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 December 31, 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 March 16, 1994 ..................................... 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 4th
quarter and year to date are indicated below:
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
1994 Fuel Supply Program:
1. Gas and Oil Development and Production ......... $ 341 $ 664
2. Nuclear Fuel Procurement ....................... (1,747) 23,353
3. Fuel Oil Program ............................... 25 (3,070)
--------- --------
Total Expenditures .................................... (1,381) 20,947
--------- --------
Less funds derived through amortization and
depreciation charges:
Amortization of Gas and Oil Development and
Production Costs ................................. 1,833 1,060
Depreciation and other amortization ................ (157) (617)
--------- --------
Total depreciation and amortization ................... 1,676 443
--------- --------
Net Expenditures ...................................... 295 21,390
(Increase) Decrease in:
Outside financing .................................. 0 (23,000)
System Money Pool borrowings ....................... 7,293 12,740
Parent Companies borrowings ........................ 0 0
--------- --------
Total (increase) decrease in borrowings ............... 7,293 (10,260)
--------- --------
(Increase) Decrease in working capital ................$ (7,588) $11,130
========= ========
1. Gas and Oil Development and Production
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Gas and Oil Development and Production ............. $ 341 $ 664
======== ========
a) During the quarter, there was no drilling activity
b) SFI produced, during the quarter, 365,000 MCF of
natural gas and 15,000 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 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.
During this quarter, SFI recorded a multi-year
income tax adjustment, to expense, resulting in $1.8
million of negative amortization. This caused the
depletion of previously reported accumulated amortization
to approximately $40,000 at year end 1994. Current
quarter's expenditures of $341,000 are included in those
net results.
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 .................................. $ 159 $ 1,153
Condensate ................................... 38 83
Crude Oil .................................... 212 678
--------- --------
Total ......................................... 409 1,914
Miscellaneous income from non-System parties.. 68 262
--------- --------
Total ......................................... 477 2,176
General and administrative expense ............ (1,761) (2,116)
Operating expense ............................. (209) (806)
Interest expense ................................... 37 (53)
Amortization adjustment ....................... (377) (261)
-------- --------
Net proceeds .................................. $ (1,833) $ (1,060)
======== ========
2. Nuclear Fuel Procurement (See Item III)
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Nuclear Fuel Procurement ........................... $ (1,747) $ 23,353
======== ========
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Activities during the period:
Expenditures for nuclear materials and processing
services ..................................... $ 23,492 $ 79,760
General and administrative expense .............. 628 975
Interest expense ................................ 645 1,780
--------- --------
Total ........................................... 24,765 82,515
--------- --------
Sales of nuclear materials and processing
services to System companies ................. 26,512 59,162
--------- --------
Net effect on inventory ........................... $ (1,747) $ 23,353
======== ========
During the quarter, SFI's purchases totaled $23.5 million
for nuclear materials and services. Also, SFI entered into one
contract for the purchase of uranium and associated conversion
services, and, two contracts for enrichment services.
SFI sold, to System Energy Resources, Inc., nuclear materials
and services totaling $26.4 million for use at its Grand Gulf
nuclear unit during this reporting period.
3. Fuel Oil Program (See Item II)
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Fuel Oil Inventory ................................. $ 25 $ (3,070)
======== ========
a) Fuel Oil Inventory:
Book
Inventory as of: Barrels Value
(In Thousands)
March 31, 1994 ............................... 1,790 $ 28,316
June 30, 1994 ................................ 1,652 $ 27,418
September 30, 1994 ........................... 1,754 $ 28,501
December 31, 1994 ............................ 1,759 $ 28,526
During 4th Qtr.
Barrels Cost
Sales price per barrel to System companies
excluding period cost:
#2 Fuel Oil ............................... 36,618 $ 23.84
#6 Fuel Oil ............................... 3,592 $ 11.63
During this quarter, SFI and Marathon Oil Company could not
reach a mutual resolution regarding the continuation of the
suspension of fuel oil deliveries under their 1982 supply
contract. Therefore, on December 29, 1994, SFI filed
litigation in Federal Court, in New Orleans, against Marathon
for failure to perform under the terms and conditions of the
long term fuel oil supply contract due to expire December 31,
1996. Other than Marathon, SFI has no long term contracts for
fuel oil.
4. Other Items:
a) As of December 31, 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 ............................ 12,590
--------
Outside Financing:
Bank borrowings ........................... 23,000
--------
Total ........................................ $ 69,610
========
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 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
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 $ 18,348 $ 19,882 $ 18,043 $ 56,273
Other direct cost ..... 9,060 6,060 2,964 18,084
Indirect cost ............ 22,545 9,344 29,164 61,053
-------- -------- --------- --------
Total .............. 49,953 35,286 50,171 135,410
-------- -------- --------- --------
Cost of services charged to
Service Requests not related
to transfer of SFI personnel. 132,806 120,309 194,213 447,328
-------- -------- -------- --------
Total cost of services
performed by Entergy
Services .................... $182,759 $155,595 $244,384 $582,738
======== ======== ======== ========
Amounts billed to Operating
Companies for the Fuel Oil
Program * ................... $129,590 $ 99,317 $186,756 $415,663
Deferred Cost/Services....... 0 (539) 1,212 673
Charged to Nuclear Fuel
Procurement ................. 10,248 11,738 26,175 48,161
Charged to Gas and Oil
Development and Production .. 42,921 45,079 30,241 118,241
-------- -------- -------- --------
Total .................... $182,759 $155,595 $244,384 $582,738
======== ======== ======== ========
* Charged to the Fuel Oil Program as a component of
period costs. For the 4th 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 $11,500 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 $135,194.
As of December 31, 1994, the sum of the Aggregate Borrowing
Base of Eligible Fuel Oil Inventory and Receivables was
$11,300,000 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
$13,611 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 $231,883.
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, 1994, the book value of the nuclear fuel
was $37,290,000 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 December 31, 1994, SFI did not
borrow under this agreement.
<PAGE>
IN WITNESS WHEREOF, SFI has caused this certificate to be
executed as of the 31st of January, 1995.
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
