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
December 31, 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(FRN1)),
(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 $440,861 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 $11,614,910 for preliminary
development activities associated with potential investments that
would qualify as "foreign utility companies" under Section 33 of
the Act. Enterprises also expended $1,486,771 for preliminary
development activities associated with potential investments that
would qualify as "nonutility business" and $320,402 for
preliminary development activities related to non-exempt
wholesale generating facilities. Finally, Enterprises received
a credit of $152,173 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
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..
Enterprises charged these companies for direct costs incurred
plus an indirect loading based upon current month Enterprises
administrative charges. In regard to EPI ($171,115), 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. ($3,519,663) and Entergy
Trading and Marketing Ltd. ($649,313) 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. ($557,986) these were primarily
administrative services. In regard to , Entergy Power Edesur
Holding Ltd. ($113,901), ETHC ($1,158,945), Entergy Technology
Company ($390,583), Entergy Power Development Corp. ($4,554,792),
Entergy International Holdings, Ltd., LLC (3,835,041), Entergy
Pakistan Ltd. (40,620), EP Edegel, Inc. (191,318), , Entergy
Operations Services Inc. ($219,137), Entergy Power Operations
Corp. ($244,710), Entergy Power International Holdings Corp.
($1,454,622) Entergy Power Generation Corp. ($85), and Entergy
Nuclear, Inc. ($643,999) 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 (Maine Yankee). 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. ENI is paid a fixed monthly fee and
certain incentive fees for providing these services and is
reimbursed its actual expenses for labor and related charges at
cost for the services provided. The total amounts billed for
services in the fourth quarter were $879,584 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
installation of a transformer for Conway Corporation. Design and
installation of new substation switches at an Exxon oil refinery;
consulting work for the City of Austin's municipal utility
(Austin Energy) on the coal industry; and on site ground testing
for continuity and capacity on all ground leads for Birmingham
Southeast, LLC. EOSI also provided the following: an ongoing
load flow and coordination study for Grace Davison, Inc.;
preventive maintenance on 35kV OCB's and insulator cleaning relay
test for Cytec, Industries; repaired and replaced insulators for
Industrial Specialty Contractors, Inc.; design, engineering and
construction at Echo substation for Engineered Carbons, Inc.;
maintenance services to Occidental Chemical Corporation that
included testing a transformer, replacing arrestors, repairing
and replacing S&C interrupters on 230kV lines and assistance in
closing 230kV lines and preventive maintenance services to Vulcan
Chemical. The total amounts billed for services in the fourth
quarter were $1,494,721 consisting of market-based fees and
reimbursable expenses.
During the quarter, EOSI also provided management oversight
services to the Entergy Business Solutions, Inc. District Energy
Project. The amount billed in the fourth quarter was $31,812,
primarily for 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
Enterprises' unaudited Balance Sheet and Income Statement for the
twelve month period ended December 31, 1998 are included as
Exhibit 1.
IN WITNESS WHEREOF, the undersigned companies have caused
this certificate to be executed on this 15th day of February ,
1999.
ENTERGY CORPORATION
By:/s/ Nathan E. Langston
Nathan E. Langston
Vice-President and Chief Accounting Officer
ENTERGY ENTERPRISES, INC.
By: /s/ Gary S. Fuqua
Gary S. Fuqua
Vice-President-Finance and Treasurer
_______________________________
FRN1 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
BALANCE SHEET
AS OF DECEMBER 31, 1998
(UNAUDITED)
ASSETS
PROPERTY
Furniture and Equipment $ 5,326,606.09
Intangible Assets
Construction in Process 144,883.51
_________________
Total Property 5,471,489.60
_________________
INVESTMENTS
Investment in EOSI 311,587.76
_________________
311,587.76
_________________
CURRENT & ACCRUED ASSETS
Cash 5,428,864.81
Working Funds/Travel Advances 573,381.21
Special Deposits 353,690.63
Temporary Cash Investments 13,175,394.47
Accounts Receivable 84,301.58
Accounts Receivable - Associated Companies 15,370,002.23
Notes Receivable 2,223,555.67
Accounts Receivable - Customer Service 0.35
Accrued Interest 18,075.16
Prepaid Expenses 506,294.25
Income Taxes Receivable 12,901.22
_________________
Total Current and Accrued Assets 37,746,461.58
_________________
DEFERRED DEBITS
Accumulated Deferred Income Tax-Fed & State 16,538,365.15
Miscellaneous Deferred Debits (3,641,258.17)
_________________
Total Deferred Debits 12,897,106.98
_________________
Total Assets $ 56,426,645.92
=================
These are interim financial statements prepared without notes.
<PAGE>
ENTERGY ENTERPRISES, INC
BALANCE SHEET
AS OF DECEMBER 31, 1998
(UNAUDITED)
CAPITAL
Common Stock $ 57,400,000.00
Additional Paid-in Capital 20,000,000.00
Miscellaneous Paid-in Capital 153,000,000.00
Retained Earnings (212,809,519.04)
__________________
Total Capital 17,590,480.96
__________________
LIABILITIES
CURRENT & ACCRUED LIABILITIES
Accounts Payable 10,233,214.49
Accounts Payable to Associated Companies 4,462,457.80
Taxes Accrued (2,199,104.35)
Tax Collections Payable (461,443.49)
Miscellaneous Current & Accrued Liabilities 9,344,862.26
__________________
Total Current & Accrued Liabilities 21,379,986.71
__________________
LONG TERM LIABILITIES
Notes Payable - Entergy Corp. 17,500,000.00
__________________
Total Current & Accrued Liabilities 17,500,000.00
__________________
DEFERRED CREDITS
Other Deferred Credits (43,821.75)
__________________
Total Deferred Credits (43,821.75)
__________________
Total Liabilities 38,836,164.96
__________________
Total Capital & Liabilities $ 56,426,645.92
==================
These are interim financial statements prepared without notes.
<PAGE>
ENTERGY ENTERPRISES, INC
INCOME STATEMENT
TWELVE MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
REVENUE
Services Rendered Non-Associates $ 50,395.62
Services Rendered Associates 60,194,924.97
Equity in Earnings of Subsidiaries (39,505,136.19)
Miscellaneous Income 1,320.13
Interest Income 846,158.90
_________________
Total Revenue 21,587,663.43
_________________
EXPENSES
Salaries, Wages and Benefits 32,540,416.03
Outside Services 33,360,763.87
Selling and Marketing Expenses 937,770.41
Rent 4,035,309.57
Administrative and General 15,418,276.
Active Development Credit (2,951,804.22)
Active Development Reserve 800,492.87
Directors' Fees and Expenses _________________
Total Administrative and General Expense 84,141,225.50
Taxes Other Than Income 184,726.19
Depreciation and Amortization 2,197,487.77
Miscellaneous Expenses 539,616.15
Loss on Sale of EISI 46,052,514.52
_________________
Total Expenses 133,115,570.13
_________________
Income (Loss) Before Income Taxes (111,527,906.70)
Income Taxes - Federal (Benefit) (41,940,518.67)
Income Taxes - State 1,041,685.54
Provision for Deferred Income Taxes - Federal 270,801.35
Provision for Deferred Income Taxes - State 161,843.59
__________________
Net Income (Loss) (71,061,718.51)
==================
These are interim financial statements prepared without notes.
