UNITED STATES OF AMERICA
BEFORE THE SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
In the Matter of .
.
Entergy Corporation .
Entergy Services, Inc. .
System Fuels, Inc. .
Entergy Enterprises, Inc. .
Entergy Gulf States, Inc. (formerly known .
as Gulf States Utilities Company) . CERTIFICATE PURSUANT
System Energy Resources, Inc. . TO RULE 24
Entergy Arkansas, Inc. (formerly known .
as Arkansas Power & Light Company) .
Entergy Louisiana, Inc. (formerly known .
as Louisiana Power & Light Company) .
Entergy Mississippi, Inc. (formerly known .
as Mississippi Power & Light Company) .
Entergy New Orleans, Inc. (formerly known .
as New Orleans Public Service Inc.) .
Entergy Power, Inc. .
Entergy Operations, Inc. .
.
File No. 70-8529 .
.
(Public Utility Holding Company .
Act of 1935) .
This is to certify, pursuant to Rule 24 under the
Public Utility Holding Company Act of 1935, as amended, that
the transactions proposed by Entergy Corporation, Entergy
Services, Inc. ("ESI"), System Fuels, Inc. Entergy
Enterprises, Inc. ("EEI"), Entergy Gulf States, Inc.,
formerly known as Gulf States Utilities Company ("EGS")
,System Energy Resources, Inc., Entergy Arkansas, Inc.,
formerly known as Arkansas Power & Light Company ("EAI"),
Entergy Louisiana, Inc., formerly known as Louisiana Power &
Light Company ("ELI"), Entergy Mississippi, Inc., formerly
known as Mississippi Power & Light Company ("EMI"), Entergy
New Orleans, Inc., formerly known as New Orleans Public
Service Inc. ("ENO"), Entergy Power, Inc. ("EPI") and
Entergy Operations, Inc. in the Application-Declaration, as
amended, in the above file ("Application-Declaration") have
been carried out in accordance with the terms and conditions
of, and for the purposes represented by, the Application-
Declaration and pursuant to the Memorandum Opinion and Order
of the Securities and Exchange Commission with respect
thereto dated June 22, 1999 (HCAR No. 27040) (the "Order").
For the purpose, among other things, of implementing the
provision of the Settlement Agreements (as defined in the
Order) requiring that services rendered by Entergy's
Regulated Utilities (as defined in the Order) to
Nonregulated Businesses (as defined in the Order) be charged
at cost plus 5%, as of June 22, 1999:
(1) ESI entered into Amended and Restated Service
Agreements with EEI and EPI;
(2) EAI, ELI, EMI and ENO each entered into an Amended
and Restated Service Agreement with EEI; and
(3) EGS entered into a Service Agreement with EEI.
Attached hereto and incorporated herein by
reference are the following exhibits:
B-1(a) Amended and Restated Service Agreement
between ESI and EEI, as executed
B-2(a) Amended and Restated Service Agreement
between ESI and EPI, as executed
B-3(a) Amended and Restated Service Agreement
between EAI and EEI, as executed
B-3(b) Amended and Restated Service Agreement
between ELI and EEI, as executed
B-3(c) Amended and Restated Service Agreement
between EMI and EEI, as executed
B-3(d) Amended and Restated Service Agreement
between ENO and EEI, as executed
B-4(a) Service Agreement between
EGS and EEI, as executed
<PAGE>
IN WITNESS WHEREOF, the undersigned companies have
caused this Certificate to be executed this 12TH day of
November, 1999.
ENTERGY CORPORATION ENTERGY ENTERPRISES, INC.
ENTERGY SERVICES, INC. ENTERGY POWER, INC.
SYSTEM FUELS, INC.
ENTERGY GULF STATES, INC.
SYSTEM ENERGY RESOURCES, INC. By: /s/ Steven C. McNeal
ENTERGY ARKANSAS, INC. Steven C. McNeal
ENTERGY LOUISIANA, INC. Vice President and Treasurer
ENTERGY MISSISSIPPI, INC.
ENTERGY NEW ORLEANS, INC.
ENTERGY OPERATIONS, INC.
By: /s/C. John Wilder
C. John Wilder
Executive Vice President and
Chief Financial Officer
EXHIBIT B-1(a)
AMENDED AND RESTATED
SERVICE AGREEMENT
BETWEEN
ENTERGY SERVICES, INC.
AND
ENTERGY ENTERPRISES, INC.
THIS AGREEMENT, made and entered into as of June 22, 1999 by
and between Entergy Services, Inc., formerly MSU System Services,
Inc., formerly Middle South Services, Inc., a corporation
organized under the laws of the State of Delaware (hereinafter
sometimes referred to as "Service Company") and Entergy
Enterprises, Inc., formerly Electec, Inc., a corporation
organized under the laws of the State of Louisiana (hereinafter
sometimes referred to as "EEI"), amends, restates and supercedes
in its entirety that certain Service Agreement made and entered
into as of January 24, 1984, by and between Service Company and
EEI, as heretofore amended by Amendments, effective January 1,
1989, January 1, 1991, January 1, 1992, January 1, 1996, January
1, 1998, and January 1, 1999 (the "Original Service Agreement").
W I T N E S S E T H:
WHEREAS, Service Company and EEI are both direct
subsidiaries of Entergy Corporation ("Entergy") and, together
with Entergy and its other direct and indirect subsidiaries
("Client System Companies"), form the Entergy System; and
WHEREAS, Service Company is organized, staffed and
equipped and is authorized by the Securities and Exchange
Commission (the "Commission") as a subsidiary service company
under Section 13 of the Public Utility Holding Company Act of
1935, as amended (the "Act"), to render to Client System
Companies certain services and to render to EEI services as
herein provided (hereinafter EEI and Client System Companies will
be sometimes collectively referred to as "Client Companies"); and
WHEREAS, in the performance of past and future services
for the Client Companies, Service Company has acquired and will
acquire certain properties and other resources; and
WHEREAS, EEI is authorized by orders of the Commission
dated July 8, 1993 (HCAR No. 25848), June 30, 1995 (HCAR No.
26322) and June 22, 1999 (HCAR No. 27039) to utilize those
services, properties and resources of Service Company, as well as
those provided by other companies of the Entergy System, (i) to
conduct preliminary development activities with respect to
potential investments by Entergy in various energy, energy-
related and other non-utility businesses, (ii) to provide various
management, administrative and support services to certain of its
associate companies, (iii) to provide consulting services to
certain of its associate companies and to non-associate
companies, and (iv) to provide, directly or indirectly, through
one or more
special purpose subsidiary companies of Entergy or EEI, power
project operations and maintenance services to non-associate
companies and to certain of its associate companies; and
WHEREAS, economies and increased efficiencies benefiting
the Entergy System will result from the performance by Service
Company of services for EEI and the provision of certain property
and resources to EEI as herein provided; and
WHEREAS, subject to the terms and conditions herein
described, Service Company is willing, upon request by EEI, to
render such services and provide such property and resources to
EEI; and
WHEREAS, pursuant to settlement arrangements entered into
by Entergy with certain of its state and local regulators in 1992
and 1993 (collectively, the "Settlement Agreements"), Entergy has
agreed (subject to the receipt of any requisite Commission
authorization) to implement certain special provisions pertaining
to affiliate transactions between Entergy's Regulated Utilities
and Nonregulated Businesses (each as defined in Article 1 of this
Agreement), including, without limitation, (i) a provision
requiring that any services rendered by Entergy's Regulated
Utilities (including Service Company) to its Nonregulated
Businesses (including EEI), be priced at cost plus 5%, and (ii) a
provision modifying the methodology, incorporated in the Original
Service Agreement, for the allocation of profits derived by EEI
from its marketing to non-affiliates of intellectual property
developed or otherwise acquired by Entergy's Regulated Utilities
(including Service Company); and
WHEREAS, by Order dated June 22, 1999 (HCAR No. 27040),
the Commission granted Entergy's application requesting, among
other things, an exemption from the "at cost" requirements of
Section 13(b) of the Act to permit implementation of the
provision of the Settlement Agreements requiring that services
rendered by Service Company to EEI be priced at cost plus 5%, and
(to the extent jurisdictional under the Act) implementation of
the profit sharing methodology required under the Settlement
Agreements in connection with the marketing by EEI of Service
Company developed or acquired intellectual property; and
WHEREAS, it is necessary and appropriate that the Original
Service Agreement be amended and restated for the purpose, among
other things, of incorporating the above referenced provisions of
the Settlement Agreements.
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements herein, the parties hereto hereby agree as
follows:
1.
Definitions
As used hereinafter, the following terms, in addition to
those elsewhere defined in this Agreement, shall have the
following meanings unless the context otherwise requires:
(A) "Services" shall mean the services described in Articles 3,
4 and 5 hereof.
(B) "Basic Services" shall mean all the Services described in
Article 5 and those Services in Article 3, but only insofar as
such Services, when rendered to EEI, relate to the internal
management of EEI's operations and systems.
(C) "Extra Services" shall mean all services other than Basic
Services.
(D) "Non-Affiliate" means any corporation, company, agency,
government, business, entity or person other than (i) Entergy,
(ii) a direct or indirect subsidiary of Entergy, or (iii) a
person employed by Entergy or any of such subsidiaries.
(E) "Intellectual Property" means any process, program or
technique which is protected by the copyright, patent or
trademark laws, or by virtue of it being a trade secret, and
which has been specifically and knowingly incorporated into,
exhibited in, or reduced to a tangible writing, drawing, manual,
computer program, product or similar manifestation or thing.
(F) "Regulated Utilities" means Entergy Arkansas, Inc., Entergy
Gulf States, Inc., Entergy Louisiana, Inc., Entergy New Orleans,
Inc., Entergy Mississippi, Inc., System Energy Resources, Inc.,
Entergy Operations Inc., System Fuels, Inc. and Service Company
and such other similar subsidiaries as Entergy shall 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 services thereto.
(G) "Nonregulated Businesses" means Entergy Power, Inc., Entergy
Enterprises, Inc. and such other subsidiaries and affiliates as
Entergy shall create that are not domestic regulated electric or
combination electric and gas utilities primarily engaged in the
business of selling electric energy or natural gas at retail or
wholesale to affiliates or are not primarily engaged in the
business of providing services or goods to regulated electric or
combination electric and gas utility affiliates.
2. Agreement to Furnish Services
(A) Upon its receipt of EEI's work order or other request
therefor, Service Company agrees to furnish to EEI upon the terms
and conditions hereinafter set forth such of the Basic Services
requested by EEI, at such times, for such periods and in such
manner as EEI shall have requested. Service Company will, as and
to the extent required for EEI, keep itself and its personnel
available and competent to render to EEI the Basic Services on
the same basis as such services are provided the other Client
System Companies.
(B) Upon its receipt of EEI's work order or other request for
Extra Services, Service Company will, if it has or can have
available the personnel and resources needed to fill the work
order or request for Extra Services, furnish to EEI upon the
terms and conditions hereinafter set forth such of the Extra
Services, at such times, for such periods and in such manner as
EEI may from time to time request; provided, however, that the
determination of whether Service Company has the available
personnel and resources to perform in accordance with the work
order or request will be entirely within the discretion of
Service Company, and Service Company may at its sole option elect
not to perform any requested Extra Services, except that, once
having agreed to perform pursuant to a work order or request,
Service Company shall not withdraw or depart from such
performance without the consent of EEI. In making its
determination as to the availability of personnel and resources,
Service Company nay consider whether the use thereof by EEI will
interfere with its own use of such personnel and resources.
(C) The provision of Services by Service Company pursuant to
this Agreement shall in all cases and notwithstanding anything
herein contained to the contrary be subject to any limitations
contained in authorizations, rules or regulations of those
governmental agencies, if any having jurisdiction over Service
Company, EEI, or such provision of Services.
3. Description of Services
The Services to be provided by Service Company hereunder shall
include the following:
(A) General Executive and Advisory Services. Advise and assist
the officers and employees of EEI in connection with various
phases of its business and operations, including particularly but
not exclusively, those phases which involve coordination of
planning or operations between EEI and other entities.
(B) EWGs, FUCOs, Qualifying Facilities, etc. Advise and assist
EEI in rendering consulting services to customers regarding
possible investment and participation in, and related activities
with respect to (i) "exempt wholesale generators" and "foreign
utility companies," as such terms are defined in Sections 32 and
33, respectively, of the Act, (ii) "Qualifying Facilities",
including certain cogeneration facilities and small power
production facilities, as such terms are defined under the Public
Utility Regulatory Policies Act of 1978 and the rules and
regulations promulgated thereunder by the Federal Energy
Regulatory Commission, and (iii) other non-exempt domestic
electric generating facilities.
(C) Development of Other Business Enterprises. Advise and assist
EEI in the investigation of other business enterprises, and the
development of such other business enterprises as are approved by
the Commission or otherwise are permitted under the Act.
(D) General Engineering. Perform general engineering work,
including system production and transmission studies; prepare and
analyze apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies and problems,
and fuel supply studies; and advise and assist in connection with
analyses of operations and operating and construction budgets.
(E) Design Engineering. Perform detailed design work as
requested by EEI.
(F) Purchasing. Render purchasing and group purchasing services
to EEI, coordinate group purchasing, and supply expediting
services. All requests for bids shall be made by and purchases
confirmed in the name of EEI (or its customer, if requested by
EEI).
(G) Accounting and Statistical. Perform for EEI all such
bookkeeping, accounting, and auditing services and install such
internal accounting and auditing procedures as are required by
EEI or its customers to maintain its or their books and records
properly and account for and safeguard its or their operations
and properties; advise and assist EEI in connection with the
installation of accounting systems and similar efforts,
requirements of regulatory bodies with respect to accounting,
studies of accounting procedures and practices to improve
efficiency, book entries resulting from unusual financial
transactions, internal audits, employment of independent
auditors, preparation and analyses of financial and operating
reports and other statistical matters relating to EEI or its
customers, preparation of reports to regulatory commissions,
insurance companies and others, standardization of accounting and
statistical forms in the interest of economy, and other
accounting and statistical matters.
(H) Finance and Treasury. Advise and assist EEI on financing
matters, including short and long range financial planning,
determination of types and times of sales of securities, the
preparation of petitions and applications for the issuance of
securities and the preparation of various documents required in
connection therewith, negotiation and structuring of financing
arrangements and the provision of credit from banks, and all
treasury matters, including banking and investment of surplus
funds.
(I) Taxes. Advise and assist EEI in connection with tax matters,
including preparation of Federal, State or Foreign income and
other tax returns and of protests, claims and briefs where
necessary, tax accruals, and other matters in connection with any
applicable taxes, governmental fees or assessments, and
assistance in connection with audit of returns by the Internal
Revenue Service and State Tax Agencies.
(J) Risk Management. Advise and assist EEI in connection with
risk management matters including but not limited to insurance
and bonding, including contracts with insurers, trustees and
actuaries and the placing of individual or blanket/group policies
covering EEI and/or other Client Companies or its or their
customers, and other insurance and bonding problems as required.
(K) Employee Benefits. Advise and assist EEI in connection with
employee benefit matters including but not limited to welfare and
pension matters.
(L) Corporate. Advise and assist EEI in connection with
corporate affairs, including assistance and suggestions in
connection with the preparation of petitions and applications for
the issuance of securities, contracts for the sale of
underwriting of securities, preparation of schedules or steps
required in connection with general corporate matters and the
consummation thereof; maintenance of minutes of directors' and
stockholders' meetings and other proceedings and of other related
corporate records; and also arrangements for stockholders'
meetings, including notices, proxies and records thereof, and for
other types of meetings.
(M) Budgeting. Advise and assist EEI in matters involving the
preparation and development of capital and operating budgets,
cash and cost forecasts, and budgetary controls.
(N) Business Promotion and Public Relations. Advise and assist
EEI in the development of marketing and sales programs, in the
preparation and use of advertising and sales materials, and in
the determination and carrying out of promotional programs.
(O) Employee Services. Furnish EEI with advisory and
administrative services and programs in connection with employee
and employee relations matters, including matters relative to
employees loaned under Article 4 hereof, payroll, recruitment,
employee placement, training, compensation, safety, labor
relations and health, welfare and employee benefits.
(P) Regulatory Matters. Consultation and advice with respect to
regulatory matters, particularly those involving the Securities
and Exchange Commission or the Federal Energy Regulatory
Commission, and the provision of liaison and assistance in
processing matters with the staffs of such commissions.
(Q) Data Processing Services. Operation of a data processing
Computer Center to serve the Entergy System. This operation may
include: applications software development, maintenance and
enhancements; data communications network design, operation and
management; Computer Center production operations; and
information systems consulting.
(R) Systems and Procedures. Advise and assist EEI in the
establishment of good operating practices and methods of
procedure, the standardization of forms, the purchase, rental and
use of mechanical and electronic data processing, computing and
communications equipment, in conducting economic research and
planning and in the development of special economic studies.
(S) Access to and Use of Resources. Subject to those conditions
with respect to Service Company's discretion not to perform Extra
Services set forth in Article 2B, make available to EEI in the
conduct of its business and/or, to the extent necessary or
appropriate as required in the performance of its services to its
customers access to, use of, or rights in all Service Company's
resources, including facilities, products, processes, techniques,
computer hardware and software, technical information, training
aids and properties, vehicles, equipment, machines and other
property, whether owned, leased or licensed by or otherwise to,
Service Company.
(T) Training. Assist EEI in providing training to personnel of
EEI or its customers; develop and make available training
procedures, materials and facilities, and provide instructors.
(U) Legal Services. Provide services and advice relating to
litigation, contracts, leases, real estate, property rights and
other legal matters.
(V) General. Make available services in the areas of
construction planning and supervision, design, management,
programs, quality assurance, licensing matters, research and
development, and communications systems and procedures.
(W) Other Services. Render advice and assistance in connection
with such other matters as EEI may request and Service Company
may be able to perform with respect to EEI's business and
operations.
4. Provision of Personnel
Where specifically requested by EEI, Service Company may
loan its employees to EEI. In that event, such loaned employees
will be under the sole supervision and control of EEI for such
period or periods of time as are necessary to complete the work
to be performed by such employees. Such employees may be
withdrawn by Service Company from tasks assigned by EEI only with
the consent of EEI. EEI will be responsible for the actions and
activities of such employees while engaged in the performance of
the work to the same degree as though such persons were employees
of EEI. However, as part of Extra Services, Service Company,
during periods such employees are loaned to EEI, will continue to
provide to such employees those same payroll, pension, savings,
tax withholding, Social Security, unemployment, bookkeeping and
other personnel support services then being utilized by Service
Company in connection with compensating and benefiting such
employees. Compensation for employees loaned by Service Company
to EEI pursuant to this Article 4 shall be equal to Service
Company's cost of providing such employees, determined in
accordance with applicable rules and regulations (including, but
not limited to, Rules 90 and 91) under the Act and appropriate
accounting standards, plus a charge of 5% of the amount of such
cost.
5. Exchange of Intellectual Property
(A) Should EEI in the course of its business develop
Intellectual Property, it will make such Intellectual Property
available for utilization by Service Company without charge
(except the actual expenses incurred by EEI in connection with
making such Intellectual Property available to Service Company);
provided, however, that such availability shall be dependent upon
and subject to any contractual commitments of EEI to
Non-Affiliates, applicable laws and regulations, and the legal
rights and entitlements of others.
