
NOPR. As noted above, the transmission tariffs adopt the same rates as
those currently under investigation in Docket No. ER95-112-000.
l. Transmission Tariff Terms and Conditions
Arkansas Cities and Cooperative concedes that Entergy's adoption of
the pro forma tariffs eliminates the existing tariff restrictions on when
Entergy will provide certain ancillary services and when customers can
obtain them elsewhere. Arkansas Cities and Cooperative complains, however,
that Entergy has not resubmitted a revised network operating agreement
(NOA) and that the existing NOA at issue in Docket No. ER95-112-000
includes such restrictions. Arkansas Cities and Cooperative argues that,
if Entergy's restrictions on ancillary services are continued, Entergy's
filing does not mitigate its transmission market power. Arkansas Cities
and Cooperative asks that the Commission direct Entergy to revise the
existing NOA because it is claimed to be inconsistent with the revised
tariffs.
Arkansas Cities and Cooperative also asks that the Commission allow
intervenors to explore at hearing the terms and conditions under which
Entergy would allow existing customers to terminate existing wholesale
power service arrangements and to begin service under the transmission
tariffs. Alternatively, Arkansas Cities and Cooperatives asks the
Commission to initiate a hearing on competitive issues as contemplated by
the court remand in Cajun.
Consistent with our recent guidance orders on this subject (see supra
note 3), we will resolve non-rate terms and conditions on a generic basis
in the Open Access NOPR proceeding. All nonrate terms and conditions of
Entergy's revised transmission tariffs will remain subject to the outcome
of the Open Access NOPR proceeding. If the parties wish to litigate any
case-specific issues after we have issued a final rule in the Open Access
NOPR proceeding, the parties may raise them at that time.
2. Transmission Tariff Rates
Intervenors request summary disposition of the proposed pricing in the
revised network tariff to the extent it permits the sum of a rate
reflecting average system costs and incremental opportunity costs. They
contend that Entergy's position is that the Commission's established
prohibition on duplicative "and" pricing applies only to point-to-point
service, not to network service.
We will grant this request for summary disposition. Nothing in our
Transmission Pricing Policy Statement or orders on this subject supports
Entergy's position that postage stamp "and" pricing is prohibited only for
point-to-point service and is permitted for network transmission service.<FN6>
We will direct Entergy to revise its tariffs to eliminate any provisions
permitting "and" pricing for network service.
Lafayette, among other intervenors, requests summary disposition with
respect to Entergy's failure to include specific tariff provisions
providing credits for customer-owned transmission facilities. Lafayette
complains that, under the standards recently applied by the Commission in
Florida Municipal Power Agency v. Florida Power & Liqht Company, 74 FERC
paragraph 61,006 (1996), reh'g pendinq, its facilities are eligible for
credit. Lafayette contends that, unless the Commission resolves this issue
summarily, it will be foreclosed from competing with Entergy because the
cost of transmission otherwise would be too expensive.
As an alternative to its preferred resolution of the crediting issue,
Lafayette asks that the Commission direct Entergy to revise the rate in an
existing power sales agreement. Lafayette explains that it purchases
nonfirm power from Entergy under a rate that recovers both production and
transmission costs. Lafayette contends that Entergy intends to assess a
separate tariff transmission charge for that power, thereby charging
Lafayette for transmission twice. Lafayette asks that the Commission
direct Entergy to reduce the power sales rate so that it will only pay one
transmission charge.
We will deny Lafayette's request for summary disposition. Lafayette's
request to revise the rate in an existing power sale agreement is premature
because Entergy has not proposed a separate charge and is beyond the scope
of this proceeding. If Entergy assesses a separate charge, Lafayette can
raise its concerns at that time. Also, intervenors' concern that, absent a
credit for customer-owned transmission facilities, transmission service
will be too expensive provides no basis to direct credits at this time.
The appropriate level of credit, if any, for a particular customer must be
based on the facts presented. Here, the intervenors have presented no
facts in their pleadings that support summary disposition in their favor.
Entergy's proposed tariff rates employ the same methodology as that
reflected in its rates filed in Docket No. ER95-112-000. Our preliminary
examination of Entergy's proposed tariff rates in Docket No. ER96-586-000
indicates that the proposed rates (as modified above) have not been shown
to be just and reasonable and may be unjust, unreasonable, unduly
discriminatory or preferential, or otherwise unlawful. Accordingly, we will
accept the tariff rates (as modified) for filing, suspend them for a
nominal period and set them for hearing, subject to refund.
