File No. 70-9123
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
____________________________
AMENDMENT NO. 2
To
APPLICATION-DECLARATION
Under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________
Entergy Corporation Entergy Integrated Solutions, Inc.
639 Loyola Avenue 4740 Shelby Drive, Suite 105
New Orleans, LA 70113 Memphis, TN 38118
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)
____________________________
Edwin Lupberger Robert J. Cushman
Chairman and Vice President
Chief Executive Officer Entergy Enterprises, Inc.
Entergy Corporation 4 Park Plaza, Suite 2000
639 Loyola Avenue Irvine, CA 92614
New Orleans, LA 70113
(Names and addresses of agents for service)
____________________________
The Commission is also requested to send copies
of any communications in connection with this matter to:
Frederick F. Nugent, Esq. Laurence M. Hamric, Esq.
General Counsel Associate General Counsel
Entergy Enterprises, Inc. Entergy Services, Inc.
4 Park Plaza, Suite 2000 639 Loyola Avenue
Irvine, CA 92614 New Orleans, LA 70113
Thomas C. Havens, Esq. Kent R. Foster, Esq.
Mayer, Brown & Platt Vice President
1675 Broadway Entergy Services, Inc.
New York, NY 10019 P.O. Box 8082
Little Rock, AR 72203
<PAGE>
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 non-utility
affiliates (as hereinafter described) from time to time during
the period through December 31, 2002, in an aggregate amount not
to exceed $750 million; (2) for Entergy to acquire, directly or
indirectly, the securities of one or more companies
(collectively, the "New Subsidiaries") organized for purposes of
performing certain service and development activities currently
authorized by the Commission<FN1>, and/or for purposes of acquiring
(including financing or refinancing an acquisition), owning and
holding the securities of associate companies which are (i)
"exempt wholesale generators" ("EWGs"), as defined in Section
32(a) of the Act, (ii) "foreign utility companies" ("FUCOs"), as
defined in Section 33(a) of the Act (EWGs and FUCOs are sometimes
collectively referred to herein as "Exempt Projects"), (iii)
"exempt telecommunications companies" ("ETCs"), as defined in
Section 34(a) of the Act, (iv) other subsidiary companies of
Entergy (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")<FN2>, (v) other New
Subsidiaries and/or (vi) "energy-related companies", as defined
in Rule 58 under the Act ("Energy-related Companies";<FN3> 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. ("EOSI"); (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 companies<FN4>, (3) to
provide consulting services ("Consulting Services") to certain of
its associate companies and to non-associate companies, and (4)
to provide operations and maintenance services ("O&M Services")
directly, or indirectly through other subsidiaries of Entergy
("O&M Subs") to non-associate companies and to certain of its
associate companies, in each case utilizing the skills and
resources of other System companies<FN5>, 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")<FN6>, 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.<FN7> 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 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.<FN8> 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.<FN9> 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.<FN10> EIS's primary business has been
the installation and maintenance of high efficiency lighting
equipment through multi-year sales contacts 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 and ESKOM, a South African utility, with respect to the
management and operations 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, Entergy recently 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, 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).<FN11> 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 June 30, 1997, Entergy
had sold approximately 10,647,193 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.<FN12> 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.<FN13>
(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
capital contributions in an aggregate principal amount of up to
$20 million and by guarantees or similar commitments 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), and to the extent such transactions are not exempt
from the Act or otherwise authorized or permitted by rule,
regulation or order issued by the Commission thereunder, Entergy
and Non-utility Companies hereby request authority to issue
guarantees or provide other forms of credit support or
enhancements (collectively, "Guarantees") to or for the benefit
of Non-utility Companies from time to time through December 31,
2002. Guarantees may take the form of Entergy or a Non-utility
Company agreeing to guarantee, undertake reimbursement
obligations, assume liabilities or other obligations in respect
of or act as surety on bonds, letters of credit, evidences of
indebtedness, equity commitments, performance and other
obligations undertaken by Entergy or its associate Non-utility
Companies. For example, such associate companies may be called
upon to furnish various types of bonds as security, including bid
bonds, performance bonds, and material and payment bonds.