(B) As part of Services, Service Company will make available to
EEI for utilization by it all Intellectual Property heretofore or
hereafter developed or obtained by Service Company without charge
for costs incurred in the development thereof (except for the
actual expenses incurred by Service Company in making the same
available to EEI, and except as otherwise provided in Article 8
below); provided, however, that such availability shall be
dependent upon and subject to any contractual commitments of
Service Company to Non-Affiliates, applicable laws and
regulations, and the legal rights and entitlements of others.
6. Compensation of Service Company
As compensation for Services actually requested by EEI and
rendered to it by Service Company, EEI hereby agrees to pay to
Service Company (except as described in Article 5B) an amount
equal to (a) the cost of such Services, computed in accordance
with applicable rules and regulations (including, but not limited
to, Rules 90 and 91) under the Act and appropriate accounting
standards, plus (b) a charge of 5% of such cost. The cost of
Services under (a) above shall include direct charges and EEI's
pro rata share of certain of Service Company's costs and shall be
determined as outlined in Exhibits I and II attached hereto and
incorporated herein by reference. Bills for Services will be
rendered on or before the 15th day of the succeeding month and
will be payable on or before the 25th day of such month.
7. Work Orders
The Services will be performed in accordance with work
orders or requests issued or made by or on behalf of EEI and
accepted by Service Company, and all Services will be assigned an
applicable work order number to enable specific work to be
properly allocated by project or other appropriate basis. Work
orders shall be as specific as practicable in defining the
Services requested to be performed and shall set forth the scope
and duration of the Services to be performed and the specific
employees to be loaned to EEI pursuant to the work order. EEI
shall have the right from time to time to amend, alter or rescind
any work order, provided that (i) any such amendment or
alteration which results in a material change in the scope of the
work to be performed or equipment to be provided is agreed to by
Service Company, (ii) the costs for the Services covered by the
work order will include any expense incurred by Service Company
as a direct result of such amendment, alteration or rescission of
the work order, and (iii) no amendment, alteration or rescission
of a work order will release EEI from liability for all such
costs already incurred or contracted for by Service Company
pursuant to the work order, regardless of whether the work
associated with such costs has been completed.
8. Disposition of Intellectual Property
In the event EEI with the express written consent of Service
Company markets to Non-Affiliates Intellectual Property
heretofore or hereafter developed or otherwise acquired by
Service Company for one or more of the Client System Companies
that are Regulated Utilities, and such Intellectual Property is
actually used by Service Company on behalf of such Client System
Company(ies), all profits derived by EEI from such marketing
transactions shall be divided equally by Service Company and EEI,
after deducting all of EEI's incremental costs associated with
making the Intellectual Property available for sale, including
the cost of marketing such Intellectual Property; provided,
however, that in the event any Intellectual Property developed or
otherwise acquired by Service Company for use on behalf of such
Client System Company(ies) is not actually so used, and is
subsequently marketed by EEI to Non-Affiliates, EEI shall fully
reimburse Service Company for all of its costs incurred to
develop or otherwise acquire such Intellectual Property before
any profits derived from its marketing of such Intellectual
Property shall be so divided.
9. Limitation of Liability and Indemnification
In performing the Services hereunder (except to the extent
such Services are being performed by employees loaned to and
under the supervision of EEI), Service Company will exercise due
care to assure that the Services are performed in a workmanlike
manner, meet the standards and specifications set forth in the
applicable work order or request with respect to such Services,
and comply with applicable standards of law and regulation.
However, failure to meet these obligations shall in no event
subject Service Company to any claims or liabilities other than
to reperform the work and be compensated in accordance with this
Agreement for such reperformance so that it fully complies with
the work order, request or standard, as the case may be. Service
Company makes no other warranty with respect to its performance
of the Services, and EEI agrees to accept such Services without
further warranty of any nature. EEI shall and does hereby
indemnify and agree to save harmless and defend Service Company
from liabilities, taxes, losses, obligations, claims, damages,
penalties, causes of action, suits, costs and expenses or
judgments of any nature, on account of, or resulting from: (i)
injuries to or the death of any person; (ii) damage to or loss of
any property; (iii) any alleged or actual violation of law, court
order, or governmental agency rule or regulation committed by or
existing with respect to EEI or its employees, agents or
subcontractors; (iv) any alleged or actual breaches of contract
by EEI; (v) any claims by or on account of any employee, agent or
subcontractor of EEI; (vi) services or labor performed, labor
force, materials, provisions or supplies furnished on allegedly
contracted for by or on behalf of EEI, its employees, agents or
subcontractors; and/or (vii) other damages; which, in all cases,
are attributable to or arise out of the performance and
prosecution of any project or work performed by or on behalf of
EEI, whether or not the same results or allegedly results from
the claimed or actual negligence or breach of warranty of, or
willful conduct by, EEI or any of its employees, agents or
Contractors or its or their subcontractors or any combination
thereof.
10. Miscellaneous
This Agreement shall be binding upon the successors and
assigns of the parties hereto, provided that Service Company
shall not be entitled to assign or subcontract out any of its
obligations under this Agreement or under any purchase order or
work order issued hereunder without the prior written approval of
EEI. This Agreement shall be construed and enforced under and in
accordance with the laws of the State of Louisiana. This
Agreement may be executed in counterparts, each one of which when
fully executed shall be deemed to have the same dignity, force
and effect as an original. No provision of this Agreement shall
be deemed waived nor breach of this Agreement consented to unless
such waiver or consent is set forth in writing and executed by
the party hereto making such waiver or consent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their respective corporate names by
their respective Presidents or one of their respective Vice
Presidents as of the day and year first above written.
ENTERGY SERVICES, INC.
By:
C. John Wilder
Executive Vice President and
Chief Financial Officer
ENTERGY ENTERPRISES, INC.
By:
Steven C. McNeal
Vice President and Treasurer
<PAGE>
EXHIBIT I
ENTERGY ENTERPRISES, INC.
Billing Procedure by
Entergy Services, Inc.
I. Introduction
This procedure establishes the guidelines for billings by Entergy
Services, Inc. (ESI) to Entergy Enterprises, Inc. (EEI). ESI
employs a computer based work order system for the accumulation
of costs and the allocation and billing of those costs to its
client companies. These client companies are primarily the
affiliated (Entergy System) companies. The current ESI
accounting system has been designed to facilitate compliance with
the FERC Uniform System of Accounts and generally accepted
accounting principles. All bills by ESI are at cost, plus a
charge of five percent (5%) of such cost.
The procedures to be employed in determining costs of Services
performed for EEI will follow the procedures outlined in Exhibit
II.
II. Method of Billing EEI
The cost of all Services performed by ESI for EEI will be
accounted for using the automated work order system. Sources of
this system are:
Payroll (time reports)
Accounts Payable (expense accounts and vendor invoices)
General Accounting Journal Entries
Charges for Services rendered will be billed at cost plus five
percent (5%) on or before the 15th day of the succeeding month.
All amounts billed will be payable by EEI on or before the 25th
day of such month.
III. Billings
Billings of work orders to EEI will be made on a
predetermined basis. It is expected that the billings will
be 100 percent to EEI. Should there be instances where
services are jointly provided to other System companies,
costs will be allocated on an equitable basis and EEI's
share of such costs will be subject to an additional five
percent (5%) charge.
<PAGE>
EXHIBIT II
METHODS OF ALLOCATING COSTS AMONG CLIENT COMPANIES RECEIVING
SERVICE UNDER THIS AND SIMILAR SERVICE AGREEMENTS WITH
ENTERGY SERVICES, INC. (ESI)
1. The cost of rendering services by ESI will include
all costs of doing business including interest on debt but
excluding a return for the use of ESI's initial equity
capital amount of $20,000.
2. (a) ESI will maintain a separate record of the expenses of
each department. The expenses of each department will
include:
(i) those expenses that are directly attributable to such
department, and
(ii) (ii) an appropriate portion of those office and housekeeping
expenses that are not directly attributable to a department but
which are necessary to the operation of such department.
(b) Expenses of the department will include salaries and
wages of employees, including social security taxes,
vacations, paid absences, sickness, employee disability
expenses, and other employee welfare expenses, rent and
utilities, materials, and supplies, depreciation, and all
other expenses attributable to the department.
(c) Departmental expenses will be categorized into one of two
classes:
(i) those expenses which are directly attributable to specific
services rendered to a Client Company or group of Client
Companies (Departmental Direct Costs), and
(ii) those expenses which are attributable to the overall
operation of the department and not to a specific service
provided to Client Companies (Departmental Indirect Costs).
Departmental Indirect Costs include:
(1) Administrative labor costs associated with office and
general service employees described in Section 3(a). This would
include not only thc salaries and wages of these employees but
also other related employment costs described in Section 2(b)
above
(2) Occupancy costs including rent and utilities.
(3) Depreciation.
(4) Materials and supplies, telephone use, postage, etc.
(5) Other costs attributable to a department.
(d) The indirect expenses of the department will not
include:
(i) those incremental out-of-pocket expenses that are incurred
for the direct benefit and convenience of a Client Company or a
group of Client Companies and are to be directly charged to such
Client Company or group of Client Companies; and
(ii) ESI's overhead expenses that are attributable to maintaining
the corporate existence of ESI, franchise and other general
taxes, and all other incidental overhead expenses including those
auditing fees and accounting department expenses attributable to
ESI (Indirect Corporate Costs).
(e) ESI will establish annual budgets for controlling the
expenses of each service department and those expenses
outlined above in Section 2(d) which are not department
specific.
3. (a) Employees in each department will be divided into two
classes:
(A) Those employees rendering service to Client Companies (Class
A), and
(B) Those office and general service employees, such as
secretaries, stenographers, telephone operators and file clerks,
who generally assist employees in Class A or render other house-
keeping services and who are not engaged directly in rendering
service to a Client Company or a group of Client Companies. In
the event that any such office or general service employees are
assigned to functions that are attributable to services being
performed for Client Companies, such employees shall be
reclassified as Class A employees.
(b) Expenses set forth in Section 2 above will be separated to
show:
(i) salaries and wages of Class A employees, and
(ii) all other expenses of the department.
(c) Class A employees in each department will maintain a
record of the time they are employed in rendering service to
each Client Company or group of Client Companies. The
hourly rate for each Class A employee will be determined
each month.
4. (a) The charge to Client Company or a group of
Client Companies for a particular service will be the sum of
the figures derived by multiplying the hours reported by
each Class A employee in rendering such service by the
hourly rate applicable to such employee and other direct
allocated expenses.
(b) Departmental Indirect Costs as defined in Section 2(c)(ii)
will be allocated in proportion to the direct salaries and wages
charged.
5. Those expenses of ESI that are not included in the expense
of a department under Section 2 above will be charged to Client
Companies receiving service as follows:
(a) Incremental out-of-pocket costs incurred for the direct
benefit and convenience of a Client Company or a group of Client
Companies will be charged direct to such company or group of
companies.
(b) The Indirect Corporate Costs of ESI referred to above in
Section 2(d)(ii) will be allocated among the Client Companies in
the same proportion as the charges to the Client Companies,
excluding Indirect Corporate Costs.
(c) If the method of allocation of Departmental Indirect Costs
(Section 4(b)), or Indirect Corporate costs (Section 5(b)), would
result in an inequity because of a change in operation or
organization of the Client Companies, then ESI may adjust the
basis to effect an equitable distribution. Any such change in
allocation shall be made only after first giving to the
Commission written notice of such proposed changes not less than
60 days prior to the proposed effectiveness of any such change.
6. On the basis of the foregoing, monthly bills will be rendered
to Client Companies. Billing procedures and amounts will be
open to audit by Client Company and by any regulatory
authority having jurisdiction in respect of the Client
Company.
7. When services are rendered to a group of Client Companies,
costs of such service shall be allocated equitably among the
Companies based on the nature and scope of the service
rendered according to the formulae outlined in Exhibit II,
Supplement.
<PAGE>
EXHIBIT II
Supplement
ALLOCATION FORMULAE FOR
GROUPS OF CLIENT COMPANIES
Note: Each allocation formula will be based on data relevant
to participating Client Companies to whom the services are
provided and the department providing the service.
ENERGY SALES
Based on total kilowatt-hours of energy sold to consumers.
Used primarily for the allocation of costs associated with
the financial analyses of sales and related items.
CUSTOMERS
Based on a twelve-month average of residential, commercial,
industrial, government, and municipal general business
electric and gas customers.
Used primarily for the allocation of costs associated with
the support of customer based services. Would include
customer service and support, marketing, economic forecasts,
environmental services, financial and regulatory analyses
and customer information systems.
EMPLOYEES
Based on the number of full-time employees at period end.
Used primarily for the allocation of costs associated with
the support of employee-based services. Would include
administration of employee benefits programs, employee
communications, employee training, various facilities-based
benefits and information technology desktop support.
RESPONSIBILITY RATIO
Based on the ratio of the company's load at time of system
peak load. The peak load is the average of the twelve
monthly highest clock-hour demands in kilowatts of the
interconnected system occurring each month coincident with
the system peak load.
Used primarily for the allocation of costs incurred in
fossil plant support and integrated planning.
COMPOSITE - TRANSMISSION. DISTRIBUTION/CUSTOMER SERVICE
Based on four components of equal weighting: kilowatt-hour
energy sales; average customers; number of distribution and
customer service/support employees; and the
Transmission/Substation Composite Allocation Method.
Used primarily for the allocation of costs incurred in the
support of the overall transmission and distribution system
of Entergy's Operating Companies. These costs are related to
sales, transmission lines or substations, customers or
customer service/support employees.
TRANSMISSION LINE MILES
Based on the number of miles of transmission lines, weighted
for design voltage (Voltage ~ 400kv = 1; Voltage >=400kv
=2).
Used primarily for the allocation of costs associated with
project design, maintenance and installation of Entergy
transmission lines.
SUBSTATIONS
Based on the number of high voltage substations weighted for
Voltage (Voltage < 500kv = 1; Voltage >= 500kv = 2).
Used primarily for the allocation of related engineering and
technical support for transmission and distribution
substation operations and maintenance as well as for
engineering and project management associated with
substation construction.
COMPOSITE - TRANSMISSION LINES/SUBSTATIONS
Based on two components: Transmission Line Miles (30%
weighting) and the Number of High Voltage Substations (70%
weighting).
Used primarily for the allocation of the costs associated
with the support of the transmission and distribution
function that have both a transmission line component as
well as a substation or load component.
GAS CONSUMPTION
Based on the volume of natural gas consumed annually by all
gas fired generating units within the Entergy System.
Used for the allocation of costs associated with services in
support of gas purchased for gas fired generation units.
TAX INCOME AND DEDUCTION RATIO
Based on the prior years' Federal Income Tax return, total
Income and Deductions.
Used for the allocation of costs associated with the
preparation of consolidated Federal income tax returns and
research of Federal tax issues.
LEVEL OF ESI SERVICE
Based on ESI total billings to each System company,
excluding corporate overhead.
Used for the allocation of costs associated with support of
ESI as a legal entity.
SYSTEM CAPACITY (NON-NUCLEAR)
Based on the power level, in kilowatts, that could be
achieved if all non-nuclear generating units were operating
at maximum capability simultaneously.
Used primarily for the allocation of costs associated with
the support of the fossil operations of the System. This
would include services provided by plant support,
environmental and purchasing.
LABOR DOLLARS BILLED
Based on total labor dollars billed to each company.
Used primarily to allocate the costs associated with
employee benefits plans, payroll taxes, departmental
indirect costs and performance based compensation plans for
ESI employees.
DISTRIBUTION LINE MILES
Based on the number of miles of distribution lines of 34.5kv
or less.
Used primarily for the allocation of costs associated with
project design, maintenance and installation of Entergy
distribution lines.
COAL CONSUMPTION
Based on the quantity of tons of coal delivered for a twelve
month period to each coal plant within the Entergy System.
Used for the allocation of costs associated with services in
support of coal purchased for coal generating units
ACCOUNTS PAYABLE TRANSACTIONS
Based on the number of accounts payable transactions
processed annually for each Entergy System Company.
Used for the allocation of costs associated with the support
of the accounts payable function.
SQUARE FOOTAGE
Based on square footage occupied by ESI functional business
units.
Used primarily to allocate the costs associated with
facilities supervision and support.
INSURANCE PREMIUMS (NON-NUCLEAR)
Based on non-nuclear insurance premiums.
Used for the allocation of costs associated with risk
management.
ASSET RECORDS
Based on the number of asset records at period end.
Used for the allocation of costs associated with the fixed
asset accounting function.
AVERAGE OUTSTANDING CAPITAL EXPENDITURE AUTHORIZATIONS
(CEA'S)
Based on a twelve-month average of outstanding CEA's.
Used for the allocation of costs associated with the capital
project costing accounting function.
TOTAL ASSETS
Based on total assets at period end.
Used primarily to allocate costs associated with the
oversight and safeguarding of corporate assets. This would
include services provided by financial management and
certain finance functions, among others. Also used when the
services provided are driven by the relative size and
complexity of the System Companies and there is no
functional relationship between the services and any other
available allocation formula.
BANK ACCOUNTS
Based on the number of bank accounts at period end.
Used for the allocation of costs associated with daily cash
management activities.
COMPUTER USAGE COMPOSITE
Based on three components: Customers (52% weighting),
General Ledger Transactions (29% weighting) and Employees
(19% weighting), with weighting based on historical usage.
Used primarily for the allocation of costs associated with
the mainframe computer, unix servers and related database
administration.
GENERAL LEDGER TRANSACTIONS
Based on the number of general ledger transactions for the
period.
Used primarily for the allocation of costs associated with
general ledger activities, including related information
systems, and for general accounting activities.
CUSTOMERS AND EMPLOYEES COMBINATION
Based on the equal weighting of a twelve-month average of
residential, commercial, industrial, government and
municipal general business electric and gas customers and on
the number of full-time employees at period end.
Used primarily for systems that support both customers and
employees.
FIBER
Based on capacity and use of the Entergy System's fiber
optic network.
Used primarily for the allocation of fiber optic operations
and maintenance expenses.
EXHIBIT B-2(a)
AMENDED AND RESTATED
SERVICE AGREEMENT
BETWEEN
ENTERGY SERVICES, INC.
AND
ENTERGY POWER, INC.
THIS AGREEMENT, made and entered into as of June 22, 1999 by
and between Entergy Services, Inc., a corporation organized under
the laws of the State of Delaware (hereinafter sometimes referred
to as "Service Company") and Entergy Power, Inc., a corporation
organized under the laws of the State of Delaware (hereinafter
sometimes referred to as "EPI"), amends, restates and supercedes
in its entirety that certain Service Agreement made and entered
into as of August 28, 1990, between Service Company and EPI, as
heretofore amended by Amendments, effective January 1, 1991,
January 1, 1992, January 1, 1996, January 1, 1998 and January 1,
1999 (the "Original Service Agreement").