Because Entergy's new filing involves the same rate issues as those
set for hearing in Docket No. ER95-112-000, we will consolidate Docket Nos.
ER96-586-000 and ER95-112-000 for purposes of hearing and decision. We
leave to the presiding administrative law judge the discretion how best to
accommodate consolidation. Finally, we will grant waiver of the prior
notice requirement to allow the revised tariffs to become effective
December 13, 1995, because the revised tariffs adopt improved terms and
conditions over the existing tariffs. <FN7>
B. Docket Nos. ER95-112-001 and ER95-1001-000 -- Compliance
Filinq/Informational Filinq
In Docket No. ER95-112-001 (compliance filing proceeding), intervenors
complain that both the tariffs at issue in Docket No. ER95-112-000 and the
compliance tariffs reflect prohibited "and" pricing for network
transmission service. As explained above, we are ordering Entergy to
eliminate "and" pricing from the revised tariffs. With this modification,
we will accept for filing the compliance filing.
In Docket No. ER95-1001-000 (informational filing proceeding),
intervenors complain that the worksheets submitted in support of the
informational filing fail to reflect one of the compliance revisions filed
in Docket No. ER95-112-001, i.e., the elimination of the variable return on
equity. Entergy responds that this was an oversight, notes that it
properly computed the revised rates using the stated 11% return on equity
under investigation in Docket No. ER95-112-000, and agrees to revise the
worksheets in its next informational filing. This response resolves the
intervenors' concerns.
C. Docket No. ER95-1615-000 -- Market-Based Sales Rates
In Heartland Energy Services, Inc., 68 FERC paragraph 61,223 (1994)
(Heartland), and other cases, we have explained the general standards under
which we review applications to sell at market-based rates. To obtain
market-based rate authorization, the seller (and each of its associates)
must not have, or must have mitigated, market power in generation and
transmission and not control other barriers to entry. In order for its
associate to demonstrate the requisite absence or mitigation of market
power, the transmission-owning public utility must have on file with the
Commission an open access transmission tariff for the provision of
comparable services.<FN8> In addition, the Commission considers whether there
is evidence of associate abuse or reciprocal dealing.
Entergy Marketing states that it meets the standards for market-based
rate authorization. Entergy Marketing cites Entergy's most recent market
analysis to demonstrate that its filing meets the Commission's requirements
for market-based rate authorization.<FN9> In support, Entergy Marketing states
that it does not own or control any generating resources in the United
States other than an indirect ownership interest in a cogeneration
facility.<FN10> Entergy Marketing also states that it has filed a code of
conduct governing transactions between the power marketer and its
franchised utility associates. It adds that the open access transmission
tariffs filed by Entergy meet all of the requirements of the Open Access
NOPR and the Commission's recent guidance orders on this subject.
As explained below, we find that Entergy Marketing meets the
requirements for approval of its market-based rate application.
1. Generation Market Power
We agree with Entergy Marketing that, as demonstrated in Entergy's
most recent market power analysis, Entergy Marketing lacks dominance in
generation.
2. Transmission Market Power
Earlier in this order, we accept for filing, suspend and (as to rate
issues) set for hearing revised open access transmission tariffs proposed
by Entergy in Docket No. ER96-586-000. We find that, as revised February
2, 1996, the non-rate terms and conditions of Entergy's revised open access
transmission tariffs are consistent with the pro forma tariffs attached to
the Open Access NOPR, and serve to mitigate its transmission market power.
For this reason, and consistent with our recent guidance on this subject
(see AEP, 72 FERC at 62,237), we find that Entergy Marketing's application
meets the Commission's transmission market power requirements.
3. Affiliate Abuse/Other Barriers to Entry
As required by Heartland, Entergy Marketing has developed a code of
conduct which explicitly prohibits the private communication of competitive
information to its parent or associates. The code requires Entergy
Marketing to obtain transmission services from Entergy on a
nondiscriminatory basis under the open access tariffs. In addition,
Entergy Marketing has agreed not to sell power to, or purchase power from,
other Entergy associates except pursuant to a separate Commission-approved
rate schedule under Section 205 of the Federal Power Act (FPA), 16 U.S.C.
