File No. 70-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________
FORM U-1
APPLICATION/DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
_________________________________________________________
Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
Entergy Arkansas, Inc.
425 West Capitol Avenue, 40th Floor
Little Rock, Arkansas 72201
Entergy Gulf States, Inc.
350 Pine Street
Beaumont, Texas 77701
Entergy Louisiana, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
Entergy Mississippi, Inc.
308 East Pearl Street
Jackson, Mississippi 39201
(Names of companies filing this statement and addresses of
principal executive offices)
_____________________________________________________
Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
(Name of top registered holding company parent)
______________________________________________________
Frank F. Gallaher
Senior Vice President
Transmission and Energy Management
L-ENT - 23F
Entergy Services, Inc.
639 Loyola Avenue
New Orleans, LA 70113
______________________________________________________
(Name and address of agent for service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application or Declaration to:
Laurence M. Hamric, Esq. William T. Baker, Jr.
Associate General Counsel Thelen Reid & Priest LLP
Entergy Services, Inc. 40 West 57th Street, 25th Floor
639 Loyola Avenue New York, New York 10019
New Orleans, Louisiana 70113
<PAGE>
Item 1. Description of Proposed Transaction.
1.1. Background. Entergy Corporation ("Entergy"), a
registered holding company under the Public Utility Holding
Company Act of 1935, as amended (the "Act"), and four of its
wholly owned public utility subsidiaries, Entergy Arkansas, Inc.
("Entergy Arkansas"), Entergy Gulf States, Inc. ("Entergy Gulf
States"), Entergy Louisiana, Inc. ("Entergy Louisiana"), and
Entergy Mississippi, Inc. ("Entergy Mississippi") (collectively,
the "Entergy Operating Companies"),<FN1> request authorization to
sell certain utility assets without further Commission approval.
In 1994, the Commission amended Rule 44(b) under the Act.<FN2>
This amendment was part of a general attempt to modernize the
rules under the Act and, in particular, to reduce undue
regulatory burdens on companies in a registered holding company
system by eliminating the need for such companies to seek prior
Commission approval to engage in specified kinds of routine
business transactions. Rule 44, adopted under section 12(d) of
the Act, governs sales of utility securities and utility assets
by a registered holding company or any subsidiary to any person.
Prior to its amendment, Rule 44(b) provided an exemption from the
pre-approval requirements of Section 12(d) for any sales of
securities of any public utility company or of utility assets if
the total consideration to be received was in excess of $100,000,
and the acquisition by the buyer was not subject to Commission
approval. Rule 44(b), as amended, provides an exemption for all
sales of utility securities or utility assets up to an annual
aggregate amount of $5 million for all system operating
subsidiaries if the acquisition thereof does not require
Commission approval.
The electric utility industry is in transition to a more
competitive environment. This is particularly true in Texas,
which has already adopted measures requiring restructuring of
electric utilities. In response to requests of customers, the
Entergy Operating Companies have been willing to transfer
substations and transmission and distribution lines or other
utility assets dedicated to serving a particular customer to the
customer. In addition, all of the Entergy Operating Companies
engage in routine transfers of poles to joint users.
In this new environment, it is mandatory that the Entergy
Operating Companies be able to transfer assets quickly. Since
the Entergy Operating Companies are comprised of four operating
companies, the $5 million system-wide exemption could be
exhausted with relatively few transactions. For example, Entergy
Gulf States, Inc. has entered into an agreement to sell a
substation and related facilities to Chevron Chemical Company,
LLC. These facilities consist primarily of a step-down
transformer located adjacent to a Chevron Chemical plant located
in Orange, Texas, and are used exclusively by Chevron Chemical in
its operations. The sales price is approximately $4.7 million.
Although this specific transaction could close on the basis of
the Rule 44(b) exemption, it would essentially foreclose the use
of Rule 44(b) by the Entergy Operating Companies for the
remainder of 2000.
Accordingly, it is requested that, without further
Commission approval, the Entergy Operating Companies be permitted
to transfer utility assets to both customers and non-customers
for the period ending December 31, 2004 in transactions in which
the acquisition thereof does not require approval of the
Commission. The consideration for the transfers will not exceed
$12,000,000 per Entergy Operating Company per calendar year, or
$40,000,000 in the aggregate in any calendar year during the
authorization period for all Entergy Operating Companies. The
consideration for such asset transfers will, in no case, be less
than the net book value of the assets being sold. In the case of
any lease of utility assets, the specified lease payments over
the term of the lease will be valued using a discount factor
equal to the selling company's allowed rate of return at the time
of entering into the lease and counted against the foregoing
limitations in the initial year of the lease.