W I T N E S S E T H:
WHEREAS, Service Company and EPI are both direct
subsidiaries of Entergy Corporation ("Entergy") and Entergy
Power, Inc., together with Entergy and its other direct and
indirect subsidiaries ("Client Companies") form the Entergy
System; and
WHEREAS, Service Company is organized, staffed and equipped
and is authorized by the Securities and Exchange Commission (the
"Commission") as a subsidiary service company under Section 13 of
the Public Utility Holding Company Act of 1935, as amended (the
"Act") to render to Client Companies certain services and to
render to EPI services as herein provided; and
WHEREAS, in the performance of past and future services for
the Client Companies, Service Company has acquired and will
acquire certain properties and other resources; and
WHEREAS, EPI is authorized under the Act by order of the
Commission dated August 27, 1990 to utilize those services,
personnel, properties and other resources of Service Company; and
WHEREAS, economies and increased efficiencies benefiting
the Entergy System will result from the performance by Service
Company of services for EPI and the provision of certain property
and resources to EPI as herein provided; and
WHEREAS, subject to the terms and conditions herein
described, Service Company is willing, upon request by EPI, to
render such services and provide such property and resources to
EPI; and
WHEREAS, pursuant to settlement arrangements entered into by
Entergy with certain of its state and local regulators in 1992
and 1993 (collectively, the "Settlement Agreements"), Entergy has
agreed (subject to the receipt of any requisite Commission
authorization) to implement certain special provisions pertaining
to affiliate transactions between Entergy's Regulated Utilities
and Nonregulated Businesses (each as defined in the Settlement
Agreements), including, without limitation, a provision requiring
that any services rendered by Entergy's Regulated Utilities
(including Service Company) to Nonregulated Businesses (including
EPI), be priced at cost plus 5%; and
WHEREAS, by Order dated June 22, 1999 (HCAR No. 27040), the
Commission granted Entergy's application requsting, among other
things, an exemption from the "at cost" requirements of Section
13(b) of the Act to permit implementation of the provision of the
Settlement Agreements requiring that services rendered by Service
Company to EPI be priced at cost plus 5%; and
WHEREAS, it is necessary and appropriate to amend the
Original Service Agreement for the purpose, among other things,
of incorporating the above referenced provision of the Settlement
Agreements.
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein, the parties hereto hereby agree as
follows:
1. Definitions.
In addition to those terms elsewhere defined in this
Agreement, the term, "Services" shall mean the services described
in Article 3 hereof, unless the context otherwise requires.
2. Agreement to Furnish Services.
A. Upon its receipt of EPI's service request, Service
Company agrees to furnish to EPI upon the terms and
conditions hereinafter set forth such of the Services
requested by EPI, at such times, for such periods and in
such manner as EPI shall have requested. Service Company
will keep itself and its personnel available and competent
to render to EPI the Services on the same basis as such
Services are provided the other Client Companies.
B. Upon its receipt of EPI's service request, Service
Company will, if it has or can have available the personnel
and resources needed to fill the service request, furnish to
EPI upon the terms and conditions hereinafter set forth such
of the Services, at such times, for such periods and in such
manner as EPI may from time to time request; provided,
however, that the determination of whether Service Company
has the available personnel and resources to perform in
accordance with the service request will be entirely within
the discretion of Service Company, and Service Company may
at its sole option elect not to perform any requested
Services, except that, once having agreed to perform
pursuant to a service request, Service Company shall not
withdraw or depart from such performance without the consent
of EPI.
C. The providing of Services by Service Company
pursuant to this Agreement shall in all cases and
notwithstanding anything herein contained to the contrary be
subject to any limitations contained in authorizations,
rules or regulations of those governmental agencies, if any,
having jurisdiction over Service Company, EPI, or such
providing of Services.
3. Description of Services.
The Services to be provided by Service Company hereunder
may, upon request, include the following:
A. General Executive and Advisory Services. Advise and assist
the officers and employees of EPI in connection with various
phases of its business and operations, including particularly
(but not exclusively) those phases which involve coordination of
planning or operations between EPI and other entities.
B. General Engineering. Perform general engineering work,
including system production and transmission studies; prepare and
analyze apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies and problems,
and fuel supply studies; and advise and assist in connection with
analyses of operations and operating and construction budgets.
C. Design Engineering. Perform detailed design work as
requested by EPI.
D. Purchasing. Render purchasing and group purchasing services
to EPI, coordinate group purchasing, and supply expediting
services. All requests for bids shall be made by and purchases
confirmed in the name of EPI (or its customer, if requested by
EPI).
E. Accounting and Statistical. Perform for EPI all such
business, accounting, and auditing services and install such
internal accounting and auditing procedures as are requested by
EPI or its customers to maintain its or their books and records
properly and account for and safeguard its operations and
properties; advise and assist EPI in connection with the
installation of accounting systems and similar efforts,
requirements of regulatory bodies with respect to accounting,
studies of accounting procedures and practices to improve
efficiency, accounting entries resulting from financial
transactions, internal audits, employment of independent
auditors, preparation and analyses of financial and operating
reports and other statistical matters relating to EPI or its
customers, preparation of reports to regulatory commissions,
insurance companies and others, standardization or accounting and
statistical forms in the interest of economy, and other
accounting and statistical matters.
F. Finance and Treasury. Advise and assist Entergy Power on
financing matters, including short and long range financial
planning, determination of types and times of sales of
securities, preparation of petitions and applications for the
issuance of securities and the preparation of various documents
required in connection therewith, negotiation and structuring of
financing arrangements, and all treasury matters, including
banking and investment of surplus funds.
G. Taxes. Advise and assist EPI in connection with tax
matters, including preparation of Federal, State or foreign
income and other tax returns and of protests, claims and briefs
where necessary, tax accruals, and other matters in connection
with any applicable taxes, governmental fees or assessments, and
assistance in connection with audit of returns by the Internal
Revenue Service and State Tax Agencies.
H. Risk Management. Advise and assist EPI in connection with
risk management matters including but not limited to insurance
and bonding, including contracts with insurers, trustees and
actuaries and the placing of individual or blanket/group policies
covering EPI and/or other Client Companies or its or their
customers, and other insurance and bonding problems as required.
I. Employee Benefits. Advise and assist EPI in connection with
employee benefit matters including but not limited to welfare and
pension matters.
J. Corporate. Advise and assist EPI in connection with
corporate affairs, including assistance and suggestions in
connection with the preparation of petitions and applications for
the issuance of securities, contracts for the sale of
underwriting of securities, maintenance of minutes of directors'
and stockholders' meetings and other proceedings and of other
related corporate records; and also arrangements for stockholders
meetings, including notices, proxies and records thereof, and for
other types of meetings.
K. Budgeting. Advise and assist EPI in matters involving the
preparation and development of capital and operating budgets,
cash and cost forecasts, and budgetary controls and preparation
of long-range forecasts.
L. Business Promotion and Public Relations. Advise and assist
EPI in the development of marketing and sales programs, in the
preparation and use of advertising and sales materials, and in
the determination and carrying out of promotional programs.
M. Employee Services. Furnish EPI with advisory and
administrative services and programs in connection with employee
and employee relations matters, payroll, recruitment, employee
placement, training, compensation, safety, labor relations and
health, welfare and employee benefits.
N. Systems and Procedures. Advise and assist EPI in the
establishment of sound operating practices and methods of
procedure, the standardization of forms, the purchase, rental and
use of mechanical and electronic data processing and
communications equipment, in conducting economic research and
planning and in the development of special economic studies.
O. Regulatory Matters. Consultation and advice with respect to
regulatory matters, particularly those involving the Securities
and Exchange Commission or the Federal Energy Regulatory
Commission, and the provision of liaison and assistance in
processing matters with the staffs of such commissions.
P. Systems Operations Center. Operation of a System Operations
Center for the control of bulk power supply and load dispatching
within the Entergy System, with EPI, and with interconnected
systems.
Q. Data Processing Services. Operation of a data processing
Computer center to serve the Entergy System. This operation may
include: applications software development, maintenance and
enhancements; data communications network design, operation and
management; Computer Center production operations; and
information systems consulting.
R. Access to and Use of Resources. Make available to EPI in
the conduct of its business and/or, to the extent necessary or
appropriate as required in the performance of its services to its
customers, access to, use of, or rights in all Service Company's
resources, including facilities, products, processes, techniques,
computer hardware and software, technical information, training
aids and properties, vehicles, equipment, machines and other
property, whether owned, leased or licensed by or otherwise to
Service Company.
S. Training. Assist EPI in providing training to personnel of
EPI or its customers; develop and make available training
procedures, materials and facilities, and provide instructors.
T. Legal Services. Provide services and advice relating to
litigation, contracts, leases, real estate, property rights and
other legal matters.
U. General. Make available services in the areas of
construction, planning and supervision, design, management,
programs, quality assurance, licensing matters, research and
development, and communications systems and procedures.
V. Other Services. Render advice and assistance in connection
with such other matters as EPI may request and Service Company
may be able to perform with respect to EPI's business and
operations.
4. Compensation of Service Company.
As compensation for Services actually requested by EPI and
rendered to it by Service Company, EPI hereby agrees to pay to
Service Company an amount equal to (a) the cost of such Services,
computed in accordance with applicable rules and regulations
(including, but not limited to, Rules 90 and 91) under the Act
and appropriate accounting standards, plus (b) a charge of 5% of
such cost. The cost of Services under (a) above shall include
direct charges and EPI's pro rata share of certain of Service
Company's costs and shall be determined as outlined in Exhibits I
and II attached hereto and incorporated herein by reference.
Bills for Services will be rendered on or before the 15th day of
the succeeding month and will be payable on or before the 25th
day of such month.
5. Work Orders.
The Services will be performed in accordance with work
orders or requests issued or made by or on behalf of EPI and
accepted by Service Company, and all Services will be assigned an
applicable work order number to enable specific work to be
properly allocated by project or other appropriate basis. Work
orders shall be as specific as practicable in defining the
Services requested to be performed and shall set forth the scope
and duration of the Services to be performed pursuant to the
service request. EPI shall have the right from time to time to
amend, alter or rescind any work order, provided that (i) any
such amendment or alteration which results in a material change
in the scope of the work to be performed or equipment to be
provided is agreed to by Service Company, (ii) the costs for the
Services covered by the work order will include any expense
incurred by Service Company as a direct result of such amendment,
alteration or rescission of the work order, and (iii) no
amendment, alteration or rescission of a work order will release
EPI from liability for all such costs already incurred or
contracted for by Service Company pursuant to the work order,
regardless of whether the work associated with such costs has
been completed.
6. Miscellaneous.
This Agreement shall be binding upon the successors and
assigns of the parties hereto, provided that Service Company
shall not be entitled to assign or subcontract out any of its
obligations under this Agreement or under any purchase order or
service request issued hereunder without the prior written
approval of EPI. This Agreement shall be construed and enforced
under and in accordance with the laws of the State of Arkansas.
This Agreement may be executed in counterparts, each one of which
when fully executed shall be deemed to have the same dignity,
force and effect as an original. No provision of this Agreement
shall be deemed waived nor breach of this Agreement consented to
unless such waiver or consent is set forth in writing and
executed by the party hereto making such waiver or consent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their respective corporate names by
their respective Presidents or one of their respective Vice
Presidents as of the day and year first above written.
ENTERGY SERVICES, INC.
By: /s/ C. John Wilder
C. John Wilder
Executive Vice President and
Chief Financial Officer
ENTERGY POWER, INC.
By: /s/Steven C. McNeal
Steven C. McNeal
Vice President and Treasurer
<PAGE>
EXHIBIT I
ENTERGY POWER, INC.
Billing Procedure by
Entergy Services, Inc.
I. Introduction
This procedure establishes the guidelines for determining the
cost of Services for billings by Entergy Services, Inc. ("ESI")
to Entergy Power, Inc. ESI employs a computer based work order
system for the accumulation of costs and the allocation and
billing of those costs to its client companies. These client
companies are primarily the affiliated (Entergy System)
companies. The current ESI accounting system has been designed
to facilitate compliance with the FERC Uniform System of Accounts
and generally accepted accounting principles. All bills by ESI
are at cost, plus a charge of five percent (5%) of such cost.
The procedures to be employed in determining costs of Services
performed for Entergy Power, Inc. will follow the procedures
outlined in Exhibit II.
II. Method of Billing Entergy Power, Inc.
All Services performed by ESI for Entergy Power, Inc. will be
accounted for using the automated work order system. Sources of
this system are:
Payroll (time reports)
Accounts Payable (expense accounts and vendor invoices)
General Accounting Journal Entries
Charges for services rendered will be billed at cost plus five
percent (5%) on or before the 15th day of the succeeding month.
All amounts billed will be payable by Entergy Power, Inc. on or
before the 25th day of such month.
III. Billings
Billings of work orders to Entergy Power, Inc. will be made on a
predetermined basis. It is expected that the billings will be 100
percent to Entergy Power, Inc. Should there be instances where
services are jointly provided to other System Companies, costs
will be allocated on an equitable basis and Entergy Power Inc.'s
share of such costs will be subject to an additional five percent
(5%) charge.
<PAGE>
EXHIBIT II
METHODS OF ALLOCATING COSTS AMONG CLIENT COMPANIES RECEIVING
SERVICE UNDER THIS AND SIMILAR SERVICE AGREEMENTS WITH
ENTERGY SERVICES, INC. (ESI)
1. The cost of rendering services by ESI will include all
costs of doing business including interest on debt but
excluding a return for the use of ESI's initial equity
capital amount of $20,000.
2. (a) ESI will maintain a separate record of the expenses of
each department. The expenses of each department will
include:
(i) those expenses that are directly attributable to such
department, and
(ii) an appropriate portion of those office and housekeeping
expenses that are not directly attributable to a department but
which are necessary to the operation of such department.
(b) Expenses of the department will include salaries and wages
of employees, including social security taxes, vacations, paid
absences, sickness, employee disability expenses, and other
employee welfare expenses, rent and utilities, materials, and
supplies, depreciation, and all other expenses attributable to
the department.
(c) Departmental expenses will be categorized into one of two
classes:
(i) those expenses which are directly attributable to specific
services rendered to a Client Company or group of Client
Companies (Departmental Direct Costs), and
(ii) those expenses which are attributable to the overall
operation of the department and not to a specific service
provided to Client Companies (Departmental Indirect Costs).
Departmental Indirect Costs include:
(l) Administrative labor costs associated with office and
general service employees described in Section 3(a). This would
include not only the salaries and wages of these employees but
also other related employment costs described in Section 2(b)
above.
(2) Occupancy costs including rent and utilities.
(3) Depreciation.
(4) Materials and supplies, telephone use, postage, etc.
(5) Other costs attributable to a department.
(b) The indirect expenses of the department will not include:
(i) those incremental out-of-pocket expenses that are incurred
for the direct benefit and convenience of a Client Company or a
group of Client Companies and are to be directly charged to such
Client Company or group of Client Companies; and
(ii) ESI's overhead expenses that are attributable to maintaining
the corporate existence of ESI, franchise and other general
taxes, and all other incidental overhead expenses including those
auditing fees and accounting department expenses attributable to
ESI (Indirect Corporate Costs).
(e) ESI will establish annual budgets for controlling the
expenses of each service department and those expenses
outlined above in Section 2(d) which are not department
specific.
3. (a) Employees in each department will be divided into two
classes:
(i) Those employees rendering service to Client Companies (Class
A), and
(ii) Those office and general service employees, such as
secretaries, stenographers, telephone operators and file clerks,
who generally assist employees in Class A or render other house-
keeping services and who are not engaged directly in rendering
service to a Client Company or a group of Client Companies. In
the event that any such office or general service employees are
assigned to functions that are attributable to services being
performed for Client Companies, such employees shall be
reclassified as Class A employees.
(b) Expenses set forth in Section 2 above will be separated to
show:
(i) salaries and wages of Class A employees, and
(ii) all other expenses of the department.
(b) Class A employees in each department will maintain a record
of the time they are employed in rendering service to each Client
Company or group of Client Companies. The hourly rate for each
Class A employee will be determined each month.
4. (a) The charge to Client Company or a group of Client
Companies for a particular service will be the sum of
the figures derived by multiplying the hours reported
by each Class A employee in rendering such service by
the hourly rate applicable to such employee and other
direct allocated expenses.
(b) Departmental Indirect Costs as defined in Section
2(c)(ii) will be allocated in proportion to the direct
salaries and wages charged.
5. Those expenses of ESI that are not included in the expense
of a department under Section 2 above will be charged to Client
Companies receiving service as follows:
(a) Incremental out-of-pocket costs incurred for the direct
benefit and convenience of a Client Company or a group of Client
Companies will be charged direct to such company or group of
companies.
(b) The Indirect Corporate Costs of ESI referred to above in
Section 2(d)(ii) will be allocated among the Client Companies in
the same proportion as the charges to the Client Companies,
excluding Indirect Corporate Costs.
(c) If the method of allocation of Departmental Indirect Costs
(Section 4(b)), or Indirect Corporate costs (Section 5(b)), would
result in an inequity because of a change in operation or
organization of the Client Companies, then ESI may adjust the
basis to effect an equitable distribution. Any such change in
allocation shall be made only after first giving to the
Commission written notice of such proposed changes not less than
60 days prior to the proposed effectiveness of any such change.
6. On the basis of the foregoing, monthly bills will
be rendered to Client Companies. Billing procedures and
amounts will be open to audit by Client Company and by any
regulatory authority having jurisdiction in respect of the
Client Company.
7. When services are rendered to a group of Client Companies,
costs of such service shall be allocated equitably among the
Companies based on the nature and scope of the service
rendered according to the formulae outlined in Exhibit II,
Supplement.
<PAGE>
EXHIBIT II
Supplement
ALLOCATION FORMULAE FOR
GROUPS OF CLIENT COMPANIES
Note: Each allocation formula will be based on data relevant to
participating Client Companies to whom the services are provided
and the department providing the service.
ENERGY SALES
Based on total kilowatt-hours of energy sold to consumers.
Used primarily for the allocation of costs associated with the
financial analyses of sales and related items.
CUSTOMERS
Based on a twelve-month average of residential, commercial,
industrial, government, and municipal general business electric
and gas customers.
Used primarily for the allocation of costs associated with the
support of customer based services. Would include customer
service and support, marketing, economic forecasts, environmental
services, financial and regulatory analyses and customer
information systems.
EMPLOYEES
Based on the number of full-time employees at period end.
Used primarily for the allocation of costs associated with the
support of employee-based services. Would include administration
of employee benefits programs, employee communications, employee
training, various facilities-based benefits and information
technology desktop support.
RESPONSIBILITY RATIO
Based on the ratio of the company's load at time of system peak
load. The peak load is the average of the twelve monthly highest
clock-hour demands in kilowatts of the interconnected system
occurring each month coincident with the system peak load.
Used primarily for the allocation of costs incurred in fossil
plant support and integrated planning.
COMPOSITE - TRANSMISSION. DISTRIBUTION/CUSTOMER SERVICE
Based on four components of equal weighting: kilowatt-hour energy
sales; average customers; number of distribution and customer
service/support employees; and the Transmission/Substation
Composite Allocation Method.
Used primarily for the allocation of costs incurred in the
support of the overall transmission and distribution system of
Entergy's Operating Companies. These costs are related to sales,
transmission lines or substations, customers or customer
service/support employees.
TRANSMISSION LINE MILES
Based on the number of miles of transmission lines, weighted for
design voltage (Voltage ~ 400kv = 1; Voltage >=400kv =2).
Used primarily for the allocation of costs associated with
project design, maintenance and installation of Entergy
transmission lines.
SUBSTATIONS
Based on the number of high voltage substations weighted for
Voltage (Voltage < 500kv = 1; Voltage >= 500kv = 2).
Used primarily for the allocation of related engineering and
technical support for transmission and distribution substation
operations and maintenance as well as for engineering and project
management associated with substation construction.
COMPOSITE - TRANSMISSION LINES/SUBSTATIONS
Based on two components: Transmission Line Miles (30% weighting)
and the Number of High Voltage Substations (70% weighting).
Used primarily for the allocation of the costs associated with
the support of the transmission and distribution function that
have both a transmission line component as well as a substation
or load component.
GAS CONSUMPTION
Based on the volume of natural gas consumed annually by all gas
fired generating units within the Entergy System.
Used for the allocation of costs associated with services in
support of gas purchased for gas fired generation units.
