File No. 70-8105
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
_________________________________
POST-EFFECTIVE AMENDMENT NO. 2
to
APPLICATION-DECLARATION
Under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
_________________________________
Entergy Corporation Entergy Enterprises, Inc.
639 Loyola Avenue Three Financial Centre
New Orleans, LA 70113 900 S. Shackleford Road
Suite 210
Little Rock, AR 72211
(Names of companies filing this statement and
addresses of principal executive offices)
________________________________
Entergy Corporation
(Name of top registered holding company parent
of each applicant or declarant)
________________________________
Jerry D. Jackson
Executive Vice President-Finance
and External Affairs
Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
(Name and address of agent for service)
_________________________________
The Commission is also requested to send copies of any
communications in connection with this matter to:
Frederick F. Nugent Laurence M. Hamric
General Counsel General Attorney
Entergy Enterprises, Inc. Entergy Services, Inc.
Three Financial Centre, Suite 210 639 Loyola Avenue
Little Rock, Arkansas 72211 New Orleans, LA 70113
William T. Baker, Jr.
Reid & Priest
40 West 57th Street
New York, New York 10019
<PAGE>
Item 1. Description of Proposed Transactions.
Item 1 of Post-Effective Amendment No. 1 in this File
is hereby amended and restated to read in its entirety as
follows:
"I. Introduction
1. Entergy Corporation ("Entergy"), a registered holding
company under the Public Utility Holding Company Act of 1935, as
amended (the "Act"), and its wholly-owned, non-utility subsidiary
company, Entergy Enterprises, Inc. ("Enterprises"), hereby
request the authorization of the Securities and Exchange
Commission (the "Commission") under the Act for Entergy to
provide funding in connection with the following Enterprises
activities, all of which are more particularly described herein:
(1) engaging in preliminary development activities with respect
to potential investments by Entergy in various energy, energy-
related and other non-utility projects; (2) providing consulting
services to unaffiliated companies primarily in the areas of
power generation, transmission and distribution and operations
ancillary thereto; (3) providing management and administrative
support services to certain of Enterprises' associate companies;
(4) providing operations and maintenance services to unaffiliated
third parties and affiliated power projects; and (5) engaging in
certain related transactions.
II. Background
2. Pursuant to Commission authorization (see Holding
Company Act Release ("HCAR") No. 22818 (dated January 11, 1983)),
Enterprises (formerly Electec, Inc.) was organized to market the
expertise and capabilities of the Entergy System<FN1> to non-
affiliates, and to investigate and develop investment
opportunities in power-related areas. In 1991, Enterprises was
further authorized to invest in First Pacific Networks, Inc.
("FPN") and to undertake development, marketing and other
activities relating to a proposed energy management system
utilizing the technology of FPN. (See HCAR No. 25353 (dated
July 25, 1991); see also HCAR No. 25580 (dated July 13, 1992)).
The Commission also authorized Enterprises to enter into various
transactions relating to the formation of an energy management
service company, Entergy Systems and Service, Inc. (see HCAR
No. 25718 (dated December 28, 1992). Enterprises is also
authorized to provide consulting services to certain affiliated
utilities located in Argentina. (See HCAR Nos. 25705 and 25706
(each dated December 14, 1992)).
3. Pursuant to the initial order of the Commission
issued in this File (HCAR No. 25848 (dated July 8, 1993) (the
"Order")), Enterprises is currently authorized to (1) conduct
preliminary development activities with respect to potential
investments by Entergy in various energy, energy-related and
other non-utility businesses, (2) provide consulting services to
non-associate companies, utilizing the expertise and resources of
Entergy System companies, and (3) provide management and
administrative support services to associate companies engaged in
certain energy, energy-related and other non-utility businesses.
The Commission reserved jurisdiction in the Order over the
provision by Enterprises of management and support services to
associate companies which are "exempt wholesale generators"
("EWGs") or "foreign utility companies" ("FUCOs") under Sections
32 and 33, respectively, of the Act. For the reasons and subject
to the terms and conditions set forth below, Enterprises is
requesting herein that the Commission release jurisdiction over
and grant all requisite approvals for the provision of various
services to associate EWGs and FUCOs.
