File No. 70-9123
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
____________________________
AMENDMENT NO. 3
To
APPLICATION-DECLARATION
Under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________
Entergy Corporation Entergy Integrated Solutions, Inc.
639 Loyola Avenue 3838 N. Causeway Blvd., Suite 53400
New Orleans, LA 70113 Metarie, LA 70002
Entergy Enterprises, Inc. Entergy Nuclear, Inc.
4 Park Plaza, Suite 2000 1340 Echelon Parkway
Irvine, CA 92614 Jackson, MS 39213
Entergy Power, Inc. Entergy Operations Services, Inc.
Parkwood Two Building 110 James Parkway West, Suite 110
10055 Grogan's Mill Road St. Rose, LA 70087
Suite 500
The Woodlands, TX 77380
Entergy Global Power Entergy Power Operations U.S., Inc.
Operations Corporation 4 Park Plaza, Suite 2000
4 Park Plaza, Suite 2000 Irvine, CA 92614
Irvine, CA 92614
Entergy Power Marketing Corp.
Parkwood Two Building
10055 Grogan's Mill Road, Suite 500
The Woodlands, TX 77380
(Names of companies filing this statement
and addresses of principal executive offices)
____________________________
Entergy Corporation
(Name of top registered holding company parent of
each applicant or declarant)
____________________________
Naomi A. Nakagama Charles J. Brown, III
Senior Vice President - Finance Vice President
and Treasurer Entergy Enterprises, Inc.
Entergy Services, Inc. 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, as
previously amended, is hereby further 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"), and its
wholly-owned subsidiaries Entergy Enterprises, Inc., Entergy
Power, Inc., Entergy Power Marketing Corp., Entergy Nuclear,
Inc., Entergy Integrated Solutions, Inc., Entergy Operations
Services, Inc., Entergy Global Power Operations Corporation and
Entergy Power Operations U.S., Inc. (Entergy and such
subsidiaries, collectively, the "Applicants") hereby request 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 affiliates
which are Non-utility Companies (as hereinafter defined) 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 Commission1/, and/or for purposes of
acquiring (including financing or refinancing an acquisition),
owning and holding the securities of affiliates 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 (including "O&M Subs", as hereinafter defined) that
currently are authorized or permitted by rule, regulation or
order of the Commission under the Act to engage in other
businesses ("Authorized Subsidiary Companies")2/, (v) other New
Subsidiaries and/or (vi) "energy-related companies", as defined
in Rule 58 under the Act ("Energy-related Companies";3/ 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; (4) for Non-utility Companies to perform certain
service and development activities currently authorized by the
Commission; and (5) for certain related transactions, all as more
particularly described herein.
I. Background.
The following section generally describes the business of
Entergy and its subsidiaries, including each of the other
Applicants.
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. ("EPI"); (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. ("EIS"); (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. ("EPMC"); and (10) various other companies formed or to be
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 Enterprises, Inc.
Pursuant to the June 1995 Order, the Commission authorized
Entergy Enterprises, 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 companies4/, (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 companies5/, 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").
C. Entergy Power, Inc.
Pursuant to Commission order dated August 27, 1990 (the
"1990 Order")6/, EPI was formed to participate as a supplier of
electricity at wholesale to non-associate companies in bulk power
markets. In accordance with the 1990 Order, EPI acquired (1) the
31.5% undivided ownership interest of Entergy Arkansas in Unit
No. 2 of the Independence Steam Electric Generating Station
("ISES 2"), a coal-fired generating facility located in Arkansas,
and (2) Entergy Arkansas' 100% ownership interest in Unit No. 2
of the Ritchie Steam Electric Generating Station ("Ritchie 2"), a
544 megawatt ("MW") oil- and gas-fired generating facility
located in Arkansas. EPI's acquired interests in ISES 2 and
Ritchie 2 represented an aggregate of 809 MW of generating
capacity.7/ Since 1990, EPI has been engaged in the business of
marketing and selling its capacity and related energy, at
wholesale, to non-associate bulk power purchasers on negotiated
(i.e., market based) terms and conditions. EPI is presently
authorized by the Federal Energy Regulatory Commission (the
"FERC") to sell, at market based rates, up to an aggregate of
1,500 MW of capacity and energy. To facilitate such sales, EPI
receives electric transmission service pursuant to the Entergy
System's open access transmission tariff.
D. Entergy Power Marketing Corp.
EPMC was originally organized in 1995 as an EWG in order to
engage in the marketing and brokering of electric power at
wholesale.8/ Pursuant to Commission order dated January 6, 1998
(HCAR No. 26812), EPMC has relinquished its EWG status, and
currently engages in the brokering and marketing of energy
commodities in wholesale and retail markets throughout the United
States, subject to compliance with applicable state laws and to
certain other conditions set forth in such order.9/ EPMC also
engages in risk management and other activities related to its
energy commodities business. In accordance with its Commission
order, EPMC does not own or operate any facilities that would
cause it to be an "electric utility company" or a "gas utility
company" as defined in the Act.
E. Entergy Integrated Solutions, Inc.
Pursuant to Commission order dated December 28, 1992 (HCAR
No. 25718), EIS was organized as a wholly-owned subsidiary of
Entergy Enterprises for the purpose of engaging in the energy
management services business.10/ EIS's primary business has been
the installation and maintenance of high efficiency lighting
equipment through multi-year sales contracts for small to medium
size commercial customers. However, EIS has recently undertaken
steps to broaden its product offerings to include the design,
installation, operation and maintenance of high efficiency air
conditioning, refrigeration and energy management systems for
commercial, institutional and government customers.
F. Entergy Nuclear, Inc.
Entergy Nuclear, Inc. ("ENI"), a wholly-owned subsidiary of
Entergy Enterprises, was organized pursuant to the June 1995
Order as an O&M Sub for the purpose of engaging in the business
of operating and managing nuclear power facilities. On February
13, 1997, ENI entered into an agreement with Maine Yankee Atomic
Power Company ("Maine Yankee") to provide management and
operating services for the Maine Yankee Nuclear Plant for an
initial period of up to one year. On November 6, 1997, following
a decision to permanently close the plant, ENI and Maine Yankee
entered into a renewal and extension of the original agreement
providing for ENI to render services in connection with the
decommissioning of the plant through September 30, 1998. ENI may
enter into agreements with other utility systems to provide O&M
Services. However, no other agreements have been concluded to
date.
G. Entergy Operations Services, Inc.
Entergy Operations Services, Inc. ("EOSI"), a wholly-owned
subsidiary of Entergy Enterprises, was organized pursuant to the
June 1995 Order as an O&M Sub to engage in the business of
operating and maintaining fossil-fueled generation, transmission
and distribution assets of utility companies, municipalities and
large commercial and industrial customers, primarily in the
United States. EOSI's current business activities include the
sale to non-affiliates of various O&M Services, including
relating to the design and construction of fossil-fueled
generating facilities and other power projects. EOSI is
currently providing services to, or on behalf of, the City of
Austin, Texas and ESKOM, a South African utility, with respect to
the management and operation of certain coal-fired generating
units and nuclear generating units owned and/or operated by these
customers. EOSI has also recently performed substation
maintenance and construction work for several industrial
customers.
