UNITED STATES OF AMERICA
BEFORE THE SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
. . . . . . . . . . . . . . . . . . . . . . . . . .
.
In the Matter of .
.
ENTERGY ARKANSAS, INC. .
ENTERGY LOUISIANA, INC. .
ENTERGY MISSISSIPPI, INC. .
ENTERGY NEW ORLEANS, INC. .
.
File No. 70-5015 .
________________ . CERTIFICATE
. PURSUANT TO
In the Matter of . RULE 24
.
SYSTEM FUELS, INC. .
SYSTEM ENERGY RESOURCES, INC. .
ENTERGY ARKANSAS, INC. .
ENTERGY LOUISIANA, INC. .
ENTERGY MISSISSIPPI, INC. .
ENTERGY NEW ORLEANS, 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 September 30, 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 3rd
quarter and year to date are indicated below:
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
1996 Fuel Supply Program:
1. Gas and Oil Development and Production $ - $ 494
2. Nuclear Fuel Procurement ............. (7,879) 12,112
3. Fuel Oil Program ..................... (137) (7,188)
------ ------
Total Expenditures ......................... (8,016) 5,418
------ ------
Less funds derived through amortization and
depreciation charges:
Amortization of Gas and Oil Development and
Production Costs ....................... (1,659) (3,250)
Depreciation and other amortization ...... (113) (366)
------ ------
Total depreciation and amortization ......... (1,772) (3,616)
------ ------
Net Expenditures ............................ (9,788) 1,802
(Increase) decrease in:
Outside financing ........................ - 30,000
System Money Pool borrowings ............. 15,641 (30,213)
------ -------
Total (increase) decrease in borrowings ..... 15,641 (213)
------ -------
Increase (decrease) in working capital $ (5,853) $ (1,589)
====== =======
1. Gas and Oil Development and Production
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
Gas and Oil Development and Production ..... $ - $ 494
======= =======
On September 6, 1996, effective July 1, 1996, SFI sold
its interest in the properties associated with its Gas and
Oil Development and Production Program, and recoginized a
net gain, after tax, of approximately $1.3 million.
During this quarter, SFI recovered its
expenditures and recorded $1.7 million to excess proceeds.
This activity increased accumulated excess proceeds to
approximately $3.7 million at September 30, 1996. SFI and
the purchaser of the oil & gas properties have 90 days in
which to finalize all their transactions/adjustments. The
accumulated net proceeds are deferred on SFI's books for
later distribution to its parent companies.
Calculation of net proceeds from sales to
non-System parties from the Program, including net
proceeds from the sale of the assets, is:
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
Sales to non-System parties:
Natural gas ........................... $ 230 $ 1,737
Condensate ............................ (6) 33
Crude oil ............................. 68 395
----- ------
Total .................................. 292 2,165
Miscellaneous income (including sale
of assets)......................... 7,134 7,253
----- ------
Total .................................. 7,426 9,418
General and administrative expense ..... (5,963) (6,130)
Operating expense ...................... 12 (512)
Interest expense ....................... 34 89
Amortization adjustment ................ 150 385
----- -----
Net proceeds ........................... $ 1,659 $ 3,250
===== =====
2. Nuclear Fuel Procurement (See Item III)
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
Nuclear Fuel Procurement ................ $ (7,879) $ 12,112
====== ======
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
Activities during the period:
Expenditures for nuclear materials and processing
services ............................. $ 23,528 $ 59,579
General and administrative expense ....... 23 72
Interest expense ......................... 1,106 3,467
------ ------
Total .................................... 24,657 63,118
Sales of nuclear materials and processing ------ ------
services to System companies .......... 32,536 51,005
------ ------
Net effect on inventory .................... $ (7,879) $12,112
====== ======
During the 3rd quarter of 1996, SFI's purchases totaled $23.5
million for nuclear materials and services. Several new
contracts were entered into, during this period, to provide
uranium deliveries from 1998 to the year 2001.