4. In addition to its own staff, Enterprises from time
to time receives specific and limited services from the System
Operating Companies and ESI in support of its ongoing business
activities. In this connection, as part of a planned
restructuring of its energy-related and non-utility businesses,
Entergy in 1992 and 1993 entered into a series of agreements with
certain of its state and local rate regulatory authorities<FN2> (the
"Settlement Arrangements") relating, among other things, to
transfer pricing in connection with the provision of services and
other affiliate transactions between Entergy's "regulated
utilities"<FN3> (hereinafter, the "Retail Electric Companies") and
Entergy's "non-utility businesses"<FN4>. Entergy has filed, with
the concurrence and support of such regulators, an Application-
Declaration in File No. 70-8529 seeking all requisite Commission
approvals under the Act in order to implement provisions of the
Settlement Arrangements. Reference is hereby made to the
Application-Declaration in such File for further information with
respect to the terms and conditions of the Settlement
Arrangements, including special pricing provisions relating to
certain transfers of services and assets between Retail Electric
Companies and non-utility businesses. To the extent that certain
of the transactions described herein would involve affiliate
transactions with Retail Electric Companies to which the
provisions of the Settlement Arrangements would apply, Entergy
and Enterprises agree that any such transactions would be subject
to, and performed in compliance with, such applicable provisions
and any order of the Commission issued with respect thereto.
III. Authorizations Requested.
A. Preliminary Development Activities.
5. The Order authorizes Enterprises to conduct, and
Enterprises proposes to continue to conduct, on an ongoing basis,
preliminary development activities relating to possible Permitted
Investments (as hereinafter defined) by Entergy. Such activities
(hereinafter, "Preliminary Development Activities") may include,
among other things, (1) project due diligence and design review;
(2) marketing studies; (3) investigating sites; (4) research,
preliminary engineering and licensing activities; (5) applying
for required permits and regulatory approvals; (6) acquiring
options and rights; (7) drafting, negotiation and execution of
contractual commitments with owners of existing facilities,
governmental authorities, equipment vendors, construction firms,
power purchasers, thermal energy users and other project
participants; (8) negotiation of financing commitments with
lenders and equity co-investors (including the provision of
guarantees and other credit enhancements, as described below);
(9) legal, accounting and financial analysis; (10) preparing and
submitting bids and proposals; and (11) any other activities
necessary to identify and analyze investment opportunities.
Enterprises would continue to conduct such activities with
respect to potential investments by Entergy in the following
types of facilities and businesses (hereinafter, "Permitted
Investments"): (1) "exempt wholesale generators" ("EWGs") and
"foreign utility companies" ("FUCOs") under the Act; (2)
"qualifying facilities" ("QFs") under the Public Utility
Regulatory Policies Act of 1978, as amended ("PURPA"); (3) non-
exempt domestic and foreign generation, transmission and
distribution facilities, including but not limited to "inside the
fence" generating projects and other power production facilities
(provided, however, that any non-exempt domestic facility would
be part of Entergy's integreted public utility system); (4)
technologies relating to energy efficiency; (5) the development
of alternative energy sources; and (6) other exempt or non-
utility businesses investments in which are permissible under the
Act.
6. Except with respect to investments in EWGs, FUCOs
and any other Permitted Investment for which Commission approval
is not required under the Act or rules promulgated by the
Commission thereunder, neither Entergy nor Enterprises would make
any Permitted Investment without obtaining any requisite further
Commission approval. In addition, the financing of any such
Permitted Investment would, to the extent jurisdictional, be
subject to further Commission authorization.
7. Enterprises may from time to time undertake
Preliminary Development Activities in collaboration with
unaffiliated third parties concerning various project-related
matters, including cost sharing and other arrangements for the
joint funding of development costs, allocation of project
development responsibilities among the parties, the formation of
informal consortia, or other non-jurisdictional arrangements and
relationships.
8. Entergy and Enterprises further propose, in order
to facilitate Enterprises' Preliminary Development Activities and
other authorized businesses, to issue guarantees or provide other
credit support arrangements. Such arrangements may take the form
of Entergy or Enterprises agreeing to guarantee, undertake
reimbursement obligations or act as surety on bonds, letters of
credit, evidences of indebtedness, equity commitments,
performance and other obligations undertaken by Enterprises or
its associate companies in connection with Preliminary
Development Activities. For example, Enterprises or its
associate companies may be called upon to furnish various types
of bonds as security, including bid bonds, performance bonds, and
material and payment bonds. Moreover, Enterprises' consulting
services (as discussed further below) may require credit support
from Entergy to cover performance and warranty obligations.
