UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58
For the Quarterly Period Ended June 30, 1997
ENTERGY CORPORATION
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
_________________________________________________________________
(Name of registered holding company and address of principal
executive offices)
<PAGE>
ITEM 1 - ORGANIZATION CHART
Percentage of
Name of Energy or voting
reporting gas related Date of State of securities Nature of
company company organization organization held business
Entergy Energy May 17, 1995 Delaware a 100% The brokering
Power related owned and marketing
Marketing business subsidiary of energy
Corporation of commodities,
(EPMC)(new) Entergy including but
Corporation not limited to
electricity,
natural or
manufactured
gas and other
combustible
fuels ("Energy
marketing and
brokering").
See below for
a description
of the
activities
during the
reporting
period
EPMC Activities
During the quarterly period ended June 30, 1997, EPMC
engaged in the business of brokering and marketing of energy
commodities, including but not limited to electricity, natural or
manufactured gas and other combustible fuels. These services
were provided to electric utilities, power marketers, electric
and municipal cooperatives, and various other customers. During
this period, EPMC received and delivered 1,736,739 MWH's of power
and 182,000 mmbtu's of natural gas.
ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL
CONTRIBUTIONS
<TABLE>
<CAPTION>
Company Type of Principal Issue Person to Collateral Consideration
issuing security amount of or Cost of whom given with received for
security issued security renewal capital security security each security
was
issued
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EPMC Common 250 Issue N/A Entergy N/A $2,500,000 or
stock shares Corporation $10,000
per share
</TABLE>
Company contributing Company receiving Amount of capital
capital capital contribution
- ----------------------------------------------------------------
None None None
ITEM 3 - ASSOCIATE TRANSACTIONS
Part I - Transactions Performed by Reporting Companies on Behalf
of Associated Companies
Reporting Associate
company company Types of Direct Indirect Total
rendering receiving services costs costs Cost of amount
services services rendered charged charged capital billed
None None N/A -0- -0- N/A -0-
<PAGE>
Part II - Transactions Performed by Associated Companies on
Behalf of Reporting Companies
<TABLE>
<CAPTION>
Reporting Associate
company company Types of Indirect Total
rendering receiving services Direct costs costs Cost of amount
services services rendered charged charged capital billed
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Entergy EPMC Professional $1,855,600 $ -0- N/A $ 1,855,600*
Enterprises, services, and
Inc. (EEI) back office
support.
*Includes Entergy Services, Inc. costs of $260,434 for services rendered to
EPMC indirectly through EEI.
</TABLE>
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies:
Total consolidated capitalization as of $17,271,783,000 Line 1
June 30, 1997
Total capitalization multiplied by 15% 2,590,767,450 Line 2
(line 1 multiplied by 0.15)
Greater of $50 million or line 2 2,590,767,450 Line 3
Total current aggregate investment:
Energy marketing and brokering (EPMC) 2,500,000
--------------
Total current aggregate investment* 2,500,000 Line 4
--------------
Difference between the greater of $50 million
or 15% of capitalization and the total
aggregate investment of the registered $2,588,267,450 Line 5
holding company system (line 3 less line 4) ==============
*Excludes other investments of $2,500,000 included under Item 5 that are
excluded from the calculation of "Aggregate Investment" under rule 58.
ITEM 5 - OTHER INVESTMENTS
Major line of Other Other Reason for
energy-related investment in investment in difference in
business last U-9C-3 this U-9C-3 other
report report investment
- ----------------------------------------------------------------
Energy N/A $2,500,000* N/A
marketing and
brokering
(EPMC)
* EPMC received an order from the Federal Energy Regulatory
Commission on October 12, 1995 determining that EPMC was an
exempt wholesale generator under Section 32 of the Act. On
July 29, 1996, EPMC issued and sold 250 shares of common stock
to Entergy Corporation for $2,500,000 pursuant to the
financing exemption set forth in Section 32. EPMC withdrew
its exempt wholesale generator status on March 24, 1997.
<PAGE>
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
A. Financial Statements
ENTERGY POWER MARKETING CORPORATION
(a wholly-owned subsidiary of Entergy Corporation)
BALANCE SHEET
JUNE 30, 1997
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $2,366,827
Accounts receivable 28,803,113
Accounts receivable - affiliates 2,337,214
Deferred expenses 1,187,571
Prepaid expenses 55,027
-----------
Total Current Assets 34,749,752
Fixed assets, net of depreciation
and amortization of $86,439 1,962,055
Deferred income taxes 4,118
-----------
TOTAL $36,715,925
===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable $26,794,593
Accounts payable - affiliates 3,327,546
Income taxes payable 119,873
Deferred revenue 1,843,937
----------
Total Current Liabilities 32,085,949
==========
Commitments and Contingencies
Shareholder's Equity:
Common stock, no par value, 1,000 shares
authorized; 500 shares issued and outstanding 5,000,000
Accumulated deficit (370,024)
-----------
Total Shareholder's Equity 4,629,976
-----------
TOTAL $36,715,925
===========
See Notes to Financial Statements.