Section 824d (1994).<FN11>
Consistent with a recent order on this subject,<FN12> we will condition our
approval of Entergy Marketing's market-based rate application on Entergy
Marketing's agreement to obtain any non-power goods and services from
Entergy at the higher of cost or market value. For the same reason, we
condition our approval on Entergy Marketing's (and its associates')
agreement not to sell any non-power goods and services to Entergy at a
price above market value. Further, Entergy Marketing's commitment not to
share market information with Entergy is not complete; Entergy itself must
commit to share market information with its associates only if the same
information also is made publicly available to non-associates
simultaneously.
We direct Entergy Marketing to revise its code of conduct accordingly.
With these conditions, we find that associate abuse or reciprocal dealing
issues are not of concern here. Further, we see no evidence to suggest
that Entergy Marketing or any of its associates controls other barriers to
entry.
4. Waivers Authorizations and Reportinq Requirements
Entergy Marketing has requested the following authorizations and
waivers of various Commission regulations consistent with those granted
other power marketers: (1) Subparts B and C of Part 35, except Sections
35.12(a), 35.13(b), 35.15 and 35.16; (2) Parts 41, 101 and 141; (3)
abbreviated filings with respect to interlocking directorships under Part
45; and (4) blanket authorization for issuances of securities or
assumptions of liabilities pursuant to section 204 of the FPA. Conditioned
on the requirements discussed in section C.3. above (concerning affiliate
abuse), we will grant such authorizations and waivers to the extent granted
to other power marketers.<FN13>
Consistent with previous Commission decisions, we will require Entergy
Marketing to file quarterly reports. As we previously have explained, the
requirement that marketers file quarterly reports detailing the purchase
and sale transactions undertaken in the prior quarter is necessary to
ensure that contracts relating to rates and services are on file as
required by sectlon 205(c) of the FPA, 16 U.S.C. Section 824d(c) (1994),
and to allow the Commission to evaluate the reasonableness of the charges
and to provide for ongoing monitoring of the marketer's ability to exercise
market power.<FN14>
We also will direct Entergy Marketing to inform the Commission
promptly of any change in status that would reflect a departure from the
characteristics the Commission has relied upon in approving market-based
pricing. These include, but are not limited to: (1) ownership of
generation or transmission facilities or inputs to electric power
production other than fuel supplies; or (2) affiliation with any entity not
disclosed in the instant filing that owns generation or transmission
facilities or inputs to electric power production, or affiliation with any
entity that has a franchised service area.<FN15> Alternatively, we will allow
Entergy Marketing the option of filing a new market analysis every three
years.<FN16>
The Commission orders:
(A) The untimely, unopposed motions to intervene of Southwestern in
Docket No. ER95-1615-000 and of Electric Clearinghouse in Docket No.
ER95-1001-000 are hereby granted.
(B) Entergy is hereby directed to revise its compliance filing in
Docket No. ER95-112-001 and the revised transmission tariffs in Docket No.
ER96-586-000 to eliminate "and" pricing, as discussed in the body of this
order, within 15 days of the date of issuance of this order. At the same
time, Entergy is hereby directed to file revised rate sheets reflecting the
February 2, 1996 amendment to its tariff filing in Docket No. ER96-586-000.
(C) All other requests for summary disposition are hereby denied, as
discussed in the body of order.
(D) Entergy's proposed open-access transmission tariffs filed in
Docket No. ER96-586-000 (as modified in Ordering Paragraph (B) above) are
hereby accepted for filing and suspended for a nominal period, to become
effective December 13, l995, subject to refund and (as to non-rate terms
and conditions) subject to the outcome of the Open Access NOPR proceeding.
(E) Pursuant to the authority contained in and subject to the
jurisdiction conferred upon the Federal Energy Regulatory Commission by
section 402(a) of the Department of Energy Organization Act and the Federal
Power Act, particularly sections 205 and 206 thereof, and pursuant to the
Commission's Rules of Practice and Procedure and the regulations under the
Federal Power Act (18 C.F.R. Chapter I), a public hearing shall be held in
Docket No. ER96-586-000 concerning the justness and reasonableness of
Entergy's proposed rates for transmission service, as discussed in the body
of this order.