Moreover, various Non-utility Companies may require credit
support from Entergy or from other Non-utility Companies to cover
performance and other obligations. Guarantees may also be
necessary or desirable to satisfy the requirements of lenders or
other project participants under financing documents or other
project agreements to which an associate Non-utility Company of
Entergy is or will become a party (including with respect to the
provision of construction, interim or permanent debt or equity
financing). These forms of credit enhancements are typical in
the marketplace, and would significantly benefit Entergy's
investments in Non-utility Companies by, among other things,
facilitating the making of bids or proposals in respect of
investments in Non-utility Companies, and helping to reduce the
cost of necessary bonds, sureties, and other credit support.
The terms and conditions of Guarantees would be established at
arm's length based upon market conditions.
Entergy hereby requests, on its behalf and on behalf of the
Non-utility Companies, all requisite authority under the Act to
issue Guarantees from time to time through December 31, 2002 in
an aggregate amount not to exceed $750 million (the "Aggregate
Authorization") at any one time outstanding (including any
guarantees previously issued and outstanding pursuant to the June
1995 Order), provided that the amount of a Guarantee shall not
reduce the Aggregate Authorization to the extent that the
provision of such Guarantee is exempt from the Act or is
otherwise authorized or permitted by rule or regulation of the
Commission issued thereunder. Any Guarantees provided by Entergy
to Exempt Projects would be subject to the limitation on
"aggregate investment" in EWGs and FUCOs set forth in Rule 53(a),
pending receipt of Commission authorization being sought in File
No. 70-9049. 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 and/or Authorized Subsidiary
Companies, or to raise debt or equity capital for purposes
described herein. New Subsidiaries may also perform Development
Activities, Administrative Services and/or Consulting Services,
as described further below. To the extent such transactions are
not exempt from the Act or otherwise authorized or permitted by
rule, regulation or order of the Commission issued thereunder,
Entergy requests authority for New Subsidiaries to engage in the
activities described herein.
There are a number of legal and business reasons for the use
of special-purpose subsidiaries such as the New Subsidiaries in
connection with investments in Non-utility Companies. For
example, the formation and acquisition of special-purpose
subsidiaries is often necessary or desirable to facilitate the
acquisition and ownership of a FUCO, an EWG or another non-
utility enterprise. Furthermore, the laws of some foreign
countries may require that the bidder in a privatization program
be a domestic company in that country. In such cases, it would
be necessary for Entergy to form a foreign subsidiary as the
entity submitting the bid or other proposal. In addition, the
interposition of one or more New Subsidiaries may allow Entergy
to defer the repatriation of foreign source income, or to take
full advantage of favorable tax treaties among foreign countries,
or otherwise to secure favorable U.S. income tax treatment that
would not otherwise be available. New Subsidiaries would also
serve to isolate business risks, facilitate subsequent
adjustments to, or sales of, ownership interests by or among the
members of the ownership group, or to raise debt or equity
capital in domestic or foreign markets.
A New Subsidiary may be organized, among other things, (1)
in order to facilitate the making of bids or proposals to develop
or acquire an interest in any EWG, FUCO or another Non-utility
Company; (2) after the award of such a bid proposal, in order to
facilitate closing on the purchase or financing of an EWG, FUCO
or another Non-utility Company; (3) at any time subsequent to the
consummation of an acquisition of an interest in an EWG, FUCO or
another Non-utility Company in order, among other things, to
effect an adjustment in the respective ownership interests in
such business held by Entergy and non-affiliated investors; (4)
to facilitate the sale of ownership interests in one or more
EWGs, FUCOs or other Non-utility Companies; (5) to comply with
applicable laws of foreign jurisdictions limiting or otherwise
relating to the ownership of domestic companies by foreign
nationals; (6) as a part of tax planning in order to limit
Entergy's exposure to U.S. and foreign taxes; (7) to further
insulate Entergy and the Excepted Companies from operational or
other business risks associated with investments in Non-utility
Companies; or (8) for other lawful business purposes.