<PAGE>
ENTERGY POWER MARKETING CORPORATION
(a wholly-owned subsidiary of Entergy Corporation)
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 1997
(Unaudited)
Three Months Six Months Ended
Ended
Power sales and other revenues $37,244,822 $54,998,145
-----------------------------
Operating Expenses:
Purchase of power 36,132,573 52,714,254
Administrative and general 1,458,094 3,095,236
-----------------------------
Total 37,590,667 55,809,490
-----------------------------
Operating Income (Loss) (345,845) (811,345)
-----------------------------
Interest Income 41,822 74,145
-----------------------------
Income (Loss) Before Income Taxes (304,023) (737,200)
Income Tax Expense (Benefit) (106,408) (258,020)
-----------------------------
Net Income (Loss) ($197,615) ($479,180)
=============================
See Notes to Financial Statements.
<PAGE>
ENTERGY POWER MARKETING CORP.
(a wholly-owned subsidiary of Entergy Corporation)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization
Entergy Power Marketing Corp. ("the Company") was
incorporated in Delaware and was authorized to conduct business
on July 2, 1996. The Company, a wholly-owned subsidiary of
Entergy Corporation ("Entergy"), was incorporated primarily to
trade electric energy and fossil fuels on the wholesale market
through the use of various financial instruments. The Company
also acts as a broker for Entergy Power, Inc., an affiliated
Company which is wholly-owned by Entergy Corporation.
During the first half of 1997, the Company traded short-term
physical electricity, natural gas, and capacity contracts. No
transactions involving the use of financial instruments occurred
during the six months ending June 30, 1997.
Cash and Cash Equivalents
The Company considers cash on hand, deposits in banks,
temporary cash investments, and all unrestricted highly liquid
debt instruments with an original maturity of three months or
less to be cash equivalents.
Concentration of Credit Risk
Financial instruments which potentially subject the Company
to concentration of credit risk are cash and cash equivalents and
the sale of electricity or capacity contracts to third parties.
The Company's cash and cash equivalents which are primarily held
in one insured institution are in excess of federally insured
amounts. The Company's credit policy, with respect to entry into
contracts with third parties, consists of credit limits for
potential third parties based on ratings provided by Moody's and
Dun & Bradstreet. No collateral or other security is required by
the Company in relation to these contracts. The Company believes
that minimal credit risk exists due to non-performance by third
parties on physical contracts. However, non-performance by third
parties on these contracts could expose the company to increased
costs related to replacing the contract(s).
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
<PAGE>
ENTERGY POWER MARKETING CORP.
(a wholly-owned subsidiary of Entergy Corporation)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:
Fair Values
The Company considers financial instruments classified as
current assets and current liabilities to be reasonable estimates
of their fair values because of their short maturities. Refer to
Note 6 for additional disclosures and methodologies related to
fair values of physical contracts outstanding at June 30, 1997.
Regulation
The Company operates pursuant to Rule 58 of the Securities
and Exchange Commission. The Company, as a subsidiary of Entergy
Corporation, which is a registered public utility holding company
under the Public Utility Holding Company Act of 1935, as amended
("PUHCA"), is subject to the broad regulatory provisions of
PUHCA, which requires, among other things, Securities and
Exchange Commission ("SEC") approval for certain transactions.
Income Taxes
The Company, its parent, and affiliates file a consolidated
federal income tax return. Income taxes are allocated to the
Company in proportion to its contribution to consolidated taxable
income. SEC regulations require that no Entergy company pay more
taxes than it would have paid if a separate income tax return had
been filed.
In accordance with SFAS 109, "Accounting for Income Taxes",
deferred income taxes are recorded for all temporary differences
between the book and tax basis of assets and liabilities, which
relate primarily to startup expenditures, amortized for tax
purposes over sixty months.
Revenue Recognition
The Company recognizes revenues and expenses for the sale or
purchase of short-term power or capacity according to the terms
and dates specified within the contracts. The Company is exposed
to market risk through price fluctuations in the market prices of
electric power and capacity.
Financial Instruments
The Company engages in price risk management activities to
hedge the impact of market fluctuations on contractual
commitments for purchases and sales of electricity. Hedge
accounting is utilized in non-trading activities when there is
a high degree of correlation between price movements in the
derivative and the item designated as being hedged. In
instances where the anticipated correlation of price movements
does not occur, hedge accounting is terminated and future
changes in the value of the derivative are recognized as gains or
losses. If the hedged item is sold, the value of the
derivative is recognized in income. Gains and losses on derivative
financial instruments used for hedging purposes are recognized in
the Income Statement in the same manner as the hedged item and
are recognized in the Balance Sheet as deferred assets or
liabilities. The cash flow impact of derivative and other
financial instruments used for trading and non-trading purposes
is reflected as cash flows from operating activities in the
Statement of Cash Flows.
<PAGE>
ENTERGY POWER MARKETING CORP.