During this reporting period, SFI sold nuclear materials and
services costing $32.5 million to System Energy Resources,
Inc. for use in its Grand Gulf Nuclear Unit.
3. Fuel Oil Program (See Item II)
Net Expenditures
During Year
3rd Qtr To Date
(In Thousands)
Fuel Oil Inventory ....................... $ (137) $ (7,189)
====== =======
a) Fuel Oil Inventory:
Book
Inventory as of: Barrels Value
(In Thousands)
September 30, 1996.................. 1,008 $ 20,761
June 30, 1996 ...................... 1,038 $ 20,898
March 31, 1996 ..................... 949 $ 19,764
December 31, 1995 .................. 1,747 $ 27,950
September 30, 1995 ................. 1,729 $ 27,518
During 3rd Qtr.
Barrels Cost
Sales price per barrel to System companies
excluding period cost:
#2 Fuel Oil ..................... 23,460 $ 24.82
#6 Fuel Oil ..................... - $ -
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 the first 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. The product delivered is
being sold to a third party.
4. Other Items:
a) As of September 30, 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 ............................ 33,045
Banks ........................................ 0
-------
Total ........................................ $ 67,065
=======
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 2nd
quarter of 1996, SFI was billed by Entergy Services for
the following amounts:
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.... $ 19,228 $ 28,911 $ 22,866 $ 71,005
Other direct cost ........ 1,805 2,518 2,248 6,571
Indirect cost ............... 1,415 775 8,733 10,923
------ ------ ------ ------
Total ................. 22,448 32,204 33,847 88,499
====== ====== ====== ======
Cost of services charged to
Service Requests not related
to transfer of SFI personnel: 146,119 130,441 78,996 355,556
------- ------- ------- -------
Total cost of services
performed by Entergy
Services .................... $168,567 $162,645 $112,843 $444,055
======= ======= ======= =======
Amounts billed to Operating
Companies for the Fuel Oil
Program * ................... $131,819 $111,262 $ 65,565 $308,646
Deferred Cost and services .. 0 0 0 0
Charged to Nuclear Fuel
Procurement ................. 7,637 6,882 5,585 20,104
Charged to Gas and Oil
Development and Production .. 29,111 44,501 41,693 115,305
------- ------- ------- -------
Total ....................... $168,567 $162,645 $112,843 $444,055
======= ======= ======= =======
* 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 ENTERGY ARKANSAS, INC.,
56% to ENTERGY LOUISIANA, INC., 26% to ENTERGY MISSISSIPPI,
INC., and 10% to ENTERGY NEW ORLEANS, 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
This financing agreement expired January 31, 1996.
Commitment fees, incurred and paid for the month of January,
1996, were $6,458 on the unused portion of that agreement. As of
September 30, 1996, there are no plans to renew this agreement.
III. File No 70-7668 Yasuda Trust and Banking Co., Ltd. Agreement
(Yasuda)
During the quarter, SFI did not borrow, nor repay anything,
under this financing agreement. Commitment fees of $16,842 were
incurred on the unused portion of the agreement. There were no
outstanding principal balance, no accrued interest cost for the
3rd 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 September 30, 1996, the book value of the nuclear fuel
was $59,706,000 and there was no amount outstanding 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 September 30, 1996, SFI had borrowed
no funds under this agreement.
<PAGE>
IN WITNESS WHEREOF, SFI has caused this certificate to be
executed as of the 31st of October, 1996.
ENTERGY ARKANSAS, INC.
ENTERGY LOUISIANA, INC.
ENTERGY MISSISSIPPI, INC.
ENTERGY NEW ORLEANS, INC.
SYSTEM ENERGY RESOURCES, INC.
ENTERGY CORPORATION
BY: /s/William J. Regan, Jr.
William J. Regan, Jr.
Vice President
and Treasurer
SYSTEM FUELS, INC.
BY: /s/William J. Regan, Jr.
William J. Regan, Jr.
Vice President, Treasurer
and Assistant Secretary
