UNITED STATES OF AMERICA
BEFORE THE SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
. . . . . . . . . . . . . . . . . . . . . . . . .. .
.
In the Matter of .
.
ARKANSAS POWER & LIGHT COMPANY .
LOUISIANA POWER & LIGHT COMPANY .
MISSISSIPPI POWER & LIGHT COMPANY .
NEW ORLEANS PUBLIC SERVICE INC. .
.
File No. 70-5015 .
________________ . CERTIFICATE
. PURSUANT TO
In the Matter of . RULE 24
.
SYSTEM FUELS, INC. .
SYSTEM ENERGY RESOURCES, INC. .
ARKANSAS POWER & LIGHT COMPANY .
LOUISIANA POWER & LIGHT COMPANY .
MISSISSIPPI POWER & LIGHT COMPANY .
NEW ORLEANS PUBLIC SERVICE INC. .
.
File No. 70-5889 .
File No. 70-7574 .
File No. 70-7668 .
.
(Public Utility Holding Company Act of 1935) .
. . . . . . . . . . . . . . . . . . . . . . . . .. .
Pursuant to Rule 24 promulgated by the Securities and Exchange Commission (SEC)
under the Public Utility Holding Company Act of 1935, modified by request in the
application(s) - declaration(s) referenced above, this is to certify that the
following transactions were carried out and borrowings made, during the quarter
ended December 31, 1993, pursuant to System Fuels, Inc.'s (SFI) function as a
supplier of fuel for the Entergy Corporation Operating Companies (System) in
accordance with the terms and conditions of and for the purposes represented in
the application(s) - declaration(s), as amended, and pursuant to the Orders of
the SEC, indicated below:
70-5015 December 17, 1971 ................................... I
70-5889 April 28, 1978 ...................................... I
70-7574 January 31, 1989 ................................... II
70-7668 September 27, 1989 ................................ III
I. File No. 70-5015 and File No. 70-5889 - 1993 Fuel Supply Programs
Expenditures for SFI's fuel program for 1993 during the 4th quarter and
year to date are indicated below:
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
1993 Fuel Supply Program:
1. Gas and Oil Development and Production ......... $ 88 $ 269
2. Nuclear Fuel Procurement ....................... (4,039) (3,310)
3. Fuel Oil Program ............................... (1,914) 1,042
-------- --------
Total Expenditures .................................... (5,865) (1,999)
-------- --------
Less funds derived through amortization and
depreciation charges:
Amortization of Gas and Oil Development and
Production Costs ................................. (3,318) (6,668)
Depreciation and other amortization ................ (131) (523)
-------- --------
Total depreciation and amortization ................... (3,449) (7,191)
-------- --------
Net Expenditures ...................................... (9,314) (9,190)
(Increase) Decrease in:
Outside financing .................................. 0 0
System Money Pool borrowings ....................... 6,646 (24,750)
Parent Companies borrowings ........................ 0 0
-------- --------
Total (increase) decrease in borrowings ............... 6,646 (24,750)
-------- --------
(Increase) Decrease in working capital ................$ 2,668 $ 33,940
========= ========
1. Gas and Oil Development and Production
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Gas and Oil Development and Production ............. $ 88 $ 269
======== ========
a) During the quarter, there was no drilling activity
b) SFI produced, during the quarter, 315,000 MCF of natural gas and
13,000 barrels of oil from its Gas and Oil Development and Production
Program (Program) which were sold to non-System parties.
During the 4th quarter of 1993, all of SFI's natural gas production
was sold to non-System parties. This condition is expected to continue
indefinitely. SFI's expenditures in the Program have been limited to
amounts required to protect its existing investments in the properties.
Amortization, net proceeds from sales to non-System parties, as of
December 31, 1993 has exceeded SFI's investment in the Program in the
amount of $1,763,052. A study to determine an appropriate methodology of
allocating the excess to the System Companies is in progress. No
investments in new leases are being made at this time.
c) Calculation of net proceeds from sales to non-System parties
from the Program used to amortize the investment in the Program:
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Sales to non-System parties:
Natural Gas .................................. $ 351 $ 2,327
Condensate ................................... 27 105
Crude Oil .................................... 187 847
-------- --------
Total ......................................... 565 3,279
Miscellaneous income from non-System parties.. 63 269
-------- --------
Total ......................................... 628 3,548
General and administrative expense ............ 2,951 4,422
Operating expense ............................. (287) (1,140)
Interest expense .............................. 26 26
Amortization adjustment ....................... 0 (188)
-------- --------
Net proceeds .................................. $ 3,318 $ 6,668
======== ========
2. Nuclear Fuel Procurement (See Item III)
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Nuclear Fuel Procurement ........................... $ (4,039) $ (3,310)
======== ========
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Activities during the period:
Expenditures for nuclear materials and processing
services ..................................... $ 54,120 $115,913
General and administrative expense .............. 1,197 1,116
Interest expense ................................ 193 779
-------- --------
Total ........................................... 55,510 117,808
-------- --------
Sales of nuclear materials and processing
services to System companies ................. (59,549) (121,118)
-------- --------
Net effect on inventory ........................... $ (4,039) $ (3,310)
======== ========
During the quarter, SFI took deliveries of U3O8 and conversion services
intended for use in 1994.
During the quarter, SFI had sales of nuclear materials to Arkansas Power
& Light Co. and Louisiana Power & Light Co. for use in refueling at their
respective reactors.
