File No. 70-9123
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
____________________________
AMENDMENT NO. 1
To
APPLICATION-DECLARATION
Under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________
Entergy Corporation
639 Loyola Avenue
New Orleans, LA 70113
(Name of company filing this statement
and address of principal executive offices)
____________________________
Entergy Corporation
(Name of top registered holding company parent of
each applicant or declarant)
____________________________
Edwin Lupberger Robert J. Cushman
Chairman and Vice President
Chief Executive Officer Entergy Enterprises, Inc.
Entergy Corporation 4 Park Plaza, Suite 2000
639 Loyola Avenue Irvine, CA 92614
New Orleans, LA 70113
(Names and addresses of agents for service)
____________________________
The Commission is also requested to send copies
of any communications in connection with this matter to:
Frederick F. Nugent, Esq. Laurence M. Hamric, Esq.
General Counsel Associate General Counsel
Entergy Enterprises, Inc. Entergy Services, Inc.
4 Park Plaza, Suite 2000 639 Loyola Avenue
Irvine, CA 92614 New Orleans, LA 70113
Thomas C. Havens, Esq. Kent R. Foster, Esq.
Mayer, Brown & Platt Vice President
1675 Broadway Entergy Services, Inc.
New York, NY 10019 P.O. Box 8082
Little Rock, AR 72203
Item 1. Description of Proposed Transaction.
Item 1 of the Application-Declaration in this File is
hereby amended and restated to read in its entirety as
follows:
"Entergy Corporation ("Entergy"), a Delaware
corporation which is a registered holding company under the
Public Utility Holding Company Act of 1935, as amended (the
"Act"), hereby requests the approval of the Securities and
Exchange Commission (the "Commission") under the Act, to the
extent not exempt from Commission approval under the Act, or
otherwise permitted or authorized under the Act pursuant to
Commission rule, regulation or order: (1) for Entergy and
certain of its existing or future subsidiary companies to
issue guarantees and provide other forms of credit support
to or for the benefit of Entergy's non-utility affiliates
(as hereinafter described) from time to time during the
period through December 31, 2002, in an aggregate amount not
to exceed $750 million; (2) for Entergy to acquire, directly
or indirectly, the securities of one or more companies
(collectively, the "New Subsidiaries") organized for
purposes of performing certain service and development
activities currently authorized by the Commission<FN1>and/or
for purposes of acquiring (including financing or
refinancing an acquisition), owning and holding the
securities of associate companies which are (i) "exempt
wholesale generators" ("EWGs"), as defined in Section 32(a)
of the Act, (ii) "foreign utility companies" ("FUCOs"), as
defined in Section 33(a) of the Act (EWGs and FUCOs are
sometimes collectively referred to herein as "Exempt
Projects"), (iii) "exempt telecommunications companies"
("ETCs"), as defined in Section 34(a) of the Act, (iv) other
subsidiary companies of Entergy that currently are or
hereafter may be authorized or permitted by rule, regulation
or order of the Commission under the Act to engage in other
businesses (including "O&M Subs", as hereinafter
defined)("Authorized Subsidiary Companies")<FN2> and/or (v)
"energy-related companies", as defined in Rule 58 under the
Act ("Energy-related Companies"; New Subsidiaries, Exempt
Projects, ETCs, Authorized Subsidiary Companies and Energy-
related Companies are collectively referred to herein as
"Non-utility Companies"); (3) for Non-utility Companies to
issue and sell securities to Entergy, to other Non-utility
Companies and/or to non-associate companies for the purpose
of financing (or refinancing) investments in Non-utility
Companies; and (4) for certain related transactions, all as
more particularly described herein.
I. Background.
A. The Entergy System.
Entergy and its various direct and indirect subsidiary
companies comprise the Entergy System (the "Entergy System"
or "System"), which currently consists of: (1) five domestic
retail electric utility companies - Entergy Arkansas, Inc.
("Entergy Arkansas"), Entergy Gulf States, Inc. ("Entergy
Gulf States"), Entergy Louisiana, Inc. ("Entergy
Louisiana"), Entergy Mississippi, Inc. ("Entergy
Mississippi") and Entergy New Orleans, Inc. ("Entergy New
Orleans") (such companies are sometimes referred to herein,
collectively, as the "System operating companies"); (2) a
domestic wholesale electric generating company that sells
power to the System operating companies (other than Entergy
Gulf States) - System Energy Resources, Inc. ("SERI"); (3) a
company that provides administrative and other services
primarily to the System operating companies - Entergy
Services, Inc. ("ESI"); (4) a company that provides
management, operations and maintenance services for the
System's nuclear facilities - Entergy Operations, Inc.