(F) Docket No. ER96-586-000 is hereby consolidated with Docket No.
ER95-112-000 for purposes of hearing and decision.
(G) The administrative law judge designated to preside in Docket No.
ER95-112-000 shall determine procedures best suited to accommodate
consolidation of Docket No. ER96-586-000 with the pending proceeding in
Docket No. ER95-112-000.
(H) Entergy's compliance filing in Docket No. ER95-112-001, as
modified in Ordering Paragraph (B) above, is hereby accepted for filing.
(I) Within 15 days of the date of this order, Entergy Marketing is
hereby directed to revise its code of conduct, as discussed in the body of
this order.
(J) Entergy Marketing's proposed market-based rates application in
Docket No. ER95-1615-000 is hereby accepted for filing, to become effective
December 13, 1995 (the date the revised tariffs become effective), without
suspension or hearing, subject to Entergy's Marketing's acceptance of the
waivers, authorizations, and conditions agreed to in its filing and those
ordered herein.
(K) As discussed in the body of this order, Entergy Marketing's
request for waiver of Parts 41, 101 and 141 of the Commission's regulations
is hereby granted.
(L) Within 30 days of the date of this order, any person desiring to
be heard or to protest the Commission's blanket approval of issuances of
securities or assumptions of liabilities by Entergy Marketing should file a
motion to intervene or protest with the Federal Energy Regulatory
Commission, 888 First Street, N.E., Washington, D.C. 20426, in accordance
with Rules 211 and 214 of the Commission's Rules of Practice and Procedure,
18 C.F.R. Section 385.211 and 385.214 (1995).
(M) Absent a request to be heard within the period set forth in
ordering paragraph (L) above, Entergy Marketing is hereby authorized,
pursuant to section 204 of the FPA, to issue securities and assume
obligations and liabilities as guarantor, endorser, surety, or otherwise in
respect of any security of another person; provided that such issue or
assumption is for some lawful object within the corporate purposes of
Entergy Marketing, compatible with the public interest, and reasonably
necessary or appropriate for such purposes.
(N) Until further order of this Commission, the full requirements of
Part 45 of the Commission's regulations, except as noted, are hereby waived
with respect to any person now holding or who may hold an otherwise
prescribed interlocking directorship involving Entergy Marketing. Any such
person instead shall file a sworn application providing the following
information:
(1) full name and business address; and
(2) all jurisdictional interlocks, identifying the affected companies
and the positions held by that person.
(O) The Commission reserves the right to modify this order to require
a further showing that neither public nor private interests will be
adversely affected by continued Commission approval of Entergy Marketing's
issuances of securities or assumptions of liabilities, or by the continued
holding of any affected interlocks.
(P) The provisions of subparts B and C of Part 35 of the Commission's
regulations, with the exception of sections 35.12(a), 35.13(b), 35.15 and
35.16, are hereby waived in Docket No. ER95-1615-000. As for those
sections, waiver is hereby denied.
(Q) Entergy Marketing is hereby directed to submit quarterly
informational filings as discussed in the body of this order. The first
quarterly report of transactions will be due within 30 days of the calendar
quarter ending March 31, 1996.
(R) Entergy and Entergy Marketing are hereby informed of the rate
schedule designations shown on Attachment A to this order.
By the Commission.