H. Other Existing O&M Subs.
In addition to ENI and EOSI, in December 1997 Entergy
organized a new wholly-owned subsidiary, Entergy Global Power
Operations Corporation, and its wholly-owned subsidiary, Entergy
Power Operations U.S., Inc., as O&M Subs pursuant to the June
1995 Order. However, to date, these companies have been minimally
capitalized, and neither company has entered into any agreements
for the provision of O&M Services.
I. Entergy Technology Holding Company and Subsidiaries.
In February 1996, Entergy formed a new wholly-owned
subsidiary, Entergy Technology Holding Company ("ETHC"), and its
wholly-owned subsidiary, Entergy Technology Company ("Entergy
Technology") as ETCs under Section 34 of the Act. During 1996,
ETHC acquired six full service security monitoring companies, all
of which (with the exception of Sonitrol Southeast, Inc.
("Sonitrol")) were merged in 1997 into a new ETC subsidiary
called Entergy Security Corporation. Products and services
offered by Entergy Security Corporation and Sonitrol include
electronic burglar and fire alarms, closed circuit television,
access control systems, fire sprinkler supervision systems,
central station alarm monitoring, industrial process monitoring
and private response. Entergy Security Corporation and Sonitrol
currently have a combined customer base of approximately 160,000
customers and serve 35 markets in Louisiana, Mississippi,
Georgia, Texas, Colorado, Indiana, North Carolina, South
Carolina, Alabama and Florida.
Entergy, through Entergy Technology, also plans to take
advantage of the rapidly expanding market developing in the
telecommunications industry by marketing a portion of Entergy's
existing telecommunications system in conjunction with additional
facilities to be constructed or leased by Entergy Technology.
Entergy Technology proposes to offer bulk interstate
telecommunications capacity on a wholesale basis to
telecommunications carriers, who will then market such capacity
to third parties. In addition, during 1997, ETHC entered into
joint ventures with, or acquired other interests in, companies
engaged in the local exchange carrier and personal communications
service business.
J. Entergy's Financing of Non-Utility Businesses.
Entergy is currently authorized under the terms of, and to
the extent provided by, orders and supplemental orders issued by
the Commission in File Nos. 70-8839, 70-8903 and 70-8863
(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).11/ Entergy's authorization under the Financing Orders
may be summarized as follows:
(1) 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 December 31, 1997,
Entergy had sold a total of 16,131,672 shares of Common Stock
pursuant to the DRIP.
(2) 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.12/ 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.13/
(3) File No. 70-8863. Pursuant to Commission order dated
January 6, 1998 (HCAR No. 26812), Entergy is authorized to
finance the energy brokering and marketing activities of EPMC by
making capital contributions in an aggregate principal amount of
up to $20 million and by issuing guarantees or similar
commitments to EPMC in an aggregate principal amount of up to
$150 million.
II. Proposed Transactions.
A. Issuance of Guarantees.
In order to facilitate the development, 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), 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 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. Pending the receipt of such authorization, Entergy
would only issue Guarantees to Exempt Projects to the extent that
the amount of any such Guarantee, when added to Entergy's
"aggregate investment" in Exempt Projects, would not 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, other New Subsidiaries, O&M Subs 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 Company. 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 or Rule 58, as applicable.
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 hereby
requests authority through December 31, 2002 to organize and
acquire the Capital Stock of O&M Subs. Subsequent to such
organization, 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.
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 requested
herein. Loans by Entergy to a New Subsidiary or an O&M Sub
generally would have interest rates and maturity dates that are
designed to parallel Entergy's effective cost of capital, in
accordance with Rule 52(b). However, in the limited
circumstances where a New Subsidiary or an O&M Sub is not wholly-
owned by Entergy, directly or indirectly, Entergy requests
authority under the Act to make such loans to such subsidiaries
at interest rates and maturities designed to provide a return to
Entergy of not less than Entergy's effective cost of capital. In
the event any such loans are made, Entergy will include in the
next certificate filed pursuant to Rule 24 in the this File
substantially the same information as that required on Form U-6B-
2 with respect to such transaction. In addition, the principal
amount of any such loans will be included in the $750 million
Aggregate Authorization requested herein.
C. Issuance of Securities.
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 (collectively, "Other 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. Entergy proposes that Other Securities
be issued and sold by Non-utility Companies to Entergy, to other
Non-utility Companies or to non-associate companies pursuant to
the authorization requested herein in one or more transactions
from time to time through December 31, 2002.14/
Loans by Entergy or a Non-utility Company to a Non-utility
Company generally would have interest rates and maturity dates
that are designed to parallel the lending company's effective
cost of capital, in accordance with Rule 52(b). However, in the
limited circumstances where the Non-utility Company effecting the
borrowing is not wholly-owned by Entergy, directly or indirectly,
authority is requested under the Act for Entergy or a Non-utility
Company to make such loans to such subsidiaries at interest rates
and maturities designed to provide a return to the lending
company of not less than its effective cost of capital. In the
event any such loans are made, Entergy will include in the next
certificate filed pursuant to Rule 24 in the this File
substantially the same information as that required on Form U-6B-
2 with respect to such transaction. In addition, the principal
amount of any such loans will be included in the $750 million
Aggregate Authorization requested herein.
Similarly, with respect to any issuance and sale by Non-
utility Companies of Other Securities to other Non-utility
Companies or to non-associate companies, the principal amount of
such Other Securities would be included in the $750 million
Aggregate Authorization. In addition, Entergy would report
periodically to the Commission pursuant to Rule 24 under the Act
concerning the issuance and sale of such Other Securities to the
same extent that such reporting is required by Rule 52(c).15/
The net proceeds from the issuance and sale of Other
Securities would be used for general corporate purposes,
including without limitation (1) for loans to and/or equity
investments in 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 Other 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).16/
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 Other Securities
that may be issued by a Non-utility Company, and any Guarantees
that may be issued by Entergy or a Non-utility Company, 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 (a) to provide other Non-utility Companies with
Administrative Services, (b) to provide Consulting Services to
other Non-utility Companies and to non-associate companies, and
(c) to engage in Development Activities, all on a world-wide
basis. 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 other Non-utility Companies and to non-associate
companies. Consulting Services would include, without
limitation, providing System-developed technical capabilities and
expertise to Non-utility Companies and to non-associate
companies, primarily in the areas of electric power generation,
transmission and distribution and operations ancillary thereto.17/
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". However, to provide Entergy with further
flexibility in the administration of its non-utility businesses,
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 affiliate Non-utility
Companies; provided, that no such Services will be rendered to an
affiliate Non-utility Company on a basis other than "at cost"
unless one or more of the following conditions shall apply:
(1) such affiliate Non-utility Company 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) such affiliate Non-utility Company 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) such affiliate Non-utility Company 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;
(4) such affiliate Non-utility Company 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; or
(5) Entergy does not own 100% of the Capital Stock of such
affiliate Non-utility Company.