TAX INCOME AND DEDUCTION RATIO
Based on the prior years' Federal Income Tax return, total Income
and Deductions.
Used for the allocation of costs associated with the preparation
of consolidated Federal income tax returns and research of
Federal tax issues.
LEVEL OF ESI SERVICE
Based on ESI total billings to each System company, excluding
corporate overhead.
Used for the allocation of costs associated with support of ESI
as a legal entity.
SYSTEM CAPACITY (NON-NUCLEAR)
Based on the power level, in kilowatts, that could be achieved if
all non-nuclear generating units were operating at maximum
capability simultaneously.
Used primarily for the allocation of costs associated with the
support of the fossil operations of the System. This would
include services provided by plant support, environmental and
purchasing.
LABOR DOLLARS BILLED
Based on total labor dollars billed to each company.
Used primarily to allocate the costs associated with employee
benefits plans, payroll taxes, departmental indirect costs and
performance based compensation plans for ESI employees.
DISTRIBUTION LINE MILES
Based on the number of miles of distribution lines of 34.5kv or
less.
Used primarily for the allocation of costs associated with
project design, maintenance and installation of Entergy
distribution lines.
COAL CONSUMPTION
Based on the quantity of tons of coal delivered for a twelve
month period to each coal plant within the Entergy System.
Used for the allocation of costs associated with services in
support of coal purchased for coal generating units
ACCOUNTS PAYABLE TRANSACTIONS
Based on the number of accounts payable transactions processed
annually for each Entergy System Company.
Used for the allocation of costs associated with the support of
the accounts payable function.
SQUARE FOOTAGE
Based on square footage occupied by ESI functional business
units.
Used primarily to allocate the costs associated with facilities
supervision and support.
INSURANCE PREMIUMS (NON-NUCLEAR)
Based on non-nuclear insurance premiums.
Used for the allocation of costs associated with risk management.
ASSET RECORDS
Based on the number of asset records at period end.
Used for the allocation of costs associated with the fixed asset
accounting function.
AVERAGE OUTSTANDING CAPITAL EXPENDITURE AUTHORIZATIONS (CEA'S)
Based on a twelve-month average of outstanding CEA's.
Used for the allocation of costs associated with the capital
project costing accounting function.
TOTAL ASSETS
Based on total assets at period end.
Used primarily to allocate costs associated with the oversight
and safeguarding of corporate assets. This would include services
provided by financial management and certain finance functions,
among others. Also used when the services provided are driven by
the relative size and complexity of the System Companies and
there is no functional relationship between the services and any
other available allocation formula.
BANK ACCOUNTS
Based on the number of bank accounts at period end.
Used for the allocation of costs associated with daily cash
management activities.
COMPUTER USAGE COMPOSITE
Based on three components: Customers (52% weighting), General
Ledger Transactions (29% weighting) and Employees (19%
weighting), with weighting based on historical usage.
Used primarily for the allocation of costs associated with the
mainframe computer, unix servers and related database
administration.
GENERAL LEDGER TRANSACTIONS
Based on the number of general ledger transactions for the
period.
Used primarily for the allocation of costs associated with
general ledger activities, including related information systems,
and for general accounting activities.
CUSTOMERS AND EMPLOYEES COMBINATION
Based on the equal weighting of a twelve-month average of
residential, commercial, industrial, government and municipal
general business electric and gas customers and on the number of
full-time employees at period end.
Used primarily for systems that support both customers and
employees.
FIBER
Based on capacity and use of the Entergy System's fiber optic
network.
Used primarily for the allocation of fiber optic operations and
maintenance expenses.
EXHIBIT B-3(a)
AMENDED AND RESTATED
SERVICE AGREEMENT
BETWEEN
ENTERGY ARKANSAS, INC.
AND
ENTERGY ENTERPRISES, INC.
THIS AGREEMENT, made and entered into as of June 22, 1999 by
and between Entergy Arkansas, Inc., formerly Arkansas Power &
Light Company, a corporation organized under the laws of the
State of Arkansas (hereinafter sometimes referred to as "EAI")
and Entergy Enterprises, Inc., formerly Electec, Inc., a
corporation organized under the laws of the State of Louisiana
(hereinafter sometimes referred to as "EEI"), amends, restates
and supercedes in its entirety that certain Service Agreement
made and entered into as of February 22, 1984, between EAI and
EEI (the "Original Service Agreement").
W I T E S S E T H:
WHEREAS, EAI and EEI are both subsidiaries of Entergy
Corporation ("Entergy") and, together with Entergy's other direct
and indirect subsidiaries and Entergy, form the Entergy System;
and
WHEREAS, EAI is organized, staffed and equipped and is
authorized by the Securities and Exchange Commission (the
"Commission"), under Section 13(b) of the Public Utility Holding
Company Act of 1935, as amended (the "Act"), to render to EEI
services as herein provided; and
WHEREAS, in the course of its operations, EAI has acquired
and will acquire certain properties and other resources; and
WHEREAS, subject to the provisions set forth herein, EEI is
authorized by orders of the Commission dated July 8, 1993 (HCAR
No. 25848), June 30, 1995 (HCAR No. 26322) and June 22, 1999
(HCAR No.27039) to utilize those services, properties and
resources of EAI, as well as those provided by other companies of
the Entergy System, (i) to conduct preliminary development
activities with respect to potential investments by Entergy in
various energy, energy-related and other non-utility businesses,
(ii) to provide various management, administrative and support
services to certain of its associate companies, (iii) to provide
consulting services to certain of its associate companies and to
non-associate companies, and (iv) to provide , directly or
indirectly, through one or more special purpose subsidiary
companies of Entergy or EEI, power project operations and
maintenance services to non-associate companies and to certain of
its associate companies; and
WHEREAS, economies and increased efficiencies benefiting the
Entergy System will result from the performance by EAI of
services for EEI and the provision of certain property and
resources to EEI as herein provided; and
WHEREAS, subject to the terms and conditions herein
described, EAI is willing, upon request by EEI, to render such
services and provide such property and resources to EEI, taking
into consideration the fulfillment of EAI's utility
responsibilities; and
WHEREAS, pursuant to settlement arrangements entered into by
Entergy with certain of its state and local regulators in 1992
and 1993 (collectively, the "Settlement Agreements"), Entergy has
agreed (subject to the receipt of any requisite Commission
authorization) to implement certain special provisions pertaining
to affiliate transactions between Entergy's Regulated Utilities
and Nonregulated Businesses (each as defined in Article 1 of this
Agreement), including, without limitation, (i) a provision
requiring that any services rendered by Entergy's Regulated
Utilities (including EAI) to its Nonregulated Businesses
(including EEI), be priced at cost plus 5%, and (ii) a provision
modifying the methodology, incorporated in the Original Service
Agreement, for the allocation of profits derived by EEI from its
marketing to non-affiliates of intellectual property developed or
otherwise acquired by Entergy's Regulated Utilities (including
EAI); and
WHEREAS, by Order dated June 22, 1999 (HCAR No. 27040), the
Commission granted Entergy's application requesting, among other
things, an exemption from the "at cost" requirements of Section
13(b) of the Act to permit implementation of the provision of the
Settlement Agreement requiring that services rendered by EAI to
EEI be rendered at cost plus 5%, and (to the extent
jurisdictional under the Act) implementation of the profit
sharing methodology required under the Settlement Agreements in
connection with the marketing by EEI of EAI developed or acquired
intellectual property; and
WHEREAS, it is necessary and appropriate to amend the
Original Service Agreement for the purpose, among other things,
of incorporating the above referenced provisions of the
Settlement Agreements.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein, the parties hereto hereby agree as
follows:
1. Definitions
As used hereinafter, the following terms, in addition to
those elsewhere defined in this Agreement, shall have the
following meanings unless the context otherwise requires:
A. "Services" shall mean those services described in Articles
3, 4 and 5 hereof.
B. "Non-Affiliate" means any corporation, company, agency,
government, business, entity or person other than Entergy, a
direct or indirect subsidiary of Entergy, or a person employed by
Entergy or any of such subsidiaries.
C. "Intellectual Property" means any process, program or
technique which is protected by the copyright, patent or
trademark laws, or by virtue of being a trade secret, and which
has been specifically and knowingly incorporated into, exhibited
in, or reduced to a tangible writing, drawing, manual, computer
program, product or similar manifestation or thing.
D. "Regulated Utilities" means Entergy Gulf States, Inc.,
Entergy Louisiana, Inc., Entergy New Orleans, Inc., Entergy
Mississippi, Inc., Entergy Services, Inc., System Energy
Resources, Inc., Entergy Operations Inc., System Fuels, Inc. and
EAI and such other similar subsidiaries as Entergy shall 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 services thereto.
E. "Nonregulated Businesses" means Entergy Power,
Inc., Entergy Enterprises, Inc. and such other subsidiaries
and affiliates as Entergy shall create that are not domestic
regulated electric or combination electric and gas utilities
primarily engaged in the business of selling electric energy
or natural gas at retail or wholesale to affiliates or are
not primarily engaged in the business of providing services
or goods to regulated electric or combination electric and
gas utility affiliates.
2. Agreement to Furnish Services
A. Upon its receipt of EEI's work order or other request
therefor, EAI will, if it has or can have available the personnel
and resources needed to fill the work order or request, furnish
to EEI upon the terms and conditions hereinafter set forth such
of the Services, at such times, for such periods and in such
manner as EEI may from time to time request; provided, however,
that the determination of whether EAI has the available personnel
and resources to perform in accordance with the work order or
request will be entirely within the discretion of EAI, and EAI
may at its option elect not to perform any requested Service,
except that, once having agreed to perform pursuant to a work
order or request, EAI cannot withdraw or depart from such
performance without the consent of EEI. In making its
determination as to the availability of personnel and resources,
EAI may consider whether the use thereof by EEI will interfere
with its own use of such personnel and resources.
B. The provision of Services by EAI pursuant to this Agreement
shall in all cases and notwithstanding anything herein contained
to the contrary be subject to any limitations contained in
authorizations, rules or regulations of those governmental
agencies, if any, having jurisdiction over EAI, EEI, or such
provision of Services.
3. Description of Services
The services which may be provided by EAI hereunder are
described as follows:
A. EWGs, FUCOs, Qualifying Facilities, etc. Advise and assist
EEI regarding possible investment and participation in, and
related activities with respect to, (i) "exempt wholesale
generators" and "foreign utility companies," as such terms are
defined in Section 32 and 33 of the Act, respectively,
(ii)"qualifying facilities," including certain cogeneration
facilities and small power production facilities, as such terms
are defined under the Public Utility Regulatory Policies Act of
1978 and the rules and regulations promulgated thereunder by the
Federal Energy Regulatory Commission, and (iii) other non-exempt
electric generating facilities.
B. Development of Other Business Enterprises. Advise and assist
EEI in the investigation of other business enterprises, and the
development of such other business enterprises as are approved by
the Commission or otherwise are permitted under the Act.
C. General Engineering. Perform general engineering work,
including system production and transmission studies; prepare and
analyze apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies and problems,
and fuel supply studies; and advise and assist in connection with
analyses of operations and operating and construction budgets.
D. Design Engineering. Perform detailed design work as
requested by EEI.
E. Accounting and Statistical. Advise and assist EEI in
connection with the installation of accounting systems and
similar problems, requirements of regulatory bodies with respect
to accounting, studies of accounting procedures and practices to
improve efficiency, book entries resulting from unusual financial
transactions, internal audits, employment of independent
auditors, preparation and analyses of financial and operating
reports and other statistical matters relating to EEI or its
customers, preparation of reports to regulatory commissions,
insurance companies and others, standardization of accounting and
statistical forms in the interest of economy, and other
accounting and statistical matters.
F. Budgeting. Advise and assist EEI in matters involving the
preparation and development of capital and operating budgets,
cash and cost forecasts, and budgetary controls.
G. Business Promotion and Public Relations. Advise and assist
EEI in the development of marketing and sales programs, in the
preparation and use of advertising and sales materials, and in
the determination and carrying out of promotional programs.
H. Systems and Procedures. Advise and assist EEI in the
establishment of good operating practices and methods of
procedure, the standardization of forms, the purchase, rental and
use of mechanical and electronic data processing, computing and
communications equipment, in conducting economic research and
planning and in the development of special economic studies.
I. Access to and Use of Resources. Subject to those conditions
with respect to EAI's discretion not to perform any requested
Service set forth in Article 2A, make available to EEI in the
conduct of its business and/or, to the extent necessary or
appropriate as required in the performance of its services to its
customers access to, use of, or rights in all EAI's resources,
including facilities, products, processes, techniques, computer
hardware and software, technical information, training aids and
properties, vehicles, equipment, machines and other property,
whether owned, leased, licensed or otherwise available to EAI.
J. Training. Assist EEI in providing training to personnel of
EEI or its customers; develop and make available training
procedures, materials and facilities, and provide instructors.
K. General. Make available services in the areas of
construction planning and supervision, design, management
programs, quality assurance, licensing matters, research and
development, and communications systems and procedures.
L. Other Services. Render advice and assistance in connection
with such other matters as EEI may request and EAI may be able to
perform with respect to EEI's business and operations.
4. Provision of Personnel
Where specifically requested by EEI, EAI may loan its
employees to EEI. In that event, such loaned employees will be
under the sole supervision and control of EEI for such period or
periods of time as are necessary to complete the work to be
performed by such employees. Such employees may be withdrawn by
EAI from tasks assigned by EEI only with the consent of EEI. EEI
will be responsible for the actions and activities of such
employees while engaged in the performance of the work to the
same degree as though such persons were employees of EEI.
However, as part of Services, EAI during periods when such
employees are loaned to EEI will continue to provide to, and with
respect to such employees those same payroll, pension, savings,
tax withholding, Social Security, unemployment, bookkeeping and
other personnel support services then being utilized by EAI in
connection with compensating and benefiting such employees.
5. Exchange of Intellectual Property
A. Should EEI in the course of its business develop
Intellectual Property, it will make such Intellectual Property
available for utilization by EAI without charge (except the
actual expenses incurred by EEI in connection with making such
new Intellectual Property available to EAI); provided, however,
that such availability shall be dependent upon and subject to any
contractual commitments of EEI to Non-Affiliates, applicable laws
and regulations, and the legal rights and entitlements of others.
B. As part of the Services, EAI will make available to EEI for
utilization by it all Intellectual Property heretofore or
hereafter developed or obtained by EAI without charge (except for
the actual expenses incurred by EAI in making the same available
to EEI, and except as otherwise provided in Article 8 below);
provided, however, that such availability shall be dependent upon
and subject to any contractual commitments of EAI to Non-
Affiliates, applicable laws and regulations, and the legal rights
and entitlements of others.
6. Compensation of EAI
As compensation for Services actually requested by EEI and
rendered to it by EAI, EEI hereby agrees to pay to EAI (except as
described in Article 5B) an amount equal to (a) all costs
properly chargeable or allocable thereto, as controlled through a
work order procedure, computed in accordance with applicable
rules and regulations (including, but not limited to, Rules 90
and 91) under the Act and appropriate accounting standards, plus
(b) a charge of five percent (5%) of such costs. Such costs
shall be determined as outlined on Exhibit A attached hereto and
incorporated herein by reference.
7. Work Orders
The Services will be performed in accordance with work
orders or requests issued or made by or on behalf of EEI and
accepted by EAI, and all Services will be assigned an applicable
work order number to enable specific work to be properly
allocated by project or other appropriate basis. Work Orders
shall be as specific as practicable in defining the Services
requested to be performed and will set forth the scope and
duration of the Services to be performed and the specific
employees to be loaned to EEI pursuant to the work order. EEI
shall have the right from time to time to amend, alter or rescind
any work order, provided that (i) any such amendment or
alteration which results in a material change in the scope of the
work to be performed or equipment to be provided is agreed to by
EAI; (ii) the costs for the Services covered by the work order
will include any expense incurred by EAI as a direct result of
such amendment, alteration or rescission of the work order; and
(iii) no amendment, alteration or rescission of a work order will
release EEI from liability for all such costs already incurred or
contracted for by EAI pursuant to the work order, regardless of
whether the work associated with such costs is discontinued by
such amendment, alteration or rescission.
8. Disposition of Intellectual Property
In the event EEI with the express written consent of EAI
markets to Non-Affiliates Intellectual Property heretofore or
hereafter developed or otherwise acquired by EAI for its own use,
and such Intellectual Property is actually used by EAI, all
profits derived by EEI from such marketing transactions shall be
divided equally by EAI and EEI, after deducting all of EEI's
incremental costs associated with making the Intellectual
Property available for sale, including the cost of marketing such
Intellectual Property; provided, however, that in the event any
Intellectual Property developed or otherwise acquired by EAI for
its own use is not actually so used, and is subsequently marketed
by EEI to Non-Affiliates, EEI shall fully reimburse EAI for all
of its costs incurred to develop or otherwise acquire such
Intellectual Property before any profits derived from its
marketing of such Intellectual Property shall be so divided.
9. Limitation of Liability and Indemnification
In performing the Services hereunder (except to the extent
such Services are being performed by employees loaned to and
under the supervision of EEI), EAI will exercise due care to
assure that the Services are performed in a workmanlike manner,
meet the standards and specifications set forth in the applicable
work order or request with respect to such Services, and comply
with applicable standards of law and regulation. However,
failure to meet these obligations shall in no event subject EAI
to any claims or liabilities other than to reperform the work and
be compensated in accordance with this Agreement for such
reperformance such that it fully complies with the work order,
request or standard, as the case may be. EAI makes no other
warranty with respect to its performance of the Services, and EEI
agrees to accept such Services without further warranty of any
nature. EEI shall and does hereby indemnify and agree to save
harmless and defend EAI from liabilities, taxes, losses,
obligations, claims, damages, penalties, causes of action, suits,
costs and expenses or judgments of any nature, on account of, or
resulting from: (i) injuries to or the death of any person; (ii)
damage to or loss of any property; (iii) any alleged or actual
violation of law, court order, or governmental agency rule or
regulation committed by or existing with respect to EEI or its
employees, agents or subcontractors; (iv) any alleged or actual
breaches of contract by EEI; (v) any claims by or on account of
any employee, agent or subcontractor of EEI; (vi) services or
labor performed, labor force, materials, provisions or supplies
furnished or allegedly contracted for by or on behalf of EEI, its
employees, agents or subcontractors; and/or (vii) other damages;
which, in all cases, are attributable to or arise out of the
performance and prosecution of any project or work performed by
or on behalf of EEI, whether or not the same results or allegedly
results from the claimed or actual negligence or breach of
warranty of, or breach of contract or willful conduct by, EEI or
of its employees, agents or contractors or its or their
subcontractors or any combination thereof.
10. Miscellaneous
This Agreement shall be binding upon the successors and
assigns of the parties hereto, provided that EAI shall not be
entitled to assign or subcontract out any of its obligations
under this Agreement or under any purchase order or work order
issued hereunder without the prior written approval of EEI. This
Agreement may not be modified or amended in any respect except in
writing executed by the parties hereto. This Agreement shall be
construed and enforced under and in accordance with the laws of
the State of Louisiana. This Agreement may be executed in
counterparts, each one of which when fully executed shall be
deemed to have the same dignity, force and effect as an original.
No provision of this Agreement shall be deemed waived nor breach
of this Agreement consented to unless such waiver or consent is
set forth in writing and executed by the party hereto making such
waiver or consent.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their respective corporate names by
their respective Presidents or one of their respective Vice
Presidents as of the day and year first above written.