( S E A L )
/s/ Lois D. Cashell
Lois D. Cashell,
Secretary
<PAGE>
Attachment A
Rate Schedule Designations
Entergy Operatinq Companies:
Description/
Designation Effective Date
Docket No. ER95-112-001
(1)First Revised Sheet No. 53 Adopts a stated 11%
Under FERC Electric Tariff, return on equity
First Revised Volume No. 1 formula rate
(Replaces Original Sheet No. 53) component/ January 9, 1995
(2) First Revised Sheet Nos. 62, 68 Adopts a stated 11%
and 79 Under FERC Electric Tariff, return on equity
First Revised Volume No. 2 formula rate
(Replaces Original Sheet Nos. 62, 68 component/ January 9, 1995
and 79)
Docket No. ER95-1001-000
(3)Original Sheet Nos. 58A-58G Under Redetermined Rates
FERC Electric Tariff, First per Attachment A/
Revised Volume No. 1 June 1, 1995
(4)Original Sheet Nos.66A-66F, 77A-77K Redetermined Rates
and 83A-83F Under FERC Electric Tariff, per Attachments A, B
Original Volume No. 2 and C/ June 1, 1995
Docket No. ER96-586-000
(5) FERC Electric Tariff, Revised Point-to-
Second Revised Volume No. 1 - Point Tariff/
Original Sheet Nos. 1 through 88 December 13, 1995
(Supersedes First Revised Volume No. 1)
(6) FERC Electric Tariff, First Revised Network
Revised Volume No. 2 - Original Tariff/ December 13, 1995
Sheet Nos. 1 through 74 (Supersedes
Original Volume No. 2)
Enterqy Power Marketinq Corporation:
Docket No. ER95-1615-000
Rate Schedule FERC No. 1
<PAGE>
_______________________________
<FN1> Arkansas Power and Light Company, Gulf States Utilities Company,
Louisiana Power & Light Company, Mississippi Power and Light Company, and
New Orleans Public Service, Inc. (collectively, the Entergy operating
companies).
<FN2> See Promoting Wholesale Competition Through Open Access Non-
discriminatory Transmission Services by Public Utilities; Recovery of
Stranded Costs by Public Utilities and Transmitting Utilities, Notice of
Proposed Rulemaking and Supplemental Notice of Proposed Rulemaking, 60 Fed.
Reg. 17,662 (1995), IV FERC Stats. & Regs. Paragraph 32,514 (1995) (Open
Access NOPR).
<FN3> See American Electric Power Service Corporation, 71 FERC paragraph
61,393, order on reh'g, 72 FERC paragraph 61,287 (1995), reh'g denied, 74
FERC paragraph 61,013 (1996).
<FN4> The parties to the ongoing proceeding in Docket No. ER95-112-000 have
entered into partial settlements of certain of the issues raised in that
proceedings. The Commission will act on those settlements at a later date.
<FN5> Due to unusual weather conditions, the Federal Government was closed on
January 12, 1996. January 15, 1996 was a federal holiday. Therefore, all
interventions received by January 16, 1996 are timely filed in Docket No.
ER95-586-000.
<FN6> See Inquiry Concerning the Commission's Pricing Policy for Transmission
Services Provided by Public Utilities Under the Federal Power Act, Policy
Statement, III FERC Stats. & Regs. paragraph 31,005, 59 Fed. Reg. 55,031
(1994).
<FN7> See Central Hudson Gas & Electric Corporation, 60 FERC paragraph 61,106
at 61,339, reh'g denied, 61 FERC paragraph 61,089 (1992).
<FN8> See, e.g., USGen Power Services, L.P., 73 FERC paragraph 61,302, slip op.
at 2-3 (1995) (USGen); American Electric Power Service Corporation, et al.,
72 FERC paragraph 61,287 at 62,237-38 (1995), reh'g denied, 74 FERC
paragraph 61,013 (1996) (AEP).
<FN9> See Entergy Services, Inc., 58 FERC paragraph 61,234, reh'g denied, 60
FERC paragraph 61,168 (1992), remanded, Cajun Electric Power Cooperative,
Inc. v. FERC, 28 F.3d 173 (D.C. Cir. 1994), in which the Commission
required Entergy to update its market power analysis every three years.
<FN10> Entergy Marketing states, Application at 6, that an associate owns a 49
percent limited partnership interest and a 1 percent general partnership
interest in the Richmond Cogeneration facility.
<FN11> Entergy Marketing has not indicated that it will broker power for the
Entergy operating companies or broker or market power for other members of
the Entergy Corporation system. Our action herein is based on the
understanding that Entergy Marketing will not broker for the Entergy
operating companies. See Wholesale Power Services, Inc., 72 FERC paragraph
61,284 (1995); Southern Company Services, Inc., et al., 72 FERC paragraph
61,324 (1995).
<FN12> See USGen, slip on. at 4-5.
<FN13> See, e.g., LG&E Power Marketing, Inc., 68 FERC paragraph 61,247 at 62,124
(1994).
