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 March 31, 1996, 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 - 1996 Fuel Supply
Programs
Expenditures for SFI's fuel program for 1996 during the 1st
quarter and year to date are indicated below:
Net Expenditures
During Year
1st Qtr To Date
(In Thousands)
1996 Fuel Supply Program:
1. Gas and Oil Development and Production .........$ 412 $ 412
2. Nuclear Fuel Procurement ....................... 18,400 18,400
3. Fuel Oil Program ............................... (13,497) (13,497)
--------- --------
Total Expenditures ................................... 5,315 5,315
--------- --------
Less funds derived through amortization and
depreciation charges:
Amortization of Gas and Oil Development and
Production Costs ................................. (227) (227)
Depreciation and other amortization ................ (130) (130)
--------- -------
Total depreciation and amortization ................... (357) (357)
--------- -------
Net Expenditures ...................................... 4,958 4,958
(Increase) decrease in:
Outside financing .................................. - -
System Money Pool borrowings ....................... (22,122) (22,122)
--------- -------
Total (increase) decrease in borrowings ............... (22,122) (22,122)
--------- -------
Increase (decrease) in working capital $ 17,164 $ 17,164
========= ========
1. Gas and Oil Development and Production
Net Expenditures
During Year
1st Qtr To Date
(In Thousands)
Gas and Oil Development and Production ...... $ 412 $ 412
====== ========
a) During the quarter, there was no drilling activity.
b) During the 1st quarter of 1996, SFI produced 131,965
MCFs of natural gas and 8,629 barrels of oil from it's Gas
and Oil Development and Production Program (Program) which
were sold to non-System parties.
During the 1st quarter of 1996, all of SFI's
natural gas production was sold to non-System parties.
This condition is expected to continue indefinitely. As a
result, SFI's expenditures in the Program are being
limited to amounts required to protect its existing
investment in the properties. Investments in new leases
are not being made at this time.
During this quarter, SFI recorded net excess
amortization of $227,273, which results in accumulated
excess amortization of $227,273 at the end of this period.
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
1st Qtr To Date
(In Thousands)
Sales to non-System parties:
Natural gas .................................. $ 798 $ 798
Condensate ................................... 13 13
Crude oil .................................... 94 94
------- --------
Total ......................................... 905 905
Miscellaneous income from non-System parties.. 57 57
------- --------
Total ......................................... 962 962
General and administrative expense ............ (123) (123)
Operating expense ............................. (252) (252)
Interest expense .............................. 14 14
Amortization adjustment ....................... (374) (374)
------- --------
Net proceeds .................................. $ 227 $ 227
======= ========
2. Nuclear Fuel Procurement (See Item III)
Net Expenditures
During Year
1st Qtr To Date
(In Thousands)
Nuclear Fuel Procurement ........................... $ 18,400 $ 18,400
========= ========
Net Expenditures
During Year
1st Qtr To Date
(In Thousands)
Activities during the period:
Expenditures for nuclear materials and processing
services ..................................... $ 35,528 $ 35,528
General and administrative expense .............. 27 27
Interest expense ................................ 1,315 1,315
--------- --------
Total ........................................... 36,870 36,870
Sales of nuclear materials and processing --------- --------
services to System companies ................. 18,469 18,469
--------- --------
Net effect on inventory ........................... $ 18,401 $ 18,401
========= ========
During the 1st quarter of 1996, SFI's purchases totaled $23.4
million for nuclear materials and services. Also, no new
contracts were entered into during this period.
During this reporting period, SFI sold, to Arkansas Power &
Light Company, nuclear materials and services totaling $18.5
million for use at their ANO 1 nuclear unit.
3. Fuel Oil Program (See Item II)
Net Expenditures
During Year
1st Qtr To Date
(In Thousands)
Fuel Oil Inventory ................................. $(13,497) $(13,497)
======== ========
a) Fuel Oil Inventory:
Book
Inventory as of: Barrels Value
(In Thousands)
March 31, 1996................................ 949 $ 19,764
December 31, 1995 ............................ 1,747 $ 27,950
September 30, 1995 ........................... 1,729 $ 27,518
June 30, 1995 ................................ 1,755 $ 28,459
March 31, 1995 ............................... 1,757 $ 28,359
During 1st Qtr.