("EOI"); (5) a company that primarily implements and/or
maintains certain fuel supply programs for the System
operating companies - System Fuels, Inc. ("SFI"); (6) a
company that markets and sells its electric generating
capacity and energy to non-associate purchasers in the
domestic bulk power markets - Entergy Power, Inc.; (7) a
company that invests in and develops energy and energy-
related projects and businesses on behalf of the Entergy
System, and markets skills and products developed by System
companies - Entergy Enterprises, Inc. ("Entergy
Enterprises"); (8) an energy management services company -
Entergy Integrated Solutions, Inc.; (9) a company that
markets and brokers electricity and other energy commodities
and that may also engage in other non-utility activities
permitted under Rule 58 - Entergy Power Marketing Corp.; and
(10) various other companies formed to develop, acquire and
own Entergy's interests in domestic and foreign energy,
energy services, energy-related and telecommunications
businesses.
Entergy, through its domestic public utility
subsidiaries and its Exempt Projects, is engaged principally
in the generation, transmission, distribution and sale of
electricity at retail and wholesale and the purchase of
electricity at wholesale. Entergy's domestic retail public
utility companies provide electric service to approximately
2.4 million customers in portions of the states of Arkansas,
Louisiana, Mississippi, Tennessee and Texas, and retail gas
service in and around Baton Rouge, Louisiana and in New
Orleans, Louisiana. In addition, Entergy's Exempt Projects,
among other things, provide electricity to approximately 2
million customers in London, England, and to approximately
240,000 customers in Melbourne, Australia.
B. Entergy's Development and Financing of Non-Utility
Businesses.
Since 1992, Entergy has been engaged in the development
of various energy, energy-related and other non-utility
businesses. Pursuant to the June 1995 Order, Entergy
Enterprises is currently authorized, among other things, (1)
to conduct development activities with respect to potential
investments by Entergy in various energy, energy-related and
other non-utility businesses ("Development Activities"), (2)
to provide various management, administrative and support
services ("Administrative Services") to certain of its
associate companies<FN3>, (3) to provide consulting services
("Consulting Services") to certain of its associate
companies and to non-associate companies, and (4) to provide
operations and maintenance services ("O&M Services")
directly, or indirectly through other subsidiaries of
Entergy ("O&M Subs") to non-associate companies and to
certain of its associate companies, in each case utilizing
the skills and resources of other System companies<FN4>,
subject to the conditions set forth in the June 1995 Order
(Development Activities, Administrative Services, Consulting
Services and O&M Services are sometimes referred to herein
as "Services").
In addition, Entergy is currently authorized under the
terms of, and to the extent provided by, orders and
supplemental orders issued by the Commission (including the
June 1995 Order) issued in File Nos. 70-8105, 70-8839 and 70-
8903 (collectively, the "Financing Orders"), to finance the
operations of various Non-utility Companies by issuing and
selling debt and equity securities and by issuing guarantees
of the securities or other obligations of Entergy
subsidiaries (other than Excepted Companies). Entergy's
authorization under the Financing Orders may be summarized
as follows:
(1) File No. 70-8105. Pursuant to the June 1995
Order, Entergy is authorized to finance the performance of
Services and the organization of O&M Subs through purchases
of common stock, capital contributions, open account
advances, loans and guarantees provided to Exempt Projects
and various other Non-utility Companies in an aggregate
amount not to exceed $350 million (exclusive of any such
investments that are exempted by Commission rule). Such
authorization expires on December 31, 1997.
(2) File No. 70-8839. Pursuant to Commission orders
dated June 6, 1996 (HCAR No. 26528) and March 25, 1997 (HCAR
No. 26693), Entergy is authorized to issue and sell up to an
aggregate of thirty million shares of its authorized but
unissued common stock, par value $0.01 per share ("Common
Stock") pursuant to its Dividend Reinvestment and Stock
Purchase Plan (the "DRIP"). Proceeds from the issuance and
sale of Common Stock under the DRIP may be used for general
corporate purposes, including investments in Exempt Projects
(subject to any requisite Commission approval and to
compliance with Rule 53) and in other Non-utility Companies.
Through June 30, 1997, Entergy had sold approximately
10,647,193 shares of Common Stock pursuant to the DRIP.