Investments in New Subsidiaries may take the form of any
combination of the following: (1) purchases of capital shares,
partnership interests, member interests in limited liability
companies, trust certificates or other forms of equity interests
(collectively, "Capital Stock"); (2) capital contributions; (3)
open account advances without interest; (4) loans; and (5)
Guarantees issued, provided or arranged in respect of the
securities or other obligations of the New Subsidiaries. Funds
for any direct or indirect investment by Entergy in any New
Subsidiary will be derived from (1) Borrowings within the
limitations prescribed in the February 1997 Order; (2) sales of
Common Stock pursuant to the Commission's orders dated June 6,
1996 (see HCAR No. 26528) and March 25, 1997 (see HCAR No.
26693); (3) any appropriate future debt or equity securities
issuance authorization obtained by Entergy from the Commission;
and (4) other available cash resources. To the extent that
Entergy provides funds to a New Subsidiary which are used for the
purpose of making an investment in an Exempt Project or an Energy-
related Company, the amount of such funds would be included in
Entergy's "aggregate investment" in such entities, as calculated
in accordance with Rule 53 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. Any loans by Entergy to
a New Subsidiary or an O&M Sub would have interest rates and
maturity dates that are designed to provide a return to Entergy
of not less than Entergy's effective cost of capital.
To the extent such transactions are not exempt from the Act
or otherwise authorized or permitted by rule, regulation or order
of the Commission issued thereunder, any initial investments in
the Capital Stock of New Subsidiaries or O&M Subs would be
included in the $750 million Aggregate Authorization to issue
Guarantees requested herein.
C. Issuance of Securities.
In addition, to the extent such transactions are not exempt
from the Act or otherwise authorized or permitted by rule,
regulation or order of the Commission issued thereunder, Entergy
requests authority under the Act for Non-utility Companies to
issue and/or sell securities of any type (including Guarantees)
(collectively, "Securities") to Entergy, to other Non-utility
Companies or to non-associate companies (with or without a
Guarantee being provided by Entergy or another Non-utility
Company), including banks, insurance companies, and other
financial institutions. Securities would be issued and sold
pursuant to the authorization requested herein in one or more
transactions from time to time through the earlier to occur of
(1) December 31, 2002 or (2) the effective date of any rule of
general applicability hereafter adopted by the Commission
exempting such transactions (to the extent they remain
jurisdictional under the Act) from the approval requirements
under Sections 6(a) and 7 of the Act.<FN14>
Equity Securities issued by a Non-utility Company may
include capital shares, partnership interests, member interests
in limited liability companies, trust certificates, or the
equivalent of any of the foregoing under applicable foreign law.
Equity Securities issued by a Non-utility Company may be
denominated in either U.S. dollars or foreign currencies. To the
extent that a proposed issuance of equity Securities is not
exempt under Rule 52(b) or otherwise authorized by order of the
Commission, the amount, type and other general terms of such
equity Securities would in each case be subject to further
approval by the Commission.<FN15> Entergy hereby requests that the
Commission reserve jurisdiction over the issuance of any equity
Securities not currently exempt under Rule 52(b) or otherwise
approved by the Commission, pending completion of the record.
Entergy hereby undertakes to file a post-effective amendment in
this File which will describe the general terms of such equity
Securities and request a supplemental order of the Commission
authorizing such issuance. Entergy requests that each such
supplemental order be issued by the Commission without further
public notice. Entergy would report periodically to the
Commission pursuant to Rule 24 under the Act concerning the
issuance and sale of such Securities to the same extent that such
reporting is required by Rule 52(c).<FN16>
In connection with the issuance of debt Securities, Non-
utility Companies may seek to manage their interest rate risk
through the use of interest rate swaps, options and related
derivatives such as interest rate caps, collars, floors or
ceilings (collectively, "Hedging Transactions"). Hedging
Transactions may be used, for example, to lock in favorable
interest rates prior to the issuance of debt Securities, such as
through (1) the sale of exchange-traded U.S. Treasury futures
contracts, a forward sale of U.S. Treasury securities and/or a
forward interest rate swap; (2) the purchase of put options on
U.S. Treasury securities ("Put Options Purchase"); (3) a Put
Options Purchase in combination with the sale of call options on
U.S. Treasury securities; or (4) any combination of the above.