<PAGE>
ENTERGY ARKANSAS, INC.
By: /s/ C. John Wilder
C. John Wilder
Executive Vice President and
Chief Financial Officer
ENTERGY ENTERPRISES, INC.
By: /s/ Steven C. McNeal
Steven C. McNeal
Vice President and Treasurer
<PAGE>
EXHIBIT A
ENTERGY ENTERPRISES, INC.
Accounting/Billing Procedures by Entergy Arkansas, Inc.
I. Introduction
This procedure establishes the guidelines for determining the
cost of Services for, and billings by, Entergy Arkansas, Inc.
(EAI) to Entergy Enterprises, Inc. (EEI). These billings will
include direct and indirect costs normally incurred by EAI in its
operations, plus a charge of five percent (5%) of the total of
such costs. Revenues and costs related to these billings will be
recorded in the accounting records of EAI in accordance with
generally accepted accounting principles and FERC guidelines.
The procedures to be employed in determining costs for Services
performed for EEI, and rendering billing for such Services, will
closely follow the procedures used to bill other System Companies
for work performed.
II. Method of Billings
Each Service provided by EAI is accounted for using a job order
system. Direct costs charged to each job will be made using the
current accounting system's source documents (time reports,
expense accounts, journal entries, vendor invoices). Charges for
Services (including the cost of Services plus the 5% adder) will
be billed on a monthly basis. All amounts will be payable in
accordance with agreed upon procedures between EAI and EEI.
III. Calculation of Cost
The cost of Services provided to EEI will be calculated, based on
individual projects or jobs, according to the following
guidelines:
A. Labor
Labor costs billed for Services provided include
salaries and related direct labor costs for employees.
1. Direct Labor
Direct labor costs will be based on actual
gross wage rates of employees assigned to
perform services multiplied by the actual
number of hours actually worked. These direct
labor hours will be recorded on time reports.
EXHIBIT A
2. Indirect Labor Off-Duty Wages and Benefits
A labor overhead rate (calculated annually)
will be applied to each direct labor hour for
the following:
Vacations
Holidays
Sick
Off-duty time
Pensions
Savings plan
Insurance
Salary related taxes (FICA, FUTA, SUTA,
etc)
All other employee benefits and salary
taxes
B. Employee Travel, Subsistence and Other Related Expenses
It is likely in the normal course of providing Services
to EEI that travel, meals, lodging and related expenses
will be incurred. Such expenses will be accumulated at
cost on an expense account form.
C. Vehicle and Equipment Usage
When vehicles or equipment are used by EAI in the
course of providing services, a standard rate (miles or
hours) by vehicle or equipment class will be applied to
recover all costs of operation of the vehicle or
equipment.
D. Materials
The cost of materials purchased by EAI in connection
with direct services rendered will be determined based
on the total net purchase price plus applicable stores
overheads and taxes.
E. Administrative and Engineering Overheads
An overhead rate will be applied to total expenses in
items A-D above to compensate for indirect
administrative and engineering overheads.
EXHIBIT B-3(b)
AMENDED AND RESTATED
SERVICE AGREEMENT
BETWEEN
ENTERGY LOUISIANA, INC.
AND
ENTERGY ENTERPRISES, INC.
THIS AGREEMENT, made and entered into as of June 22, 1999 by
and between Entergy Louisiana, Inc., formerly Louisiana Power &
Light Company, a corporation organized under the laws of the
State of Louisiana (hereinafter sometimes referred to as "ELI")
and Entergy Enterprises, Inc., formerly Electec, Inc., a
corporation organized under the laws of the State of Louisiana
(hereinafter sometimes referred to as "EEI"), amends, restates
and supercedes in its entirety that certain Service Agreement
made and entered into as of February 23, 1984, between ELI and
EEI (the "Original Service Agreement").
W I T E S S E T H:
WHEREAS, ELI and EEI are both subsidiaries of Entergy
Corporation ("Entergy") and, together with Entergy's other direct
and indirect subsidiaries and Entergy, form the Entergy System;
and
WHEREAS, ELI is organized, staffed and equipped and is
authorized by the Securities and Exchange Commission (the
"Commission"), under Section 13(b) of the Public Utility Holding
Company Act of 1935, as amended (the "Act"), to render to EEI
services as herein provided; and
WHEREAS, in the course of its operations, ELI has acquired
and will acquire certain properties and other resources; and
WHEREAS, subject to the provisions set forth herein, EEI is
authorized by orders of the Commission dated July 8, 1993 (HCAR
No. 25848), June 30, 1995 (HCAR No. 26322) and June 22, 1999
(HCAR No. 27039) to utilize those services, properties and
resources of ELI, as well as those provided by other companies of
the Entergy System, (i) to conduct preliminary development
activities with respect to potential investments by Entergy in
various energy, energy-related and other non-utility businesses,
(ii) to provide various management, administrative and support
services to certain of its associate companies, (iii) to provide
consulting services to certain of its associate companies and to
non-associate companies, and (iv) to provide , directly or
indirectly, through one or more special purpose subsidiary
companies of Entergy or EEI, power project operations and
maintenance services to non-associate companies and to certain of
its associate companies; and
WHEREAS, economies and increased efficiencies benefiting the
Entergy System will result from the performance by ELI of
services for EEI and the provision of certain property and
resources to EEI as herein provided; and
WHEREAS, subject to the terms and conditions herein
described, ELI is willing, upon request by EEI, to render such
services and provide such property and resources to EEI, taking
into consideration the fulfillment of ELI's utility
responsibilities; and
WHEREAS, pursuant to settlement arrangements entered into by
Entergy with certain of its state and local regulators in 1992
and 1993 (collectively, the "Settlement Agreements"), Entergy has
agreed (subject to the receipt of any requisite Commission
authorization) to implement certain special provisions pertaining
to affiliate transactions between Entergy's Regulated Utilities
and Nonregulated Businesses (each as defined in Article 1 of this
Agreement), including, without limitation, (i) a provision
requiring that any services rendered by Entergy's Regulated
Utilities (including ELI) to Nonregulated Businesses (including
EEI), be priced at cost plus 5%, and (ii) a provision modifying
the methodology incorporated in the Original Service Agreement
for the allocation of profits derived by EEI from its marketing
to non-affiliates of intellectual property developed or otherwise
acquired by Entergy's Regulated Utilities (including ELI); and
WHEREAS, by Order dated June 22, 1999 (HCAR No. 27040), the
Commission granted Entergy's application requesting, among other
things, an exemption from the "at cost" requirements of Section
13(b) of the Act to permit implementation of the provision of the
Settlement Agreement requiring that services rendered by ELI to
EEI be rendered at cost plus 5%, and (to the extent
jurisdictional under the Act) implementation of the profit
sharing methodology required under the Settlement Agreements in
connection with the marketing by EEI of ELI developed or acquired
intellectual property; and
WHEREAS, it is necessary and appropriate the Original
Service Agreement be amended and restated for the purpose, among
other things, of incorporating the above referenced provisions of
the Settlement Agreements.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein, the parties hereto hereby agree as
follows:
1. Definitions
As used hereinafter, the following terms, in addition to
those elsewhere defined in this Agreement, shall have the
following meanings unless the context otherwise requires:
A. "Services" shall mean those services described in Articles
3, 4 and 5 hereof.
B. "Non-Affiliate" means any corporation, company, agency,
government, business, entity or person other than Entergy, a
direct or indirect subsidiary of Entergy, or a person employed by
Entergy or any of such subsidiaries.
C. "Intellectual Property" means any process, program or
technique which is protected by the copyright, patent or
trademark laws, or by virtue of being a trade secret, and which
has been specifically and knowingly incorporated into, exhibited
in, or reduced to a tangible writing, drawing, manual, computer
program, product or similar manifestation or thing.
D. "Regulated Utilities" means Entergy Arkansas, Inc., Entergy
Gulf States, Inc., Entergy New Orleans, Inc., Entergy
Mississippi, Inc., Entergy Services, Inc., System Energy
Resources, Inc., Entergy Operations Inc., System Fuels, Inc. and
ELI and such other similar subsidiaries as Entergy shall 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 services thereto.
E. "Nonregulated Businesses" means Entergy Power, Inc., Entergy
Enterprises, Inc. and such other subsidiaries and affiliates as
Entergy shall create that are not domestic regulated electric or
combination electric and gas utilities primarily engaged in the
business of selling electric energy or natural gas at retail or
wholesale to affiliates or are not primarily engaged in the
business of providing services or goods to regulated electric or
combination electric and gas utility affiliates.
2. Agreement to Furnish Services
A. Upon its receipt of EEI's work order or other request
therefor, ELI will, if it has or can have available the personnel
and resources needed to fill the work order or request, furnish
to EEI upon the terms and conditions hereinafter set forth such
of the Services, at such times, for such periods and in such
manner as EEI may from time to time request; provided, however,
that the determination of whether ELI has the available personnel
and resources to perform in accordance with the work order or
request will be entirely within the discretion of ELI, and ELI
may at its option elect not to perform any requested Service,
except that, once having agreed to perform pursuant to a work
order or request, ELI cannot withdraw or depart from such
performance without the consent of EEI. In making its
determination as to the availability of personnel and resources,
ELI may consider whether the use thereof by EEI will interfere
with its own use of such personnel and resources.
B. The provision of Services by ELI pursuant to this Agreement
shall in all cases and notwithstanding anything herein contained
to the contrary be subject to any limitations contained in
authorizations, rules or regulations of those governmental
agencies, if any, having jurisdiction over ELI, EEI, or such
provision of Services.
3. Description of Services
The services which may be provided by ELI hereunder are
described as follows:
A. EWGs, FUCOs, Qualifying Facilities, Etc.. Advise and assist
EEI in regarding possible investment and participation in, and
related activities with respect to, (i) "exempt wholesale
generators" and "foreign utility companies," as such terms are
defined in Section 32 and 33, respectively, of the Act,
(ii)"qualifying facilities," including certain cogeneration
facilities and small power production facilities, as such terms
are defined under the Public Utility Regulatory Policies Act of
1978 and the rules and regulations promulgated thereunder by the
Federal Energy Regulatory Commission and (iii) other non-exempt
electric generating facilities.
B. Development of Other Business Enterprises. Advise and assist
EEI in the investigation of other business enterprises, and the
development of such other business enterprises as are approved by
the Commission or otherwise are permitted under the Act.
C. General Engineering. Perform general engineering work,
including system production and transmission studies; prepare and
analyze apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies and problems,
and fuel supply studies; and advise and assist in connection with
analyses of operations and operating and construction budgets.
D. Design Engineering. Perform detailed design work as
requested by EEI.
E. Accounting and Statistical. Advise and assist EEI in
connection with the installation of accounting systems and
similar problems, requirements of regulatory bodies with respect
to accounting, studies of accounting procedures and practices to
improve efficiency, book entries resulting from unusual financial
transactions, internal audits, employment of independent
auditors, preparation and analyses of financial and operating
reports and other statistical matters relating to EEI or its
customers, preparation of reports to regulatory commissions,
insurance companies and others, standardization of accounting and
statistical forms in the interest of economy, and other
accounting and statistical matters.
F. Budgeting. Advise and assist EEI in matters involving the
preparation and development of capital and operating budgets,
cash and cost forecasts, and budgetary controls.
G. Business Promotion and Public Relations. Advise and assist
EEI in the development of marketing and sales programs, in the
preparation and use of advertising and sales materials, and in
the determination and carrying out of promotional programs.
H. Systems and Procedures. Advise and assist EEI in the
establishment of good operating practices and methods of
procedure, the standardization of forms, the purchase, rental and
use of mechanical and electronic data processing, computing and
communications equipment, in conducting economic research and
planning and in the development of special economic studies.
I. Access to and Use of Resources. Subject to those conditions
with respect to ELI's discretion not to perform any requested
Service set forth in Article 2A, make available to EEI in the
conduct of its business and/or, to the extent necessary or
appropriate as required in the performance of its services to its
customers access to, use of, or rights in all ELI's resources,
including facilities, products, processes, techniques, computer
hardware and software, technical information, training aids and
properties, vehicles, equipment, machines and other property,
whether owned, leased, licensed or otherwise available to, ELI.
J. Training. Assist EEI in providing training to personnel of
EEI or its customers; develop and make available training
procedures, materials and facilities, and provide instructors.
K. General. Make available services in the areas of
construction planning and supervision, design, management
programs, quality assurance, licensing matters, research and
development, and communications systems and procedures.
L. Other Services. Render advice and assistance in connection
with such other matters as EEI may request and ELI may be able to
perform with respect to EEI's business and operations.
4. Provision of Personnel
Where specifically requested by EEI, ELI may loan its
employees to EEI. In that event, such loaned employees will be
under the sole supervision and control of EEI for such period or
periods of time as are necessary to complete the work to be
performed by such employees. Such employees may be withdrawn by
ELI from tasks assigned by EEI only with the consent of EEI. EEI
will be responsible for the actions and activities of such
employees while engaged in the performance of the work to the
same degree as though such persons were employees of EEI.
However, as part of Services, ELI during periods when such
employees are loaned to EEI will continue to provide to, and with
respect to such employees those same payroll, pension, savings,
tax withholding, Social Security, unemployment, bookkeeping and
other personnel support services then being utilized by ELI in
connection with compensating and benefiting such employees.
5. Exchange of Intellectual Property
A. Should EEI in the course of its business develop
Intellectual Property, it will make such Intellectual Property
available for utilization by ELI without charge (except the
actual expenses incurred by EEI in connection with making such
new Intellectual Property available to ELI);provided, however,
that such availability shall be dependent upon and subject to any
contractual commitments of EEI to Non-Affiliates, applicable laws
and regulations, and the legal rights and entitlements of others.
B. As part of the Services, ELI will make available to EEI for
utilization by it all Intellectual Property heretofore or
hereafter developed or obtained by ELI without charge (except for
the actual expenses incurred by ELI in making the same available
to EEI, and except as otherwise provided in Article 8 below);
provided, however, that such availability shall be dependent upon
and subject to any contractual commitments of ELI to Non-
Affiliates, applicable laws and regulations, and the legal rights
and entitlements of others.
6. Compensation of ELI
As compensation for Services actually requested by EEI and
rendered to it by ELI, EEI hereby agrees to pay to ELI (except as
described in Article 5B) an amount equal to (a) all costs
properly chargeable or allocable thereto, as controlled through a
work order procedure, computed in accordance with applicable
rules and regulations (including, but not limited to, Rules 90
and 91) under the Act and appropriate accounting standards, plus
(b) a charge of five percent (5%) of such costs. Such costs
shall be determined as outlined on Exhibit A attached hereto and
incorporated herein by reference.
7. Work Orders
The Services will be performed in accordance with work
orders or requests issued or made by or on behalf of EEI and
accepted by ELI, and all Services will be assigned an applicable
work order number to enable specific work to be properly
allocated by project or other appropriate basis. Work orders
shall be as specific as practicable in defining the Services
requested to be performed and will set forth the scope and
duration of the Services to be performed and the specific
employees to be loaned to EEI pursuant to the work order. EEI
shall have the right from time to time to amend, alter or rescind
any work order, provided that (i) any such amendment or
alteration which results in a material change in the scope of the
work to be performed or equipment to be provided is agreed to by
ELI; (ii) the costs for the Services covered by the work order
will include any expense incurred by ELI as a direct result of
such amendment, alteration or rescission of the work order; and
(iii) no amendment, alteration or rescission of a work order will
release EEI from liability for all such costs already incurred or
contracted for by ELI pursuant to the work order, regardless of
whether the work associated with such costs is discontinued by
such amendment, alteration or rescission.
8. Disposition of Intellectual Property
In the event EEI with the express written consent of ELI
markets to Non-Affiliates Intellectual Property heretofore or
hereafter developed or otherwise acquired by ELI for its own use,
and such Intellectual Property is actually used by ELI, all
profits derived by EEI from such marketing transactions shall be
divided equally by ELI and EEI, after deducting all of EEI's
incremental costs associated with making the Intellectual
Property available for sale, including the cost of marketing such
Intellectual Property; provided, however, that in the event any
Intellectual Property developed or otherwise acquired by ELI for
its own use is not actually so used, and is subsequently marketed
by EEI to Non-Affiliates, EEI shall fully reimburse ELI for all
of its costs incurred to develop or otherwise acquire such
Intellectual Property before any profits derived from its
marketing of such Intellectual Property shall be so divided.
9. Limitation of Liability and Indemnification
In performing the Services hereunder (except to the extent
such Services are being performed by employees loaned to and
under the supervision of EEI), ELI will exercise due care to
assure that the Services are performed in a workmanlike manner,
meet the standards and specifications set forth in the applicable
work order or request with respect to such Services, and comply
with applicable standards of law and regulation. However,
failure to meet these obligations shall in no event subject ELI
to any claims or liabilities other than to reperform the work and
be compensated in accordance with this Agreement for such
reperformance such that it fully complies with the work order,
request or standard, as the case may be. ELI makes no other
warranty with respect to its performance of the Services, and EEI
agrees to accept such Services without further warranty of any
nature. EEI shall and does hereby indemnify and agree to save
harmless and defend ELI from liabilities, taxes, losses,
obligations, claims, damages, penalties, causes of action, suits,
costs and expenses or judgments of any nature, on account of, or
resulting from: (i) injuries to or the death of any person; (ii)
damage to or loss of any property; (iii) any alleged or actual
violation of law, court order, or governmental agency rule or
regulation committed by or existing with respect to EEI or its
employees, agents or subcontractors; (iv) any alleged or actual
breaches of contract by EEI; (v) any claims by or on account of
any employee, agent or subcontractor of EEI; (vi) services or
labor performed, labor force, materials, provisions or supplies
furnished or allegedly contracted for by or on behalf of EEI, its
employees, agents or subcontractors; and/or (vii) other damages;
which, in all cases, are attributable to or arise out of the
performance and prosecution of any project or work performed by
or on behalf of EEI, whether or not the same results or allegedly
results from the claimed or actual negligence or breach of
warranty of, or breach of contract or willful conduct by, EEI or
of its employees, agents or contractors or its or their
subcontractors or any combination thereof.
10. Miscellaneous
This Agreement shall be binding upon the successors and
assigns of the parties hereto, provided that ELI shall not be
entitled to assign or subcontract out any of its obligations
under this Agreement or under any purchase order or work order
issued hereunder without the prior written approval of EEI. This
Agreement may not be modified or amended in any respect except in
writing executed by the parties hereto. This Agreement shall be
construed and enforced under and in accordance with the laws of
the State of Louisiana. This Agreement may be executed in
counterparts, each one of which when fully executed shall be
deemed to have the same dignity, force and effect as an original.
No provision of this Agreement shall be deemed waived nor breach
of this Agreement consented to unless such waiver or consent is
set forth in writing and executed by the party hereto making such
waiver or consent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their respective corporate names by
their respective Presidents or one of their respective Vice
Presidents as of the day and year first above written.
ENTERGY LOUISIANA, INC.
By: /s/ C. John Wilder
C. John Wilder
Executive Vice President and
Chief Financial Officer
ENTERGY ENTERPRISES, INC.
By: /s/ Steven C. McNeal
Steven C. McNeal
Vice President and Treasurer
<PAGE>
EXHIBIT A
ENTERGY ENTERPRISES, INC.
Accounting/Billing Procedures by Entergy Louisiana, Inc.
I. Introduction
This procedure establishes the guidelines for determining the
cost of Services for, and billings by, Entergy Louisiana, Inc.