(a wholly-owned subsidiary of Entergy Corporation)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:
Depreciation and Amortization
Depreciation is computed using the straight-line method over
the useful life of the furniture and equipment. Leasehold costs
and improvements are amortized over the lesser of their estimated
useful lives or the remaining lease term. Average useful lives
range from 3 to 7 years.
2. INCOME TAXES:
During the first six months of 1997, the Company has a
credit due to a net operating loss for that period. The
Company's effective income tax rate was 35%. The Company does
not pay state income taxes.
3. LEASES:
The Company entered into an operating lease agreement on
October 9, 1996, for the use of its office facilities. This
agreement is effective February 1, 1997, and expires on January
31, 2002.
Minimum future rental payments under this operating lease as
of June 30, 1997, are as follows:
Year ending December 31,
1997 $131,287
1998 262,575
1999 262,575
2000 262,575
2001 and thereafter 284,456
-----------
Total minimum lease payments $ 1,203,468
===========
The Company also entered into an operating lease agreement
for a period of one year for its sole branch office. This
agreement, entered into on August 7, 1996, requires monthly lease
payments of $720 through the end of the lease term.
4. COMMON STOCK:
The Company is authorized, by its Charter, to issue 1,000
shares of its no par common stock. During 1997, the Company sold
250 shares of its common stock to Entergy for $2.5 million. The
proceeds of this sale were used primarily to fund the Company's
operations.
<PAGE>
ENTERGY POWER MARKETING CORP.
(a wholly-owned subsidiary of Entergy Corporation)
NOTES TO FINANCIAL STATEMENTS
5. RELATED PARTY TRANSACTIONS:
During 1997, the Company did not have any employees or
physical facilities as these resources were provided to the
Company by Entergy Enterprises, Inc., a wholly-owned subsidiary
of Entergy Corporation. The Company recognized approximately $2
million of expense in 1997 for these services and related
charges.
During July 1996, the Company entered into a one-year short-
term "Flexible Power Agreement" ("Agreement") with Entergy Power,
Inc. The Agreement, among other things, stipulates general
terms, rate guidelines, and conditions which govern the short-
term transactions between the Company and Entergy Power, Inc.
During 1997, the Company also had purchases totaling
approximately $5.3 million from Entergy Power, Inc., in the form
of purchased power, transmission expense, plant charges, and
operation and maintenance charges.
At June 30, 1997, the Company had two outstanding contracts
with Entergy Power, Inc. to purchase electricity at Entergy
Power's cost.
6. COMMITMENTS AND CONTINGENCIES:
As of June 30, 1997, the Company had outstanding commitments
to both purchase and sell electricity during the last half of
1997. The marked-to-market unrealized gain for these
transactions amounted to approximately $4.4 million based on
quoted market prices.
B. Exhibits
Form of Short-Term Flexible Power Service Agreement for
Entergy Power, Inc.
Service Agreement between Entergy Enterprises, Inc. and
Entergy Power Marketing Corporation.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto
duly authorized.
Entergy Corporation
By: /s/ Louis E. Buck
--------------------------
Louis E. Buck
Vice President, Chief
Accounting Officer and
Assistant Secretary
Dated: August 29, 1997
<PAGE>
Mary W. Cochran, Esq. Norma K. Scogin, Esq.
Arkansas Public Service Commission Texas Attorney General's Office
1000 Center Street 300 West 15th Street/10th Floor
Little Rock, AR 72201 Austin, TX 78701
Lawrence C. St. Blanc, Secretary Sherry A. Quirk, Esq.
Louisiana Public Service Commission Verner, Liipfert, Bernhard,
Post Office Box 91154 McPherson and Hand
Baton Rouge, LA 70821-9154 901 15th Street, NW / Suite 700
Washington, DC 20005-2301
William Bruce McKinley, Esq. Frank Spencer, Esq.
Mississippi Public Service Commission Assistant Attorney General
Walter Sillers State Office Building Mississippi Attorney
550 High Street / 19th Floor General's Office
Jackson, MS 39215 Post Office Box 22947
Jackson, MS 39225
George W. Fleming, Esq. Mr. James Galloway, Filing Clerk
Mississippi Public Utilities Staff Central Records - PUCT
Post Office Box 1174 7800 Shoal Creek Boulevard
Jackson, MS 39215 Suite 400N
Austin, TX 78757
<PAGE>
SERVICE AGREEMENT
BETWEEN
ENTERGY ENTERPRISES, INC.
AND
ENTERGY POWER MARKETING CORP.
THIS AGREEMENT, made and entered into as of June 17,
1995 by and between Entergy Enterprises, Inc., a corporation
organized under the laws of the State of Delaware
(hereinafter sometimes referred to as "Service Company") and
Entergy Power Marketing Corp., a corporation organized under
the laws of the State of Delaware ("Client Company").