(3) File No. 70-8903. Pursuant to the Commission's
order dated February 26, 1997 (HCAR No. 26674) (the
"February 1997 Order"), Entergy is authorized to enter into
credit facilities with one or more banks pursuant to which
Entergy would effect borrowings and reborrowings
(collectively, "Borrowings"), and issue unsecured notes in
connection therewith, from time to time through December 31,
2002, in an aggregate principal amount outstanding at any
time not to exceed $500 million.<FN5> Entergy may use the
proceeds of Borrowings for general corporate purposes,
including to finance the acquisition of the securities or
other interests in Exempt Projects and other Non-utility
Companies.<FN6>
II. Proposed Transactions.
A. Issuance of Guarantees.
In order to facilitate Entergy's Development Activities
and the acquisition and ownership by Entergy of interests in
other businesses, as authorized or permitted under the Act
from time to time (including, without limitation, interests
in Non-utility Companies), and to the extent such
transactions are not exempt from the Act or otherwise
authorized or permitted by rule, regulation or order issued
by the Commission thereunder, Entergy and Non-utility
Companies hereby request authority to issue guarantees or
provide other forms of credit support or enhancements
(collectively, "Guarantees") to or for the benefit of Non-
utility Companies from time to time through December 31,
2002. Guarantees may take the form of Entergy or a Non-
utility Company agreeing to guarantee, undertake
reimbursement obligations, assume liabilities or other
obligations in respect of or act as surety on bonds, letters
of credit, evidences of indebtedness, equity commitments,
performance and other obligations undertaken by Entergy or
its associate Non-utility Companies. For example, such
associate companies may be called upon to furnish various
types of bonds as security, including bid bonds, performance
bonds, and material and payment bonds. Moreover, various
Non-utility Companies may require credit support from
Entergy or from other Non-utility Companies to cover
performance and other obligations. Guarantees may also be
necessary or desirable to satisfy the requirements of
lenders or other project participants under financing
documents or other project agreements to which an associate
Non-utility Company of Entergy is or will become a party
(including with respect to the provision of construction,
interim or permanent debt or equity financing). These forms
of credit enhancements are typical in the marketplace, and
would significantly benefit Entergy's investments in Non-
utility Companies by, among other things, facilitating the
making of bids or proposals in respect of investments in Non-
utility Companies, and helping to reduce the cost of
necessary bonds, sureties, and other credit support. The
terms and conditions of Guarantees would be established at
arm's length based upon market conditions.
Entergy hereby requests, on its behalf and on behalf of
the Non-utility Companies, all requisite authority under the
Act to issue Guarantees from time to time through December
31, 2002 in an aggregate amount not to exceed $750 million
(the "Aggregate Authorization") at any one time outstanding
(including any guarantees previously issued and outstanding
pursuant to the June 1995 Order), provided that the amount
of a Guarantee shall not reduce the Aggregate Authorization
to the extent that the provision of such Guarantee is exempt
from the Act or is otherwise authorized or permitted by rule
or regulation of the Commission issued thereunder. Any
Guarantees provided by Entergy to Exempt Projects would be
subject to the limitation on "aggregate investment" in EWGs
and FUCOs set forth in Rule 53(a), pending receipt of
Commission authorization being sought in File No. 70-9049.
Entergy requests that the Commission reserve jurisdiction
over the issuance by Entergy of Guarantees to Exempt
Projects, pending the receipt of such authorization, to the
extent that the amount of any such Guarantee, when added to
Entergy's "aggregate investment" in Exempt Projects, would
exceed 50% of Entergy's "consolidated retained earnings" (as
defined in Rule 53(a)). Any Guarantees provided to Energy-
related Companies would be subject to the limitation on
"aggregate investment" in energy-related companies set forth
in Rule 58.
B. Organization of New Subsidiaries, O&M Subs
and Related Transactions.
As discussed above, Entergy System companies from time
to time have invested in or considered potential
opportunities to acquire electric generation, transmission
and/or distribution facilities outside the United States and
to engage in certain authorized non-utility businesses
domestically. Entergy expects to pursue other such
opportunities in the future. To facilitate its investments
in FUCOs, EWGs and other Non-utility Companies, and to
provide Entergy with additional flexibility to structure
(and restructure) its investments in Non-utility Companies,
Entergy proposes to create one or more New Subsidiaries.