Entergy also requests an exemption from Section 13(b) of the
Act in connection with the performance of Administrative
Services, Consulting Services and Development Activities by Non-
utility Companies for affiliate Non-utility Companies if (a) such
affiliate is a subsidiary of Entergy, the sole business of which
is developing, owning, operating and/or providing Services to
affiliates described in clauses (1), (2), (3), (4) or (5) above,
or (b) such affiliate is a subsidiary of Entergy, which
subsidiary does not derive, directly or indirectly, any material
part of its income from sources within the United States and is
not a public utility company operating within the United States.
Entergy hereby requests that the Commission reserve
jurisdiction over the granting of an exemption from the "at cost"
standards of Section 13(b) of the Act in connection with the
provision of Services between Non-utility Companies, on a basis
other than one or more of the foregoing conditions, pending
completion of the record.
To the extent that any Non-utility Company utilizes the
expertise or resources of an Excepted Company in connection with
the performance of Administrative Services, Consulting Services
or Development Activities, such expertise or resources shall be
provided in a manner consistent with the terms and conditions set
forth in the June 1995 Order. Specifically, pending the receipt
of Commission approval in File No. 70-8529 of Entergy's request
pursuant to Section 13(b) for an exemption from the "at cost"
requirements of Rules 90 and 91 under the Act, Excepted Companies
would be reimbursed for the use of such expertise or resources at
cost.18/ Moreover, to the extent that, pursuant to the exemption
requested herein, any such Services are provided between Non-
utility Companies at a price other than "cost", Entergy agrees
that no Excepted Company shall be engaged or otherwise involved,
directly or indirectly, in the rendering of such Services unless
and until such time as the Commission issues an order in File No.
70-8529.
(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.19/ 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 QF under 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;
(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; or
(5) Entergy does not own 100% of the Capital Stock of the
company that owns the project.
Entergy also requests an exemption from Section 13(b) of the
Act in connection with the provision of O&M Services by O&M Subs
for affiliate Non-utility Companies if (a) such affiliate is a
subsidiary of Entergy, the sole business of which is developing,
owning, operating and/or providing Services to affiliates
described in clauses (1), (2), (3), (4) or (5) above, or (b) such
affiliate is a subsidiary of Entergy, which subsidiary does not
derive, directly or indirectly, any material part of its income
from sources within the United States and is not a public utility
company operating within the United States.
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 an O&M Sub that would not qualify as an Exempt Project or an
Energy-related Company, Entergy Enterprises would continue to
provide the Commission with the same information as currently
required under the June 1995 Order concerning the formation and
capitalization of such subsidiary in the next quarterly
certificate filed pursuant to Rule 24, as set forth below. 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.20/ 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 is equal
to approximately 54% of Entergy's "consolidated retained
earnings" as of March 31, 1998. Entergy's aggregate investment
in Exempt Projects currently exceeds the 50% limitation in Rule
53(a)(1) as a result of certain charges against Entergy's
consolidated retained earnings, including a net decrease of
approximately $140 million in Entergy's consolidated retained
earnings from the quarter ended June 30, 1997 to the quarter
ended September 30, 1997.21/ This $140 million net decrease was
attributable primarily 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.
So long as Entergy's "aggregate investment" in EWGs and
FUCOs exceeds the 50% limitation in Rule 53(a)(1), Entergy will
not make any additional investments in EWGs or FUCOs using the
proceeds of securities (including any Guarantees authorized
herein) issued by Entergy, except as may be authorized by the
Commission in File No. 70-9049."
Item 5. Procedure.
The third paragraph of Item 5 of the Application-Declaration
in this File is hereby amended and restated to read in its
entirety as follows:
"Entergy Enterprises proposes to continue to provide the
Commission, on a quarterly basis within 60 days after the end of
each calendar quarter (commencing with the first full calendar
quarter following the Commission's order herein), a report
pursuant to Rule 24, which shall include the following: (1)
balance sheets and income statements for Entergy Enterprises for
the three, six, or nine month period then ended; (2) amounts
expended by Entergy Enterprises and other Non-utility Companies
on Development Activities during the quarter, broken down by
categories of proposed investments in Exempt Projects, ETCs,
Energy-related Companies and any other businesses that Entergy is
permitted or authorized under the Act to invest in from time to
time; (3) information concerning the nature and extent of
Administrative Services, Consulting Services and O&M Services
provided by Entergy Enterprises and other Non-utility Companies
during the quarter, identifying the customer company, the service
and the charge, and stating whether the charge was computed at
cost, market or pursuant to another method, which shall be
specified; (4) information concerning the formation and
capitalization of any New Subsidiaries during the quarter; (5)
information concerning the formation and capitalization of any
O&M Subs during the quarter; and (6) information concerning any
loans made by Entergy or Non-utility Companies to associate Non-
utility Companies during the quarter that are not exempt under
Rule 52(b) and the issuance of any Other Securities by Non-
utility Companies during the quarter, as described in Item 1
hereof. Entergy proposes that such report continue to combine
the information required herein with the information required in
File Nos. 70-7851, 70-8002, 70-8010 and 70-8105."
Item 6. Exhibits and Financial Statements.
(a) Exhibits:
I - Reply of Entergy Corporation to Notices
of Intervention
(b) Financial Statements:
Financial Statements of Entergy Enterprises, Inc. and of
Entergy Enterprises, Inc. and subsidiaries, consolidated, as of
March 31, 1998.
Financial Statements of Entergy Power, Inc. as of March 31,
1998.
Financial Statements of Entergy Power Marketing Corp. as of
March 31, 1998.
Financial Statements of Entergy Integrated Solutions, Inc.
as of March 31, 1998.
Financial Statements of Entergy Nuclear, Inc. as of March
31, 1998.
Financial Statements of Entergy Operations Services, Inc. as
of March 31, 1998.
Except as reflected in the Financial Statements, no material
changes not in the ordinary course of business have taken place
since March 31, 1998.
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.
<PAGE>
ENTERGY CORPORATION
By: /s/ Michael G. Thompson
Michael G. Thompson
Senior Vice President,
General Counsel and
Secretary
ENTERGY ENTERPRISES, INC.
By: /s/ Michael G. Thompson
Michael G. Thompson
Senior Vice President,
Law and Secretary
ENTERGY INTEGRATED SOLUTIONS, INC.
By: /s/ Michael G. Thompson
Michael G. Thompson
Vice President,
and Secretary
ENTERGY NUCLEAR, INC.
ENTERGY POWER, INC.