<FN14> See Enron Power Marketing, Inc., 65 FERC paragraph 61,305 at 62,406
(1993), order on reh'g, 66 FERC paragraph 61,244 at 61,599 (1994); Morgan
Stanley Capital Group, 69 FERC paragraph 61,175 at 61,694-95 (1994), order
on reh'g, 72 FERC paragraph 61,082 at 61,436 n.8, 61,437 n.15 (1995)
(Moraan Stanley).
<FN15> See, e.g., Morgan Stanley, 69 FERC at 61,694-95 and 72 FERC at 61,436-37;
InterCoast Power Marketing Company, 68 FERC 61,248 at 62,134, order on
clarification, 68 FERC paragraph 61,323 (1994).
<FN16> See, e.g., USGen, slip op. at 9; Morqan Stanley, 69 FERC at 61,695.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
1440 NEW YORK AVENUE N W
WASHINGTON D.C 20005-2107
February 29, 1996
The Honorable Lois D. Cashell Secretary Federal Energy
Regulatory Commission 888 First Street, NE Washington,
DC 20426
Re: Entergy Power Marketing Corp.
Docket No. ER95 1615-001
Dear Secretary Cashell:
Enclosed for filing please find an original and
fourteen (14) copies of the Compliance Filing of Entergy Power
Marketing Corp.
Please acknowledge receipt of this application by
stamping the additional copy included with this filing.
Thank you for your attention to this matter.
Sincerely,
/s/Kathleen A. Foudy
Kathleen A. Foudy
<PAGE>
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Entergy Power Marketing Corp. ) Docket No. ER95-1615-001
COMPLIANCE FILING
OF
ENTERGY POWER MARKETING CORP.
On February 14, 1996, the Commission issued an Order in
the above-captioned proceeding conditionally accepting
for filing the application of Entergy Power Marketing
Corp. ("EPMC") for authorization to sell power at
market-based rates. Enterqy Power Marketing Corp., 74
FERC 61,137 (1996). The Commission allowed EPMC's FERC
Rate Schedule No. 1 to become effective as of December
13, 1995, provided that EPMC accepted the waivers,
authorizations and conditions set forth in its
application and in the Order. EPMC accepts such
waivers, authorizations and conditions. The Commission
also directed EPMC to revise its code of conduct on or
before February 29, 1996. As EPMC stated in its
application, EPMC is a subsidiary of Entergy Corp.
("Entergy"). Certain aspects of the relationships
between the so-called regulated and non-regulated
subsldiarles of Entergy currently are governed by
certain agreements Entergy entered into with its state
regulators ("State Agreements")<FN1> as well as by a
document entitled "Standards of Conduct Regarding the
Relationship Between Entergy's Regulated and
Nonregulated Subsidiaries" ("Standards of Conduct"). To
comply with the Order, EPMC agrees to the following
standards of conduct IN addition to those set forth in
the State Agreements <FN2> and revises its Standards of
Conduct accordingly.<FN3>
Affiliate Sales of Goods and Services
EPMC's Purchase of Goods or Services from Entergy
Requlated Utiliti's
In the Order, the Commission conditioned its
approval of EPMC's market-based rates on EPMC's
"agreement to obtain any non-power goods and services
from Entergy at the higher of cost or market value."
(Slip. Op. at 10). Section 6.0 of the Standards of
Conduct states that "[a]ny transfer of assets, goods or
services between Regulated Companies and Nonregulated
Companies shall be in accordance with the" State
Agreements. In turn, under the State Agreements any
transfer of generating as sets, fuel and fuel-related
assets, or real property or improvements with a fair
market value exceeding $100,000 from an Entergy
regulated utility to EPMC is to be priced at the higher
of fair market value or book value. This provision of
the State Agreements complies with the Order. To the
extent EPMC purchases any non-power good from an
Entergy regulated utility not covered by the State
Agreements, EPMC agrees to purchase such good at the
higher of cost or market value. To ensure compliance
with the Order with re spect to the provision of
services from a regulated utility to EPMC, EPMC agrees
to obtain any services from the Entergy regulated
utllit_es at the hlgher ot cost o~ market value.<FN4>
EPMC's Sale of Goods or Services to the Entergy
Requlated Utilities
In the Order, the Commission conditioned its
approval of EPMC's market-based rates on EPMC's "(and
its associates') agreement not to sell any non-power
goods and services to Entergy at a price above market
value." (Slip Op. at 10). Pursuant to Section 6.0 of
the Standards of Conduct and the State Agreements, the
Entergy regulated utilities may not make a procurement
in excess of $100,000 from EPMC or any other
"nonregulated" business of Entergy (i.e., subsidiaries
of Entergy which are not domestic regulated electric
utilities primarily engaged in the business of selling
electric energy at retail or at wholesale or are not
primarily engaged in the business of providing services
or goods to regulated electric utility affiliates),
except through a competitive bidding process or as
authorized by an appropriate state regulatory
commission. To ensure compliance with both the Order
and the State Agreements, EPMC will supplement this
requirement by agreeing that for procurements not in
excess of $100,000, neither EPMC nor any other Entergy
nonregulated buslness will sell ary non-power goods or
services to an Entergy regulated utility at a price
above market value. In the event the Entergy regulated
utilities make a procurement in excess of $100,000 from
EPMC or any other nonregulated business of Entergy, the
market value will be determined by competitive bid or by
an appropriate state regulatory commission.
