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
September 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 $558,777 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 $14,235,095 for preliminary
development activities associated with potential investments that
would qualify as "foreign utility companies" under Section 33 of
the Act. Enterprises also expended $1,822,276 for preliminary
development activities associated with potential investments that
would qualify as "nonutility business" and $594,640 for
preliminary development activities related to non-exempt
wholesale generating facilities. Finally, Enterprises recorded
a credit of $2,646,550 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, Entergy
Business Solutions, Inc., Entergy Trading and Marketing Ltd. 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 ($156,832), these services related to the 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. ($3,047,143) and Entergy Trading and Marketing
Ltd. ($265,108) these services related to the marketing of energy
commodities to third parties at wholesale, preparation of
contracts and regulatory filings and procurement of transmission
services. In regard to Entergy Business Solutions, Inc.
($506,439) these were primarily administrative services. In
regard to EIS ($1,004,713), Entergy Power Edesur Holding Ltd.
($152,218), ETHC ($1,478,377), Entergy Technology Company
($454,432) Entergy Power Development Corp. ($7,900,919), Entergy
International Holdings, Ltd.,LLC ($2,708,381), Entergy Pakistan
Ltd. ($67,971), EP Edegel, Inc. ($197,565), Entergy Power CBA
Holding Ltd. (a credit of $1,956), Entergy Operations Services
Inc. ($207,801), Entergy Power Operations Corp. ($495,960),
Entergy Power International Holdings Corp. ($688,856) Entergy
Power Generation Corp. (a credit of $126,157), and Entergy
Nuclear, Inc. ($397,047), these services were primarily 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 $12,600 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.
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 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 was paid a fixed monthly fee and certain incentive
fees 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 third
quarter were $943,761 consisting primarily of Maine Yankee fees
and reimbursable expenses. On September 30, 1998, a long-term
contract was executed, effective October 1, 1998, authorizing ENI
to continue to provide management services in respect of the
decommissioning of Maine Yankee through 2004, the end of plant
decommissioning.
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: substation maintenance, bushing replacement and
transformer oil drain, test and refill for TransAmerican Refining
Corporation; provided on going load flow and coordination study
for Grace Davison, Inc.; installation of a transformer for
Praxair, Inc.; installation of a padmount transformer for North
American Fabricators; performed an engineering analysis of a
failed transformer for the U.S. Army Corp. of Engineers. EOSI
also received final payment for the disconnection of a switch and
installation of a neutral ground resistor for Koch Hydrocarbons,
S.E., Inc. The total amounts billed for services in the third
quarter were $629,715.82 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 September 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 nine month period ended
September 30, 1998 are included as Exhibit 1.
IN WITNESS WHEREOF, the undersigned companies have caused
this certificate to be executed on this 16th day of November,
1998.
ENTERGY CORPORATION
By: /s/ Steven C. McNeal
Steven C. McNeal
Director, Corporate Fianance
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.
Exhibit 1
Page 1 of 3
ENTERGY ENTERPRISES, INC.
UNCONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(UNAUDITED)
ASSETS
PROPERTY
Furniture and Equipment $ 5,746,762.42
Intangible Assets (855.68)
Construction in Process 26,993.56
-------------------
Total Property 5,772,900.30
-------------------
INVESTMENTS
Investment in EOSI 311,587.59
-------------------
311,587.59
-------------------
CURRENT & ACCRUED ASSETS
Cash 3,208,800.82
Working Funds/Travel Advances 789,571.25
Special Deposits 459,452.09
Temporary Cash Investments 14,110,276.36
Accounts Receivable 60,605.49
Accounts Receivable - Associated Companies 10,549,907.39
Notes Receivable 2,190,429.17
Accounts Receivable - Customer Service 1,903.74
Accrued Interest 18,114.73
Prepaid Expenses 161,359.88
Income Taxes Receivable 24,347.50
-------------------
Total Current and Accrued Assets 31,574,768.42
-------------------
DEFERRED DEBITS
Accumulated Deferred Income Tax-Fed & State 40,046,661.05
Miscellaneous Deferred Debits (3,303,179.11)
-------------------
Total Deferred Debits 36,743,481.94
-------------------
Total Assets $ 74,402,738.25
===================
<PAGE>
Exhibit 1
Page 2 of 3
ENTERGY ENTERPRISES, INC.
UNCONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(UNAUDITED)
CAPITAL
Common Stock $ 57,400,000.00
Additional Paid-in Capital $ 12,000,000.00
Miscellaneous Paid-in Capital 153,000,000.00
Retained Earnings (205,001,998.31)
-----------------
Total Capital 17,398,001.69
-----------------
LIABILITIES
CURRENT & ACCRUED LIABILITIES
Accounts Payable 4,879,750.33
Accounts Payable to Associated Companies 26,180,711.99
Taxes Accrued (2,678,210.10)
Tax Collections Payable 59,788.04
Miscellaneous Current & Accrued Liabilities 9,441,381.92
-----------------
Total Current & Accrued Liabilities 37,883,422.18
-----------------
LONG TERM LIABILITIES
Notes Payable - Entergy Corp. 17,500,000.00
Other Long Term Debt 0.00
Accum. Misc. Operating Provision 0.00
-----------------
Total Current & Accrued Liabilities 17,500,000.00
-----------------
DEFERRED CREDITS
Other Deferred Credits 1,621,314.38
-----------------
Total Deferred Credits 1,621,314.38
-----------------
Total Liabilities 57,004,736.56
-----------------
Total Capital & Liabilities $ 74,402,738.25
=================
<PAGE>
Exhibit 1
Page 3 of 3
ENTERGY ENTERPRISES, INC.
UNCONSOLIDATED INCOME STATEMENT
NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
REVENUE
Services Rendered Non-Associates $ 37,795.62
Services Rendered Associates 45,427,007.86
Equity in Earnings of Subsidiaries 0.00
Miscellaneous Income 1,320.13
Interest Income 520,725.44
Dividend Income 0.00
---------------------
Total Revenue 45,986,849.05
---------------------
EXPENSES
Salaries, Wages and Benefits 23,878,335.31
Outside Services 22,768,196.53
Selling and Marketing Expenses 935,962.14
Rent 3,049,269.08
Administrative and General 9,149,942.62
Active Development Credit (4,834,310.32)
Active Development Reserve 4,883,496.55
---------------------
Total Administrative and General Expense 59,830,891.91
---------------------
Taxes Other Than Income 154,334.37
Depreciation and Amortization 1,661,924.50
Miscellaneous Expenses 27,121.73
Loss on Sale of EISI 46,052,514.52
---------------------
Total Expenses 107,726,787.03
---------------------
Income (Loss) Before Income Taxes (61,739,937.98)
Income Taxes - Federal (38,387,881.30)
Income Taxes - State (Benefit) 81,576.90
Provision for Deferred Income Taxes - Federal 291,255.01
Provision for Deferred Income Taxes - State 24,173.00
---------------------
Net Income (Loss) (23,749,061.59)
=====================
