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 .
----------------
In the Matter of .
.
SYSTEM FUELS, INC. .
ENTERGY CORPORATION .
.
File No. 70-8331 .
.
(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 June 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
<PAGE>
I. File No. 70-5015 and File No. 70-5889 - 1994 Fuel Supply
Programs
Expenditures for SFI's fuel program for 1994 during the
2nd quarter and year to date are indicated below:
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
1994 Fuel Supply Program:
1. Gas and Oil Development and Production ......... $ 79 $ 186
2. Nuclear Fuel Procurement ....................... 23,213 29,113
3. Fuel Oil Program ............................... (898) (4,177)
-------- ---------
Total Expenditures .................................... 22,395 25,122
-------- ---------
Less funds derived through amortization and
depreciation charges:
Amortization of Gas and Oil Development and
Production Costs ................................. 125 (287)
Depreciation and other amortization ................ (171) (304)
-------- --------
Total depreciation and amortization ................... (46) (591)
--------- --------
Net Expenditures ...................................... 22,349 24,531
(Increase) Decrease in:
Outside financing .................................. (23,000) (23,000)
System Money Pool borrowings ....................... 13,984 12,535
Parent Companies borrowings ........................ 0 0
--------- --------
Total (increase) decrease in borrowings ............... (9,016) (10,465)
--------- --------
(Increase) Decrease in working capital ................$ 13,333 $ 14,066
========= ========
1. Gas and Oil Development and Production
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Gas and Oil Development and Production ............. $ 79 $ 186
======== ========
a) During the quarter, there was no drilling activity
b) SFI produced, during the quarter, 234,000 MCF of
natural gas and 14,000 barrels of oil from its Gas and Oil
Development and Production Program (Program) which were
sold to non-System parties.
During the 2nd 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, was eroded by the
payment of a judgment rendered in a thirteen year old
lawsuit. The net effect was $204,000 reduction of the
accumulated excess, which now stands at $1,863,795, at
June 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
2nd Qtr To Date
(In Thousands)
Sales to non-System parties:
Natural Gas .................................. $ 161 $ 599
Condensate ................................... 19 30
Crude Oil .................................... 106 259
--------- --------
Total ......................................... 286 888
Miscellaneous income from non-System parties.. 71 132
--------- --------
Total ......................................... 357 1,020
General and administrative expense ............ (88) (228)
Operating expense ............................. (258) (391)
Interest expense .............................. (161) (145)
Amortization adjustment ....................... 25 31
-------- -------
Net proceeds .................................. $ (125) $ 287
======== =======
2. Nuclear Fuel Procurement (See Item III)
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Nuclear Fuel Procurement ........................... $ 23,213 $ 29,113
======== ========
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Activities during the period:
Expenditures for nuclear materials and processing
services ..................................... $ 22,645 $ 28,306
General and administrative expense .............. 52 76
Interest expense ................................ 516 731
--------- --------
Total ........................................... 23,213 29,113
-------- --------
Sales of nuclear materials and processing
services to System companies ................. 0 0
-------- --------
Net effect on inventory ........................... $ 23,213 $ 29,113
======== ========
During the quarter, SFI's purchases totaled $22.6
million for nuclear materials and services. SFI entered into
contracts for the supply of 2.673 million puounds of U3O8.
SFI had no sales of nuclear materials and services during
this reporting period.
3. Fuel Oil Program (See Item II)
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Fuel Oil Inventory ................................. $ (898) $ (4,177)
======== ========
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
During 2nd Qtr.
Barrels Cost
Sales price per barrel to System companies
excluding period cost:
#2 Fuel Oil ............................... 47,032 $ 24.75
#6 Fuel Oil ............................... 972,477 $ 10.36
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 June 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 ............................ 12,795
--------
Outside Financing:
Bank borrowings ........................... 23,000
--------
Total ........................................ $ 69,815
========
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 2nd 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
Apr May Jun 2nd 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 $ 31,854 $ 39,510 $ 31,906 $103,270
Other direct cost ..... 14,025 9,862 530 24,417
Indirect cost ............ 7,857 4,834 3,774 16,465
-------- -------- --------- --------
Total .............. 53,736 54,206 36,210 144,152
-------- -------- --------- --------
Cost of services charged to
Service Requests not related
to transfer of SFI personnel. 125,143 95,674 337,587 558,404
-------- -------- --------- --------
Total cost of services
performed by Entergy
Services .................... $178,879 $149,880 $373,797 $702,556
======== ======== ======== ========
Amounts billed to Operating
Companies for the Fuel Oil
Program * ................... $119,053 $ 98,914 $242,872 $460,839
Deferred Cost/Services....... 2,139 747 (3,073) (187)
Charged to Nuclear Fuel
Procurement ................. 6,891 5,555 25,120 37,566
Charged to Gas and Oil
Development and Production .. 50,796 44,664 108,878 204,338
-------- -------- -------- --------
Total .................... $178,879 $149,880 $373,797 $702,556
======== ======== ======== ========
* Charged to the Fuel Oil Program as a component of
period costs. For the 2nd 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 borrowed $8,000,000 under this
financing agreement. Commitment fees of $11,375 were incurred on
the unused portion of the agreement. The average outstanding
principal balance, for the quarter, was $5,538,000 and interest
cost totaled $66,500.00.
As of June 30, 1994, the sum of the Aggregate Borrowing Base
of Eligible Fuel Oil Inventory and Receivables was $17,584,000
and $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 borrowed $15,000,000 under this
financing agreement. Commitment fees of $13,463 were incurred on
the unused portion of the agreement. The average outstanding
principal balance, for the quarter, was $10,385,000 and interest
cost totaled $119,766.
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 June 30, 1994, the book value of the nuclear fuel was
$43,050,000 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,
(Realease 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 June 30, 1994, SFI did not
borrow under this agreement.
<PAGE>
IN WITNESS WHEREOF, SFI has caused this certificate to be
executed as of the 27th of July, 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
ENTERGY CORPORATION
BY: /s/Glenn E. Harder
Glenn E. Harder
Treasurer
SYSTEM FUELS, INC.
BY: /s/Glenn E. Harder
Glenn E. Harder
Treasurer and Assistant
Secretary
