UNITED STATES OF AMERICA
BEFORE THE SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
* * * * * * * * * * * * * * * * *
In the Matter of *
*
ENTERGY CORPORATION * CERTIFICATE
ENTERGY ENTERPRISES, INC. * PURSUANT TO RULE 24
*
File No. 70-7851 *
File No. 70-8002 *
File No. 70-8010 *
File No. 70-8105 *
*
(Public Utility Holding Company *
Act of 1935) *
* * * * * * * * * * * * * * * * *
Pursuant to Rule 24 promulgated by the Securities and
Exchange Commission (SEC) under the Public Utility Holding
Company Act of 1935, as amended (Act), modified by the
application(s) - declaration(s), as amended, in the above
referenced files and the related orders dated July 25, 1991,
December 14, 1992(2), December 28, 1992, July 8, 1993, and June
30, 1995, respectively, this is to certify that the following
transactions were carried out during the three (3) months ended
June 30, 1998 by Entergy Enterprises, Inc. (Enterprises) pursuant
to the authorization of the SEC.
Programs Authorized
Pursuant to the Orders, Enterprises is authorized to (a)
conduct preliminary development activities with respect to
various investment opportunities for the Entergy System, (b)
market to non-associates the System's expertise and capabilities
in energy-related areas, including the expertise of Entergy
Power, Inc. (EPI) gained from its bulk power business, (c) market
to non-associates intellectual property developed by System
companies, (d) provide various consulting, management,
administrative and support services to associate companies,
excluding certain associate companies (Excluded Companies<FN1>),
(e) provide directly, or indirectly through one or more special
purpose subsidiary companies of Entergy Corporation (Entergy) or
Enterprises (O&M Subsidiaries), various operations and
maintenance services to non-associate or associate companies, and
(f) develop and field test telecommunications systems for
advanced energy management and other utility applications.
During the quarter, Enterprises participated in the
following:
I. Preliminary Development Activities
During the quarter, Enterprises has been engaged in
preliminary development activities relating to investigating
sites, research, contract drafting and negotiations, acquiring
options or rights, partnership selection and other activities
necessary to identify and analyze investment opportunities for
Entergy. These development activities include domestic and
international opportunities.
During the quarter, Enterprises expended $395,020 for
preliminary development activities associated with potential
investments that would qualify as "exempt wholesale generators"
under Section 32(a) of the Act. In addition, Enterprises
recorded an expenditure of $10,384,154 for preliminary
development activities associated with potential investments that
would qualify as "foreign utility companies" under Section 33 of
the Act. Enterprises also expended $2,472,721 for preliminary
development activities associated with potential investments that
would qualify as "nonutility business" and $277,747 for
preliminary development activities related to non-exempt
wholesale generating facilities. Finally, Enterprises recorded
an expenditure of $3,252,631 for preliminary development
activities associated with potential investments in other
domestic energy related businesses.
II. Management Services Provided to Associate Companies
Enterprises provided certain management and support services
to its associate companies, EPI, Entergy Power Marketing Corp.,
Entergy Power Edesur Holding Ltd., Entergy S.A., Entergy
Integrated Solutions, Inc. (EIS), Entergy Technology Holding
Company (ETHC), Entergy Technology Company (ETC), Entergy Power
Development Corporation, Entergy International Holdings, Ltd.,
LLC (formerly Entergy Power Development International
Corporation), Entergy Pakistan, Ltd., EP Edegel, Inc., Entergy
Power CBA Holding Ltd., Entergy Operations Services Inc., Entergy
Power Operations Corp., Entergy Power International Holdings
Corporation, Entergy Power Generation Corporation, and Entergy
Nuclear, Inc. (ENI). Enterprises charged these companies for
direct costs incurred plus an indirect loading based upon current
month Enterprises administrative charges. In regard to EPI
($163,936), these services included marketing of EPI capacity and
energy to other utilities at wholesale, preparation of contracts
and regulatory filings, oversight of plant operations and
maintenance by plant operators, and procurement of transmission
services. In regard to Entergy Power Marketing Corp.($3,645,949)
these services included marketing of energy to utilities at
wholesale, preparation of contracts and regulatory filings and
procurement of transmission services. In regard to EIS
($1,089,490), Entergy Power Edesur Holding Ltd. ($135,665), ETHC
($1,946,629), Entergy Technology Company ($253,223) Entergy Power
Development Corp. ($8,494,736), Entergy International Holdings,
Ltd.,LLC. ($1,893,888), Entergy Pakistan Ltd. ($32,899), EP
Edegel, Inc. ($309,659), Entergy Power CBA Holding Ltd. ($3,441),
Entergy Operations Services Inc. ($126,763), Entergy Power
Operations Corp. ($798,150), Entergy Power International Holdings
Corp. ($387,596) Entergy Power Generation Corp. ($310,838), and
Entergy Nuclear, Inc. ($276,450), these services were related to
management oversight and project development.