(ELI) to Entergy Enterprises, Inc. (EEI). These billings will
include direct and indirect costs normally incurred by ELI in its
operations, plus a charge of five percent (5%) of the total of
such costs. Revenues and costs related to these billings will be
recorded in the accounting records of ELI in accordance with
generally accepted accounting principles and FERC guidelines.
The procedures to be employed in determining costs for Services
performed for EEI, and rendering billing for such Services, will
closely follow the procedures used to bill other System Companies
for work performed.
II. Method of Billings
Each Service provided by ELI is accounted for using a job order
system. Direct costs charged to each job will be made using the
current accounting system's source documents (time reports,
expense accounts, journal entries, vendor invoices). Charges for
Services (including the cost of Services plus the 5% adder) will
be billed on a monthly basis. All amounts will be payable in
accordance with agreed upon procedures between ELI and EEI.
III. Calculation of Cost
The cost of Services provided to EEI will be calculated, based on
individual projects or jobs, according to the following
guidelines:
A. Labor
Labor costs billed for Services provided include
salaries and related direct labor costs for employees.
1. Direct Labor
Direct labor costs will be based on actual
gross wage rates of employees assigned to
perform services multiplied by the actual
number of hours actually worked. These direct
labor hours will be recorded on time reports.
2. Indirect Labor Off-Duty Wages and Benefits
A labor overhead rate (calculated annually)
will be applied to each direct labor hour for
the following:
Vacations
Holidays
Sick
Off-duty time
Pensions
Savings plan
Insurance
Salary related taxes (FICA, FUTA, SUTA, etc)
All other employee benefits and salary taxes
B. Employee Travel, Subsistence and Other Related Expenses
It is likely in the normal course of providing Services
to EEI that travel, meals, lodging and related expenses
will be incurred. Such expenses will be accumulated at
cost on an expense account form.
C. Vehicle and Equipment Usage
When vehicles or equipment are used by ELI in the
course of providing services, a standard rate (miles or
hours) by vehicle or equipment class will be applied to
recover all costs of operation of the vehicle or
equipment.
D. Materials
The cost of materials purchased by ELI in connection
with direct services rendered will be determined based
on the total net purchase price of such materials, plus
applicable stores overheads and taxes.
E. Administrative and Engineering Overheads
An overhead rate will be applied to total expenses in
items A-D above to compensate for indirect
administrative and engineering overheads.
EXHIBIT B-3(c)
AMENDED AND RESTATED
SERVICE AGREEMENT
BETWEEN
ENTERGY MISSISSIPPI, INC.
AND
ENTERGY ENTERPRISES, INC.
THIS AGREEMENT, made and entered into as of June 22, 1999 by
and between Entergy Mississippi, Inc., formerly Mississippi Power
& Light Company, a corporation organized under the laws of the
State of Mississippi (hereinafter sometimes referred to as "EMI")
and Entergy Enterprises, Inc., formerly Electec, Inc., a
corporation organized under the laws of the State of Louisiana
(hereinafter sometimes referred to as "EEI"), amends, restates
and supercedes in its entirety that certain Service Agreement
made and entered into as of February 22, 1984, between EMI and
EEI (the "Original Service Agreement").
W I T E S S E T H:
WHEREAS, EMI and EEI are both subsidiaries of Entergy
Corporation ("Entergy") and, together with Entergy's other direct
and indirect subsidiaries and Entergy, form the Entergy System;
and
WHEREAS, EMI is organized, staffed and equipped and is
authorized by the Securities and Exchange Commission (the
"Commission"), under Section 13(b) of the Public Utility Holding
Company Act of 1935, as amended (the "Act"), to render to EEI
services as herein provided; and
WHEREAS, in the course of its operations, EMI has acquired
and will acquire certain properties and other resources; and
WHEREAS, subject to the provisions set forth herein, EEI is
authorized by orders of the Commission dated July 8, 1993 (HCAR
No. 25848), June 30, 1995 (HCAR No. 26322) and June 22, 1999
(HCAR No. 27039) to utilize those services, properties and
resources of EMI, as well as those provided by other companies of
the Entergy System, (i) to conduct preliminary development
activities with respect to potential investments by Entergy in
various energy, energy-related and other non-utility businesses,
(ii) to provide various management, administrative and support
services to certain of its associate companies, (iii) to provide
consulting services to certain of its associate companies and to
non-associate companies, and (iv) to provide , directly or
indirectly, through one or more special purpose subsidiary
companies of Entergy or EEI, power project operations and
maintenance services to non-associate companies and to certain of
its associate companies; and
WHEREAS, economies and increased efficiencies benefiting the
Entergy System will result from the performance by EMI of
services for EEI and the provision of certain property and
resources to EEI as herein provided; and
WHEREAS, subject to the terms and conditions herein
described, EMI is willing, upon request by EEI, to render such
services and provide such property and resources to EEI, taking
into consideration the fulfillment of EMI's utility
responsibilities; and
WHEREAS, pursuant to settlement arrangements entered into by
Entergy with certain of its state and local regulators in 1992
and 1993 (collectively, the "Settlement Agreements"), Entergy has
agreed (subject to the receipt of any requisite Commission
authorization) to implement certain special provisions pertaining
to affiliate transactions between Entergy's Regulated Utilities
and Nonregulated Businesses (each as defined in Article 1 of this
Agreement), including, without limitation, (i) a provision
requiring that any services rendered by Entergy's Related
Utilities (including EMI) to its Nonregulated Businesses
(including EEI), be priced at cost plus 5%, and (ii) a provision
modifying the methodology, incorporated in the Original Service
Agreement, for the allocation of profits derived by EEI from its
marketing to non-affiliates of intellectual property developed or
otherwise acquired by Entergy's Regulated Utilities (including
EMI); and
WHEREAS, by Order dated June 22, 1999 (HCAR No. 27040), the
Commission granted Entergy's application requesting, among other
things, an exemption from the "at cost" requirements of Section
13(b) of the Act to permit implementation of the provision of the
Settlement Agreement requiring that services rendered by EMI to
EEI be rendered at cost plus 5%, and (to the extent
jurisdictional under the Act) implementation of the profit
sharing methodology required under the Settlement Agreements in
connection with the marketing by EEI of EMI developed or acquired
intellectual property; and
WHEREAS, it is necessary and appropriate to amend the
Original Service Agreement for the purpose, among other things,
of incorporating the above referenced provisions of the
Settlement Agreements.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein, the parties hereto hereby agree as
follows:
1. Definitions
As used hereinafter, the following terms, in addition to
those elsewhere defined in this Agreement, shall have the
following meanings unless the context otherwise requires:
A. "Services" shall mean those services described in Articles
3, 4 and 5 hereof.
B. "Non-Affiliate" means any corporation, company, agency,
government, business, entity or person other than Entergy, a
direct or indirect subsidiary of Entergy, or a person employed by
Entergy or any of such subsidiaries.
C. "Intellectual Property" means any process, program or
technique which is protected by the copyright, patent or
trademark laws, or by virtue of being a trade secret, and which
has been specifically and knowingly incorporated into, exhibited
in, or reduced to a tangible writing, drawing, manual, computer
program, product or similar manifestation or thing.
D. "Regulated Utilities" means Entergy Arkansas, Inc., Entergy
Gulf States, Inc., Entergy Louisiana, Inc., Entergy New Orleans,
Inc., Entergy Services, Inc., System Energy Resources, Inc.,
Entergy Operations Inc., System Fuels, Inc. and EMI and such
other similar subsidiaries as Entergy shall 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 services thereto.
E. "Nonregulated Businesses" means Entergy Power, Inc., Entergy
Enterprises, Inc. and such other subsidiaries and affiliates as
Entergy shall create that are not domestic regulated electric or
combination electric and gas utilities primarily engaged in the
business of selling electric energy or natural gas at retail or
wholesale to affiliates or are not primarily engaged in the
business of providing services or goods to regulated electric or
combination electric and gas utility affiliates.
2. Agreement to Furnish Services
A. Upon its receipt of EEI's work order or other request
therefor, EMI will, if it has or can have available the personnel
and resources needed to fill the work order or request, furnish
to EEI upon the terms and conditions hereinafter set forth such
of the Services, at such times, for such periods and in such
manner as EEI may from time to time request; provided, however,
that the determination of whether EMI has the available personnel
and resources to perform in accordance with the work order or
request will be entirely within the discretion of EMI, and EMI
may at its option elect not to perform any requested Service,
except that, once having agreed to perform pursuant to a work
order or request, EMI cannot withdraw or depart from such
performance without the consent of EEI. In making its
determination as to the availability of personnel and resources,
EMI may consider whether the use thereof by EEI will interfere
with its own use of such personnel and resources.
B. The provision of Services by EMI pursuant to this Agreement
shall in all cases and notwithstanding anything herein contained
to the contrary be subject to any limitations contained in
authorizations, rules or regulations of those governmental
agencies, if any, having jurisdiction over EMI, EEI, or such
provision of Services,
3. Description of Services
The services which may be provided by EMI hereunder are
described as follows:
A. EWGs, FUCOs, Qualifying Facilities, Etc. Advise and assist
EEI regarding possible investment and participation in, and
related activities with respect to, (i) "exempt wholesale
generators" and "foreign utility companies," as such terms are
defined in Section 32 and 33 of the Act, respectively,
(ii)"qualifying facilities," including certain cogeneration
facilities and small power production facilities, as such terms
are defined under the Public Utility Regulatory Policies Act of
1978 and the rules and regulations promulgated thereunder by the
Federal Energy Regulatory Commission and (iii) other non-exempt
electric generating facilities.
B. Development of Other Business Enterprises. Advise and assist
EEI in the investigation of other business enterprises, and the
development of such other business enterprises as are approved by
the Commission or otherwise are permitted under the Act.
C. General Engineering. Perform general engineering work,
including system production and transmission studies; prepare and
analyze apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies and problems,
and fuel supply studies; and advise and assist in connection with
analyses of operations and operating and construction budgets.
D. Design Engineering. Perform detailed design work as
requested by EEI.
E. Accounting and Statistical. Advise and assist EEI in
connection with the installation of accounting systems and
similar problems, requirements of regulatory bodies with respect
to accounting, studies of accounting procedures and practices to
improve efficiency, book entries resulting from unusual financial
transactions, internal audits, employment of independent
auditors, preparation and analyses of financial and operating
reports and other statistical matters relating to EEI or its
customers, preparation of reports to regulatory commissions,
insurance companies and others, standardization of accounting and
statistical forms in the interest of economy, and other
accounting and statistical matters.
F. Budgeting. Advise and assist EEI in matters involving the
preparation and development of capital and operating budgets,
cash and cost forecasts, and budgetary controls.
G. Business Promotion and Public Relations. Advise and assist
EEI in the development of marketing and sales programs, in the
preparation and use of advertising and sales materials, and in
the determination and carrying out of promotional programs.
H. Systems and Procedures. Advise and assist EEI in the
establishment of good operating practices and methods of
procedure, the standardization of forms, the purchase, rental and
use of mechanical and electronic data processing, computing and
communications equipment, in conducting economic research and
planning and in the development of special economic studies.
I. Access to and Use of Resources. Subject to those conditions
with respect to EMI's discretion not to perform any requested
Service set forth in Article 2A, make available to EEI in the
conduct of its business and/or, to the extent necessary or
appropriate as required in the performance of its services to its
customers access to, use of, or rights in all EMI's resources,
including facilities, products, processes, techniques, computer
hardware and software, technical information, training aids and
properties, vehicles, equipment, machines and other property,
whether owned, leased, licensed or otherwise available to, EMI.
J. Training. Assist EEI in providing training to personnel of
EEI or its customers; develop and make available training
procedures, materials and facilities, and provide instructors.
K. General. Make available services in the areas of
construction planning and supervision, design, management
programs, quality assurance, licensing matters, research and
development, and communications systems and procedures.
L. Other Services. Render advice and assistance in connection
with such other matters as EEI may request and EMI may be able to
perform with respect to EEI's business and operations.
4. Provision of Personnel
Where specifically requested by EEI, EMI may loan its
employees to EEI. In that event, such loaned employees will be
under the sole supervision and control of EEI for such period or
periods of time as are necessary to complete the work to be
performed by such employees. Such employees may be withdrawn by
EMI from tasks assigned by EEI only with the consent of EEI. EEI
will be responsible for the actions and activities of such
employees while engaged in the performance of the work to the
same degree as though such persons were employees of EEI.
However, as part of Services, EMI during periods when such
employees are loaned to EEI will continue to provide to, and with
respect to such employees those same payroll, pension, savings,
tax withholding, Social Security, unemployment, bookkeeping and
other personnel support services then being utilized by EMI in
connection with compensating and benefiting such employees.
5. Exchange of Intellectual Property
A. Should EEI in the course of its business develop
Intellectual Property, it will make such Intellectual Property
available for utilization by EMI without charge (except the
actual expenses incurred by EEI in connection with making such
new Intellectual Property available to EMI); provided, however,
that such availability shall be dependent upon and subject to any
contractual commitments of EEI to Non-Affiliates, applicable laws
and regulations, and the legal rights and entitlements of others.
B. As part of the Services, EMI will make available to EEI for
utilization by it all Intellectual Property heretofore or
hereafter developed or obtained by EMI without charge (except for
the actual expenses incurred by EMI in making the same available
to EEI, and except as otherwise provided in Article 8 below);
provided, however, that such availability shall be dependent upon
and subject to any contractual commitments of EMI to Non-
Affiliates, applicable laws and regulations, and the legal rights
and entitlements of others.
6. Compensation of EMI
As compensation for Services actually requested by EEI and
rendered to it by EMI, EEI hereby agrees to pay to EMI (except as
described in Article 5B) an amount equal to (a) all costs
properly chargeable or allocable thereto, as controlled through a
work order procedure, computed in accordance with applicable
rules and regulations (including, but not limited to, Rules 90
and 91) under the Act and appropriate accounting standards, plus
(b) a charge of five percent (5%) of such costs. Such costs
shall be determined as outlined on Exhibit A attached hereto and
incorporated herein by reference.
7. Work Orders
The Services will be performed in accordance with work
orders or requests issued or made by or on behalf of EEI and
accepted by EMI, and all Services will be assigned an applicable
work order number to enable specific work to be properly
allocated by project or other appropriate basis. Work orders
shall be as specific as practicable in defining the Services
requested to be performed and will set forth the scope and
duration of the Services to be performed and the specific
employees to be loaned to EEI pursuant to the work order. EEI
shall have the right from time to time to amend, alter or rescind
any work order, provided that (i) any such amendment or
alteration which results in a material change in the scope of the
work to be performed or equipment to be provided is agreed to by
EMI; (ii) the costs for the Services covered by the work order
will include any expense incurred by EMI as a direct result of
such amendment, alteration or rescission of the work order; and
(iii) no amendment, alteration or rescission of a work order will
release EEI from liability for all such costs already incurred or
contracted for by EMI pursuant to the work order, regardless of
whether the work associated with such costs is discontinued by
such amendment, alteration or rescission.
8. Disposition of Intellectual Property
In the event EEI with the express written consent of EMI
markets to Non-Affiliates Intellectual Property heretofore or
hereafter developed or otherwise acquired by EMI for its own use,
and such Intellectual Property is actually used by EMI, all
profits derived by EEI from such marketing transactions shall be
divided equally by EMI and EEI, after deducting all of EEI's
incremental costs associated with making the Intellectual
Property available for sale, including the cost of marketing such
Intellectual Property; provided, however, that in the event any
Intellectual Property developed or otherwise acquired by EMI for
its own use is not actually so used, and is subsequently marketed
by EEI to Non-Affiliates, EEI shall fully reimburse EMI for all
of its costs incurred to develop or otherwise acquire such
Intellectual Property before any profits derived from its
marketing of such Intellectual Property shall be so divided.
9. Limitation of Liability and Indemnification
In performing the Services hereunder (except to the extent
such Services are being performed by employees loaned to and
under the supervision of EEI), EMI will exercise due care to
assure that the Services are performed in a workmanlike manner,
meet the standards and specifications set forth in the applicable
work order or request with respect to such Services, and comply
with applicable standards of law and regulation. However,
failure to meet these obligations shall in no event subject EMI
to any claims or liabilities other than to reperform the work and
be compensated in accordance with this Agreement for such
reperformance such that it fully complies with the work order,
request or standard, as the case may be. EMI makes no other
warranty with respect to its performance of the Services, and EEI
agrees to accept such Services without further warranty of any
nature. EEI shall and does hereby indemnify and agree to save
harmless and defend EMI from liabilities, taxes, losses,
obligations, claims, damages, penalties, causes of action, suits,
costs and expenses or judgments of any nature, on account of, or
resulting from: (i) injuries to or the death of any person; (ii)
damage to or loss of any property; (iii) any alleged or actual
violation of law, court order, or governmental agency rule or
regulation committed by or existing with respect to EEI or its
employees, agents or subcontractors; (iv) any alleged or actual
breaches of contract by EEI; (v) any claims by or on account of
any employee, agent or subcontractor of EEI; (vi) services or
labor performed, labor force, materials, provisions or supplies
furnished or allegedly contracted for by or on behalf of EEI, its
employees, agents or subcontractors; and/or (vii) other damages;
which, in all cases, are attributable to or arise out of the
performance and prosecution of any project or work performed by
or on behalf of EEI, whether or not the same results or allegedly
results from the claimed or actual negligence or breach of
warranty of, or breach of contract or willful conduct by, EEI or
of its employees, agents or contractors or its or their
subcontractors or any combination thereof.
10. Miscellaneous
This Agreement shall be binding upon the successors and
assigns of the parties hereto, provided that EMI shall not be
entitled to assign or subcontract out any of its obligations
under this Agreement or under any purchase order or work order
issued hereunder without the prior written approval of EEI. This
Agreement may not be modified or amended in any respect except in
writing executed by the parties hereto. This Agreement shall be
construed and enforced under and in accordance with the laws of
the State of Louisiana. This Agreement may be executed in
counterparts, each one of which when fully executed shall be
deemed to have the same dignity, force and effect as an original.
No provision of this Agreement shall be deemed waived nor breach
of this Agreement consented to unless such waiver or consent is
set forth in writing and executed by the party hereto making such
waiver or consent.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their respective corporate names by
their respective Presidents or one of their respective Vice
Presidents as of the day and year first above written.
<PAGE>
ENTERGY MISSISSIPPI, INC.
By: /s/ C. John Wilder
C. John Wilder
Executive Vice President and
Chief Financial Officer
ENTERGY ENTERPRISES, INC.
By: /s/ Steven C. McNeal
Steven C. McNeal
Vice President and Treasurer
<PAGE>
EXHIBIT A
ENTERGY ENTERPRISES, INC.
Accounting/Billing Procedures by Entergy Mississippi, Inc.
I. Introduction
This procedure establishes the guidelines for determining the
cost of Services for, and billings by, Entergy Mississippi, Inc.
(EMI) to Entergy Enterprises, Inc. (EEI). These billings will
include direct and indirect costs normally incurred by EMI in its
operations, plus a charge of five percent (5%) of the total of
such costs. Revenues and costs related to these billings will be
recorded in the accounting records of EMI in accordance with
generally accepted accounting principles and FERC guidelines.
The procedures to be employed in determining costs for Services
performed for EEI, and rendering billing for such Services, will
closely follow the procedures used to bill other System Companies
for work performed.
II. Method of Billings
Each Service provided by EMI is accounted for using a job order
system. Direct costs charged to each job will be made using the
current accounting system's source documents (time reports,
expense accounts, journal entries, vendor invoices). Charges for
Services (including the cost of Services plus the 5% adder) will
be billed on a monthly basis. All amounts will be payable in
accordance with agreed upon procedures between EMI and EEI.