ENTERGY POWER MARKETING CORP.
ENTERGY GLOBAL POWER OPERATIONS
CORPORATION
ENTERGY POWER OPERATIONS U.S., INC.
By: /s/ Michael G. Thompson
Michael G. Thompson
Senior Vice President,
and Secretary
ENTERGY OPERATIONS SERVICES, INC.
By: /s/ Naomi Nakagama
Naomi Nakagama
Senior Vice President-
Finance, Treasurer and
Assistant Secretary
Dated: July 7, 1998
_______________________________
1/ See Entergy Corporation, et al., Holding Company Act
Release ("HCAR") No. 26322 (June 30, 1995) (hereinafter
referred to as the "June 1995 Order").
2/ The Authorized Subsidiary Companies currently consist
of Entergy Enterprises, Inc., Entergy Power, Inc.,
Entergy Nuclear, Inc., Entergy Integrated Solutions,
Inc., Entergy Operations Services, Inc., Entergy Global
Power Operations Corporation and Entergy Power
Operations U.S., Inc.
3/ In late 1997, Entergy organized a new direct subsidiary
company, Entergy Business Solutions, Inc. ("EBSI") as
an "energy-related company" pursuant to Rule 58. EBSI
intends to engage, directly or indirectly, in a broad
range of "energy-related" activities, as permitted
under Rule 58, including without limitation energy
commodity marketing, energy management services and
related consulting, power quality services, power
project operations and maintenance services and the
sale or distribution of thermal energy products.
4/ 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 that Entergy may create, the activities
and operations of which 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").
5/ 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.
6/ See HCAR No. 25136. The 1990 Order was reaffirmed by
the Commission on remand from the U.S. Court of Appeals
for the District of Columbia Circuit. See HCAR No.
26410 (dated November 17, 1995).
7/ Pursuant to Commission order dated August 2, 1996 (HCAR
No. 26549), on August 28, 1996, EPI sold to City Water
and Light Plant of Jonesboro (Arkansas)(which
previously had a 5% undivided ownership interest in
ISES 2) an additional 10% undivided ownership interest
in ISES 2 (equivalent to 84 MW of capacity) and related
assets for a total purchase price of approximately
$37.5 million. As a result of such sale, EPI currently
has a 21.5% undivided ownership interest in ISES 2.
EPI recently filed an application with the Commission
seeking authority under the Act to sell an additional
portion of its interest in ISES 2 to a non-affiliate,
East Texas Electric Cooperative, Inc.
8/ See Entergy Power Marketing Corp., 73 FERC 61,063
(1995) (authorizing EPMC to purchase and resell
electric energy at wholesale that it has not generated,
to contract for transmission capacity and to resell
excess transmission capacity, to contract for delivery
of fuel supplies to third-parties and to engage in
brokering).
9/ See Entergy Services, Inc. and Entergy Power Marketing
Corp., 74 FERC 61,137 (1996) (authorizing EPMC to sell
power at market-based rates).
10/ See also Entergy Corporation, et al., HCAR No. 26342
(July 27, 1995) (authorizing, among other things,
provision by EIS of consulting services related to its
energy management and demand side management
activities).
11/ Pursuant to the June 1995 Order, Entergy was 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 were exempted by Commission
rule). Such authorization (as well as Entergy's
authorization to form and fund O&M Subs) expired on
December 31, 1997.
12/ 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.
13/ As of December 31, 1997, the indebtedness outstanding
under these credit arrangements was approximately $75
million.
14/ Issuances of Other Securities by a Non-utility Company
generally are not subject to prior Commission approval
under the Act pursuant to Rule 52(b), provided the
conditions of such rule are satisfied, including that
the interest rate and maturity date of debt securities
are designed to parallel the effective cost of capital
of the lending company. Under certain circumstances,
however, it may be desirable for Entergy or a Non-
utility Company to make a loan to a Non-utility Company
at a rate of interest or with a maturity that does not
provide a return equivalent to the lending company's
cost of capital.
15/ If an Energy-related Company issues Other Securities,
it will also report such issuance to the Commission as
required under Form U-9C-3.
16/ 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 that Non-utility Companies
be permitted to modify the terms of their charters or
other governing documents as necessary to effectuate
the issuance of Other Securities. Entergy would
describe the general terms of any such modification in
the next quarterly certificate filed with the
Commission pursuant to Rule 24 in this File.
17/ 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. Consulting Services may include the
marketing to non-associate companies of intellectual
property developed or otherwise acquired by System
companies, subject to certain profit sharing provisions
as set forth in the June 1995 Order.
18/ In accordance with settlement arrangements that Entergy
entered into with certain of its state and local
regulators in 1992, 1993 and 1998 (collectively, the
"Settlement Agreement"), Entergy has agreed, subject to
the receipt of Commission approval in File No. 70-8529,
to implement special pricing provisions relating to
certain transfers of services between Excepted
Companies and Entergy's non-utility businesses. To the
extent that any of the transactions described herein
would involve transfers to which the provisions of the
Settlement Agreement would apply, the Applicants agree
that such transactions would be subject to, and
performed in compliance with, such applicable
provisions and any order the Commission may issue in
File No. 70-8529 with respect thereto.
19/ Except for consulting services that may be required in
connection with the business of owning or operating
such facilities or coordinating their operations in
power markets, O&M Subs will not otherwise be engaged
in the provision of Consulting Services to associate or
non-associate companies.
20/ To the extent that any O&M Sub utilizes the expertise
or resources of an Excepted Company in connection with
the performance of O&M Services, pending the receipt of
Commission approval in File No. 70-8529 of Entergy's
request for an exemption pursuant to Section 13(b) of
the Act, such Excepted Company would be reimbursed for
the use of such expertise or resources "at cost".
21/ In addition to the reduction in Entergy's consolidated
retained earnings attributable to the U.K windfall
profits tax, during the fourth quarter of 1997,
Entergy's consolidated retained earnings decreased by
approximately $90 million due primarily to (a) the
establishment of a $227 million (net of tax) reserve
for potential regulatory adjustments based upon
management's estimates of the financial effect of
potential adverse rulings in connection with costs
related to Entergy Gulf States' River Bend nuclear
plant and pending rate proceedings in Texas, and (b)
the net of tax write-off of $7.4 million of previously
deferred radioactive waste facility costs.
EXHIBIT I
UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION
In the Matter of
ENTERGY CORPORATION, ET AL. ) File No. 70-9123
) (Public Utility Holding
) Company Act of 1935)
REPLY OF ENTERGY CORPORATION, ET AL., TO NOTICE OF
INTERVENTION, COMMENTS, AND REQUEST FOR HEARING AND
REJECTION OF APPLICATION BY THE COUNCIL OF THE CITY OF NEW
ORLEANS, MOTION TO INTERVENE, PROTEST, AND REQUEST FOR
HEARING OF THE ARKANSAS PUBLIC SERVICE COMMISSION, AND
NOTICE OF INTERVENTION OF THE MISSISSIPPI PUBLIC SERVICE
COMMISSION
Applicants-Declarants, Entergy Corporation
("Entergy"), Entergy Enterprises, Inc., Entergy Power,
Inc., Entergy Power Marketing Corp., Entergy Nuclear,
Inc., Entergy Operations Services, Inc., Entergy Power
Operations U.S., Inc., Entergy Global Power Operations
Corporation and Entergy Integrated Solutions, Inc.