1.2 Application of Proceeds. The proceeds from any sale of
utility assets will be added to the general funds of the selling
company and used to pay the general obligations of such company,
including capital expenditures, and for other corporate purposes.
1.3 Certificates of Notification. It is proposed that in
lieu of reporting sales of utility assets by filing Certificates
of Notification under Rule 24, sales by Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, and Entergy Mississippi will be
reported in the Annual Report on Form U5S filed with the
Commission by Entergy.
Item 2. Fees, Commissions and Expenses.
The estimated fees, commissions or other expenses to be paid
or incurred, directly or indirectly, by the applicants in
connection with this Application or Declaration shall not exceed
$5,000 in the aggregate.
Item 3. Applicable Statutory Provisions.
3.1 Entergy, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, and Entergy Mississippi designate Section 12(d) of the
Act and Rule 44 thereunder as applicable to the sale or lease of
utility assets to non-affiliates.<FN3>
3.2 Rule 54 Analysis. The transactions proposed herein are
also subject to Section 32(h)(4) of the Act and Rule 54
thereunder. Rule 54 provides that, in determining whether to
approve any transaction that does not relate to an "exempt
wholesale generator" ("EWG") or "foreign utility company"
("FUCO"), the Commission shall not consider the effect of the
capitalization or earnings of any subsidiary which is an EWG or
FUCO upon the registered holding company system if paragraphs
(a), (b) and (c) of Rule 53 are satisfied.
Rule 53(a)(1) limits a registered holding company's
financing of investments in EWGs if such holding company's
"aggregate investment" in EWGs and FUCOs exceeds 50% of its
"consolidated retained earnings." Entergy's "aggregate
investment" (as defined in Rule 53(a)(1)(i)) in all EWGs and
FUCOs is currently equal to 41.2% of Entergy's "consolidated
retained earnings" (as defined in Rule 53(a)(1)(ii)) for the four
quarters ended December 31, 1999. In addition, Entergy has
complied and will comply with the record-keeping requirements of
Rule 53(a)(2), the limitation under Rule 53(a)(3) on the use of
the Entergy system's domestic public-utility company personnel to
render services to EWGs and FUCOs, and the requirements of Rule
53(a)(4) concerning the submission of copies of certain filings
under the Act to retail regulatory commissions. At the present
time, therefore, Entergy satisfies all of the requirements of
Rule 53(a). Further, none of the circumstances described in Rule
53(b) has occurred or is continuing. Rule 53(c) by its terms is
inapplicable.
Item 4. Regulatory Approvals.
In addition to the jurisdiction of the Commission over sales
of utility assets by the Entergy Operating Companies, the Federal
Energy Regulatory Commission has jurisdiction over any sale of
assets used for the transmission of electric energy in interstate
commerce valued in excess of $50,000. Further, individual sales
of utility assets by the Entergy Operating Companies may require
approval by the public service commissions of Louisiana,
Arkansas, Mississippi, or Texas, as the case may be, as follows:
Louisiana: The Louisiana Public Service Commission does not
exercise jurisdiction over isolated transactions such as the sale
of substation facilities to a customer of a utility. However,
the regulatory consequences of any such sale would be subject to
review during a subsequent base rate proceeding.
Arkansas: The Arkansas Public Service Commission has
jurisdiction over any sale, lease or other disposition of the
whole a or any part of any public utility plant or property
constituting an operating unit or system of a public utility
pursuant to 23-3-102(a)(3) of the Arkansas Code Annotated and
Rule 6.01 of such commission's rules of practice and procedure.
Mississippi: Under 77-3-23 and 25 of the Mississippi
Code Annotated, the Mississippi Public Service Commission has
jurisdiction over the sale of a "substantial part" of a public
utility's property necessary or useful in the performance of the
utility's duties to the public. Isolated sales of relatively
small amounts of utility property to a non-affiliate do not
require specific commission approval, but nonetheless are subject
to review during rate proceedings.
Texas: Section 14.101 of the Public Utility Regulatory Act
and the regulations of the Public Utility Commission of Texas
provide that, unless a public utility reports the transaction to
the commission while pending or within 30 days after closing, it
may not sell or lease a plant as an operating unit or system for
a total consideration of more than $100,000. The commission will
then determine whether such transaction is in the public
interest, and, if determined not to be in the public interest,
will take the effect of the transaction into consideration in
ratemaking proceedings.