New Subsidiaries may be direct or indirect subsidiary
companies used to acquire, hold and/or finance the
acquisition of, the securities of one or more Exempt
Projects, ETCs, Energy-related Companies and/or Authorized
Subsidiary Companies, or to raise debt or equity capital for
purposes described herein. New Subsidiaries may also
perform Development Activities, Administrative Services
and/or Consulting Services, as described further below. To
the extent such transactions are not exempt from the Act or
otherwise authorized or permitted by rule, regulation or
order of the Commission issued thereunder, Entergy requests
authority for New Subsidiaries to engage in the activities
described herein.
There are a number of legal and business reasons for
the use of special-purpose subsidiaries such as the New
Subsidiaries in connection with investments in Non-utility
Companies. For example, the formation and acquisition of
special-purpose subsidiaries is often necessary or desirable
to facilitate the acquisition and ownership of a FUCO, an
EWG or another non-utility enterprise. Furthermore, the
laws of some foreign countries may require that the bidder
in a privatization program be a domestic company in that
country. In such cases, it would be necessary for Entergy
to form a foreign subsidiary as the entity submitting the
bid or other proposal. In addition, the interposition of
one or more New Subsidiaries may allow Entergy to defer the
repatriation of foreign source income, or to take full
advantage of favorable tax treaties among foreign countries,
or otherwise to secure favorable U.S. income tax treatment
that would not otherwise be available. New Subsidiaries
would also serve to isolate business risks, facilitate
subsequent adjustments to, or sales of, ownership interests
by or among the members of the ownership group, or to raise
debt or equity capital in domestic or foreign markets.
A New Subsidiary may be organized, among other things,
(1) in order to facilitate the making of bids or proposals
to develop or acquire an interest in any EWG, FUCO or
another Non-utility Company; (2) after the award of such a
bid proposal, in order to facilitate closing on the purchase
or financing of an EWG, FUCO or another Non-utility Company;
(3) at any time subsequent to the consummation of an
acquisition of an interest in an EWG, FUCO or another Non-
utility Company in order, among other things, to effect an
adjustment in the respective ownership interests in such
business held by Entergy and non-affiliated investors; (4)
to facilitate the sale of ownership interests in one or more
EWGs, FUCOs or other Non-utility Companies; (5) to comply
with applicable laws of foreign jurisdictions limiting or
otherwise relating to the ownership of domestic companies by
foreign nationals; (6) as a part of tax planning in order to
limit Entergy's exposure to U.S. and foreign taxes; (7) to
further insulate Entergy and the Excepted Companies from
operational or other business risks associated with
investments in Non-utility Companies; or (8) for other
lawful business purposes.
Investments in New Subsidiaries may take the form of
any combination of the following: (1) purchases of capital
shares, partnership interests, member interests in limited
liability companies, trust certificates or other forms of
equity interests (collectively, "Capital Stock"); (2)
capital contributions; (3) open account advances without
interest; (4) loans; and (5) Guarantees issued, provided or
arranged in respect of the securities or other obligations
of the New Subsidiaries. Funds for any direct or indirect
investment by Entergy in any New Subsidiary will be derived
from (1) Borrowings within the limitations prescribed in the
February 1997 Order; (2) sales of Common Stock pursuant to
the Commission's orders dated June 6, 1996 (see HCAR No.
26528) and March 25, 1997 (see HCAR No. 26693); (3) any
appropriate future debt or equity securities issuance
authorization obtained by Entergy from the Commission; and
(4) other available cash resources. To the extent that
Entergy provides funds to a New Subsidiary which are used
for the purpose of making an investment in an Exempt Project
or an Energy-related Company, the amount of such funds would
be included in Entergy's "aggregate investment" in such
entities, as calculated in accordance with Rule 53 and Rule
58, respectively.
Entergy may determine from time to time to consolidate
or otherwise reorganize all or any part of its direct and
indirect ownership interests in Non-utility Companies and/or
New Subsidiaries through which it may hold investments in
Non-utility Companies, and activities and functions related
to such investments, under one or more New Subsidiaries. To
effect any such consolidation or other reorganization,
Entergy ordinarily would contribute to such New Subsidiary
all of the outstanding stock of other New Subsidiaries and,
indirectly, its interests in Non-utility Companies. To the
extent such transactions are not exempt from the Act or
otherwise authorized or permitted by rule, regulation or
order of the Commission issued thereunder, Entergy requests
any requisite authorization under the Act to accomplish such
reorganizations from time to time.