WITNESSETH:
WHEREAS, Service Company and Client Company are both
direct or indirect subsidiaries of Entergy Corporation, and
Client Company, together with Entergy Corporation and
Entergy Corporation's other direct or indirect subsidiaries
and Service Company form the Entergy System; and
WHEREAS, Service Company is authorized by the
Securities and Exchange Commission (the "Commission") under
Section 13 of the Public Utility Holding Company Act of
1935, as amended (the "Act") to render to certain indirect
and indirect subsidiaries of Entergy Corporation which are
not domestic retail electric utility companies ("Client
Companies")<FN1> certain services and to render to Client
Company services as herein provided; and
WHEREAS, in the performance of past and future services
for the Client Companies, Service Company has acquired and
will acquire certain properties and other resources; and
WHEREAS, economies and increased efficiencies
benefiting the Entergy System will result from the
performance by Service Company of services for Client
Company; and
WHEREAS, subject to the terms and conditions herein
described, Service Company is willing, upon request by
Client Company, to render such services and provide such
property and resources to Client Company at cost, determined
in accordance with applicable rules, regulations and orders
of the Commission under the Act;
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements herein, the parties hereto hereby
agree as follows:
1. Definitions
As used hereinafter, the following terms, in
addition to those elsewhere defined in this
Agreement, shall have the following meanings
unless the context otherwise requires:
A. "Services" shall mean the services
described in the Article 3 hereof.
B. "Non-Affiliate" means any corporation,
company, agency, government, business, entity or
person other than (i) Entergy Corporation, (ii) a
direct or indirect subsidiary of Entergy
Corporation, or (iii) a person employed by Entergy
Corporation, or any of such subsidiaries.
Agreement to Furnish Services.
A. Service Company hereby agrees to furnish
or otherwise make available to Client Company,
upon the terms and conditions hereinafter set
forth, the Services set forth in Section 3 hereof.
Service Company will keep itself and its personnel
available and competent to render to Client
Company the Services on the same basis as such
Services are provided to the other Client
Companies.
B. Upon its receipt of Client
Company's service request, Service Company will,
if it has or can have available the personnel and
resources needed to fill the service request,
furnish to Client Company, upon the terms and
conditions hereinafter set forth, such of the
services set forth in Section 3 hereof, at such
times, for such periods and in such manner as
Client Company may from time to time request;
provided, however, that the determination of
whether Service Company has the available
personnel and resources to perform in accordance
with the service request will be entirely within
the discretion of Service Company, and Service
Company may at its sole option elect not to
perform any requested services, except that, once
having agreed to perform pursuant to a service
request, Service Company shall not withdraw or
depart from such performance without the consent
of Client Company.
C. The providing of services by
Service Company pursuant to this Agreement shall
in all cases and notwithstanding anything herein
contained to the contrary be subject to any
limitations contained in authorizations, rules or
regulations of those governmental agencies, if
any, having jurisdiction over Service Company,
Client Company, or such providing of Services.
Description of Services.<FN2>
A. General Executive and Advisory Services.
Advise and assist the officers and employees of
Client Company in connection with various phases
of its business and operations, including
particularly (but not exclusively) those phases
which involve coordination of planning or
operations between Client Company and other
entities.
B. General Engineering. Perform general
engineering work, including system production and
transmission studies; prepare and analyze
apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies
and problems, and fuel supply studies; and advise
and assist in connection with analyses of
operations and operating and construction budgets.
C. Development of Other Business
Enterprises. Advise and assist Client
Company in the investigation of other business
enterprises and the development of such other
business enterprises.
D. Design Engineering. Perform detailed
design work as requested by Client Company
E. Purchasing. Render Purchasing and
group purchasing services to Client Company,
coordinate group purchasing, and supply expediting
services. All requests for bids shall be made by
and purchases confirmed in the name of Client
Company (or its customer, if requested by Client
Company).
F. Accounting and Statistical. Perform
for Client Company all such business, accounting,
and auditing services and install such internal
accounting and auditing procedures as are
requested by Client Company to maintain its books
and records properly and account for and safeguard
its operations and properties; advise and assist
Client Company in connection with the installation
of accounting systems and similar efforts,
requirements of regulatory bodies with respect to
accounting, studies and accounting procedures and
practices and improve efficiency, accounting
entries resulting from financial transactions,
internal audits, employment of independent
auditors, preparation and analyses of financial
and operating reports and other statistical
matters relating to Client company or its
customers, preparation of reports to regulatory
commission, insurance companies and others,
standardization or accounting and statistical
forms in the interest of economy, and other
accounting and statistical matters.
G. Finance and Treasury. Advise and
assist Client Company on financing matters,
including sort and long range financial planning,
determination of types and terms of sales of
securities, the preparation of petitions and
applications for the issuance of securities and
the preparation of various documents required in
connection therewith, negotiation and structuring
of financing arrangements, and all treasury
matters, including banking and investment of
surplus funds.
H. Taxes. Advise and assist Client
Company in connect with tax matters, including
preparation of Federal, State or foreign income
and other tax returns and of protests, claims and
briefs where necessary, tax accruals, and other
matters in connection with any applicable taxes,
governmental fees or assessments, and assistance
in connection with audit or returns by the
Internal Revenue Service and State Tax Agencies.