The counterparty to any swap instrument would be a financial
institution rated above "A" by Standard & Poor's Ratings Group
and above "A2" by Moody's Investors Service, Inc. Any Guarantees
that may be required in connection with such Hedging Transactions
would be provided pursuant to the authorization granted herein.
All Hedging Transactions would meet the criteria established by
the Financial Accounting Standards Board from time to time
necessary to qualify for hedge accounting treatment.
The net proceeds from the issuance and sale of Securities
would be used for general corporate purposes, including without
limitation (1) for loans to and/or equity investments in Non-
utility Companies; (2) for the repayment, refinancing or
redemption of outstanding securities of Entergy or Non-utility
Companies originally issued for purposes of acquiring interests
in Non-utility Companies or providing funds for the authorized or
permitted business activities of such companies; and (3) for
working capital or other cash requirements of Non-utility
Companies, provided that such net proceeds will only be applied
to finance activities that are exempt under the Act or are
otherwise authorized or permitted by rule, regulation or order of
the Commission issued thereunder, and provided further, that at
the time of issuance of any Securities authorized by the
Commission herein that are recourse to Entergy, directly or
indirectly, the proceeds of which are to be used to invest in any
Exempt Project, Entergy will be in compliance with Rule 53 (as
the conditions set forth therein may be modified by order of the
Commission issued in File No. 70-9049).
Entergy represents and agrees that no System operating
company will incur any indebtedness, extend any credit, or sell
or pledge its assets, directly or indirectly, to or for the
benefit of any Non-utility Company, and that any Securities that
may be issued by a Non-utility Company, and any Guarantees that
may be issued by Entergy, will not be recourse to any System
operating company.
D. Provision of Services.
(a) Administrative
Services, Consulting Services and
Development Activities.
In order to provide Entergy with further flexibility in the
administration of its non-utility businesses, to the extent such
transactions are not exempt from the Act or otherwise authorized
or permitted by rule, regulation or order of the Commission
issued thereunder, Entergy requests authority herein for Non-
utility Companies to provide other Non-utility Companies with
Administrative Services, to provide Consulting Services to other
Non-utility Companies and to non-associate companies, and 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.<FN17>
Non-utility Companies would continue to charge fair market value
for Consulting Services provided to non-associate companies,
subject to compliance with all applicable rules of the Commission
and the terms and conditions set forth herein.
Administrative Services, Consulting Services and Development
Activities would generally be performed for associate Non-utility
Companies "at cost". In addition, 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. Furthermore, to the extent not exempt pursuant
to rule, regulation or order of the Commission, Entergy hereby
requests an exemption pursuant to Section 13(b) from the "at
cost" requirements of Rules 90 and 91 under the Act in connection
with the performance of Administrative Services, Consulting
Services and Development Activities by Non-utility Companies for
associate Non-utility Companies, subject, however, to the
condition that no Excepted Company shall be engaged or otherwise
involved, directly or indirectly, in the rendering of
Administrative Services, Consulting Services or Development
Activities that are provided to Non-utility Companies at a price
other than "cost".
(2) O&M Services.
Entergy further proposes to continue to provide, indirectly
through one or more O&M Subs, various O&M Services to or for the
benefit of developers, owners and operators of domestic and
foreign power projects and other electric utility systems or
facilities, including projects that Entergy may develop on its
own (through an associate Non-utility Company) or in
collaboration with third parties. O&M Services would include,
but not be limited to, development, engineering, design,
construction and construction management, pre-operational start-
up, testing, and commissioning, long-term operations and
maintenance, fuel procurement, management and supervision,
technical and training, administrative support, market analysis,
consulting, coordination and any other managerial, technical,
administrative or consulting services required in connection with
the business of owning or operating facilities used for the
generation, transmission or distribution of electric energy
(including related facilities for the production, conversion,
sale or distribution of thermal energy) or coordinating their
operations in the power market. An O&M Sub may also lease all or
a portion of the facilities with respect to which it is providing
O&M Services. However, an O&M Sub will not undertake to enter
into such leases without further approval of the Commission if,
as a result thereof, such O&M Sub would become a "public-utility
company" as defined in the Act.