Limits on Information Sharinq
In the Order, the Commission, citing USGen Power Services. L.P.,
73 FERC 61,302 (1995) ("USGen"), stated that EPMC's "commitment not
to share market infor mation with Entergy is not complete; Entergy
itself must commit to share market information with its associates
only if the same information also is made publicly available to
non-associates simultaneously." (Slip Op. at 10). In assessing how to
comply with this statement, EPMC is informed by the Compliance Filing
made by USGen which was accepted by the Commission in a February 13,
1996 Letter Order. USGen modified its standards of conduct to state
that its affiliated utility "may share market information with
affiliated QFs, EWGs, or other traditional power marketers or
generators without captive customers, only if the same information is
made publicly available to non-affiliates simultaneously." Thus, in
accordance with the Order and the USGen decision on which it relied,
Entergy will modify Section 12 of its Stan dards of Conduct to state
that the Entergy regulated utilities may share market information with
affiliated QFs, EWGs, EPMC or other non-traditional power marketers
or generators without captive customers only if the same information
also is made publicly available to non-associates simultaneously,
unless such information is provided in response to a request for
service from an affiliated QF, EWG, EPMC, or another nontraditional
power market er or generator without captive customers and such
information pertains to the requested service.
WHEREFORE, EPMC respectfully requests that the Commission accept
these revisions to its code of conduct.
Respectfully submitted,
/S/Kathleen A. Foudy
William S. Scherman
Kathleen A. Foudy
Skadden, Arps, Slate,
Meagher & Flom
1440 New York Avenue, N.W.
Washington, D.C. 20005
(202) 371-7000
February 29, 1996
_______________________________
<FN1> The State Agreements are: (1) the October 1992 Settlement Agreement among
Entergy, the Arkansas Public Service Commission, the Mississippi Public
Service Commission and the Council for the City of New Orleans and (2)
Appendix 3 to the Louisiana Public Service Commission's May 3, 1993 Order No.
U19904.
<FN2> Nothing in this filing is intended to modify or terminate
the State Agreements. As discussed below, Entergy
believes the intent of both the Commission's Order and
the State Agreements can be reconciled.
<FN3> The Securities and Exchange Commission ("SEC"),
pursuant to the Public Utility Holding Company Act of
1935, as amended, also may have jurisdiction over
certain transactions between EPMC and the Entergy
regulated utilities, namely the sale of goods and
services from an Entergy regulated utility to EPMC.
However, with respect to the sale of goods from an
Entergy regulated utility to EPMC, no such sales
presently are contemplated. In an SEC order relating to
the provision of services at fair market prices to
nonutility affiliates of Entergy Enterprises, Inc.,
including EPMC, the SEC indicated that Entergy and
Entergy Enterprises, Inc. acknowledged that the SEC's
authorization of market prices with respect to such
services would not be binding on this Commission or
appropriate state regulatory commissions. Enterqy
Corporation, SEC Release No. 35-26322; 73-al05 (June 30,
1995).
<FN4> As noted above, certain aspects of the relationship between
EPMC and the regulated subsidiaries of Entergy are subject
to the State Agreements, which currently are pending
before the SEC. If necessary, the Standards of Conduct will
be modifled accordlngly.