III. Calculation of Cost
The cost of Services provided to EEI will be calculated, based on
individual projects or jobs, according to the following
guidelines:
A. Labor
Labor costs billed for Services provided include
salaries and related direct labor costs for employees.
1. Direct Labor
Direct labor costs will be based on actual
gross wage rates of employees assigned to
perform services multiplied by the actual
number of hours actually worked. These direct
labor hours will be recorded on time reports.
EXHIBIT A
2. Indirect Labor Off-Duty Wages and Benefits
A labor overhead rate (calculated annually)
will be applied to each direct labor hour for
the following:
Vacations
Holidays
Sick
Off-duty time
Pensions
Savings plan
Insurance
Salary related taxes (FICA, FUTA, SUTA,
etc)
All other employee benefits and salary
taxes
B. Employee Travel, Subsistence and Other Related Expenses
It is likely in the normal course of providing Services
to EEI that travel, meals, lodging and related expenses
will be incurred. Such expenses will be accumulated at
cost on an expense account form.
C. Vehicle and Equipment Usage
When vehicles or equipment are used by EMI in the
course of providing services, a standard rate (miles or
hours) by vehicle or equipment class will be applied to
recover all costs of operation of the vehicle or
equipment.
D. Materials
The cost of materials purchased by EMI in connection
with direct services rendered will be determined based
on the total net purchase price, plus applicable stores
overheads and taxes.
E. Administrative and Engineering Overheads
An overhead rate will be applied to total expenses in
items A-D above to compensate for indirect
administrative and engineering overheads.
EXHIBIT B-3(d)
AMENDED AND RESTATED
SERVICE AGREEMENT
BETWEEN
ENTERGY NEW ORLEANS, INC.
AND
ENTERGY ENTERPRISES, INC.
THIS AGREEMENT, made and entered into as of June 22, 1999 by
and between Entergy New Orleans, Inc., formerly New Orleans
Public Service Inc., a corporation organized under the laws of
the State of Louisiana (hereinafter sometimes referred to as
"ENO") and Entergy Enterprises, Inc., formerly Electec, Inc., a
corporation organized under the laws of the State of Louisiana
(hereinafter sometimes referred to as "EEI"), amends, restates
and supercedes in its entirety that certain Service Agreement
made and entered into as of February 23, 1984, between ENO and
EEI (the "Original Service Agreement").
W I T E S S E T H:
WHEREAS, ENO and EEI are both subsidiaries of Entergy
Corporation ("Entergy") and, together with Entergy's other direct
and indirect subsidiaries and Entergy, form the Entergy System;
and
WHEREAS, ENO is organized, staffed and equipped and is
authorized by the Securities and Exchange Commission (the
"Commission"), under Section 13(b) of the Public Utility Holding
Company Act of 1935, as amended (the "Act"), to render to EEI
services as herein provided; and
WHEREAS, in the course of its operations, ENO has acquired
and will acquire certain properties and other resources; and
WHEREAS, subject to the provisions set forth herein, EEI is
authorized by orders of the Commission dated July 8, 1993 (HCAR
No. 25848), June 30, 1995 (HCAR No. 26322), and June 22, 1999
(HCAR No. 27039) to utilize those services, properties and
resources of ENO, as well as those provided by other companies of
the Entergy System, (i) to conduct preliminary development
activities with respect to potential investments by Entergy in
various energy, energy-related and other non-utility businesses,
(ii) to provide various management, administrative and support
services to certain of its associate companies, (iii) to provide
consulting services to certain of its associate companies and to
non-associate companies, and (iv) to provide , directly or
indirectly, through one or more special purpose subsidiary
companies of Entergy or EEI, power project operations and
maintenance services to non-associate companies and to certain of
its associate companies; and
WHEREAS, economies and increased efficiencies benefiting the
Entergy System will result from the performance by ENO of
services for EEI and the provision of certain property and
resources to EEI as herein provided; and
WHEREAS, subject to the terms and conditions herein
described, ENO is willing, upon request by EEI, to render such
services and provide such property and resources to EEI, taking
into consideration the fulfillment of ENO's utility
responsibilities; and
WHEREAS, pursuant to settlement arrangements entered into by
Entergy with certain of its state and local regulators in 1992
and 1993 (collectively, the "Settlement Agreements"), Entergy has
agreed (subject to the receipt of any requisite Commission
authorization) to implement certain special provisions pertaining
to affiliate transactions between Entergy's Regulated Utilities
and Nonregulated Businesses (each as defined in Article 1 of this
Agreement), including, without limitation, (i) a provision
requiring that any services rendered by Entergy's Regulated
Utilities (including ENO) to its Nonregulated Businesses
(including EEI), be priced at cost plus 5%, and (ii) a provision
modifying the methodology, incorporated in the Original Service
Agreement, for the allocation of profits derived by EEI from its
marketing to non-affiliates of intellectual property developed or
otherwise acquired by Entergy's Regulated Utilities (including
ENO); and
WHEREAS, by Order dated June 22, 1999 (HCAR No. 27040), the
Commission granted Entergy's application requesting, among other
things, an exemption from the "at cost" requirements of Section
13(b) of the Act to permit implementation of the provision of the
Settlement Agreement requiring that services rendered by ENO to
EEI be rendered at cost plus 5%, and (to the extent
jurisdictional under the Act) implementation of the profit
sharing methodology required under the Settlement Agreements in
connection with the marketing by EEI of ENO developed or acquired
intellectual property; and
WHEREAS, it is necessary and appropriate to amend the
Original Service Agreement for the purpose, among other things,
of incorporating the above referenced provisions of the
Settlement Agreements.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein, the parties hereto hereby agree as
follows:
1. Definitions
As used hereinafter, the following terms, in addition to
those elsewhere defined in this Agreement, shall have the
following meanings unless the context otherwise requires:
A. "Services" shall mean those services described in Articles
3, 4 and 5 hereof.
B. "Non-Affiliate" means any corporation, company, agency,
government, business, entity or person other than Entergy, a
direct or indirect subsidiary of Entergy, or a person employed by
Entergy or any of such subsidiaries.
C. "Intellectual Property" means any process, program or
technique which is protected by the copyright, patent or
trademark laws, or by virtue of being a trade secret, and which
has been specifically and knowingly incorporated into, exhibited
in, or reduced to a tangible writing, drawing, manual, computer
program, product or similar manifestation or thing.
D. "Regulated Utilities" means Entergy Arkansas, Inc., Entergy
Gulf States, Inc., Entergy Louisiana, Inc., Entergy Mississippi,
Inc., Entergy Services, Inc., System Energy Resources, Inc.,
Entergy Operations Inc., System Fuels, Inc. and ENO and such
other similar subsidiaries as Entergy shall 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 services thereto.
E. "Nonregulated Businesses" means Entergy Power, Inc., Entergy
Enterprises, Inc. and such other subsidiaries and affiliates as
Entergy shall create that are not domestic regulated electric or
combination electric and gas utilities primarily engaged in the
business of selling electric energy or natural gas at retail or
wholesale to affiliates or are not primarily engaged in the
business of providing services or goods to regulated electric or
combination electric and gas utility affiliates.
2. Agreement to Furnish Services
A. Upon its receipt of EEI's work order or other request
therefor, ENO will, if it has or can have available the personnel
and resources needed to fill the work order or request, furnish
to EEI upon the terms and conditions hereinafter set forth such
of the Services, at such times, for such periods and in such
manner as EEI may from time to time request; provided, however,
that the determination of whether ENO has the available personnel
and resources to perform in accordance with the work order or
request will be entirely within the discretion of ENO, and ENO
may at its option elect not to perform any requested Service,
except that, once having agreed to perform pursuant to a work
order or request, ENO cannot withdraw or depart from such
performance without the consent of EEI. In making its
determination as to the availability of personnel and resources,
ENO may consider whether the use thereof by EEI will interfere
with its own use of such personnel and resources.
B. The provision of Services by ENO pursuant to this Agreement
shall in all cases and notwithstanding anything herein contained
to the contrary be subject to any limitations contained in
authorizations, rules or regulations of those governmental
agencies, if any, having jurisdiction over ENO, EEI, or such
provision of Services.
3. Description of Services
The services which may be provided by ENO hereunder are
described as follows:
A. EWGs, FUCOs, Qualifying Facilities, Etc. Advise and assist
EEI regarding possible investment and participation in, and
related activities with respect to, (i) "exempt wholesale
generators" and "foreign utility companies," as such terms are
defined in Section 32 and 33 of the Act, respectively,
(ii)"qualifying facilities," including certain cogeneration
facilities and small power production facilities, as such terms
are defined under the Public Utility Regulatory Policies Act of
1978 and the rules and regulations promulgated thereunder by the
Federal Energy Regulatory Commission and (iii) other non-exempt
electric generating facilities.
B. Development of Other Business Enterprises. Advise and assist
EEI in the investigation of other business enterprises, and the
development of such other business enterprises as are approved by
the Commission or otherwise are permitted under the Act.
C. General Engineering. Perform general engineering work,
including system production and transmission studies; prepare and
analyze apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies and problems,
and fuel supply studies; and advise and assist in connection with
analyses of operations and operating and construction budgets.
D. Design Engineering. Perform detailed design work as
requested by EEI.
E. Accounting and Statistical. Advise and assist EEI in
connection with the installation of accounting systems and
similar problems, requirements of regulatory bodies with respect
to accounting, studies of accounting procedures and practices to
improve efficiency, book entries resulting from unusual financial
transactions, internal audits, employment of independent
auditors, preparation and analyses of financial and operating
reports and other statistical matters relating to EEI or its
customers, preparation of reports to regulatory commissions,
insurance companies and others, standardization of accounting and
statistical forms in the interest of economy, and other
accounting and statistical matters.
F. Budgeting. Advise and assist EEI in matters involving the
preparation and development of capital and operating budgets,
cash and cost forecasts, and budgetary controls.
G. Business Promotion and Public Relations. Advise and assist
EEI in the development of marketing and sales programs, in the
preparation and use of advertising and sales materials, and in
the determination and carrying out of promotional programs.
H. Systems and Procedures. Advise and assist EEI in the
establishment of good operating practices and methods of
procedure, the standardization of forms, the purchase, rental and
use of mechanical and electronic data processing, computing and
communications equipment, in conducting economic research and
planning and in the development of special economic studies.
I. Access to and Use of Resources. Subject to those conditions
with respect to ENO's discretion not to perform any requested
Service set forth in Article 2A, make available to EEI in the
conduct of its business and/or, to the extent necessary or
appropriate as required in the performance of its services to its
customers access to, use of, or rights in all ENO's resources,
including facilities, products, processes, techniques, computer
hardware and software, technical information, training aids and
properties, vehicles, equipment, machines and other property,
whether owned, leased, licensed or otherwise available to, ENO.
J. Training. Assist EEI in providing training to personnel of
EEI or its customers; develop and make available training
procedures, materials and facilities, and provide instructors.
K. General. Make available services in the areas of
construction planning and supervision, design, management
programs, quality assurance, licensing matters, research and
development, and communications systems and procedures.
L. Other Services. Render advice and assistance in connection
with such other matters as EEI may request and ENO may be able to
perform with respect to EEI's business and operations.
4. Provision of Personnel
Where specifically requested by EEI, ENO may loan its
employees to EEI. In that event, such loaned employees will be
under the sole supervision and control of EEI for such period or
periods of time as are necessary to complete the work to be
performed by such employees. Such employees may be withdrawn by
ENO from tasks assigned by EEI only with the consent of EEI. EEI
will be responsible for the actions and activities of such
employees while engaged in the performance of the work to the
same degree as though such persons were employees of EEI.
However, as part of Services, ENO during periods when such
employees are loaned to EEI will continue to provide to, and with
respect to such employees those same payroll, pension, savings,
tax withholding, Social Security, unemployment, bookkeeping and
other personnel support services then being utilized by ENO in
connection with compensating and benefiting such employees.
5. Exchange of Intellectual Property
A. Should EEI in the course of its business develop
Intellectual Property, it will make such Intellectual Property
available for utilization by ENO without charge (except the
actual expenses incurred by EEI in connection with making such
new Intellectual Property available to ENO); provided, however,
that such availability shall be dependent upon and subject to any
contractual commitments of EEI to Non-Affiliates, applicable laws
and regulations, and the legal rights and entitlements of others.
B. As part of the Services, ENO will make available to EEI for
utilization by it all Intellectual Property heretofore or
hereafter developed or obtained by ENO without charge (except for
the actual expenses incurred by ENO in making the same available
to EEI, and except as otherwise provided in Article 8 below);
provided, however, that such availability shall be dependent upon
and subject to any contractual commitments of ENO to Non-
Affiliates, applicable laws and regulations, and the legal rights
and entitlements of others.
6. Compensation of ENO
As compensation for Services actually requested by EEI and
rendered to it by ENO, EEI hereby agrees to pay to ENO (except as
described in Article 5B) an amount equal to (a) all costs
properly chargeable or allocable thereto, as controlled through a
work order procedure, computed in accordance with applicable
rules and regulations (including, but not limited to, Rules 90
and 91) under the Act and appropriate accounting standards, plus
(b) a charge of five percent (5%) of such costs. Such costs
shall be determined as outlined on Exhibit A attached hereto and
incorporated herein by reference.
7. Work Orders
The Services will be performed in accordance with work
orders or requests issued or made by or on behalf of EEI and
accepted by ENO, and all Services will be assigned an applicable
work order number to enable specific work to be properly
allocated by project or other appropriate basis. Work orders
shall be as specific as practicable in defining the Services
requested to be performed and will set forth the scope and
duration of the Services to be performed and the specific
employees to be loaned to EEI pursuant to the work order. EEI
shall have the right from time to time to amend, alter or rescind
any work order, provided that (i) any such amendment or
alteration which results in a material change in the scope of the
work to be performed or equipment to be provided is agreed to by
ENO; (ii) the costs for the Services covered by the work order
will include any expense incurred by ENO as a direct result of
such amendment, alteration or rescission of the work order; and
(iii) no amendment, alteration or rescission of a work order will
release EEI from liability for all such costs already incurred or
contracted for by ENO pursuant to the work order, regardless of
whether the work associated with such costs is discontinued by
such amendment, alteration or rescission.
8. Disposition of Intellectual Property
In the event EEI with the express written consent of ENO
markets to Non-Affiliates Intellectual Property heretofore or
hereafter developed or otherwise acquired by ENO for its own use,
and such Intellectual Property is actually used by ENO, all
profits derived by EEI from such marketing transactions shall be
divided equally by ENO and EEI, after deducting all of EEI's
incremental costs associated with making the Intellectual
Property available for sale, including the cost of marketing such
Intellectual Property; provided, however, that in the event any
Intellectual Property developed or otherwise acquired by ENO for
its own use is not actually so used, and is subsequently marketed
by EEI to Non-Affiliates, EEI shall fully reimburse ENO for all
of its costs incurred to develop or otherwise acquire such
Intellectual Property before any profits derived from its
marketing of such Intellectual Property shall be so divided.
9. Limitation of Liability and Indemnification
In performing the Services hereunder (except to the extent
such Services are being performed by employees loaned to and
under the supervision of EEI), ENO will exercise due care to
assure that the Services are performed in a workmanlike manner,
meet the standards and specifications set forth in the applicable
work order or request with respect to such Services, and comply
with applicable standards of law and regulation. However,
failure to meet these obligations shall in no event subject ENO
to any claims or liabilities other than to reperform the work and
be compensated in accordance with this Agreement for such
reperformance such that it fully complies with the work order,
request or standard, as the case may be. ENO makes no other
warranty with respect to its performance of the Services, and EEI
agrees to accept such Services without further warranty of any
nature. EEI shall and does hereby indemnify and agree to save
harmless and defend ENO from liabilities, taxes, losses,
obligations, claims, damages, penalties, causes of action, suits,
costs and expenses or judgments of any nature, on account of, or
resulting from: (i) injuries to or the death of any person; (ii)
damage to or loss of any property; (iii) any alleged or actual
violation of law, court order, or governmental agency rule or
regulation committed by or existing with respect to EEI or its
employees, agents or subcontractors; (iv) any alleged or actual
breaches of contract by EEI; (v) any claims by or on account of
any employee, agent or subcontractor of EEI; (vi) services or
labor performed, labor force, materials, provisions or supplies
furnished or allegedly contracted for by or on behalf of EEI, its
employees, agents or subcontractors; and/or (vii) other damages;
which, in all cases, are attributable to or arise out of the
performance and prosecution of any project or work performed by
or on behalf of EEI, whether or not the same results or allegedly
results from the claimed or actual negligence or breach of
warranty of, or breach of contract or willful conduct by, EEI or
of its employees, agents or contractors or its or their
subcontractors or any combination thereof.
10. Miscellaneous
This Agreement shall be binding upon the successors and
assigns of the parties hereto, provided that ENO shall not be
entitled to assign or subcontract out any of its obligations
under this Agreement or under any purchase order or work order
issued hereunder without the prior written approval of EEI. This
Agreement may not be modified or amended in any respect except in
writing executed by the parties hereto. This Agreement shall be
construed and enforced under and in accordance with the laws of
the State of Louisiana. This Agreement may be executed in
counterparts, each one of which when fully executed shall be
deemed to have the same dignity, force and effect as an original.
No provision of this Agreement shall be deemed waived nor breach
of this Agreement consented to unless such waiver or consent is
set forth in writing and executed by the party hereto making such
waiver or consent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their respective corporate names by
their respective Presidents or one of their respective Vice
Presidents as of the day and year first above written.
ENTERGY NEW ORLEANS, INC.
By: /s/ C. John Wilder
C. John Wilder
Executive Vice President and
Chief Financial Officer
ENTERGY ENTERPRISES, INC.
By: /s/ Steven C. McNeal
Steven C. McNeal
Vice President and Treasurer
<PAGE>
EXHIBIT A
ENTERGY ENTERPRISES, INC.
Accounting/Billing Procedures by Entergy New Orleans, Inc.
I. Introduction
This procedure establishes the guidelines for determining the
cost of Services for, and billings by, Entergy New Orleans, Inc.
(ENO) to Entergy Enterprises, Inc. (EEI). These billings will
include direct and indirect costs normally incurred by ENO in its
operations, plus a charge of five percent (5%) of the total of
such costs. Revenues and costs related to these billings will be
recorded in the accounting records of ENO in accordance with
generally accepted accounting principles and FERC guidelines.
The procedures to be employed in determining costs for Services
performed for EEI, and rendering billing for such Services, will
closely follow the procedures used to bill other System Companies
for work performed.
II. Method of Billings
Each Service provided by ENO is accounted for using a job order
system. Direct costs charged to each job will be made using the
current accounting system's source documents (time reports,
expense accounts, journal entries, vendor invoices). Charges for
Services (including the cost of Services plus the 5% adder) will
be billed on a monthly basis. All amounts will be payable in
accordance with agreed upon procedures between ENO and EEI.
III. Calculation of Cost
The cost of Services provided to EEI will be calculated, based on
individual projects or jobs, according to the following
guidelines:
A. Labor
Labor costs billed for Services provided include
salaries and related direct labor costs for employees.
1. Direct Labor
Direct labor costs will be based on actual
gross wage rates of employees assigned to
perform services multiplied by the actual
number of hours actually worked. These direct
labor hours will be recorded on time reports.