In addition, as discussed further below, Entergy is
requesting authority herein through December 31, 2002 to
organize O&M Subs. Investments in O&M Subs may take the
form of (1) additional purchases of Capital Stock; (2)
capital contributions or open account advances without
interest; (3) loans; (4) Guarantees of the securities or
other obligations of an O&M Sub; or (5) any combination of
the foregoing. Any loans by Entergy to a New Subsidiary or
an O&M Sub would have interest rates and maturity dates that
are designed to provide a return to Entergy of not less than
Entergy's effective cost of capital.
To the extent such transactions are not exempt from the
Act or otherwise authorized or permitted by rule, regulation
or order of the Commission issued thereunder, any initial
investments in the Capital Stock of New Subsidiaries or O&M
Subs would be included in the $750 million Aggregate
Authorization to issue Guarantees requested herein.
C. Issuance of Securities.
In addition, to the extent such transactions are not
exempt from the Act or otherwise authorized or permitted by
rule, regulation or order of the Commission issued
thereunder, Entergy requests authority under the Act for Non-
utility Companies to issue and/or sell securities of any
type (including Guarantees) (collectively, "Securities") to
Entergy, to other Non-utility Companies or to non-associate
companies (with or without a Guarantee being provided by
Entergy or another Non-utility Company), including banks,
insurance companies, and other financial institutions.
Securities would be issued and sold pursuant to the
authorization requested herein in one or more transactions
from time to time through the earlier to occur of (1)
December 31, 2002 or (2) the effective date of any rule of
general applicability hereafter adopted by the Commission
exempting such transactions (to the extent they remain
jurisdictional under the Act) from the approval requirements
under Sections 6(a) and 7 of the Act.<FN7>
Equity Securities issued by a Non-utility Company may
include capital shares, partnership interests, member
interests in limited liability companies, trust
certificates, or the equivalent of any of the foregoing
under applicable foreign law. Equity Securities issued by a
Non-utility Company may be denominated in either U.S.
dollars or foreign currencies. To the extent that a
proposed issuance of equity Securities is not exempt under
Rule 52(b) or otherwise authorized by order of the
Commission, the amount, type and other general terms of such
equity Securities would in each case be subject to further
approval by the Commission.<FN8> Entergy hereby requests that
the Commission reserve jurisdiction over the issuance of any
equity Securities not currently exempt under Rule 52(b) or
otherwise approved by the Commission, pending completion of
the record. Entergy hereby undertakes to file a post-
effective amendment in this File which will describe the
general terms of such equity Securities and request a
supplemental order of the Commission authorizing such
issuance. Entergy requests that each such supplemental
order be issued by the Commission without further public
notice. Entergy would report periodically to the Commission
pursuant to Rule 24 under the Act concerning the issuance
and sale of such Securities to the same extent that such
reporting is required by Rule 52(c).
In connection with the issuance of debt Securities, Non-
utility Companies may seek to manage their interest rate
risk through the use of interest rate swaps, options and
related derivatives such as interest rate caps, collars,
floors or ceilings (collectively, "Hedging Transactions").
Hedging Transactions may be used, for example, to lock in
favorable interest rates prior to the issuance of debt
Securities, such as through (1) the sale of exchange-traded
U.S. Treasury futures contracts, a forward sale of U.S.
Treasury securities and/or a forward interest rate swap; (2)
the purchase of put options on U.S. Treasury securities
("Put Options Purchase"); (3) a Put Options Purchase in
combination with the sale of call options on U.S. Treasury
securities; or (4) any combination of the above. The
counterparty to any swap instrument would be a financial
institution rated above "A" by Standard & Poor's Ratings
Group and above "A2" by Moody's Investors Service, Inc. Any
Guarantees that may be required in connection with such
Hedging Transactions would be provided pursuant to the
authorization granted herein. All Hedging Transactions
would meet the criteria established by the Financial
Accounting Standards Board from time to time necessary to
qualify for hedge accounting treatment.