I. Risk Management. Advise and assist
Client Company in connection with risk management
matters including but not limited to insurance and
bonding, including contracts with insurers,
trustees and actuaries and the placing of
individual or blanket/group policies covering
Client Company and/or other Client Companies, and
other insurance and bonding problems as required.
J. Employee Benefits. Advise and assist
Client Company in connection with employee
benefits matters including but not limited to
welfare and pension matters.
K. Corporate. Advise and assist
Client Company in connection with corporate
affairs, including assistance and suggestions in
connection with the preparation of petitions and
applications for the issuance of securities,
contracts for the sale or underwriting of
securities, maintenance of minutes of directors'
and stockholders' meetings and other proceedings
and of other related corporate records; and also
arrangements for stockholders' meetings, including
notices, proxies and records thereof, and for
other types of meetings.
L. Budgeting. Advise and assist
Client Company in matters involving the
preparation and development of capital and
operating budgets, cash and cost forecasts, and
budgetary controls and preparation of long-range
forecast.
M. Business Promotion and Public Relations.
Advise and assist Client Company in the
development of marketing and sales programs, in
the preparation and use of advertising and sales
materials, and in the determination and carrying
out of promotional programs.
N. Employee Services. Furnish Client
Company with advisory and administrative services
and programs in connection with employees and
employee relations matters, payroll, recruitment,
employee placement, training, compensation,
safety, labor relations and health, welfare and
employee benefits.
O. Systems and Procedures. Advise and
assist Client Company in the formation of sound
operating practices and methods of procedures, the
standardization of forms, the purchase, rental and
use of mechanical and electronic data processing,
computing and communications equipment, in
conducting economic research and planning and in
the development of special economic studies.
P. Regulatory Matters.
Consultation and advice with respect to regulatory
matters, particularly those involving the
Securities and Exchange Commission or the Federal
Energy Regulatory Commission, and the provision of
liaison and assistance in processing matters with
the staffs of such commissions.
Q. Systems Operations Center.
Make available services from the operation of a
System Operations Center for the control of bulk
power supply and load dispatching within the
Entergy System, with Client Company, and with
interconnected systems.
R. Data Processing Services. Make
available services from the operation of a data
processing computer Center serving the Entergy
System. This may include: applications software
development, maintenance and enhancements; data
communications network design, operation and
management; computer center production operations;
and information systems consulting.
S. Access to and Use of Resources. Make
available to Client Company in the conduct of its
business and/or, to the extent necessary or
appropriate as required in the performance of its
services to its customers, access to, use of, or
rights in all Service Company's resources,
including facilities, products, processes,
techniques, computer hardware and software,
technical information, training aids and
properties, vehicles, equipment, machines and
other property, whether owned, leased or licensed
by or otherwise available to Service Company.
T. Training. Assist Client Company in
providing training to personnel of Client Company
or of Non-Affiliates; develop and make available
training procedures, materials and facilities, and
provide instructors.
U. Legal Services. Provide services and
advice relating to litigation, contracts, leases,
real estate, property rights and other legal
matters.
V. General. Make available services
in the areas of construction, planning and
supervision, design, management, programs, quality
assurance, licensing matters, research and
development, and communications systems and
procedures.
W Other Services. Render advise and
assistance in connection with such other matters
as Client Company may request and Service Company
may be able to perform with respect to Client
Company's business and operations.
4. Compensation for Services.
As compensation for Services actually requested by
Client Company and rendered to it by Service
Company, Client Company hereby agrees to pay to
Service Company all direct and indirect costs of
such Services, computed in accordance with
applicable rules and regulations(including, but
not limited to, Rules 90 and 91) under the Act and
appropriate accounting standards. Bills will be
rendered for the amount of such costs on or before
the 20th day of the succeeding month and will be
payable on or before the 60th day thereafter. The
cost of Services to be allocated to and paid by
Client Company shall include all direct charges
and Client Company's pro rata share of Service
company's indirect costs, determined as outlined
on Exhibits I and II attached hereto and
incorporated herein by reference.
5. Service Requests.
The services performed in accordance with service
requests issued or made by or on behalf of Client
Company and accepted by Service Company will be
assigned an applicable service request number to
enable specific work to be properly allocated by
project or other appropriate basis. Service
requests (I) shall be in writing, (ii) shall be
signed by appropriate representatives of Client
Company<FN3> and of Service company, (iii) shall be
as specific as practicable in defining the
Services requested to be performed, and (iv) shall
set forth the scope, duration and estimated cost
of the services to be performed pursuant to the
service request, provided that (I) any such
amendment or alteration which results in a
material change in the scope of the work to be
performed or equipment to be provided is agreed to
by Service Company, (ii) the costs for the
services covered by the service request will
include any expense incurred by Service Company as
a direct result of the service request, and (iii)
no amendment, alteration or rescission of a
service request will release Client Company from
liability for all such direct costs already
incurred or contracted for by Service Company
pursuant to the service request, regardless of
whether the work associated with such costs has
been completed.