(collectively, the "Applicants"), hereby respond to the
Notice of Intervention, Comments, and Request for
Hearing and Rejection of Application by the Council of
the City of New Orleans ("New Orleans"), dated March 9,
1998, the Motion to Intervene, Protest, and Request for
Hearing of the Arkansas Public Service Commission (the
"APSC"), dated March 6, 1998 and the Notice of
Intervention of the Mississippi Public Service
Commission (the "MPSC"), dated March 5, 1998
(collectively, the "Notices of Intervention"), filed in
connection with the Applicants' Application-Declaration
on Form U-1, as amended, in the above-referenced docket
(the "Application").1/ (New Orleans, the APSC and the
MPSC are hereinafter collectively referred to as the
"Intervenors.")
For the reasons discussed below, the Notices of
Intervention fail to raise any significant issue of
fact or law that requires a hearing to resolve.
Moreover, the transactions for which authorization is
requested in the Application are fully consistent with
the standards of the Public Utility Holding Company Act
of 1935, as amended (the "Act"), and applicable
precedent of the Securities and Exchange Commission
(the "Commission") thereunder.
I. BACKGROUND
As more fully set forth in the Application, the
Applicants are seeking all requisite approvals of the
Commission under the Act (1) for Entergy and certain of
its existing or future subsidiary companies to issue
Guarantees to or for the benefit of Entergy's
affiliates which are Non-utility Companies in an
aggregate amount not to exceed $750 million (inclusive
of, among other things, certain previously authorized
and outstanding Entergy guarantees), (2) for Entergy to
acquire, directly or indirectly, the securities of one
or more New Subsidiaries organized for purposes of
acquiring (including financing or refinancing an
acquisition), owning and holding the securities of
associate companies which are 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 purposes of
financing (or refinancing) investments in Non-utility
Companies, (4) for Non-utility Companies to perform
Administrative Services, Consulting Services and
Development Activities, (5) for O&M Subs to provide O&M
Services, (6) for Non-utility Companies to provide
Services to Non-utility Companies at market prices,
subject to the condition, among others, that no
domestic retail utility associate company is directly
or indirectly involved in the transaction, and (7) for
Non-utility Companies to pay dividends out of capital
or unearned surplus.
II. SUMMARY OF INTERVENORS' ARGUMENTS
A. APSC
The APSC asserts that the Application raises
"factual issues" concerning the effect of Entergy's
diversified activities on its domestic retail utility
subsidiaries, particularly their cost of capital. The
APSC also asserts that, to the extent Entergy is
proposing in the Application that any services provided
by its domestic retail utility companies to Non-utility
Companies would be priced at "cost", such a proposal is
inconsistent with the terms of Entergy's Settlement
Agreement with the APSC and certain of Entergy's other
state and local regulators.
B. CNO
The CNO claims that Entergy is seeking authority
for up to $750 million in investments to "branch out
into world-wide activities", in violation of the
integration requirements of Section 11 of the Act. The
CNO asserts that without details of Entergy's planned
investments, the CNO cannot assess the risk that
guarantees provided by Entergy in respect of such
investments will have to be honored. In addition, the
CNO alleges that Entergy's proposal to form New
Subsidiaries would complicate Entergy's corporate
structure, in violation of Section 11 of the Act.
Finally, the CNO asserts that Entergy is attempting to
avoid its obligations under the Settlement Agreement
with respect to transfer pricing, in that the
Application appears to provide that Entergy's domestic
retail utility subsidiaries would be reimbursed at
"cost" for services rendered to their non-utility
affiliates.
C. MPSC.
The MPSC has not submitted specific comments at
this time with respect to the Application.
III. RESPONSES TO INTERVENORS' ARGUMENTS.
A. The Transactions Proposed in the
Application are Consistent with the
Applicable Precedent and Standards of the
Act.
Contrary to the assertions of the CNO, the
transactions proposed in the Application are fully
consistent with the applicable standards of the Act and
Commission precedent thereunder. The additional
investments proposed by Entergy in the Application, in
the form of Guarantees, will be limited exclusively to
Non-utility Companies. As set forth in the
Application, Non-utility Companies are defined to
include only those companies that own interests in non-
utility businesses the acquisition of which either (1)
have previously been approved by order of the
Commission or (2) are exempt from Commission approval
under the Act. In other words, Entergy may not utilize
the additional authority to issue Guarantees to support
investments that Entergy is not authorized or permitted
to make under the Act. Such a limitation should
satisfy any concerns the Commission or the CNO may have
about Entergy's use of its Guarantee authority to
"branch out" into "unidentified" activities that would
violate the standards of Section 11 of the Act.
Furthermore, as stated in the Application, the use
of New Subsidiaries is intended, in part, to help
simplify the organizational structure of Entergy's Non-
utility Companies. Due to the manner in which certain
of the statutory provisions and regulations for exempt
investments are written, Entergy currently must hold
different types of investments in Non-utility Companies
under separate ownership "chains" (i.e., by using
separate intermediate holding companies for its
investments in domestic EWGs, FUCOs, Energy-related
Companies and ETCs). The ability to combine different
types of investments in Non-utility Companies under a
single intermediate holding company will allow Entergy
to simplify the organization of its non-utility
businesses by eliminating certain intermediate holding
companies. In addition, the use of New Subsidiaries to
group investments appropriately in Non-utility
Companies would facilitate the raising of capital for
investments in those or other Non-utility Companies.
This reorganization of Non-utility Companies would not
undermine the protections afforded to Entergy's
investors and consumers by the Act, because the
applicable limits on investments in Non-utility
Companies imposed under Commission orders or rules
(including Rules 53 and 58) would still be observed.2/
Moreover, Entergy's proposal to organize New
Subsidiaries is fully consistent with numerous orders
issued by the Commission in recent years authorizing
the use of "Project Parents" by registered holding
companies to combine, and hold, their interests in
EWGs, FUCOs and other non-utility businesses.3/
B. Affiliate Transactions Between Non-
utility Companies and Excepted Companies, if
any, will be Performed in a Manner Consistent
with the Settlement Agreement.