Item 5. Procedure.
It is requested, pursuant to Rule 23(c) of the Rules and
Regulations of the Commission, that the Commission's order
granting this Application or Declaration on Form U-1 be issued on
or before May 31, 2000. The applicants waive any recommended
decision by a hearing officer or by any other responsible officer
of the Commission and waive the 30-day waiting period between the
issuance of the Commission's order and the date it is to become
effective, since it is desired that the Commission's order, when
issued, become effective forthwith.
The applicants consent to the Division of Investment
Management assisting in the preparation of the Commission's
decision and/or order in this matter, unless such Division
opposes the matters contained herein.
Item 6. Exhibits and Financial Statements.
The following exhibits and financial statements are filed as part
of this statement:
A. Exhibits.
Exhibit A. None.
Exhibit B. None.
Exhibit C. None.
Exhibit D. None.
Exhibit E. None.
Exhibit F. Opinion of Counsel
Exhibit G. None.
Exhibit H. Form of Notice
B. Financial Statements.
1.1 Balance Sheet of Entergy Corporation and
consolidated subsidiaries, as of December 31, 1999
(incorporated by reference to the Annual Report on
Form 10-K of Entergy for the year ended December
31, 1999) (File No. 1-11299).
1.2 Statement of Income of Entergy Corporation and
consolidated subsidiaries, as of December 31, 1999
(incorporated by reference to the Annual Report on
Form 10-K of Entergy for the year ended December 31,
1999) (File No. 1-11299).
1.3 Balance Sheet of Entergy Corporation, as of December 31,
1999 (incorporated by reference to the Annual Report on
Form 10-K of Entergy for the year ended December 31,
1999) (File No. 1-11299)
1.4 Statement of Income of Entergy Corporation, as of
December 31, 1999 (incorporated by reference to the
Annual Report on Form 10-K of Entergy for the year
ended December 31, 1999) (File No. 1-11299).
1.5 Balance Sheet of Entergy Arkansas, Inc., as of
December 31, 1999 (incorporated by reference to the
Annual Report on Form 10-K of Entergy for the year
ended December 31, 1999) (File No. 1-11299).
1.6 Statement of Income of Entergy Arkansas, Inc., as of
December 31, 1999 (incorporated by reference to the
Annual Report on Form 10-K of Entergy for the year
ended December 31, 1999) (File No. 1-11299).
1.7 Balance Sheet of Entergy Gulf States, Inc., as of
December 31, 1999 (incorporated by reference to the
Annual Report on Form 10-K of Entergy for the year
ended December 31, 1999) (File No. 1-11299).
1.8 Statement of Income of Entergy Gulf States, Inc.,
as of December 31, 1999 (incorporated by reference
to the Annual Report on Form 10-K of Entergy for
the year ended December 31, 1999) (File No. 1-11299).
1.9 Balance Sheet of Entergy Louisiana, Inc., as of
December 31, 1999 (incorporated by reference to
the Annual Report on Form 10-K of Entergy for the
year ended December 31, 1999) (File No. 1-11299).
1.10 Statement of Income of Entergy Louisiana, Inc.,
as of December 31, 1999 (incorporated by reference
to the Annual Report on Form 10-K of Entergy for
the year ended December 31, 1999) (File No. 1-11299).
1.11 Balance Sheet of Entergy Mississippi, Inc., as of
December 31, 1999 (incorporated by reference to
the Annual Report on Form 10-K of Entergy for the
year ended December 31, 1999) (File No. 1-11299).
1.12 Statement of Income of Entergy Mississippi, Inc.,
as of December 31, 1999 (incorporated by reference
to the Annual Report on Form 10-K of Entergy for
the year ended December 31, 1999) (File No. 1-11299).
Item 7. Information as to Environmental Effects.
It is believed that the granting of this Application or
Declaration will not constitute a major Federal action
significantly affecting the quality of the human environment. No
other Federal agency has prepared or is preparing an
environmental impact statement with respect to the proposed
transactions.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned have duly caused this
statement to be signed on their behalf by the undersigned
thereunto duly authorized.
Entergy Corporation
Entergy Arkansas, Inc.
Entergy Gulf States, Inc.
Entergy Louisiana, Inc.