III. Consulting Activities with Non-Associate Companies
Enterprises, under contract with Louisiana Hydroelectric
Ltd. Partnership, continues to provide an array of technical
services/support for a hydro electric transmission line project.
Certain Entergy Services, Inc. personnel are providing the
services. The Louisiana Hydroelectric Ltd. Partnership was
charged $12,596 for services rendered during this quarter.
IV. Development and Field Testing of CCLM/AFS
As previously reported, Enterprises concluded its CCLM
testing program and does not intend to resume testing of CCLM
dedicated systems in the foreseeable future. However,
consistent with Enterprises' authorization to engage in
preliminary development activities, Enterprises continues to
investigate other utility and energy related applications of
communications technologies, including automated meter reading,
power outage reporting and consumer accessible information such
as real-time meter information and bill estimation systems.
Amounts expended by Enterprises in connection with such
preliminary development activities are reported as "nonutility
business" related expenses under Item "1" above.
V. Formation and Capitalization of O&M Subsidiaries
During the quarter, no amounts were expended to form
and capitalize any O&M Subsidiaries pursuant to the Commission's
order dated September 30, 1995.
VI. Nature and Extent of O&M Services Provided.
During the quarter, Entergy's subsidiary, Entergy Nuclear,
Inc. (ENI), provided nuclear management services to Maine Yankee
Atomic Power Company. A new contract was signed on November 6,
1997, to extend the original agreement to provide management
services for initial decommissioning activities through September
30, 1998. ENI is paid a fixed monthly fee for providing these
services and was reimbursed its actual expenses for labor and
related charges at cost for the services provided. The total
amounts billed for services in the second quarter were $1,543,960
consisting primarily of Maine Yankee fees and reimbursable
expenses.
In addition, during the quarter, Entergy's subsidiary,
Entergy Operations Services, Inc. (EOSI), provided power project
related operation and management services to several customers,
including professional advice, technical expertise and
maintenance services. Specifically, EOSI's services included the
following: testing oil samples from transformers at the Hot
Springs Rehabilitation Center; replaced a 230kV switch at the
TransAmerican Refinery substation; preventive maintenance on
three 34.5kV oil circuit breakers at Cytec Industries; provided
design/installation on new substation switches at the Exxon Oil
Refinery; disconnection of a switch and installation of a neutral
ground resistor at Koch Hydrocarbons, S.E. Inc.; inspected core
and coil of transformer and witnessed transformer testing at
Bayou Steel. Also, EOSI provided management oversight to Entergy
Business Solutions, Inc. for the District Energy Project. The
total amounts billed for services in the second quarter were
$321,429.19 consisting of market based fees and reimbursable
expenses.
Entergy and Enterprises represent that no Excluded Company
has subsidized the operations of Enterprises or any O&M
Subsidiary, and that the rendering of O&M Services by O&M
Subsidiaries is in compliance with the applicable rules,
regulations and orders of the Commission and has not adversely
affected the services provided by any Excluded Company to its
customers.
VII. Financing, Amortization and Financial Statements
During the three months ended June 30, 1998:
A. Enterprises incurred no amortization expenses related to
the organization of EIS.
B. Enterprises' unaudited unconsolidated Balance Sheet and
unconsolidated Income Statement for the six month period ended
June 30, 1998 are included as Exhibit 1.
IN WITNESS WHEREOF, the undersigned companies have caused
this certificate to be executed on this 14th day of August, 1998.
ENTERGY CORPORATION
By: /s/ C. John Wilder
C. John Wilder
Executive Vice President &
Chief Financial Officer
ENTERGY ENTERPRISES, INC.