These forms of credit enhancements are typical in the
marketplace, and would significantly benefit Enterprises'
business by, among other things, facilitating the making of bids
or proposals in respect of power projects, and helping to reduce
the cost of necessary bonds, sureties and other credit support.
Ordinarily, such credit enhancement arrangements are limited both
in duration and in amount, covering only a portion of the total
value of the project or activity. However, until such time as
there is no possibility of a claim against Entergy or Enterprises
under such arrangements, the full contingent amount of any
guarantees or other credit support arrangements issued by Entergy
would be included as part of Entergy's proposed additional
investments in Enterprises as requested herein.
B. Consulting Services.
9. The Order authorizes Enterprises to provide, on an
ongoing basis, various consulting services to non-associate
companies. Enterprises proposes, in addition to its Preliminary
Development Activities, to continue to render consulting services
(hereinafter, "Consulting Services") to non-associate companies.
Such Consulting Services may include the provision of (1)
management expertise, such as strategic planning, organization,
policy matters and management services; (2) technical expertise,
such as design engineering, availability engineering,
construction management planning and procedures, and financial,
system and operational planning; (3) operating expertise,
particularly with respect to generating, transmission and
distribution facilities; (4) environmental expertise, such as
environmental licensing and compliance, negotiation of permits
and environmental planning; (5) training expertise, particularly
in the areas of operations and management; (6) technical and
procedural resources, such as are embedded in computer systems,
programs and manuals; (7) fuel procurement, delivery and storage
expertise; (8) expertise relating to the marketing and brokering
of power resources; and (9) expertise relating to demand side
management or other energy management services. Enterprises also
would continue to market expertise in the bulk power business of
its associate company, EPI, including (1) management services in
respect of generating projects, transmission facilities and
thermal energy facilities, particularly in the areas strategic
planning, feasibility studies, and policy and organizational
matters; (2) technical services in respect of such projects and
facilities, particularly in the areas of design, engineering,
procurement and construction; and (3) training services in
respect of such projects and facilities, particularly in the
areas of operations and maintenance. Enterprises will charge
fair market value for Consulting Services provided to
unaffiliated third parties. Enterprises also from time to time
may provide Consulting Services to associate companies, including
associate EWGs, FUCOs and QFs. However, Enterprises will not,
without further authorization of the Commission, provide any
Consulting Services to Retail Electric Companies.
10. Enterprises further proposes to provide such
Consulting Services (and O&M Services, as discussed below) to its
associate companies (excluding the Retail Electric Companies) at
fair market prices, and requests an exemption pursuant to Section
13(b) of the Act from the requirements of Rules 90 and 91
thereunder, provided one or more of the following conditions are
satisfied (in the case of the provision of such services to
associated power projects):
(1) An associated power project is an EWG or a
FUCO which derives no part of its income, directly or
indirectly, from the generation, transmission, or
distribution of electric energy for sale within the United
States;
(2) An associated power project is an EWG which
sells electricity at market-based rates which have been
approved by the Federal Energy Regulatory Commission
("FERC") or the appropriate state public utility commission,
provided that the purchaser is not a Retail Electric
Company;
(3) An associated power project is a QF which
sells electricity exclusively at rates negotiated at arm's
length to one or more industrial or commercial customers
purchasing such electricity for their own use and not for
resale, and/or to an electric utility company, other than a
Retail Electric Company, at the purchaser's "avoided cost"
as determined in accordance with the regulations under
PURPA; or
(4) An associated power project is an EWG or a QF
that sells electricity at rates based upon its cost of
service, as approved by FERC or any state public utility
commission having jurisdiction, provided that the purchaser
of such electricity is not a Retail Electric Company.
11. Enterprises also will continue to license to non-
affiliated third parties software and other intellectual property
acquired or developed by Entergy System companies. Certain
provisions of the Settlement Arrangements apply to the sharing of
costs and profits associated with the marketing by Enterprises of
products developed by Retail Electric Companies.<FN5> Reference is
hereby made to the Application-Declaration in File No. 70-8529
for further information with respect to such provisions.
C. Provision of Other Services.
12. Administrative Services. As discussed above, the
Order authorizes Enterprises to provide certain management and
administrative support services to associate companies which are
not Retail Electric Companies. Such services include corporate
and project development and planning, portfolio management, and
administrative services, including legal, financial, accounting
and internal auditing (hereinafter, "Administrative Services").