6. Miscellaneous.
This Agreement shall be binding upon the successor
and assigns of the parties hereto, provided that
Service Company shall not be entitled to assign or
subcontract out any of its obligations under this
Agreement or under any purchase order or service
request issued hereunder without the prior written
approval of Client Company. This Agreement shall
be construed and enforced under and in accordance
with the laws of the State of Arkansas. This
Agreement may be executed in counterparts, each
one of which when fully executed shall be deemed
to have the same dignity, force and effect as an
original. No provision of this Agreement shall be
deemed waived nor breach of this Agreement
consented to unless such waiver or consent is set
forth in writing and executed by the party hereto
making such waiver or consent.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed in their respective corporate
names by their respective Presidents or one of their
respective Vice Presidents and their respective seals to be
hereunto affixed and attested by their respective
Secretaries or one of their respective Assistant Secretaries
or one of their respective Assistant Secretaries as of the
day and year first above written.
ENTERGY ENTERPRISES, INC.
ATTEST:
By:
Frederick F. Nugent Robert A. Keegan
Assistant Secretary Vice President
CLIENT COMPANY
ATTEST:
By:
Frederick F. Nugent Robert J. Cushman
Assistant Secretary Vice President
_______________________________
<FN1> Those companies to which Service Company shall not
render Services are Arkansas Power & Light Company,
Louisiana Power & Light Company, Mississippi Power & Light
Company, New Orleans Public Service Inc., Entergy
Operations, Inc., system Fuels, Inc., System Energy
Resources, Inc., Entergy Services, Inc., and such other
similar direct or indirect subsidiaries of Entergy
corporation now or hereafter existing whose activities and
operations are primarily related to the domestic sale of
electric energy at retail or at wholesale to affiliates, or
the provision of goods or services thereto.
<FN2> Note -The following is a list of the various kinds of
services that could be provided by Enterprises to its Client
Companies. However, this list is not intended to be
exhaustive, and the services to be provided to any
particular Client Company will depend upon, among other
factors, the nature of such company and the needs of its
business.
<FN3> The representative or Client Company shall be an officer
of Client Company acting on its behalf in signing the
service request.
SERVICE AGREEMENT
BETWEEN
ENTERGY ENTERPRISES, INC.
AND
ENTERGY POWER MARKETING CORP.
THIS AGREEMENT, made and entered into as of June 17,
1995 by and between Entergy Enterprises, Inc., a corporation
organized under the laws of the State of Delaware
(hereinafter sometimes referred to as "Service Company") and
Entergy Power Marketing Corp., a corporation organized under
the laws of the State of Delaware ("Client Company").
WITNESSETH:
WHEREAS, Service Company and Client Company are both
direct or indirect subsidiaries of Entergy Corporation, and
Client Company, together with Entergy Corporation and
Entergy Corporation's other direct or indirect subsidiaries
and Service Company form the Entergy System; and
WHEREAS, Service Company is authorized by the
Securities and Exchange Commission (the "Commission") under
Section 13 of the Public Utility Holding Company Act of
1935, as amended (the "Act") to render to certain indirect
and indirect subsidiaries of Entergy Corporation which are
not domestic retail electric utility companies ("Client
Companies")<FN1> certain services and to render to Client
Company services as herein provided; and
WHEREAS, in the performance of past and future services
for the Client Companies, Service Company has acquired and
will acquire certain properties and other resources; and
WHEREAS, economies and increased efficiencies
benefiting the Entergy System will result from the
performance by Service Company of services for Client
Company; and
WHEREAS, subject to the terms and conditions herein
described, Service Company is willing, upon request by
Client Company, to render such services and provide such
property and resources to Client Company at cost, determined
in accordance with applicable rules, regulations and orders
of the Commission under the Act;
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements herein, the parties hereto hereby
agree as follows:
1. Definitions
As used hereinafter, the following terms, in
addition to those elsewhere defined in this
Agreement, shall have the following meanings
unless the context otherwise requires:
A. "Services" shall mean the services
described in the Article 3 hereof.
B. "Non-Affiliate" means any corporation,
company, agency, government, business, entity or
person other than (i) Entergy Corporation, (ii) a
direct or indirect subsidiary of Entergy
Corporation, or (iii) a person employed by Entergy
Corporation, or any of such subsidiaries.
Agreement to Furnish Services.
A. Service Company hereby agrees to furnish
or otherwise make available to Client Company,
upon the terms and conditions hereinafter set
forth, the Services set forth in Section 3 hereof.
Service Company will keep itself and its personnel
available and competent to render to Client
Company the Services on the same basis as such
Services are provided to the other Client
Companies.
B. Upon its receipt of Client
Company's service request, Service Company will,
if it has or can have available the personnel and
resources needed to fill the service request,
furnish to Client Company, upon the terms and
conditions hereinafter set forth, such of the
services set forth in Section 3 hereof, at such
times, for such periods and in such manner as
Client Company may from time to time request;
provided, however, that the determination of
whether Service Company has the available
personnel and resources to perform in accordance
with the service request will be entirely within
the discretion of Service Company, and Service
Company may at its sole option elect not to
perform any requested services, except that, once
having agreed to perform pursuant to a service
request, Service Company shall not withdraw or
depart from such performance without the consent
of Client Company.