The net proceeds from the issuance and sale of
Securities would be used for general corporate purposes,
including without limitation (1) for loans to and/or equity
investments in Energy-related Companies, Exempt Projects,
ETCs, New Subsidiaries, O&M Subs and other Non-utility
Companies; (2) for the repayment, refinancing or redemption
of outstanding securities of Entergy or Non-utility
Companies originally issued for purposes of acquiring
interests in Non-utility Companies or providing funds for
the authorized or permitted business activities of such
companies; and (3) for working capital or other cash
requirements of Non-utility Companies, provided that such
net proceeds will only be applied to finance activities that
are exempt under the Act or are otherwise authorized or
permitted by rule, regulation or order of the Commission
issued thereunder, and provided further, that at the time of
issuance of any Securities authorized by the Commission
herein that are recourse to Entergy, directly or indirectly,
the proceeds of which are to be used to invest in any Exempt
Project, Entergy will be in compliance with Rule 53 (as the
conditions set forth therein may be modified by order of the
Commission issued in File No. 70-9049).
Entergy represents and agrees that no System operating
company will incur any indebtedness, extend any credit, or
sell or pledge its assets, directly or indirectly, to or for
the benefit of any Non-utility Company, and that any
Securities that may be issued by a Non-utility Company, and
any Guarantees that may be issued by Entergy, will not be
recourse to any System operating company.
D. Provision of Services.
(a) Administrative
Services, Consulting Services and
Development Activities.
In order to provide Entergy with further flexibility in
the administration of its non-utility businesses, to the
extent such transactions are not exempt from the Act or
otherwise authorized or permitted by rule, regulation or
order of the Commission issued thereunder, Entergy requests
authority herein for Non-utility Companies to provide other
Non-utility Companies with Administrative Services, to
provide Consulting Services and to engage in Development
Activities. Administrative Services would include, without
limitation, corporate and project development and planning,
management, administrative, employment, tax, legal,
accounting, engineering, consulting, marketing, utility
performance, and electronic data processing services, and
intellectual property development, marketing and other
support services. Development Activities would include,
without limitation, investigating sites, research,
engineering and licensing activities, acquiring options and
rights, contract drafting and negotiation, legal, accounting
and financial analysis, preparing and submitting bids and
proposals, and other activities necessary to identify and
analyze investment opportunities on behalf of Entergy System
companies (other than the Excepted Companies).
In addition, to the extent such transactions are not
exempt from the Act or otherwise authorized or permitted by
rule, regulation or order of the Commission issued
thereunder, Non-utility Companies propose to continue to
provide Consulting Services to non-associate companies.
Consulting Services would include, without limitation,
providing technical capabilities and expertise to non-
associate and associate companies (other than Excepted
Companies) in the areas of electric power generation,
transmission and distribution and operations ancillary
thereto.<FN9> Non-utility Companies would continue to charge
fair market value for Consulting Services provided to non-
associate companies, subject to compliance with all
applicable rules of the Commission and the terms and
conditions set forth herein.
Administrative Services, Consulting Services and
Development Activities would generally be performed for
associate Non-utility Companies "at cost", in a manner
consistent with the terms and conditions set forth in the
June 1995 Order, including with respect to the use of the
expertise and resources of the Excepted Companies. However,
to the extent not exempt pursuant to rule, regulation or
order of the Commission, Entergy hereby requests an
exemption pursuant to Section 13(b) from the "at cost"
requirements of Rules 90 and 91 under the Act in connection
with the performance of Administrative Services, Consulting
Services and Development Activities by Non-utility Companies
for associate Non-utility Companies, subject, however, to
the condition that no Excepted Company shall be engaged or
otherwise involved, directly or indirectly, in the rendering
of Administrative Services, Consulting Services or
Development Activities that are provided to Non-utility
Companies at a price other than "cost".
(2) O&M Services.
Entergy further proposes to continue to provide,
indirectly through one or more O&M Subs, various O&M
Services to or for the benefit of developers, owners and
operators of domestic and foreign power projects and other
electric utility systems or facilities, including projects
that Entergy may develop on its own (through an associate
Non-utility Company) or in collaboration with third parties.
O&M Services would include, but not be limited to,
development, engineering, design, construction and
construction management, pre-operational start-up, testing,
and commissioning, long-term operations and maintenance,
fuel procurement, management and supervision, technical and
training, administrative support, market analysis,
consulting, coordination and any other managerial,
technical, administrative or consulting services required in
connection with the business of owning or operating
facilities used for the generation, transmission or
distribution of electric energy (including related
facilities for the production, conversion, sale or
distribution of thermal energy) or coordinating their
operations in the power market. An O&M Sub may also lease
all or a portion of the facilities with respect to which it
is providing O&M Services. However, an O&M Sub will not
undertake to enter into such leases without further approval
of the Commission if, as a result thereof, such O&M Sub
would become a "public-utility company" as defined in the
Act.