In conjunction with its management and administration of
Entergy's non-utility businesses, Enterprises would continue to
provide, from time to time, various Administrative Services to
certain associate companies which are not Retail Electric
Companies. Existing associate companies to which Enterprises
provides Administrative Services are Entergy SASI, a subsidiary
of Enterprises engaged in the energy management services
business, and Entergy S.A. and Entergy Argentina S.A., two
subsidiary companies of Entergy formed pursuant to Commission
authorization to hold Entergy's interests in electric generation
and distribution facilities located in Argentina.
13. In the Order, the Commission specifically reserved
jurisdiction over the provision of Administrative Services to
associate companies which are EWGs or FUCOs "until such time as
the Commission has adopted final rules" with respect to EWGs and
FUCOs and Enterprises has demonstrated its compliance with such
rules. The Commission in September 1993 adopted final rules with
respect to investments in EWGs (see HCAR No. 25886 (September 23,
1993)), and, as described further below, Entergy and Enterprises
are in compliance with such rules. In addition, Entergy and
Enterprises agree to comply with the terms and conditions of all
applicable rules under the Act from time to time in effect
relating to the provision of services to EWGs and FUCOs.
Accordingly, Entergy and Enterprises request that the Commission
release jurisdiction over the provision by Enterprises of
Administrative Services to associate companies that are EWGs and
FUCOs, subject to the terms and conditions set forth herein.
14. Enterprises would continue to charge its associate
companies for the fully allocated direct and indirect cost of
services provided, determined in accordance with Rules 90 and 91
under the Act. Enterprises also would continue to utilize a
project-based accounting system to properly account for and
allocate the cost of providing such services to its associate
companies.
15. No change in the method of allocating costs among
those associate companies receiving services from Enterprises
shall be made unless and until Enterprises shall have first given
the Commission written notice of such proposed change not less
than 60 days prior to the proposed effectiveness of any such
change. If, upon the receipt of any such notice, the Commission
within such 60 day period shall notify Enterprises that a
question exists as to whether such proposed change is consistent
with the provisions of Section 13 of the Act, or any rule,
regulation or order thereunder, the proposed change shall not
become effective unless and until Enterprises shall have filed
with the Commission an appropriate declaration with respect to
such proposed change, and the Commission shall have permitted
such declaration to become effective. Further, in the event the
operation of the allocation plan of Enterprises does not result
in a fair and equitable allocation of its costs among associate
companies receiving services from Enterprises, the Commission
shall have the right to require, after notice and opportunity for
hearing, prospective adjustments, and, to the extent it appears
feasible and equitable, retroactive adjustments of such cost
allocations.
16. Operations and Maintenance Services. Enterprises
further proposes to offer directly, or indirectly through one or
more special purpose subsidiary companies of Entergy or
Enterprises (hereinafter, an "O&M Sub"), various operations and
maintenance services (hereinafter, "O&M Services") to developers,
owners and operators of domestic and foreign power projects,
including power projects that Enterprises may develop on its own
or in collaboration with third parties. Such O&M Services would
include, among others, development, engineering, design,
construction and construction management, pre-operational start-
up, testing and commissioning, long-term operations and
maintenance, fuel procurement, management and supervision,
technical and training, administrative support, and any other
managerial or technical services required in connection with the
operation and maintenance of electric power facilities.
17. Enterprises proposes to render such O&M Services
using its own work force and the personnel and resources of the
Retail Electric Companies obtained pursuant to the Service
Agreements with such companies, as they may be amended by order
of the Commission in File No. 70-8529. Further, in accordance
with the Settlement Arrangements, the Retail Electric Companies
would be reimbursed for the fully allocated cost of any services
provided to Enterprises or any O&M Sub, plus 5%.
18. Enterprises and any O&M Sub formed to provide O&M
Services would charge fair market value for services, provided
that Enterprises or such O&M Sub, as the case may be, would
perform such services in compliance with all applicable rules of
the Commission and the terms and conditions set forth herein.
O&M Subs would either be domestic or foreign corporations,
partnerships or other entities (depending upon the legal and
regulatory requirements of a particular project). With respect
to any O&M Sub that would not qualify as an EWG or FUCO,
Enterprises would provide information as to the formation and
capitalization of such subsidiary to the Commission in the next
quarterly certificate filed pursuant to Rule 24 (as more
particularly described below). Such certificate would, among
other things, represent that no Retail Electric Company has
subsidized the operations of Enterprises or any O&M Sub, and
further, that any transfer of personnel from any Retail Electric
Company to, and the rendering of O&M Services by, Enterprises or
such O&M Sub are in compliance with applicable rules, regulations
and orders of the Commission and have not adversely affected the
services provided by such Retail Electric Companies to their
respective customers.