As set forth in the Application, to the extent
that any of the transactions described therein would
involve transfers between Non-utility Companies and any
Excepted Company to which the provisions of the
Settlement Agreement would apply, the Applicants agree
that such transactions would be subject to, and
performed in accordance with, such applicable
provisions and any order of the Commission issued with
respect thereto in File 70-8529. Entergy hereby
reiterates its agreement to abide by the transfer
pricing provisions in the Settlement Agreement, and
urges the Commission to approve Entergy's application
in File No. 70-8529. However, the Application
properly notes that, pending receipt of such Commission
approval, Non-utility Companies are only permitted
under the Act to reimburse Excepted Companies for any
services provided at "cost", determined in accordance
with applicable regulations under the Act. Therefore,
contrary to the allegations of the APSC and CNO, the
transactions proposed in the Application clearly will
not be performed in violation of Entergy's commitment
in the Settlement Agreement.
Entergy's request for an exemption from Section
13(b) of the Act to permit Non-utility Companies to
provide Services to other Non-utility Companies at a
price other than "cost" will not have any adverse
effect on the Excepted Companies, including Entergy's
domestic retail utility subsidiaries. No Excepted
Company will be involved, directly or indirectly, in
the rendering of any Services that are priced other
than at "cost" unless and until Commission approval is
obtained in File No. 70-8529. As provided in the
Application, additional safeguards will prevent any
Excepted Company from being the recipient, directly or
indirectly, of Services provided between Non-utility
Companies at a price more than "cost". These and
other safeguards in the Settlement Agreement will
ensure that any Services between Non-utility Companies
will not affect the cost of service of any of Entergy's
domestic retail utility subsidiaries.
Finally, in response to the APSC's concerns
regarding the possible effects of Entergy's investments
upon the cost of capital of Entergy's domestic retail
utility subsidiaries, Entergy notes that existing
structural safeguards, together with the authority of
its state and local regulators, are sufficient to
protect Entergy's customers from any such effects. All
of its investments in Non-utility Companies are, and
will continue to be, strictly segregated from Entergy's
domestic retail utility subsidiaries. Financing
arrangements in respect of Entergy's investments in Non-
utility Companies are carefully structured to insulate
fully the domestic retail utility subsidiaries from the
direct effects of any losses that may be incurred in
connection with such investments.4/ No such subsidiary
owes indebtedness or has extended credit, directly or
indirectly, to any Non-utility Company, and none of the
indebtedness attributable to the Non-utility Companies
is recourse to any such subsidiary. Therefore, there
is no possibility that any of Entergy's domestic retail
utility subsidiaries will have any liability with
respect to Entergy's investments in Non-utility
Companies.
Moreover, in the event that Entergy's investments
in Non-utility Companies were to have an indirect
adverse effect on the cost of capital of Entergy's
domestic retail utility subsidiaries, Entergy's state
and local regulators have the authority and the means
to prevent any increased capital costs from being
passed on to the customers of such companies.
Furthermore, Entergy has committed to such regulators,
and hereby reiterates, that it will not seek recovery
through rates charged to customers by its domestic
retail utility subsidiaries for any possible losses
that Entergy may sustain on investments in Non-utility
Companies or for inadequate returns on such
investments.
IV. CONCLUSION.
For the reasons set forth herein, the allegations
in the Notices of Intervention are unsupported by any
evidence and are without merit. The burden is on the
Intervenors to offer at least minimal evidence that an
issue of material fact or law exists and that an
evidentiary hearing is required to resolve such
issue.5/ The Applicants have clearly established in the
Application and in this Reply that the transactions
proposed in the Application are in conformity with the
applicable standards of the Act and are in the best
interests of investors and consumers. There is nothing
in the Notices of Intervention which suggests
otherwise. It is well settled that under such
circumstances a hearing is not necessary or justified.
Consequently, the Commission should deny the relief
requested in the Notices of Intervention and approve
the Application forthwith.
Respectfully submitted,
___________________
Thomas C. Havens
MAYER, BROWN & PLATT
1675 Broadway
New York, NY 10019-5820
(212) 506-2640
___________________
Laurence M. Hamric
ENTERGY SERVICES, INC.
639 Loyola Avenue
New Orleans, LA 70113
___________________
Frederick F. Nugent
ENTERGY ENTERPRISES, INC.
4 Park Plaza, Suite 2000
Irvine, CA 92614
Date: July 7, 1998
CERTIFICATE OF SERVICE
I hereby certify that the foregoing "Reply of
Entergy Corporation to the Notice of Intervention,
Comments, and Request for Hearing and Rejection of
Application by the Council of the City of New Orleans,
the Motion to Intervene, Protest, and Request for
Hearing of the Arkansas Public Service Commission and
the Notice of Intervention of the Mississippi Public
Service Commission", in File No. 70-9123, has been
served upon the following, via the United States mail,
postage prepaid, this 7th day of July, 1998.
_______________________
Thomas C. Havens
George M. Fleming, Esq. Kenneth M. Carter, Esq.
Patricia L. Trantham, Esq. Karen R. Carter, Esq.
Public Utilities Staff Carter & Cates
Post Office Box 1174, Suite 1230 - Energy Centre
Suite 1702 1100 Poydras Street
Jackson, Mississippi 39215- New Orleans, LA 70163
1174
Mary W. Cochran, Esq. Sherry A. Quirk, Esq.
D. David Slaton, Esq. Montina M. Cole, Esq.
Arkansas Public Service Verner, Liipfert,
Commission Bernhard,
P.O. Box 400 McPherson & Hand,
Little Rock, Arkansas Chartered
72203-0400 901 15th Street, N.W.
Suite 700
Washington, D.C. 20005
Avis M. Russell, Esq. Jacquelyn Frick
City Attorney Director, Council
Room 5E01 City Hall Utilities
1300 Perdido Street Regulatory Office
New Orleans, LA 70112 1300 Perdido Street
New Orleans, LA 70112
_______________________________
1/ Unless otherwise noted, all capitalized terms used
herein have the meanings ascribed to them in the
Application.
2/ Compliance with these investment limits is continually
tracked through internal accounting procedures already
in place at Entergy.
3/ See, e.g., The Southern Company, et al., Holding
Company Act Release ("HCAR") No. 26468 (February 2,
1996); Northeast Utilities, et al., HCAR No. 26213
(December 12, 1996); New England Electric System. et
al., HCAR No. 26504 (April 15, 1996); General Public
Utilities, Inc., et al., HCAR No. 26457 (January 19,
1996); and Consolidated Natural Gas Company, et al.,
HCAR No. 26523 (May 30, 1996).
4/ Entergy has not been called upon to fund its obligation
under any guarantee issued with respect to an
investment in a Non-utility Company.
5/ See Environmental Action, Inc. v. Securities and
Exchange Commission, 895 F.2d 1255, 1265-66 (9th Cir.
1990).
