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
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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 .
.
________________ .
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In the Matter of .
.
SYSTEM FUELS, INC. .
ENTERGY CORPORATION .
.
File No. 70-8331 .
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(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 September 30, 1994, 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
70-8331 December 29, 1993 .................................. IV
I. File No. 70-5015 and File No. 70-5889 - 1994 Fuel Supply
Programs
Expenditures for SFI's fuel program for 1994 during the
3rd quarter and year to date are indicated below:
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
1994 Fuel Supply Program:
1. Gas and Oil Development and Production ......... $ 137 $ 323
2. Nuclear Fuel Procurement ....................... (4,007) 25,098
3. Fuel Oil Program ............................... 1,082 (3,095)
Total Expenditures .................................... (2,788) 22,326
Less funds derived through amortization and
depreciation charges:
Amortization of Gas and Oil Development and
Production Costs ................................. (486) (773)
Depreciation and other amortization ................ (156) (460)
Total depreciation and amortization ................... (642) (1,233)
Net Expenditures ...................................... (3,430) 21,093
(Increase) Decrease in:
Outside financing .................................. 0 (23,000)
System Money Pool borrowings ....................... (7,088) 5,447
Parent Companies borrowings ........................ 0 0
Total (increase) decrease in borrowings ............... (7,088) (17,553)
(Increase) Decrease in working capital ................$ 10,518 $ (3,540)
========= ========
1. Gas and Oil Development and Production
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
Gas and Oil Development and Production ............. $ 137 $ 323
======== ========
a) During the quarter, there was no drilling activity
b) SFI produced, during the quarter, 197,000 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 3rd quarter of 1994, all of SFI's natural
gas production was sold to non-System parties. This
condition is expected to continue indefinitely. As a
result, SFI expenditures in the Program are being limited
to amounts required to protect its existing investments in
the properties. No investments in new leases are being
made at this time.
As previously reported, amortization continues to
exceed SFI's investment in this program. Excess
amortization, during this quarter, of $349,000 brings the
accumulated excess, to $2.2 million, at September 30,
1994.
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
3rd Qtr To Date
(In Thousands)
Sales to non-System parties:
Natural Gas .................................. $ 395 $ 994
Condensate ................................... 14 45
Crude Oil .................................... 208 467
Total ......................................... 617 1,506
Miscellaneous income from non-System parties.. 61 193
Total ......................................... 678 1,699
General and administrative expense ............ (128) (356)
Operating expense ............................. (206) (597)
Interest expense ................................... 55 (90)
Amortization adjustment ....................... 87 117
Net proceeds .................................. $ 486 $ 773
======== ========
2. Nuclear Fuel Procurement (See Item III)
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
Nuclear Fuel Procurement ........................... $ (4,007) $ 25,098
======== ========
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
Activities during the period:
Expenditures for nuclear materials and processing
services ..................................... $ 21,808 $ 50,114
General and administrative expense .............. 277 345
Interest expense ................................ 404 1,135
Total ........................................... 22,489 51,594
Sales of nuclear materials and processing
services to System companies ................. 26,496 26,496
Net effect on inventory ........................... $ (4,007) $ 25,098
======== ========
During the quarter, SFI's purchases totaled $21.8
million for nuclear materials and services.
SFI sold, to Arkansas Power & Light Company, nuclear
materials and services totaling $26.5 million for use at its
Arkansas Nuclear One during this reporting period.
3. Fuel Oil Program (See Item II)
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
Fuel Oil Inventory ................................. $ 1,082 $ (3,095)
======== ========
a) Fuel Oil Inventory:
Book
Inventory as of: Barrels Value
(In Thousands)
December 31, 1993 ............................ 2,070 $ 31,596
March 31, 1994 ............................... 1,790 $ 28,316
June 30, 1994 ................................ 1,652 $ 27,418
September 30, 1994 ........................... 1,754 $ 28,501
During 3rd Qtr.
Barrels Cost
Sales price per barrel to System companies
excluding period cost:
#2 Fuel Oil ............................... 27,439 $ 23.33
#6 Fuel Oil ............................... 36,826 $ 15.66
During this quarter, there was no resolution between SFI
and Marathon Oil Company regarding the continuation of
suspension of the fuel oil deliveries under the April, 1982
supply contract. Discussions continue. Other than Marathon,
SFI has no long term contracts for fuel oil.
4. Other Items:
a) As of September 30, 1994, 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 ............................ 19,883
Outside Financing:
Bank borrowings ........................... 23,000
Total ........................................ $ 76,903
========
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 3rd quarter of 1994, 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
Jul Aug Sep 3rd 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 $ 31,896 $ 24,824 $ 29,270 $ 85,990
Other direct cost ..... 10,144 7,562 15,943 33,649
Indirect cost ............ 5,020 18,475 25,489 48,984
Total .............. 47,060 50,861 70,702 168,623
Cost of services charged to
Service Requests not related
to transfer of SFI personnel. (7,364) 28,912 122,445 143,993
Total cost of services
performed by Entergy
Services .................... $ 39,696 $ 79,773 $193,147 $312,616
======== ======== ======== ========
Amounts billed to Operating
Companies for the Fuel Oil
Program * ................... $ 26,172 $ 49,266 $137,080 $212,518
Deferred Cost/Services....... 173 368 (1,027) (486)
Charged to Nuclear Fuel
Procurement ................. (1,319) 3,898 12,286 14,865
Charged to Gas and Oil
Development and Production .. 14,670 26,241 44,808 85,719
Total .................... $ 39,696 $ 79,773 $193,147 $312,616
======== ======== ======== ========
* Charged to the Fuel Oil Program as a component of
period costs. For the 3rd quarter of 1994 Fuel Oil Program
period costs were allocated 15% to Arkansas Power & Light
Company, 54% to Louisiana Power & Light Company, 19% to
Mississippi Power & Light Company and 12% 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 management 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 amount
under this financing agreement. Commitment fees of $14,041 were
incurred on the unused portion of the agreement. The average
outstanding principal balance, for the quarter, was $8,000,000
and interest cost totaled $97,111.
As of September 30, 1994, the sum of the Aggregate Borrowing
Base of Eligible Fuel Oil Inventory and Receivables was
$11,100,000 of which $8,000,000 was 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
amounts under this financing agreement. Commitment fees of
$15,682 were incurred on the unused portion of the agreement.
The average outstanding principal balance, for the quarter, was
$15,000,000 and interest cost totaled $194,583.
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 September 30, 1994, the book value of the nuclear fuel
was $39,034,000 and there was $15,000,000 outstanding under the
Yasuda agreement.
IV. File No 70-8331 Entergy Corporation Revolving Credit
Agreement (Entergy)
Pursuant to the Order issued on March 16, 1994, (Release
35-26006), SFI entered into a loan agreement with Entergy
Corporation on March 21, 1994. The agreement allows SFI to borrow
and reborrow from Entergy Corporation amounts not to exceed
$30,000,000 at any one time. This agreement terminates
on December 31, 1996.
During the quarter ended September 30, 1994, SFI did not
borrow under this agreement.
IN WITNESS WHEREOF, SFI has caused this certificate to be
executed as of the 27th of October, 1994.
ARKANSAS POWER & LIGHT COMPANY
LOUISIANA POWER & LIGHT COMPANY
MISSISSIPPI POWER & LIGHT COMPANY
NEW ORLEANS PUBLIC SERVICE INC.
SYSTEM ENERGY RESOURCES, INC
ENTERGY CORPORATION
SYSTEM FUELS, INC.
BY: /s/Gerald D. McInvale
Gerald D. McInvale
Senior Vice President and
Chief Financial Officer