Barrels Cost
Sales price per barrel to System companies
excluding period cost:
#2 Fuel Oil ............................... 94,483 $ 26.01
#6 Fuel Oil ............................... 1,350,645 $ 12.07
SFI has a fuel oil contract with Marathon Oil Company dated April 15, 1982
that was originally scheduled to terminate on December 31, 1996. On
January 1, 1994 Marathon breached the contract by refusing to deliver
product and on December 29, 1994 SFI filed suit against Marathon in
federal court in New Orleans, Louisiana. During this quarter, SFI and
Marathon reached a negotiated settlement to the dispute, and Marathon
resumed delivery of the high sulfur product portion of the contract.
This began on March 1, 1996 and will continue through February 28, 1999
to satisfy the final three years of the agreement.
4. Other Items:
a) As of March 31, 1996, 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 ............................ 24,954
Banks ........................................ 30,000
--------
Total ........................................ $ 88,974
========
b) As of January 1, 1987, SFI's employees were
transferred to Entergy Services, Inc. (Entergy Services).
Entergy Services bills SFI for labor associated with the
operation of continuing activities for SFI and other
services provided to SFI (financial, legal,
administrative, and other activities). For the 1st
quarter of 1996, SFI was billed by Entergy Services for
the following amounts:
Total
During
Jan Feb Mar 1st 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 $ 12,891 $ 15,058 $ 27,186 $ 55,135
Other direct cost ..... 1,835 3,694 988 6,517
Indirect cost ............ 1,570 830 1,638 4,038
-------- -------- -------- --------
Total .............. 16,296 19,582 29,812 65,690
-------- -------- -------- --------
Cost of services charged to
Service Requests not related
to transfer of SFI personnel: 134,725 115,854 99,062 349,641
-------- -------- -------- --------
Total cost of services
performed by Entergy
Services .................... $151,021 $135,436 $ 128,874 $415,331
======== ======== ========= ========
Amounts billed to Operating
Companies for the Fuel Oil
Program * ................... $102,094 $ 90,663 $ 79,465 $272,222
Deferred Cost and services .. 0 0 0 0
Charged to Nuclear Fuel
Procurement ................. 9,152 8,240 6,483 23,875
Charged to Gas and Oil
Development and Production .. 39,776 36,532 42,926 119,234
-------- -------- -------- --------
Total .................... $151,021 $135,436 $ 128,874 $415,331
======== ======== ========= ========
* Charged to the Fuel Oil Program as a component of
period costs. For the 1st quarter of 1996 Fuel Oil Program
period costs were allocated 8% to Arkansas Power & Light
Company, 56% to Louisiana Power & Light Company, 26% to
Mississippi Power & Light Company, and 10% 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
During the quarter, SFI had no borrowings or repayments
under this financing agreement. Commitment fees of $18,958 were
incurred on the unused portion of the agreement. As of March 31,
1996, the sum of the Aggregate Borrowing Base of Eligible Fuel
Oil Inventory and Receivables was $16,211,781, and there were no
outstanding borrowings under this agreement.
III. File No 70-7668 Yasuda Trust and Banking Co., Ltd. Agreement
(Yasuda)
During the quarter, SFI borrowed $0 under this financing
agreement. Commitment fees of $2,025 were incurred on the
unused portion of the agreement. The average outstanding
principal balance, was $30,000,000 and accrued interest cost was
$652,214 for the quarter.
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 27, 1996. A copy of the amended
credit agreement was previously filed with the SEC.
As of March 31, 1996, the book value of the nuclear fuel was
$65,994,000 and there was $30,000,000 of outstanding borrowings
under the Yasuda financing 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 expires on
December 31, 1996.
As of the period ended March 31, 1996, SFI had borrowed no
funds under this agreement.
<PAGE>
IN WITNESS WHEREOF, SFI has caused this certificate to be
executed as of the 30th of April, 1996.
ARKANSAS POWER & LIGHT COMPANY
LOUISIANA POWER & LIGHT COMPANY
MISSISSIPPI POWER & LIGHT COMPANY
NEW ORLEANS PUBLIC SERVICE INC.
SYSTEM ENERGY RESOURCES, INC
ENTERGY CORPORATION
BY: /s/William J. Regan
William J. Regan
Vice President
and Treasurer
SYSTEM FUELS, INC.
BY: /s/William J. Regan
William J. Regan
Vice President, Treasurer
and Assistant Secretary