<TABLE>
<CAPTION>
ENTERGY ENTERPRISES, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Entergy Corporation)
CONSOLIDATED BALANCE SHEET (UNAUDITED)
March 31, 1998
(in thousands, except for shares)
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents $17,376
Accounts receivable (less allowance for doubtful accounts of $390) 3,640
Accounts receivable - associated companies 8,031
Inventory 299
Other current assets 3,741
--------
Total current assets 33,087
--------
Equipment:
Installed, net of depreciation 50,898
Installation in process 15,556
Held for installation 12,574
Furniture and equipment, net 14,481
--------
Total 93,509
Deferred income taxes 22,760
Deferred charges and other assets 1,076
--------
Total Assets $150,432
========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable $9,034
Accounts payable - associated companies 2,212
Notes payable 982
Accrued expense 12,957
Capital lease obligations 95
--------
Total current liabilities 25,280
Notes payable - associated companies 11,000
Deferred service contract revenue 45,360
Deferred credits and other liabilities 4,338
--------
Total liabilities 85,978
--------
Commitments and Contingencies
Shareholder's Equity:
Common stock, no par value, 100,000 shares authorized;
57,400 shares issued and outstanding 210,400
Accumulated deficit (145,946)
--------
Total shareholder's equity 64,454
--------
Total Liabilities and Shareholder's Equity $150,432
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ENTERPRISES, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Entergy Corporation)
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
For the twelve months ended March 31, 1998
(in thousands, except for shares)
<S> <C>
Operating Revenues $91,678
Operations 788
Maintenance 14,867
--------
Total 15,655
--------
Gross Profit 76,023
Selling, general and administrative expenses:
Salaries and wages 29,867
Outside services 31,128
Depreciation and amortization 47,733
Other general and administrative costs 10,168
--------
Total 118,896
--------
Operating Loss (42,873)
Other income (expense):
Interest income 809
Interest expense (5,834)
Restructuring charges and adjustments 2,717
--------
Total (2,308)
--------
Loss Before Income Tax Benefit (45,181)
Benefits in Lieu of Income Taxes 14,757
--------
Net Loss ($30,424)
========
</TABLE>
<TABLE>
<CAPTION>
ENTERGY ENTERPRISES, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Entergy Corporation)
UNCONSOLIDATED BALANCE SHEET (UNAUDITED)
March 31, 1998
(in thousands, except for shares)
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents $10,904
Accounts receivable - associated companies 8,033
Accounts receivable - non associated companies 73
Taxes accrued 2,804
Prepayments and other 647
--------
Total current assets 22,461
Property and Investments:
Furniture and equipment, net 6,675
Construction in progress 619
Investments 57,728
--------
Total 65,022
Deferred income taxes and other 3,804
--------
Total assets 91,287
========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable $7,393
Accounts payable - associated companies 1,990
Other 5,069
--------
Total current liabilities 14,452
Long Term Liabilities:
Notes payable, associated companies 11,000
Other Deferred Credits 1,381
--------
Total long term liabilities 12,381
--------
Total liabilities 26,833
--------
Shareholder's Equity:
Common stock, no par value, 100,000 shares authorized;
57,400 shares issued and outstanding 57,400
Additional Paid in Capital 153,000
Accumulated deficit (145,946)
--------
Total shareholder's equity 64,454
--------
Total Liabilities and Shareholder's Equity 91,287
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ENTERPRISES, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Entergy Corporation)
UNCONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
For the twelve months ended March 31, 1998
(in thousands, except for shares)
<S> <C>
Operating Revenues:
Services Rendered - Non associates $60
Services Rendered - Associates 54,417
Loss in earnings of subsidiary (19,580)
--------
Total $34,897
Operation Expense 304
Maintenance Expense 68
--------
Total 372
--------
Gross Profit 34,525
Selling, general and administrative expenses:
Salaries and wages 27,306
Outside services 30,384
Depreciation and amortization 2,216
Other general and administrative costs 10,313
--------
Total 70,219
--------
Operating Loss (35,694)
Other income (expense):
Interest income 95
--------
Loss Before Income Tax Benefit (35,599)
Benefits in Lieu of Income Taxes 5,175
--------
Net Loss ($30,424)
========
</TABLE>
<TABLE>
<CAPTION>
ENTERGY POWER, INC.
(a wholly-owned subsidiary of Entergy Corporation)
BALANCE SHEET (UNAUDITED)
March 31, 1998
(in thousands, except for shares)
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents:
Cash $739
Temporary investments and cash equivalents 12,501
--------
Total cash and cash equivalents 13,240
Accounts receivable:
Associated companies 20,724
Non associated companies 11,908
Fuel inventory - at average cost 834
Materials and supplies - at average cost 1,956
--------
Total current assets 48,662
--------
Utility Plant:
Electric 184,507
Electric plant acquisition adjustment 482
Construction work in progress 412
--------
Total 185,401
Less - accumulated depreciation and amortization 90,684
--------
Utility Plant - net 94,717
--------
Deferred unrealized losses on hedging 7,910
--------
Total Assets $151,289
========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable - associated companies 1,635
Taxes accrued 5,658
Other (60)
--------
Total current liabilities 7,233
Deferred credits:
Accumulated deferred income taxes 29,075
Other 1,792
--------
Total liabilities 38,100
--------
Commitments and contingencies
Shareholder's Equity:
Common stock, $5 par value, 20,000 shares authorized;
11,000 shares issued and outstanding 55
Additional paid-in capital 174,950
Accumulated deficit (61,816)
--------
Total shareholder's equity 113,189
--------
Total Liabilities and Shareholder's Equity $151,289
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY POWER, INC.
(a wholly-owned subsidiary of Entergy Corporation)
STATEMENT OF OPERATIONS (UNAUDITED)
For the twelve months ended March 31, 1998
(in thousands)
<S> <C>
Revenues:
Associated companies $37,849
Others 45,063
Natural gas sales 12,672
--------
Total 95,584
Operating Expenses:
Operation and maintenance:
Fuel and fuel related expenses 55,617
Purchased power 6,753
Other 12,349
Maintenance 3,277
Depreciation and amortization 4,520
Taxes other than income taxes 920
--------
Total 83,436
--------
Operating Income 12,148
Other Income (Expense):
Interest income 1,838
Miscellaneous, net (26)
--------
Total 1,812
--------
Income Before Income Taxes 13,960
Income Taxes 4,978
--------
Net Income $8,982
========
</TABLE>
<TABLE>
<CAPTION>
ENTERGY POWER MARKETING CORPORATION
(a wholly-owned subsidiary of Entergy Corporation)
BALANCE SHEET (UNAUDITED)
March 31, 1998
(in thousands, except for shares)
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents $117,743
Accounts receivable 75,907
Accounts receivable - associated companies 545
Natural gas inventory - at average cost 1,154
Prepayments and other assets 19,240
--------
Total current assets 214,589
--------
Leasehold improvements and equipment 2,270
Less: accumulated depreciation and amortization 370
--------
Leasehold improvements and equipment, net 1,900
Total Assets $216,489
========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable $70,693
Accounts payable - associated companies 9,113
Accrued taxes 212
Other 30,881
--------
Total current liabilities 110,899
--------
Commitments and contingencies
Shareholder's Equity:
Common stock, no par value, 1,000 shares authorized;
250 shares issued and outstanding 2,500
Additional paid-in capital 97,500
Retained earnings 5,590
--------
Total shareholder's equity 105,590
--------
Total Liabilities and Shareholder's Equity $216,489
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY POWER MARKETING CORPORATION
(a wholly-owned subsidiary of Entergy Corporation)
STATEMENT OF OPERATIONS (UNAUDITED)
For the twelve months ended March 31, 1998
(in thousands)
<S> <C>
Energy commodity sales and other revenue $672,437
Energy commodity purchases (651,567)
--------
Gross profit 20,870
Selling, general and administrative expenses:
Operating expenses 3,009
General and administrative 10,360
Depreciation and amortization 368
--------
Total 13,737
--------
Operating income 7,133
Other Income (Expense):
Interest income 2,444
Interest expense (88)
--------
Total 2,356
--------
Income Before Income Taxes 9,489
Income Taxes 3,726
--------
Net Income $5,763
========
</TABLE>
<TABLE>
<CAPTION>
ENTERGY INTEGRATED SOLUTIONS, INC.