O&M Subs would charge fair market value for O&M
Services, subject to compliance with all applicable rules of
the Commission and the terms and conditions set forth
herein. To the extent not exempt pursuant to rule,
regulation or order of the Commission, Entergy requests an
exemption pursuant to Section 13(b) from the "at cost"
requirements of Rules 90 and 91 under the Act in connection
with the rendering of O&M Services to associate companies
(other than an Excepted Company); provided, that no such
services will be rendered to an associate power project
unless one or more of the following conditions shall apply:
(1) the project is a FUCO or is an EWG that derives no
part of its income, directly or indirectly, from the
generation and sale of electric energy within the
United States;
(2) the project is an EWG that sells electricity at
market-based rates which have been approved by the FERC
or the appropriate state public utility commission,
provided that the purchaser is not an Excepted Company;
(3) the project is a "qualifying facility" ("QF") under
the Public Utility Regulatory Policies Act of 1978, as
amended ("PURPA") that sells electricity exclusively at
rates negotiated at arm's length to one or more
industrial or commercial customers purchasing such
electricity for their own use and not for resale, or to
an electric utility company (other than an Excepted
Company) at the purchaser's "avoided cost" determined
in accordance with the regulations under PURPA; or
(4) the project is an EWG or a QF that sells
electricity at rates based upon its cost of service, as
approved by the FERC or any state public utility
commission having jurisdiction, provided that the
purchaser of such electricity is not an Excepted
Company.
O&M Subs would either be domestic or foreign
corporations, partnerships or other entities (depending upon
the legal and regulatory requirements of a particular
project). With respect to any O&M Sub that would not
qualify as an Exempt Project, Entergy Enterprises would
continue to provide the same information as to the formation
and capitalization of such subsidiary to the Commission in
the next quarterly certificate filed pursuant to Rule 24 as
currently required under the June 1995 Order. Such
certificate would, among other things, continue to represent
that, in connection with the rendering of O&M Services, no
Excepted Company has subsidized the operations of any O&M
Sub, and further, that any transfer of personnel from any
Excepted Company to, and the rendering of O&M Services by,
any such O&M Sub are in compliance with applicable rules,
regulations and orders of the Commission and have not
adversely affected the services provided by such Excepted
Companies to their respective customers. Entergy further
acknowledges that the Commission's authorization of fair
market prices with regard to any services provided by Non-
utility Companies shall not be binding upon the FERC or any
state public utility commission having jurisdiction over the
rates charged by any associate company of Entergy, and
represents and agrees that it will not assert or take any
position to the contrary in any administrative determination
of the rates that may be charged by any such associate
company.
E. Payment of Dividends.
To the extent such transactions are not exempt from the
Act or otherwise authorized or permitted by rule, regulation
or order of the Commission issued thereunder, Entergy
requests authorization under Section 12(c) of the Act and
Rule 46 thereunder for Non-utility Companies (including
without limitation Varibus Corporation, GSG&T, Inc. and
Southern Gulf Railway Company, each of which is a direct,
wholly-owned subsidiary of Entergy Gulf States) to declare
and pay dividends to their respective immediate parent
companies out of capital or unearned surplus, from time to
time through December 31, 2002, to the extent permitted
under applicable corporate law and any applicable financing
agreement which restricts distributions to shareholders.
The payment by Non-utility Companies of dividends out
of capital or unearned surplus will not contravene the
intent of Section 12(c) of the Act. Permitting the use of
distributable cash to pay dividends ultimately to Entergy
will benefit the Entergy System by enabling Entergy to
reduce or refinance outstanding Borrowings and fund
operations of Entergy System companies. The payment of
dividends out of capital or unearned surplus will not be
detrimental to the financial integrity of the Entergy System
or jeopardize the working capital any of the Excepted
Companies (including any public-utility subsidiary company
of Entergy) since the original source of such dividends
would be distributable cash derived exclusively from
Entergy's investments in Non-utility Companies.
III. Compliance With Rules 53 and 54.
Entergy hereby represents that, pursuant to Rule 54
under the Act, (1) for the reasons discussed below, the
condition set forth in Rule 53(a)(1) that Entergy's
"aggregate investment" in EWGs and FUCOs not exceed 50% of
Entergy's "consolidated retained earnings" is not currently
satisfied, and (2) all of the other criteria of Rule 53(a)
and (b) are satisfied.
