SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date earliest event reported) December 12, 1997
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
1-11299 ENTERGY CORPORATION 72-1229752
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
1-10764 ENTERGY ARKANSAS, INC. 71-0005900
(an Arkansas corporation)
425 West Capitol Avenue, 40th Floor
Little Rock, Arkansas 72201
Telephone (501) 377-4000
1-2703 ENTERGY GULF STATES, INC. 74-0662730
(a Texas corporation)
350 Pine Street
Beaumont, Texas 77701
Telephone (409) 838-6631
1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777
(an Arkansas corporation)
425 Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Telephone (601) 368-5000
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Item 5. Other Information
Entergy Corporation, Entergy Arkansas, Inc. and
System Energy Resources, Inc.
On December 12, 1997, the Arkansas Public Service Commission
("APSC") issued an Order approving a proposal made jointly by
Entergy Corporation's wholly-owned subsidiary, Entergy Arkansas,
Inc. ("Entergy Arkansas"), and other parties, which reduces
Entergy Arkansas' rates and provides a structure for the
transition to a more competitive retail electricity market in
Arkansas in the future.
The Order provides for retail rate reductions by Entergy
Arkansas aggregating $160201 million in 1998 and 1999, including
approximately $170 million of reductions arising from the
elimination of cost deferrals associated with the Grand Gulf
Nuclear Station ("Grand Gulf"), which will not affect net income.
The rate decrease also includes $16.9 million of base rate
reductions, elimination of nuclear performance incentives and
elimination of two other small tariffs. The rate reduction is
expected to reduce Entergy Arkansas' net income by approximately
$22 million in 1998 and have no effect thereafter and to have no
incremental effect thereafter.
The Order fixes Entergy Arkansas' allowed rate of return on
equity at 11% per annum through June 2001, and provides that any
excess earnings, as determined periodicallyannually pursuant to a
tariff review, will go into a Transition Cost Account ("TCA")
earmarked for payment of costs that may be determined in the
future to be stranded. In 2000, the APSC will evaluate the
balance of and future funding level of the TCA and make any
necessary revisions. The Order also calls for the APSC to hold
conduct a generic hearingproceedings in 1998 to develop
information on customer choice issues for the 1999 legislative
session.
As a part of the effort to avoid potential future stranded
costs, the APSC Order also endorses a commitment by Entergy
Arkansas to seek approval from the Federal Energy Regulatory
Commission ("FERC") of tariffs that will accelerate the recovery
by System Energy Resources, Inc. ("SERI") of the costs of Grand
GulfPlant paid by Entergy Arkansas with revenues from Arkansas
ratepayers. FERC will be asked to maintain the tariffs charged
to Entergy Arkansas by SERI at 1998 levels and to cancel rate
reductions previously scheduled for 1999 in connection with the
ending of certain rate deferrals. The expected result would be
an additional $165 million of payments by Entergy Arkansas to
SERI during the 5.5 year period beginning January 1, 1999, that
would not otherwise be made. This accelerated recovery of Grand
Gulf costs will help mitigate potential future stranded cost
exposure of Entergy Arkansas.
Entergy Corporation and Entergy Gulf States, Inc.
The previously reported settlement (the "Cajun Settlement")
among Entergy Gulf States, Inc. ("Entergy Gulf States"), the
Trustee in bankruptcy (the "Cajun Trustee") for Cajun Electric
Power Cooperative, Inc. ("Cajun") and the Rural Utilities Service
("RUS"), was substantially completed on December 23, 1997. On
that date, Cajun's 30% undivided interest in the River Bend
Nuclear Station ("River Bend") was transferred to Entergy Gulf
States at the direction of the RUS, formerly the Rural
Electrification Administration.
RUS directed the transfer of the 30% ownership interest in
River Bend under provisions of the Cajun Settlement, with no cash
outlay by Entergy Gulf States, after an unsuccessful attempt to
sell that portion of the plant to a new owner. In connection
with the transfer on December 23, 1997, Cajun contributes $132
million to a trust fund for River Bend nuclear decommissioning
costs related to the 30 % interest.
In addition, Entergy Gulf States received from the Cajun
Trustee certain Cajun-owned electric transmission lines that were
located between segments of Entergy Gulf States' transmission
lines, thereby providing uninterrupted ownership to Entergy Gulf
States in certain areas. With the completion of the Cajun
Settlement, Cajun also will qualify to receive the lower
transmission rate offered through Entergy Gulf States' open
access tariff.
Also, as a part of the Cajun Settlement on December 23,
1997, Entergy Gulf States received back the funds it has paid
over the past three years into a court-administered escrow
account in connection with disputes with Cajun. The amount
received was $102,298,508. The escrow arrangements will cease,
and future payments will be made by Entergy Gulf States to Cajun
in accordance with the Joint Operating Agreement between them
with respect to their respective shares of the Big Cajun II, Unit
3 coal plant.
Entergy Gulf States, RUS and the Cajun Trustee originally
entered into the Cajun Settlement in May 1996. It provided that
Entergy Gulf States would take ownership of Cajun's undivided
interest in River Bend if no buyer could be found and if the RUS
did not wish to take title to the interest for itself. The Cajun
Settlement was approved by the U.S. District Judge Frank Polozola
in August 1996. In accordance with the Cajun Settlement, all
litigation and claims filed by Cajun and Entergy Gulf States
against one another are ended.
The remaining 70% interest in River Bend is already owned by
Entergy Gulf States, which was an original owner of the plant.
The Entergy Operations, Inc., subsidiary of Entergy Corporation,
operates the 936-megawatt unit which is located in St.
Francisville, Louisiana.
Entergy Gulf States' new share of River Bend will not
increase the retail rates for its approximately 600,000 customers
in South Louisiana and Southeast Texas.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
ENTERGY CORPORATION
ENTERGY ARKANSAS, INC.
ENTERGY GULF STATES, INC.
SYSTEM ENERGY RESOURCES, INC.
By: /s/ Louis E. Buck, Jr.
Louis E. Buck, Jr.
Vice President, Chief Accounting
Officer and Assistant Secretary
Dated: December 29, 1997