C. The providing of services by
Service Company pursuant to this Agreement shall
in all cases and notwithstanding anything herein
contained to the contrary be subject to any
limitations contained in authorizations, rules or
regulations of those governmental agencies, if
any, having jurisdiction over Service Company,
Client Company, or such providing of Services.
Description of Services.<FN2>
A. General Executive and Advisory Services.
Advise and assist the officers and employees of
Client Company in connection with various phases
of its business and operations, including
particularly (but not exclusively) those phases
which involve coordination of planning or
operations between Client Company and other
entities.
B. General Engineering. Perform general
engineering work, including system production and
transmission studies; prepare and analyze
apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies
and problems, and fuel supply studies; and advise
and assist in connection with analyses of
operations and operating and construction budgets.
C. Development of Other Business
Enterprises. Advise and assist Client
Company in the investigation of other business
enterprises and the development of such other
business enterprises.
D. Design Engineering. Perform detailed
design work as requested by Client Company
E. Purchasing. Render Purchasing and
group purchasing services to Client Company,
coordinate group purchasing, and supply expediting
services. All requests for bids shall be made by
and purchases confirmed in the name of Client
Company (or its customer, if requested by Client
Company).
F. Accounting and Statistical. Perform
for Client Company all such business, accounting,
and auditing services and install such internal
accounting and auditing procedures as are
requested by Client Company to maintain its books
and records properly and account for and safeguard
its operations and properties; advise and assist
Client Company in connection with the installation
of accounting systems and similar efforts,
requirements of regulatory bodies with respect to
accounting, studies and accounting procedures and
practices and improve efficiency, accounting
entries resulting from financial transactions,
internal audits, employment of independent
auditors, preparation and analyses of financial
and operating reports and other statistical
matters relating to Client company or its
customers, preparation of reports to regulatory
commission, insurance companies and others,
standardization or accounting and statistical
forms in the interest of economy, and other
accounting and statistical matters.
G. Finance and Treasury. Advise and
assist Client Company on financing matters,
including sort and long range financial planning,
determination of types and terms of sales of
securities, the preparation of petitions and
applications for the issuance of securities and
the preparation of various documents required in
connection therewith, negotiation and structuring
of financing arrangements, and all treasury
matters, including banking and investment of
surplus funds.
H. Taxes. Advise and assist Client
Company in connect with tax matters, including
preparation of Federal, State or foreign income
and other tax returns and of protests, claims and
briefs where necessary, tax accruals, and other
matters in connection with any applicable taxes,
governmental fees or assessments, and assistance
in connection with audit or returns by the
Internal Revenue Service and State Tax Agencies.
I. Risk Management. Advise and assist
Client Company in connection with risk management
matters including but not limited to insurance and
bonding, including contracts with insurers,
trustees and actuaries and the placing of
individual or blanket/group policies covering
Client Company and/or other Client Companies, and
other insurance and bonding problems as required.
J. Employee Benefits. Advise and assist
Client Company in connection with employee
benefits matters including but not limited to
welfare and pension matters.
K. Corporate. Advise and assist
Client Company in connection with corporate
affairs, including assistance and suggestions in
connection with the preparation of petitions and
applications for the issuance of securities,
contracts for the sale or underwriting of
securities, maintenance of minutes of directors'
and stockholders' meetings and other proceedings
and of other related corporate records; and also
arrangements for stockholders' meetings, including
notices, proxies and records thereof, and for
other types of meetings.
L. Budgeting. Advise and assist
Client Company in matters involving the
preparation and development of capital and
operating budgets, cash and cost forecasts, and
budgetary controls and preparation of long-range
forecast.
M. Business Promotion and Public Relations.
Advise and assist Client Company in the
development of marketing and sales programs, in
the preparation and use of advertising and sales
materials, and in the determination and carrying
out of promotional programs.
N. Employee Services. Furnish Client
Company with advisory and administrative services
and programs in connection with employees and
employee relations matters, payroll, recruitment,
employee placement, training, compensation,
safety, labor relations and health, welfare and
employee benefits.
O. Systems and Procedures. Advise and
assist Client Company in the formation of sound
operating practices and methods of procedures, the
standardization of forms, the purchase, rental and
use of mechanical and electronic data processing,
computing and communications equipment, in
conducting economic research and planning and in
the development of special economic studies.
P. Regulatory Matters.
Consultation and advice with respect to regulatory
matters, particularly those involving the
Securities and Exchange Commission or the Federal
Energy Regulatory Commission, and the provision of
liaison and assistance in processing matters with
the staffs of such commissions.
Q. Systems Operations Center.
Make available services from the operation of a
System Operations Center for the control of bulk
power supply and load dispatching within the
Entergy System, with Client Company, and with
interconnected systems.