Entergy's "aggregate investment" in Exempt Projects as
of November 30, 1997 is equal to approximately 50.8% of
Entergy's "consolidated retained earnings" as of September
30, 1997. Entergy's aggregate investment in Exempt Projects
exceeds the 50% limitation in Rule 53(a)(1) as a result of a
decrease of approximately $140 million in Entergy's
consolidated retained earnings from the quarter ended June
30, 1997 to the quarter ended September 30, 1997. This
decrease was attributable wholly to the recording in July
1997 of a one-time "windfall profits tax" imposed by the
British government on London Electricity plc ("London
Electricity"), an indirect subsidiary of Entergy and a FUCO,
and other privatized companies in the United Kingdom. This
tax, which was approximately US$234 million for London
Electricity, was made payable in two installments, the first
of which was paid on December 1, 1997, and the second of
which will be due on December 1, 1998. The first
installment of the tax was paid by London Electricity,
without need for additional investment by Entergy, and it is
not anticipated that there will be a need for any additional
investment by Entergy to fund London Electricity's payment
of the second installment."
Item 3. Applicable Statutory Provisions.
The last sentence of Item 3 of the Application-
Declaration in this File is hereby amended to read in its
entirety as follows:
"The proposed performance of Development Activities and
the proposed provision of Administrative Services and
Consulting Services by Non-utility Companies (other than
Exempt Projects) may be subject to Sections 9(a), 10 and
13(b) of the Act and Rules 83, 87, 90 and 91 thereunder."
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has
duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
ENTERGY CORPORATION
By: /S/William J. Regan, Jr.
William J. Regan, Jr.
Vice President and Treasurer
Dated: December 23, 1997
_______________________________
<FN1> See Entergy Corporation, et al., Holding Company Act
Release ("HCAR") No. 26322 (June 30, 1995) (hereinafter
referred to as the "June 1995 Order").
<FN2> The Authorized Subsidiary Companies currently consist of
Entergy Enterprises, Inc., Entergy Power, Inc., Entergy
Nuclear, Inc., Entergy Integrated Solutions, Inc. and
Entergy Operations Services, Inc.
<FN3> Specifically, Entergy Enterprises is authorized under the
June 1995 Order to provide such services to associate
companies other than the System operating companies, SERI,
SFI, ESI, EOI or any other subsidiaries Entergy may create
whose activities and operations are primarily related to
the domestic sale of electric energy at retail or at
wholesale to Entergy's affiliates or the provision of goods
or services thereto (such companies are sometimes referred
to herein, collectively, as the "Excepted Companies").
<FN4> Such authorization includes the marketing to non-associate
companies of intellectual property developed or otherwise
acquired by System companies, subject to certain profit
sharing provisions set forth in the June 1995 Order.
<FN5> The credit arrangements authorized in the February 1997
Order replaced those previously approved in a Commission
order dated July 27, 1995 (HCAR No. 26343) pursuant to
which Entergy could effect borrowings and reborrowings
under credit facilities in an aggregate principal amount
outstanding at any time not to exceed $300 million.
<FN6> As of December 15, 1997, the indebtedness outstanding under
these credit arrangements was approximately $150 million.
<FN7> Issuances of debt Securities by a Non-utility Company
(including without limitation secured and unsecured
promissory notes, bonds, debentures, or other evidence of
indebtedness) are not subject to prior Commission approval
under the Act pursuant to Rule 52(b).
<FN8> In addition, to the extent such action is not exempt from
the Act or otherwise authorized or permitted by rule,
regulation or order of the Commission issued thereunder,
Entergy requests authority herein for Non- utility Companies
to modify the terms of their charters or other governing
documents to effectuate the issuance of equity Securities.
<FN9> For example, Consulting Services could include the provision
of (1) management expertise and services, such as strategic
planning, feasibility studies, organization and policy
matters; (2) technical expertise and services, such
as design engineering, availability engineering,
construction management planning and procedures, financial
planning, system planning and operational planning;
(3) operating expertise, particularly in the operation and
maintenance of generating plants, transmission, distribution
and telecommunication facilities; (4) environmental
expertise, such as environmental licensing and compliance,
negotiation of federal, state, local and foreign
governmental permits and environmental planning; (5)
training expertise and services, particularly in the area
of operations and management; (6) technical and procedural
resources, such as are embedded in computer systems,
programs and manuals; (7) expertise in fuel procurement,
delivery and storage; (8) expertise relating to the
marketing and brokering of energy commodities; and
(9) demand side management or other energy management
consulting services.