Entergy Mississippi, Inc.
By: /s/ Michael G. Thompson
Name: Michael G. Thompson
Title: Senior Vice President, General Counsel
and Secretary
Date: April 20, 2000
_______________________________
<FN1> Entergy New Orleans, Inc. is not a party to this Application
or Declaration. Accordingly, any reference in this Application
or Declaration to the "Entergy Operating Companies" specifically
excludes Entergy New Orleans, Inc. and any reference to "utility
assets" which may be sold in reliance upon the order of the
Commission in this proceeding shall be understood not to apply to
any utility assets of Entergy New Orleans, Inc.
<FN2> Holding Co. Act Release No. 26031 (April 20, 1994).
<FN3> The Commission has previously granted approval for similar
transactions by another registered holding company. See American
Electric Power Company, Inc., Holding Co. Act Release No. 26622
(Dec. 12, 1996).
EXHIBIT F
April 20, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Entergy Corporation, et al.
Gentlemen:
In connection with the transaction proposed and described in
the Application or Declaration on Form U-1 filed with the
Securities and Exchange Commission by Entergy Corporation
("Entergy") and certain its operating public utility subsidiaries
(the "Entergy Operating Companies") to which this opinion is an
exhibit, I have examined, among other things, the Application or
Declaration on Form U-1 and the documents referred to in it.
In my opinion, if the Application or Declaration is granted
and permitted to become effective; if all of the actions proposed
to be taken by the boards of directors of the applicants are
taken; and if all of the proposed transactions are consummated in
accordance with the aforesaid Application or Declaration and the
Commission's order approving same:
(a) all state laws applicable to the proposed
transactions will have been complied with;
(b) the consummation of the proposed transactions will
not violate the legal rights of the holders of any
securities issued by Entergy, the Entergy Operating
Companies, or any associate company.
I consent to the use of this opinion as part of the above-
mentioned Application or Declaration.
Very truly yours,
/s/ Laurence M. Hamric
Laurence M. Hamric, Esq.
EXHIBIT H
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. ______ / , 2000
__________________________________________
:
In the Matter of :
:
ENTERGY CORPORATION, et al. :
639 Loyola Avenue :
New Orleans, Louisiana 70113 :
:
:
( ) :
__________________________________________:
NOTICE OF PROPOSED SALE OF UTILITY ASSETS
Entergy Corporation ("Entergy"), a registered holding
company under the Public Utility Holding Company Act of 1935, as
amended (the "Act"), and four of its wholly owned public utility
subsidiaries, Entergy Arkansas, Inc. ("Entergy Arkansas"),
Entergy Gulf States, Inc. ("Entergy Gulf States"), Entergy
Louisiana, Inc. ("Entergy Louisiana"), and Entergy Mississippi,
Inc. ("Entergy Mississippi") (collectively, the "Entergy
Operating Companies"), have filed a proposal with this Commission
pursuant to Section 12(d) and of the Public Utility Holding
Company Act of 1935 ("Act") and Rule 44 thereunder.
During the period through December 31, 20004, the
Operating Companies propose to transfer by sale or lease utility
assets as defined under the Act to customers and non-customers.
The consideration for the transfers will not exceed $12,000,000
per Entergy Operating Company per calendar year, or $40,000,000
in the aggregate in any calendar year during the authorization
period for all Entergy Operating Companies. The consideration
for such asset transfers will, in no case, be less than the net
book value of the assets being sold. In the case of any lease of
utility assets, the specified lease payments over the term of the
lease will be valued using a discount factor equal to the selling
company's allowed rate of return at the time of entering into the
lease and counted against the foregoing limitations in the
initial year of the lease.
The proposal and any amendments thereto are available for
public inspection through the Commission's Office of Public
Reference. Interested persons wishing to comment or request a
hearing should submit their views in writing by May 15, 2000, to
the Secretary, Securities and Exchange Commission, Washington,
D.C. 20549, and serve a copy on the applicant at the address
specified above. Proof of service (by affidavit or, in the case
of an attorney at law, by certificate) should be filed with the
request. Any request for a hearing shall identify specifically
the issues of fact or law that are disputed. A person who so
requests will be notified of any hearing, if ordered, and will
receive a copy of any notice or order issued in this matter.
After said date, the proposal, as filed or as amended, may be
authorized.
For the Commission, by the Office of Public Utility
Regulation, pursuant to delegated authority.
[_____________]
Secretary