O&M Subs would charge fair market value for O&M Services,
subject to compliance with all applicable rules of the Commission
and the terms and conditions set forth herein. To the extent not
exempt pursuant to rule, regulation or order of the Commission,
Entergy requests an exemption pursuant to Section 13(b) from the
"at cost" requirements of Rules 90 and 91 under the Act in
connection with the rendering of O&M Services to associate
companies (other than an Excepted Company); provided, that no
such services will be rendered to an associate power project
unless one or more of the following conditions shall apply:
(1) the project is a FUCO or is an EWG that derives no part
of its income, directly or indirectly, from the generation
and sale of electric energy within the United States;
(2) the project is an EWG that sells electricity at market-
based rates which have been approved by the FERC or the
appropriate state public utility commission, provided that
the purchaser is not an Excepted Company;
(3) the project is a "qualifying facility" ("QF") under the
Public Utility Regulatory Policies Act of 1978, as amended
("PURPA") that sells electricity exclusively at rates
negotiated at arm's length to one or more industrial or
commercial customers purchasing such electricity for their
own use and not for resale, or to an electric utility
company (other than an Excepted Company) at the purchaser's
"avoided cost" determined in accordance with the regulations
under PURPA; or
(4) the project is an EWG or a QF that sells electricity at
rates based upon its cost of service, as approved by the
FERC or any state public utility commission having
jurisdiction, provided that the purchaser of such
electricity is not an Excepted Company.
O&M Subs would either be domestic or foreign corporations,
partnerships or other entities (depending upon the legal and
regulatory requirements of a particular project). With respect
to any O&M Sub that would not qualify as an Exempt Project,
Entergy Enterprises would continue to provide the same
information as to the formation and capitalization of such
subsidiary to the Commission in the next quarterly certificate
filed pursuant to Rule 24 as required under the June 1995 Order.
Such certificate would, among other things, continue to represent
that, in connection with the rendering of O&M Services, no
Excepted Company has subsidized the operations of any O&M Sub,
and further, that any transfer of personnel from any Excepted
Company to, and the rendering of O&M Services by, any such O&M
Sub are in compliance with applicable rules, regulations and
orders of the Commission and have not adversely affected the
services provided by such Excepted Companies to their respective
customers. Entergy further acknowledges that the Commission's
authorization of fair market prices with regard to any Services
provided by Non-utility Companies shall not be binding upon the
FERC or any state public utility commission having jurisdiction
over the rates charged by any associate company of Entergy, and
represents and agrees that it will not assert or take any
position to the contrary in any administrative determination of
the rates that may be charged by any such associate company.
E. Payment of Dividends.
To the extent such transactions are not exempt from the Act
or otherwise authorized or permitted by rule, regulation or order
of the Commission issued thereunder, Entergy requests
authorization under Section 12(c) of the Act and Rule 46
thereunder for Non-utility Companies (including without
limitation Varibus Corporation, GSG&T, Inc. and Southern Gulf
Railway Company, each of which is a direct, wholly-owned
subsidiary of Entergy Gulf States) to declare and pay dividends
to their respective immediate parent companies out of capital or
unearned surplus, from time to time through December 31, 2002, to
the extent permitted under applicable corporate law and any
applicable financing agreement which restricts distributions to
shareholders.
The payment by Non-utility Companies of dividends out of
capital or unearned surplus will not contravene the intent of
Section 12(c) of the Act. Permitting the use of distributable
cash to pay dividends ultimately to Entergy will benefit the
Entergy System by enabling Entergy to reduce or refinance
outstanding Borrowings and fund operations of Entergy System
companies. The payment of dividends out of capital or unearned
surplus will not be detrimental to the financial integrity of the
Entergy System or jeopardize the working capital any of the
Excepted Companies (including any public-utility subsidiary
company of Entergy) since the original source of such dividends
would be distributable cash derived exclusively from Entergy's
investments in Non-utility Companies.
III. Compliance With Rules 53 and 54.
Entergy hereby represents that, pursuant to Rule 54 under
the Act, (1) for the reasons discussed below, the condition set
forth in Rule 53(a)(1) that Entergy's "aggregate investment" in
EWGs and FUCOs not exceed 50% of Entergy's "consolidated retained
earnings" is not currently satisfied, and (2) all of the other
criteria of Rule 53(a) and (b) are satisfied.