By: /s/ Stephen Refsell
Stephen Refsell
Asst. Secretary
_______________________________
<FN1> The Excluded Companies are Entergy's retail operating
companies (Entergy Arkansas Inc., Entergy Louisiana Inc., Entergy
Mississippi Inc., Entergy New Orleans Inc. and Entergy Gulf
States Inc.), System Energy Resources, Inc., System Fuels, Inc.,
Entergy Operations, Inc., Entergy Services, Inc., and any other
subsidiaries that Entergy may create 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.
ENTERGY ENTERPRISES, INC.
UNCONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(UNAUDITED)
ASSETS
PROPERTY
Furniture and Equipment $ 6,140,855.05
Construction in Process 362,283.47
---------------
Total Property 6,503,138.52
---------------
INVESTMENTS
Investment in Entergy IS, Inc. 46,974,940.86
Investment in EOSI 311,587.59
---------------
47,286,528.45
---------------
CURRENT & ACCRUED ASSETS
Cash 2,095,362.28
Working Funds/Travel Advances 729,779.66
Special Deposits 454,030.07
Temporary Cash Investments 11,468,805.01
Accounts Receivable 118,688.63
Accounts Receivable - Associated Companies 21,405,272.30
Accrued Interest 7,442.72
Prepaid Expenses 154,858.10
Income Taxes Receivable 2,580,947.61
---------------
Total Current and Accrued Assets 39,015,186.38
---------------
DEFERRED DEBITS
Accumulated Deferred Income Tax-Fed & State 6,555,704.01
Total Deferred Debits 6,555,704.01
---------------
Total Assets $ 99,360,557.36
===============
These are interim financial statements prepared without notes.
<PAGE>
ENTERGY ENTERPRISES, INC.
UNCONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(UNAUDITED)
CAPITAL
Common Stock $ 57,400,000.00
Miscellaneous Paid-in Capital 153,000,000.00
Retained Earnings (152,942,865.06)
-----------------
Total Capital 57,457,134.94
-----------------
LIABILITIES
CURRENT & ACCRUED LIABILITIES
Accounts Payable 4,123,081.75
Accounts Payable to Associated Companies 9,802,938.22
Tax Collections Payable 236,478.06
Miscellaneous Current & Accrued Liabilities 5,513,357.34
-----------------
Total Current & Accrued Liabilities 19,675,855.37
-----------------
LONG TERM LIABILITIES
Notes Payable - Entergy Corp. 17,500,000.00
Other Long Term Debt
Accum. Misc. Operating Provision
-----------------
Total Current & Accrued Liabilities 17,500,000.00
-----------------
DEFERRED CREDITS
Other Deferred Credits 4,727,567.05
-----------------
Total Deferred Credits 4,727,567.05
-----------------
Total Liabilities 41,903,422.42
-----------------
Total Capital & Liabilities $ 99,360,557.36
=================
These are interim financial statements prepared without notes.
<PAGE>
ENTERGY ENTERPRISES, INC.
UNCONSOLIDATED INCOME STATEMENTS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
REVENUE
Services Rendered Non-Associates $ 25,195.62
Services Rendered Associates 34,477,980.63
Equity in Earnings (Losses) of Subsidiaries (6,567,434.17)
Miscellaneous Income 1,224.54
Interest Income 282,859.65
Dividend Income 20,776.86
---------------
Total Revenue 28,240,603.13
---------------
EXPENSES
Salaries, Wages and Benefits 15,603,266.27
Outside Services 16,683,704.36
Selling and Marketing Expenses 1,070,604.87
Rent 1,960,484.47
Administrative and General 7,401,124.99
Active Development Credit (2,267,091.34)
---------------
Total Administrative and General Expense 40,452,093.62
---------------
Taxes Other Than Income 232,027.38
Depreciation and Amortization 1,207,076.03
Miscellaneous Expenses 28,713.81
---------------
Total Expenses 41,919,910.84
---------------
Income (Loss) Before Income Taxes (13,679,307.71)
Income Taxes - Federal (2,294,249.78)
Income Taxes - State (Benefit) (250,253.69)
Provision for Deferred Income Taxes - Federal 81,203.73
Provision for Deferred Income Taxes - State 16,129.08
---------------
Net Income (Loss) $(11,232,137.05)
===============
These are interim financial statements prepared without notes.