(an indirect wholly-owned subsidiary of Entergy Corporation)
BALANCE SHEET (UNAUDITED)
March 31, 1998
(in thousands, except for shares)
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents $820
Accounts receivable 2,871
Other current assets 7,453
--------
Total current assets 11,144
Fixed Assets:
Installed, net of depreciation 53,189
Installation in process 12,646
Held for installation 12,574
Furniture and equipment, net 7,601
--------
Total 86,010
Deferred Debits:
Miscellaneous deferred debits 1,168
Deferred income taxes 9,438
Other assets, net 1,077
--------
Total 11,683
Total Assets 108,837
========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable $1,425
Accrued liabilities 7,772
Capital lease obligations 95
Other current maturities 982
--------
Total current liabilities 10,274
Long-term Liabilities 1,466
Deferred Credits:
Deferred service contract revenue 45,360
--------
Total liabilities 57,100
Commitments and Contingencies
Shareholder's Equity:
Common stock, no par value, 50,000 shares authorized;
13,500 shares issued and outstanding 13,500
Paid-in capital 150,000
Accumulated deficit (111,763)
--------
Total shareholder's equity 51,737
--------
Total Liabilities and Shareholder's Equity $108,837
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY INTEGRATED SOLUTIONS, INC.
(an indirect wholly-owned subsidiary of Entergy Corporation)
STATEMENT OF OPERATIONS (UNAUDITED)
For the twelve months ended March 31, 1998
(in thousands)
<S> <C>
Operating Revenues $84,297
Amortization of installation costs 41,452
Maintenance 15,252
--------
Total 56,704
Gross Profit 27,593
Selling, general and administrative expenses:
Salaries and wages 19,611
Depreciation and amortization 4,076
Other 20,020
--------
Total 43,707
Operating Loss (16,114)
Other income (expense):
Interest income 198
Interest expense (8,273)
Restructuring charges (9,304)
--------
Total (17,379)
Loss Before Income Tax Benefit (33,493)
Benefit from parent in lieu of income taxes 10,588
--------
Net Loss ($22,905)
========
</TABLE>
<TABLE>
<CAPTION>
ENTERGY NUCLEAR, INC.
(an indirect wholly-owned subsidiary of Entergy Corporation)
BALANCE SHEET (UNAUDITED)
March 31, 1998
(in thousands, except for shares)
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents $3,443
Accounts receivable 697
--------
Total current assets 4,140
--------
Furniture and equipment 76
Less: accumulated depreciation and amortization 12
--------
Furniture and equipment, net 64
--------
Deferred charges and other assets 134
--------
Total Assets $4,338
========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable $164
Accounts payable - associated companies 98
Taxes Accrued 175
--------
Total current liabilities 437
Accumulated deferred income taxes 25
--------
Total liabilities 462
--------
Commitments and contingencies
Shareholder's Equity:
Common stock, no par value, 3,000 shares authorized,
issued and outstanding 3,000
Retained earnings 876
--------
Total shareholder's equity 3,876
--------
Total Liabilities and Shareholder's Equity $4,338
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NUCLEAR, INC.
(an indirect wholly-owned subsidiary of Entergy Corporation)
STATEMENT OF OPERATIONS (UNAUDITED)
For the twelve months ended March 31, 1998
(in thousands)
<S> <C>
Operating Revenues $7,478
Operating Expenses:
Operation and maintenance 4,693
Depreciation and amortization 88
Taxes other than income taxes 115
--------
Total 4,896
--------
Operating Income 2,582
Interest Income 201
--------
Income Before Income Taxes 2,783
Income Taxes 1,094
--------
Net Income $1,689
========
</TABLE>
<TABLE>
<CAPTION
ENTERGY OPERATIONS SERVICES, INC.
(an indirect wholly-owned subsidiary of Entergy Corporation)
BALANCE SHEET (UNAUDITED)
March 31, 1998
(in thousands, except for shares)
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents $2,207
Prepayments and other 224
--------
Total current assets 2,431
--------
Furniture and equipment 75
Less: accumulated depreciation and amortization 14
--------
Furniture and equipment, net 61
--------
Deferred Debits and Other Assets 10
--------
Total Assets 2,502
========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable $127
Accounts payable - associated companies 85
--------
Total current liabilities 212
Commitments and Contingencies
Shareholder's Equity:
Common stock, no par value, 5,000 shares authorized;
3,000 shares issued and outstanding 3,000
Accumulated deficit (710)
--------
Total shareholder's equity 2,290
--------
Total Liabilities and Shareholder's Equity $2,502
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY OPERATIONS SERVICES, INC.
(an indirect wholly-owned subsidiary of Entergy Corporation)
STATEMENT OF OPERATIONS (UNAUDITED)
For the twelve months ended March 31, 1998
(in thousands)
<S> <C>
Operating Revenues $233
Operating Expenses:
Operation and maintenance 985
Depreciation and amortization 15
Taxes other than income taxes 40
--------
Total 1,040
--------
Operating Income (807)
Interest Income 117
--------
Income Before Income Taxes (690)
Income Tax Benefit 261
--------
Net Loss ($429)
========
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000833411
<NAME> ENTERGY ENTERPRISES, INC.
<SUBSIDIARY>
<NUMBER> 025
<NAME> ENTERGY ENTERPRISES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 0
<OTHER-PROPERTY-AND-INVEST> 93,509
<TOTAL-CURRENT-ASSETS> 33,087
<TOTAL-DEFERRED-CHARGES> 23,836
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 150,432
<COMMON> 210,400
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> (145,946)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 64,454
0
0
<LONG-TERM-DEBT-NET> 0
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
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