IV. Periodic Reporting.
19. Enterprises will continue to provide the
Commission, on a quarterly basis within 45 days after the end of
each calendar quarter, a report pursuant to Rule 24, which shall
include the following: (1) balance sheets and income statements
for Enterprises for the three-, six-, or nine-month period then
ended; (2) amounts expended by Enterprises on Preliminary
Development Activities during the quarter, broken down by the
categories of Permitted Investments described above; (3)
information concerning the nature and extent of Enterprises'
Consulting Services and Administrative Services during the
quarter; and (4) information concerning the formation and
capitalization of any O&M Sub and the nature and extent of any
O&M Services performed by Enterprises or any such O&M Sub during
the quarter. Enterprises would also continue to file Annual
Reports on Form U-13-60 with the Commission.
V. Requested Financing Authority.
20. Entergy hereby requests authority to make
additional investments in Enterprises up to an aggregate amount
of $350 million outstanding at any one time through December 31,
1997 (and continuing beyond December 31, 1997 in accordance with
the terms of any debt incurred or guarantee issued prior to such
date pursuant to any order in this File) in connection with
Enterprises' various authorized business activities. Entergy's
investments in Enterprises may take the form of (1) additional
purchases of Enterprises' Common Stock, no par value, for a
purchase price of $1,000 per share<FN6>; (2) capital contributions;
(3) loans to Enterprises (and the conversion of any such loans to
capital contributions); and (4) guarantees by Entergy of
indebtedness or other obligations incurred by Enterprises or its
associate companies, as described below. Any loans to
Enterprises by Entergy would mature no later than December 31,
2004, and would bear interest at a rate not to exceed the prime
rate in effect on the date of the loan at a bank designated by
Entergy (the "Prime Rate").
21. Entergy and Enterprises also request authority
through December 31, 1997 to issue guarantees in an aggregate
contingent amount that, when added to investments in Enterprises
and any O&M Sub otherwise made as provided herein, will not
exceed $350 million. Such guarantees may be required, among
other things, in connection with Enterprises' Preliminary
Development Activities and other authorized businesses (as
described above), or to satisfy the requirements of lenders and
other project participants under financing documents and other
agreements to which Enterprises, an O&M Sub or another associate
company of Entergy (other than a Retail Electric Company) becomes
a party (including with respect to the provision of construction
and permanent debt and equity financing). The terms and
conditions of such guarantees would be established at arm's
length based upon market conditions.
22. In addition, Entergy and Enterprises hereby
request authorization through December 31, 1997 to organize and
provide funding to O&M Subs. Such investments may take the form
of (1) purchases of capital stock, (2) capital contributions, (3)
loans, (4) guarantees of the securities or other obligations of
an O&M Sub, or (5) any combination of the foregoing; provided
that any such loans to an O&M Sub would bear interest at the
Prime Rate, and provided further that any such investments in O&M
Subs would be included in the $350 million additional aggregate
investment authority requested by Entergy herein.
23. Enterprises would use the proceeds from
investments by Entergy (1) to provide working capital in
connection with Enterprises' Preliminary Development Activities,
Consulting Services, Administrative Services, O&M Services, and
other authorized business activities, (2) to pay its associate
companies for services rendered to Enterprises and (3) for other
general corporate purposes. Entergy and Enterprises currently
estimate that approximately $100 million of the $350 million of
additional aggregate investment authority requested herein would
be applied to meet Enterprises' foregoing capital needs.
Enterprises currently estimates that, of the proposed additional
investments by Entergy, up to $79 million (but in any case not
more than $86 million) would be used for Preliminary Development
Activities, and up to $26 million (but in any case not more than
$30 million) would be used for Administrative Services.
24. Subject to any requisite further Commission
approval, no part of the proceeds from such transactions would be
used by Enterprises to make any Permitted Investment, including
in the securities or an interest in the business of an EWG, a
FUCO or a QF.