<PAGE>
ENTERGY CORPORATION
REVISED STANDARDS OF CONDUCT
REGARDING THE RELATIONSHIP BETWEEN
ENTERGY'S REGULATED AND NONREGULATED SUBSIDIARIES
February 1996
6.1 Any non-power goods or services Entergy Power Marketing
Corp. purchases from any Entergy regulated utility will be
priced at the higher of cost or market.
6.2 Neither Entergy Power Marketing Corp. nor any other
nonregulated business will sell any non-power goods or
services to an Entergy regulated utility at a price above
market value.
12. Any Entergy regulated utility may share market
information with affiliated qualifying facilities,
exempt wholesale generators, Entergy Power Marketing
Corp., or other nontraditional power marketers or
generators without captive customers only if the same
information also is made publicly available to
nonassociates simultaneously, unless such information is
provided in respcnse to a request for service from an
affiliated qualifying facility, exempt wholesale
generator, Entergy Power Marketing Corp., or another
nontraditional power marketer or generator without
captive customers and such information pertains to the
requested service.
<PAGE>
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Entergy Power Marketing Corp. ) Docket No. R95-1615-001
NOTICE OF FILING
Take notice that on February 29, 1996, Entergy
Power Marketing Corp. tendered for filing revisions to
its Standards of Conduct which incorporate requirements
specified in the Commission's February 14, 1995 Order
concerning Entergy Power Marketing Corp.'s Application
in Docket No. ER95-1615.
Any persn desiring to be heard or to
protest said filing should file a motion to intervene or
protest with the Federal Energy Regulatory Commission,
888 First Street, N.E., Washington, D.C. 20426, in
accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 C.F.R. 385.211 and
385.214). All such motions or protests should be filed
on or before______________, 1996. Protests will be
considered by the Commission in determining the
appropriate action to be taken, but will not serve to
make protestants parties to the proceeding. Any person
wishing to become a party must file a motion to
intervene. Copies of this filing are on file with the
Commission and are available for public inspection.
Lois D. Cashell
Secretary
<PAGE>
Certificate of Service
I, Kathleen A. Foudy, certify that I have this day
served the foregoing Compliance Filing of Entergy Power
Marketing Corp. by first-class mail, postage prepaid,
to all parties on the official service list for this
pro ceeding. Dated at Washington, D.C. this 29th day
of February, 1996.
/S/Kathleen A. Foudy
Kathleen A. Foudy
Skadden, Arps, Sla~te,
Meagher & Flom
1440 New York Avenue, N.W.
Washington, D.C. 20005
(202) 371-7000
(DRAFT of NOTICE)
UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. 35-_____; File No. 70-_____
In the Matter of:
ENTERGY CORPORATION
ENTERGY POWER MARKETING, CORP.
NOTICE OF
APPLICATION-DECLARATION CONCERNING
POWER BROKERING AND MARKETING ACTIVITIES
Entergy Corporation ("Entergy"), 639 Loyola
Avenue, New Orleans, Louisiana 70113, a registered
holding company, and Entergy Power Marketing Corp.
("EPMC"), 900 South Shackleford Road, Suite 210, Little
Rock, Arkansas 72211, a Delaware corporation proposed to
be a wholly-owned subsidiary of Entergy, have filed an
application-declaration pursuant to Sections 9(a), 10 and
11(b) of the Act.
Entergy proposes to finance a subsidiary, EPMC,
which will engage in a variety of power brokering and
marketing transactions, including traditional wholesale
bulk power transactions as well as the provision of
innovative value-added financial products and services
designed to meet the evolving needs of customers in
competitive markets. EPMC seeks authority, to the extent
necessary, to engage in such transactions. Entergy's
investment in EPMC will constitute EPMC's total capital
ization. Entergy seeks authority to capitalize EPMC in
an amount up to $20 million and to provide up to $150
million in credit support, i.e., guarantees or other
similar commitments, to EPMC.
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 no later than ___________,
to the Secretary, Securities and Exchange Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, and serve a
copy on the declarants at the address specified above.
Proof of service (by affidavit, or in, in case of an
attorney at law, by certificate) should be filed with the
request. Any request for a hearing shall identify
specifically the issues of fact or law that are disputed.
A 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
declaration, as filed or as it may be amended, may be
permitted to become effective.
For the Commission, by the Office of Public
Utility Regulation, pursuant to delegated authority.