R. Data Processing Services. Make
available services from the operation of a data
processing computer Center serving the Entergy
System. This may include: applications software
development, maintenance and enhancements; data
communications network design, operation and
management; computer center production operations;
and information systems consulting.
S. Access to and Use of Resources. Make
available to Client Company in the conduct of its
business and/or, to the extent necessary or
appropriate as required in the performance of its
services to its customers, access to, use of, or
rights in all Service Company's resources,
including facilities, products, processes,
techniques, computer hardware and software,
technical information, training aids and
properties, vehicles, equipment, machines and
other property, whether owned, leased or licensed
by or otherwise available to Service Company.
T. Training. Assist Client Company in
providing training to personnel of Client Company
or of Non-Affiliates; develop and make available
training procedures, materials and facilities, and
provide instructors.
U. Legal Services. Provide services and
advice relating to litigation, contracts, leases,
real estate, property rights and other legal
matters.
V. General. Make available services
in the areas of construction, planning and
supervision, design, management, programs, quality
assurance, licensing matters, research and
development, and communications systems and
procedures.
W Other Services. Render advise and
assistance in connection with such other matters
as Client Company may request and Service Company
may be able to perform with respect to Client
Company's business and operations.
4. Compensation for Services.
As compensation for Services actually requested by
Client Company and rendered to it by Service
Company, Client Company hereby agrees to pay to
Service Company all direct and indirect costs of
such Services, computed in accordance with
applicable rules and regulations(including, but
not limited to, Rules 90 and 91) under the Act and
appropriate accounting standards. Bills will be
rendered for the amount of such costs on or before
the 20th day of the succeeding month and will be
payable on or before the 60th day thereafter. The
cost of Services to be allocated to and paid by
Client Company shall include all direct charges
and Client Company's pro rata share of Service
company's indirect costs, determined as outlined
on Exhibits I and II attached hereto and
incorporated herein by reference.
5. Service Requests.
The services performed in accordance with service
requests issued or made by or on behalf of Client
Company and accepted by Service Company will be
assigned an applicable service request number to
enable specific work to be properly allocated by
project or other appropriate basis. Service
requests (I) shall be in writing, (ii) shall be
signed by appropriate representatives of Client
Company<FN3> and of Service company, (iii) shall be
as specific as practicable in defining the
Services requested to be performed, and (iv) shall
set forth the scope, duration and estimated cost
of the services to be performed pursuant to the
service request, provided that (I) any such
amendment or alteration which results in a
material change in the scope of the work to be
performed or equipment to be provided is agreed to
by Service Company, (ii) the costs for the
services covered by the service request will
include any expense incurred by Service Company as
a direct result of the service request, and (iii)
no amendment, alteration or rescission of a
service request will release Client Company from
liability for all such direct costs already
incurred or contracted for by Service Company
pursuant to the service request, regardless of
whether the work associated with such costs has
been completed.
6. Miscellaneous.
This Agreement shall be binding upon the successor
and assigns of the parties hereto, provided that
Service Company shall not be entitled to assign or
subcontract out any of its obligations under this
Agreement or under any purchase order or service
request issued hereunder without the prior written
approval of Client Company. This Agreement shall
be construed and enforced under and in accordance
with the laws of the State of Arkansas. This
Agreement may be executed in counterparts, each
one of which when fully executed shall be deemed
to have the same dignity, force and effect as an
original. No provision of this Agreement shall be
deemed waived nor breach of this Agreement
consented to unless such waiver or consent is set
forth in writing and executed by the party hereto
making such waiver or consent.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed in their respective corporate
names by their respective Presidents or one of their
respective Vice Presidents and their respective seals to be
hereunto affixed and attested by their respective
Secretaries or one of their respective Assistant Secretaries
or one of their respective Assistant Secretaries as of the
day and year first above written.
ENTERGY ENTERPRISES, INC.
ATTEST:
By:
Frederick F. Nugent Robert A. Keegan
Assistant Secretary Vice President
CLIENT COMPANY
ATTEST:
By:
Frederick F. Nugent Robert J. Cushman
Assistant Secretary Vice President
_______________________________
<FN1> Those companies to which Service Company shall not
render Services are Arkansas Power & Light Company,
Louisiana Power & Light Company, Mississippi Power & Light
Company, New Orleans Public Service Inc., Entergy
Operations, Inc., system Fuels, Inc., System Energy
Resources, Inc., Entergy Services, Inc., and such other
similar direct or indirect subsidiaries of Entergy
corporation now or hereafter existing whose activities and
operations are primarily related to the domestic sale of
electric energy at retail or at wholesale to affiliates, or
the provision of goods or services thereto.
<FN2> Note -The following is a list of the various kinds of
services that could be provided by Enterprises to its Client
Companies. However, this list is not intended to be
exhaustive, and the services to be provided to any
particular Client Company will depend upon, among other
factors, the nature of such company and the needs of its
business.
<FN3> The representative or Client Company shall be an officer
of Client Company acting on its behalf in signing the
service request.