25. With respect to compliance with Rule 53 under the
Act, Entergy currently meets, and would continue to meet after
giving effect to the transactions proposed herein, all of the
"safe harbor" conditions under such rule (even assuming that the
entire $250 million of the $350 million of additional authorized
investments was used to provide guarantees to EWGs or FUCOs).
Inclusive of such amount, Entergy's "aggregate investment" in
EWGs and FUCOs would be approximately $425.7 million,
representing approximately 18.2% of the Entergy System's
consolidated retained earnings as of September 30, 1994.
Furthermore, Entergy has complied and will continue to comply
with the record keeping requirements of Rule 53(a)(2) concerning
affiliated EWGs and FUCOs. In addition, as required by Rule
53(a)(3), no more than 2% of the employees of the Entergy
System's domestic public utility subsidiary companies would
render services to affiliated EWGs and FUCOs. Finally, none of
the conditions set forth in Rule 53(b), under which the
provisions of Rule 53 would not be available, have been met."
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned companies have duly
caused this amendment to be signed on their behalf by the
undersigned thereunto duly authorized.
ENTERGY CORPORATION
ENTERGY ENTERPRISES, INC.
By: /s/ Michael G. Thompson
Michael G. Thompson
Senior Vice President,
Chief Legal Officer
and Secretary
Dated: February 24, 1995
_______________________________
<FN1>Entergy and its various direct and indirect subsidiaries
comprise the Entergy System ("Entergy System" or "System"),
which currently consists of (1) five retail electric utility
companies, Arkansas Power & Light Company, Gulf States
Utilities Company, Louisiana Power & Light Company,
Mississippi Power & Light Company and New Orleans Public
Service Inc. (collectively, the "System Operating
Companies"), (2) a wholesale generating company that sells
power to the System Operating Companies, System Energy
Resources, Inc. ("System Energy"), (3) a wholesale
generating company that sells power to non-affiliates,
Entergy Power, Inc. ("EPI"), (4) a service company
subsidiary, Entergy Services, Inc. ("ESI"), (5) a nuclear
management service company, Entergy Operations, Inc.
("EOI"), (6) Enterprises, (7) a fuel supply company, System
Fuels, Inc. ("SFI"), (8) an energy management services
company, Entergy Systems and Service, Inc. ("Entergy SASI"),
(9) two companies formed to own Entergy's interests in
certain Argentine utility companies, Entergy S.A. and
Entergy Argentina S.A., and (10) various direct and indirect
subsidiary companies of Entergy formed to own Entergy's
interests in "eligible facilities" within the meaning of
Section 32(a) of the Act and "foreign utility companies"
within the meaning of Section 33 of the Act.
<FN2>These regulators are the Arkansas Public Service Commission,
the Council of the City of New Orleans, the Louisiana Public
Service Commission and the Mississippi Public Service Commission.
The System Operating Companies' retail rate regulator in Texas is
precluded from agreeing to the terms of the Settlement
Arrangements because Texas has regulations governing affiliate
transactions.
<FN3>The term "regulated utility" refers to the System Operating
Companies, System Energy, EOI, ESI and SFI, 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 or goods thereto.
<FN4>The term "non-utility business" includes Enterprises, EPI
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 at wholesale
to affiliates or are not primarily engaged in the provision of
services or goods to regulated electric or combination electric
and gas utility affiliates.
<FN5>In addition to the transfer pricing provisions noted above,
Entergy and certain of its state and local regulatory
commissions also have agreed that if a "non-utility
business" markets a product that was developed by a Retail
Electric Company and is actually used by a Retail Electric
Company, all profits on the sale of the product shall be
divided evenly between the Retail Electric Company
responsible for developing the product and the non-utility
business responsible for marketing the product after
deducting all incremental costs associated with making the
product available for sale, including all costs of marketing
such product. However, in the event that a product
developed by a Retail Electric Company to be used in its
utility business is not actually so used, and subsequently
is marketed by a non-utility business to third parties, such
Retail Electric Company shall be entitled to recover all of
its costs to develop such product before any profits derived
from its marketing shall be so divided.
<FN6>In order to accommodate the possible issuance and sale of
additional Common Stock to Entergy as requested in this File, as
well as in connection with financing the business of Enterprises'
subsidiary, Entergy SASI, Enterprises is amending its Articles of
Incorporation to increase the number of authorized shares of
Common Stock specified therein from 100,000 shares to 500,000
shares. Entergy and Enterprises hereby request any requisite
Commission approval for such amendment.