Entergy's "aggregate investment" in Exempt Projects as of
November 30, 1997 is equal to approximately 50.8% of Entergy's
"consolidated retained earnings" as of September 30, 1997.
Entergy's aggregate investment in Exempt Projects exceeds the 50%
limitation in Rule 53(a)(1) as a result of a decrease of
approximately $140 million in Entergy's consolidated retained
earnings from the quarter ended June 30, 1997 to the quarter
ended September 30, 1997. This decrease was attributable wholly
to the recording in July 1997 of a one-time "windfall profits
tax" imposed by the British government on London Electricity plc
("London Electricity"), an indirect subsidiary of Entergy and a
FUCO, and other privatized companies in the United Kingdom. This
tax, which was approximately US$234 million for London
Electricity, was made payable in two installments, the first of
which was paid on December 1, 1997, and the second of which will
be due on December 1, 1998. The first installment of the tax was
paid by London Electricity, without need for additional
investment by Entergy, and it is not anticipated that there will
be a need for any additional investment by Entergy to fund London
Electricity's payment of the second installment."
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
amendment to be signed on its behalf by the undersigned thereunto
duly authorized.
ENTERGY CORPORATION
By: /s/ 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.
ENTERGY POWER, INC.
By: /s/ Michael G. Thompson
Michael G. Thompson
Vice President and Secretary
ENTERGY NUCLEAR, INC.
ENTERGY POWER MARKETING CORP.
By: /s/ Michael G. Thompson
Michael G. Thompson
Senior Vice President
and Secretary
ENTERGY OPERATIONS SERVICES, INC.
By: /s/ Michael G. Thompson
Michael G. Thompson
Director
ENTERGY GLOBAL POWER OPERATIONS CORPORATION
ENTERGY POWER OPERATIONS U.S., INC.
By: /s/ Ricardo Orozco
Ricardo Orozco
Incorporator
Dated: February 5, 1998
_______________________________
<FN1> See Entergy Corporation, et al., Holding Company Act Release
("HCAR") No. 26322 (June 30, 1995) (hereinafter referred to
as the "June 1995 Order").
<FN2> The Authorized Subsidiary Companies currently consist of
Entergy Enterprises, Inc., Entergy Power, Inc., Entergy
Nuclear, Inc., Entergy Integrated Solutions, Inc., Entergy
Operations Services, Inc., Entergy Global Power Operations
Corporation and Entergy Power Operations U.S., Inc.
<FN3> In late 1997, Entergy organized a new direct subsidiary
company, Entergy Holdings, Inc. ("EHI") as an "energy-
related company" pursuant to Rule 58. EHI 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.
<FN4> 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").
<FN5> 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.
<FN6> 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).
<FN7> 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 now has a 21.5% undivided ownership interest in ISES 2.
<FN8> 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).
<FN9> See Entergy Services, Inc. and Entergy Power Marketing
Corp., 74 FERC 61,137 (1996) (authorizing EPMC to sell
power at market-based rates).
<FN10> 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).
<FN11> 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.
<FN12> 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.
<FN13> As of December 15, 1997, the indebtedness outstanding under
these credit arrangements was approximately $150 million.
<FN14> Issuances of debt Securities by a Non-utility Company
(including without limitation secured and unsecured
promissory notes, bonds, debentures, or other evidence of
indebtedness) are not subject to prior Commission approval
under the Act pursuant to Rule 52(b).
<FN15> 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 the Commission reserve jurisdiction
over the modification by Non-utility Companies of the terms
of their charters or other governing documents to effectuate
the issuance of equity Securities, pending completion of the
record. Entergy hereby undertakes to file a post-effective
amendment in this File which will describe the general terms
of any such modification and request a supplemental order of
the Commission authorizing such modification. Entergy
requests that each such supplemental order be issued by the
Commission without further public notice.
<FN16> If an Energy-related Company issues such Securities, it will
also report such issuance to the Commission as required
under Form U-9C-3.
<FN17> 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.