3. Fuel Oil Program (See Item II)
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Fuel Oil Inventory ................................. $ (1,914) $ 1,042
======== ========
a) Fuel Oil Inventory:
Book
Inventory as of: Barrels Value
(In Thousands)
December 31, 1992 ............................ 1,884 $ 31,879
March 31, 1993 ............................... 1,616 $ 28,222
June 30, 1993 ................................ 2,102 $ 33,856
September 30, 1993 ........................... 2,041 $ 33,510
December 31, 1993 ............................ 2,070 $ 31,596
During 4th Qtr.
Barrels Cost
Sales price per barrel to System companies
excluding period cost:
#2 Fuel Oil ............................... 39,116 $ 24.30
#6 Fuel Oil ............................... 1,962,508 $ 11.04
Effective January, 1993, SFI and Marathon Oil Company extended an
agreement, under a supply contract dated April 15, 1982, to extend the
temporary suspension of all deliveries of fuel oil through 1993. Other than
Marathon, SFI has no long term contracts for fuel oil.
4. Other Items:
a) As of December 31, 1993, SFI's outstanding debt and Parent Companies
investment consisted of:
(In Thousands)
Parent Companies:
Common stock .............................. $ 20
Notes payable ............................. 34,000
--------
Total .................................. 34,020
--------
System Money Pool ............................ 25,330
--------
Outside Financing:
Bank borrowings ........................... 0
--------
Total ........................................ $ 59,350
========
b) As of January 1, 1987, SFI's employees were transferred to Entergy
Services, Inc. (Entergy Services) where some of them continue to operate
the continuing activities of SFI. For the 4th quarter of 1993, SFI was
billed by Entergy Services, Inc. the following amounts for services
performed for SFI that were previously performed by SFI employees. SFI
also reimbursed Entergy Services, at cost, for other services received
(financial, legal, administrative and other activities).
Total
During
Oct Nov Dec 4th Qtr
Cost of services charged to
Service Requests established
to track cost of functions
previously performed by SFI
personnel:
Direct Cost:
Labor and related cost $ 29,748 $ 27,425 $ 27,551 $ 84,724
Other direct cost ..... 5,559 11,863 5,223 22,645
Indirect cost ............ 12,583 (6,260) 30,592 36,915
-------- -------- --------- --------
Total .............. 47,890 33,028 63,366 144,284
-------- -------- --------- --------
Cost of services charged to
Service Requests not related
to transfer of SFI personnel. 61,514 70,709 71,408 203,631
-------- -------- --------- --------
Total cost of services
performed by Entergy
Services .................... $109,404 $103,737 $134,774 $347,915
======== ======== ======== ========
Amounts billed to Operating
Companies for the Fuel Oil
Program * ................... $ 75,765 $ 74,958 $ 83,026 $233,749
Charged to Nuclear Fuel
Procurement ................. 5,291 5,712 5,984 16,987
Charged to Gas and Oil
Development and Production .. 28,348 23,067 45,764 97,179
-------- -------- --------- --------
Total .................... $109,404 $103,737 $134,774 $347,915
======== ======== ======== ========
* Charged to the Fuel Oil Program as a component of period costs. For
the 4th quarter of 1993 Fuel Oil Program period costs were allocated 14% to
Arkansas Power & Light Company, 54% to Louisiana Power & Light Company, 19%
to Mississippi Power & Light Company and 13% to New Orleans Public Service
Inc.
c) As previously reported, the System's fuels planning and procurement
administration was reorganized during 1988, redefining the fuels
mangement roles and placing the responsibility for most fuel procurement
decisions with Entergy Corporation System Executives.
SFI, utilizing Entergy Services personnel, continues to be responsible
for gas and oil production, financing nuclear fuel inventory and fuel
oil inventory and facilities, and accounting functions related to these
continuing activities.
II. File No 70-7574 Bank of America Agreement (B of A)
During the quarter, SFI did not borrow or repay any loans under this
financing agreement. Commitment fees of $19,167 were incurred on the unused
portion of the agreement. There was no average outstanding principal balance
and no interest cost.
As of December 31, 1993, the sum of the Aggregate Borrowing Base of
Eligible Fuel Oil Inventory and Receivables was $15,209,000 and there were no
borrowings outstanding under the B of A agreement.
III. File No 70-7668 Yasuda Trust and Banking Co., Ltd. Agreement
(Yasuda)
During the quarter, SFI did not borrow or repay any loans under this
financing agreement. Commitment fees of $20,416 were incurred on the unused
portion of the agreement. There was no average outstanding principal balance
and no interest cost.
As previously reported, the Yasuda credit agreement was amended, pursuant
to SEC authorization (See HCAR No. 25634, dated September 17, 1992) to increase
the commitment fees and margins payable on certain loans and to extend the
termination date of the agreement to September 30, 1995. A copy of the amended
credit agreement was filed with the SEC.
As of December 31, 1993, the book value of the nuclear fuel was
$13,936,000 and there were no borrowings outstanding under the Yasuda agreement.
<PAGE>
IN WITNESS WHEREOF, SFI has caused this certificate to be executed as of
the 31st of January, 1994.
ARKANSAS POWER & LIGHT COMPANY
LOUISIANA POWER & LIGHT COMPANY
MISSISSIPPI POWER & LIGHT COMPANY
NEW ORLEANS PUBLIC SERVICE INC.
SYSTEM ENERGY RESOURCES, INC
BY: /s/Glenn E. Harder
Glenn E. Harder
Vice President - Financial
Strategies and Treasurer
SYSTEM FUELS, INC.
BY: /s/Glenn E. Harder
Glenn E. Harder
Treasurer and Assistant
Secretary