EXHIBIT A
2. Indirect Labor Off-Duty Wages and Benefits
A labor overhead rate (calculated annually)
will be applied to each direct labor hour for
the following:
Vacations
Holidays
Sick
Off-duty time
Pensions
Savings plan
Insurance
Salary related taxes (FICA, FUTA, SUTA,
etc)
All other employee benefits and salary
taxes
B. Employee Travel, Subsistence and Other Related Expenses
It is likely in the normal course of providing Services
to EEI that travel, meals, lodging and related expenses
will be incurred. Such expenses will be accumulated at
cost on an expense account form.
C. Vehicle and Equipment Usage
When vehicles or equipment are used by ENO in the
course of providing services, a standard rate (miles or
hours) by vehicle or equipment class will be applied to
recover all costs of operation of the vehicle or
equipment.
D. Materials
The cost of materials purchased by ENO in connection
with direct services rendered will be determined based
on the total net purchase price plus applicable stores
overheads and taxes.
E. Administrative and Engineering Overheads
An overhead rate will be applied to total expenses in
items A-D above to compensate for indirect
administrative and engineering overheads.
EXHIBIT B-4(a)
SERVICE AGREEMENT
BETWEEN
ENTERGY GULF STATES, INC.
AND
ENTERGY ENTERPRISES, INC.
THIS AGREEMENT, made and entered into as of June 22, 1999
by and between Entergy Gulf States, Inc., , a corporation
organized under the laws of the State of Texas (hereinafter
sometimes referred to as "EGS") and Entergy Enterprises, Inc.,
formerly Electec, Inc., a corporation organized under the laws
of the State of Louisiana (hereinafter sometimes referred to as
"EEI").
W I T E S S E T H:
WHEREAS, EGS and EEI are both subsidiaries of Entergy
Corporation ("Entergy") and, together with Entergy's other
direct and indirect subsidiaries and Entergy, form the Entergy
System; and
WHEREAS, EGS is organized, staffed and equipped and is
authorized by the Securities and Exchange Commission (the
"Commission") under Section 13(b) of the Public Utility Holding
Company Act of 1935, as amended (the "Act"), to render to EEI
services as herein provided; and
WHEREAS, in the course of its operations, EGS has acquired
and will acquire certain properties and other resources; and
WHEREAS, subject to the provisions set forth herein, EEI
is authorized by orders of the Commission dated July 8, 1993
(HCAR No. 25848), June 30, 1995 (HCAR No. 26322), June 22, 1999
(HCAR No. 27039) and June 22, 1999 (HCAR No. 27040) (the "1999
Order") to utilize those services, properties and resources of
EGS, as well as those provided by other companies of the
Entergy System, (i) to conduct preliminary development
activities with respect to potential investments by Entergy in
various energy, energy-related and other non-utility
businesses, (ii) to provide various management, administrative
and support services to certain of its associate companies,
(iii) to provide consulting services to certain of its
associate companies and to non-associate companies, and (iv) to
provide , directly or indirectly, through one or more special
purpose subsidiary companies of Entergy or EEI, power project
operations and maintenance services to non-associate companies
and to certain of its associate companies; and
WHEREAS, economies and increased efficiencies benefiting
the Entergy System will result from the performance by EGS of
services for EGS and the provision of certain property and
resources to EGS as herein provided; and
WHEREAS, subject to the terms and conditions herein
described, EGS is willing, upon request by EEI, to render such
services and provide such property and resources to EEI, taking
into consideration the fulfillment of EGS's utility
responsibilities; and
WHEREAS, pursuant to settlement arrangements entered into
by Entergy with certain of its state and local regulators in
1992 and 1993 (collectively, the "Settlement Agreements"),
Entergy has agreed (subject to the receipt of any requisite
Commission authorization) to implement certain special
provisions pertaining to affiliate transactions between
Entergy's Regulated Utilities and Nonregulated Businesses (each
as defined in Article 1 of this Agreement), including, without
limitation, (i) a provision requiring that any services
rendered by Entergy's Regulated Utilities (including EGS) to
Nonregulated Businesses (including EEI), be priced at cost plus
5%, and (ii) a provision incorporating a methodology for the
allocation of profits derived by EEI from its marketing to non-
affiliates of intellectual property developed or otherwise
acquired by Entergy's Regulated Utilities (including EGS); and
WHEREAS, pursuant to the 1999 Order, the Commission
granted Entergy application requesting, among other things, an
exemption from the "at cost" requirements of Section 13(b) of
the Act to permit implementation of the provision of the
Settlement Agreement requiring that services rendered by EGS to
EEI be rendered at cost plus 5%, and (to the extent
jurisdictional under the Act) implementation of the profit
sharing methodology required under the Settlement Agreements in
connection with the marketing by EEI of EGS developed or
acquired intellectual property.
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements herein, the parties hereto hereby agree
as follows:
1. Definitions
As used hereinafter, the following terms, in addition to
those elsewhere defined in this Agreement, shall have the
following meanings unless the context otherwise requires:
A. "Services" shall mean those services described in Articles
3, 4 and 5 hereof.
B. "Non-Affiliate" means any corporation, company, agency,
government, business, entity or person other than Entergy, a
direct or indirect subsidiary of Entergy, or a person employed
by Entergy or any of such subsidiaries.
C. "Intellectual Property" means any process, program or
technique which is protected by the copyright, patent or
trademark laws, or by virtue of being a trade secret, and which
has been specifically and knowingly incorporated into,
exhibited in, or reduced to a tangible writing, drawing,
manual, computer program, product or similar manifestation or
thing.
D. "Regulated Utilities" means Entergy Arkansas, Inc.,
Entergy Louisiana, Inc., Entergy New Orleans, Inc., Entergy
Mississippi, Inc., Entergy Services, Inc., System Energy
Resources, Inc., Entergy Operations Inc., System Fuels, Inc.
and EGS and such other similar subsidiaries as Entergy shall
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 services thereto.
E. "Nonregulated Businesses" means Entergy Power,
Inc., Entergy Enterprises, Inc. and such other
subsidiaries and affiliates as Entergy shall create that
are not domestic regulated electric or combination
electric and gas utilities primarily engaged in the
business of selling electric energy or natural gas at
retail or wholesale to affiliates or are not primarily
engaged in the business of providing services or goods to
regulated electric or combination electric and gas utility
affiliates.
2. Agreement to Furnish Services
A. Upon its receipt of EEI's work order or other request
therefor, EGS will, if it has or can have available the
personnel and resources needed to fill the work order or
request, furnish to EEI upon the terms and conditions
hereinafter set forth such of the Services, at such times, for
such periods and in such manner as EEI may from. time to time
request; provided, however, that the determination of whether
EGS has the available personnel and resources to perform in
accordance with the work order or request will be entirely
within the discretion of EGS, and EGS may at its option elect
not to perform any requested Service, except that, once having
agreed to perform pursuant to a work order or request, EGS
cannot withdraw or depart from such performance without the
consent of EEI. In making its determination as to the
availability of personnel and resources, EGS may consider
whether the use thereof by EEI will interfere with its own use
of such personnel and resources.
B. The provision of Services by EGS pursuant to this
Agreement shall in all cases and notwithstanding anything
herein contained to the contrary be subject to any limitations
contained in authorizations, rules or regulations of those
governmental agencies, if any, having jurisdiction over EGS,
EEI, or such provision of Services.
3. Description of Services
The services which may be provided by EGS hereunder are
described as follows:
A. EWGs, FUCOs, Qualifying Facilities, Etc. Advise and assist
EEI regarding possible investment and participation in, and
related activities with respect to, (i) "exempt wholesale
generators" and "foreign utility companies," as such terms are
defined in Section 32 and 33, respectively, of the Act,
(ii)"qualifying facilities," including certain cogeneration
facilities and small power production facilities, as such terms
are defined under the Public Utility Regulatory Policies Act of
1978 and the rules and regulations promulgated thereunder by
the Federal Energy Regulatory Commission and (iii) other non-
exempt electric generating facilities.
B. Development of Other Business Enterprises. Advise and
assist EEI in the investigation of other business enterprises,
and the development of such other business enterprises as are
approved by the Commission or otherwise are permitted under the
Act.
C. General Engineering. Perform general engineering work,
including system production and transmission studies; prepare
and analyze apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies and
problems, and fuel supply studies; and advise and assist in
connection with analyses of operations and operating and
construction budgets.
D. Design Engineering. Perform detailed design work as
requested by EEI.
E. Accounting and Statistical. Advise and assist EEI in
connection with the installation of accounting systems and
similar problems, requirements of regulatory bodies with
respect to accounting, studies of accounting procedures and
practices to improve efficiency, book entries resulting from
unusual financial transactions, internal audits, employment of
independent auditors, preparation and analyses of financial and
operating reports and other statistical matters relating to EEI
or its customers, preparation of reports to regulatory
commissions, insurance companies and others, standardization of
accounting and statistical forms in the interest of economy,
and other accounting and statistical matters.
F. Budgeting. Advise and assist EEI in matters involving the
preparation and development of capital and operating budgets,
cash and cost forecasts, and budgetary controls.
G. Business Promotion and Public Relations. Advise and assist
EEI in the development of marketing and sales programs, in the
preparation and use of advertising and sales materials, and in
the determination and carrying out of promotional programs.
H. Systems and Procedures. Advise and assist EEI in the
establishment of good operating practices and methods of
procedure, the standardization of forms, the purchase, rental
and use of mechanical and electronic data processing, computing
and communications equipment, in conducting economic research
and planning and in the development of special economic
studies.
I. Access to and Use of Resources. Subject to those
conditions with respect to EGS's discretion not to perform any
requested Service set forth in Article 2A, make available to
EEI in the conduct of its business and/or, to the extent
necessary or appropriate as required in the performance of its
services to its customers access to, use of, or rights in all
EGS's resources, including facilities, products, processes,
techniques, computer hardware and software, technical
information, training aids and properties, vehicles, equipment,
machines and other property, whether owned, leased, licensed or
otherwise available to, EGS.
J. Training. Assist EEI in providing training to personnel of
EEI or its customers; develop and make available training
procedures, materials and facilities, and provide instructors.
K. General. Make available services in the areas of
construction planning and supervision, design, management
programs, quality assurance, licensing matters, research and
development, and communications systems and procedures.
L. Other Services. Render advice and assistance in connection
with such other matters as EEI may request and EGS may be able
to perform with respect to EEI's business and operations.
4. Provision of Personnel
Where specifically requested by EEI, EGS may loan its
employees to EEI. In that event, such loaned employees will be
under the sole supervision and control of EEI for such period
or periods of time as are necessary to complete the work to be
performed by such employees. Such employees may be withdrawn
by EGS from tasks assigned by EEI only with the consent of EEI.
EEI will be responsible for the actions and activities of such
employees while engaged in the performance of the work to the
same degree as though such persons were employees of EEI.
However, as part of Services, EGS during periods when such
employees are loaned to EEI will continue to provide to, and
with respect to such employees those same payroll, pension,
savings, tax withholding, Social Security, unemployment,
bookkeeping and other personnel support services then being
utilized by EGS in connection with compensating and benefiting
such employees.
5. Exchange of Intellectual Property
A. Should EEI in the course of its business develop
Intellectual Property, it will make such Intellectual Property
available for utilization by EGS without charge (except the
actual expenses incurred by EEI in connection with making such
new Intellectual Property available to EGS);provided, however,
that such availability shall be dependent upon and subject to
any contractual commitments of EEI to Non-Affiliates,
applicable laws and regulations, and the legal rights and
entitlements of others.
B. As part of the Services, EGS will make available to EEI
for utilization by it all Intellectual Property heretofore or
hereafter developed or obtained by EGS without charge (except
for the actual expenses incurred by EGS in making the same
available to EEI, and except as otherwise provided in Article 8
below); provided, however, that such availability shall be
dependent upon and subject to any contractual commitments of
EGS to Non-Affiliates, applicable laws and regulations, and the
legal rights and entitlements of others.
6. Compensation of EGS
As compensation for Services actually requested by EEI and
rendered to it by EGS, EEI hereby agrees to pay to EGS (except
as described in Article 5B) an amount equal to (a) all costs
properly chargeable or allocable thereto, as controlled through
a work order procedure, computed in accordance with applicable
rules and regulations (including, but not limited to, Rules 90
and 91) under the Act and appropriate accounting standards,
plus (b) a charge of five percent (5%) of such costs. Such
costs shall be determined as outlined on Exhibit A attached
hereto and incorporated herein by reference.
7. Work Orders
The Services will be performed in accordance with work
orders or requests issued or made by or on behalf of EEI and
accepted by EGS, and all Services will be assigned an
applicable work order number to enable specific work to be
properly allocated by project or other appropriate basis. Work
orders shall be as specific as practicable in defining the
Services requested to be performed and will set forth the scope
and duration of the Services to be performed and the specific
employees to be loaned to EEI pursuant to the work order. EEI
shall have the right from time to time to amend, alter or
rescind any work order, provided that (i) any such amendment or
alteration which results in a material change in the scope of
the work to be performed or equipment to be provided is agreed
to by EGS; (ii) the costs for the Services covered by the work
order will include any expense incurred by EGS as a direct
result of such amendment, alteration or rescission of the work
order; and (iii) no amendment, alteration or rescission of a
work order will release EEI from liability for all such costs
already incurred or contracted for by EGS pursuant to the work
order, regardless of whether the work associated with such
costs is discontinued by such amendment, alteration or
rescission.
8. Disposition of Intellectual Property
In the event EEI with the express written consent of EGS
markets to Non-Affiliates Intellectual Property heretofore or
hereafter developed or otherwise acquired by EGS for its own
use, and such Intellectual Property is actually used by EGS,
all profits derived by EEI from such marketing transactions
shall be divided equally by EGS and EEI, after deducting all of
EEI's incremental costs associated with making the Intellectual
Property available for sale, including the cost of marketing
such Intellectual Property; provided, however, that in the
event any Intellectual Property developed or otherwise acquired
by EGS for its own use is not actually so used, and is
subsequently marketed by EEI to Non-Affiliates, EEI shall fully
reimburse EGS for all of its costs incurred to develop or
otherwise acquire such Intellectual Property before any profits
derived from its marketing of such Intellectual Property shall
be so divided.
9. Limitation of Liability and Indemnification
In performing the Services hereunder (except to the extent
such Services are being performed by employees loaned to and
under the supervision of EEI), EGS will exercise due care to
assure that the Services are performed in a workmanlike manner,
meet the standards and specifications set forth in the
applicable work order or request with respect to such Services,
and comply with applicable standards of law and regulation.
However, failure to meet these obligations shall in no event
subject EGS to any claims or liabilities other than to
reperform the work and be compensated in accordance with this
Agreement for such reperformance such that it fully complies
with the work order, request or standard, as the case may be.
EGS makes no other warranty with respect to its performance of
the Services, and EEI agrees to accept such Services without
further warranty of any nature. EEI shall and does hereby
indemnify and agree to save harmless and defend EGS from
liabilities, taxes, losses, obligations, claims, damages,
penalties, causes of action, suits, costs and expenses or
judgments of any nature, on account of, or resulting from: (i)
injuries to or the death of any person; (ii) damage to or loss
of any property; (iii) any alleged or actual violation of law,
court order, or governmental agency rule or regulation
committed by or existing with respect to EEI or its employees,
agents or subcontractors; (iv) any alleged or actual breaches
of contract by EEI; (v) any claims by or on account of any
employee, agent or subcontractor of EEI; (vi) services or labor
performed, labor force, materials, provisions or supplies
furnished or allegedly contracted for by or on behalf of EEI,
its employees, agents or subcontractors; and/or (vii) other
damages; which, in all cases, are attributable to or arise out
of the performance and prosecution of any project or work
performed by or on behalf of EEI, whether or not the same
results or allegedly results from the claimed or actual
negligence or breach of warranty of, or breach of contract or
willful conduct by, EEI or of its employees, agents or
contractors or its or their subcontractors or any combination
thereof.
10. Miscellaneous
This Agreement shall be binding upon the successors and
assigns of the parties hereto, provided that EGS shall not be
entitled to assign or subcontract out any of its obligations
under this Agreement or under any purchase order or work order
issued hereunder without the prior written approval of EEI.
This Agreement may not be modified or amended in any respect
except in writing executed by the parties hereto. This
Agreement shall be construed and enforced under and in
accordance with the laws of the State of Louisiana. This
Agreement may be executed in counterparts, each one of which
when fully executed shall be deemed to have the same dignity,
force and effect as an original. No provision of this
Agreement shall be deemed waived nor breach of this Agreement
consented to unless such waiver or consent is set forth in
writing and executed by the party hereto making such waiver or
consent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed in their respective corporate
names by their respective Presidents or one of their respective
Vice Presidents as of the day and year first above written.
ENTERGY GULF STATES, INC.
By: /s/ C. John Wilder
C. John Wilder
Executive Vice President and
Chief Financial Officer
ENTERGY ENTERPRISES, INC.
By: /s/ Steven C. McNeal
Steven C. McNeal
Vice President and Treasurer
<PAGE>
EXHIBIT A
ENTERGY ENTERPRISES, INC.
Accounting/Billing Procedures by Entergy Gulf States Inc.
I. Introduction
This procedure establishes the guidelines for determining the
cost of Services for, and billings by, Entergy Gulf States,
Inc. (EGS) to Entergy Enterprises, Inc. (EEI). These billings
will include direct and indirect costs normally incurred by EGS
in its operations, plus a charge of five percent (5%) of the
total of such costs. Revenues and costs related to these
billings will be recorded in the accounting records of EGS in
accordance with generally accepted accounting principles and
FERC guidelines.
The procedures to be employed in determining costs for Services
performed for EEI, and rendering billing for such Services,
will closely follow the procedures used to bill other System
Companies for work performed.
II. Method of Billings
Each Service provided by EGS is accounted for using a job order
system. Direct costs charged to each job will be made using
the current accounting system's source documents (time reports,
expense accounts, journal entries, vendor invoices). Charges
for Services (including the cost of Services plus the 5% adder)
will be billed on a monthly basis. All amounts will be payable
in accordance with agreed upon procedures between EGS and EEI.
III. Calculation of Cost
The cost of Services provided to EEI will be calculated, based
on individual projects or jobs, according to the following
guidelines:
A. Labor
Labor costs billed for Services provided include
salaries and related direct labor costs for
employees.
1. Direct Labor
Direct labor costs will be based on actual
gross wage rates of employees assigned to
perform services multiplied by the actual
number of hours actually worked. These
direct labor hours will be recorded on time
reports.
2. Indirect Labor Off-Duty Wages and Benefits
A labor overhead rate (calculated annually)
will be applied to each direct labor hour
for the following:
Vacations
Holidays
Sick
Off-duty time
Pensions
Savings plan
Insurance
Salary related taxes (FICA, FUTA,
SUTA, etc)
All other employee benefits and salary
taxes
B. Employee Travel, Subsistence and Other Related
Expenses
It is likely in the normal course of providing
Services to EEI that travel, meals, lodging and
related expenses will be incurred. Such expenses will
be accumulated at cost on an expense account form.
C. Vehicle and Equipment Usage
When vehicles or equipment are used by EGS in the
course of providing services, a standard rate (miles
or hours) by vehicle or equipment class will be
applied to recover all costs of operation of the
vehicle or equipment.
D. Materials
The cost of materials purchased by EGS in connection
with direct services rendered will be determined
based on the total net purchase price of such
materials, plus applicable stores overheads and
taxes.
E. Administrative and Engineering Overheads
An overhead rate will be applied to total expenses in
items A-D above to compensate for indirect
administrative and engineering overheads.
