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 June 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
I. File No. 70-5015 and File No. 70-5889 - 1996 Fuel Supply
Programs
Expenditures for SFI's fuel program for 1996 during the 2nd
quarter and year to date are indicated below:
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
1996 Fuel Supply Program:
1. Gas and Oil Development and Production .$ 83 $ 494
2. Nuclear Fuel Procurement ............... 1,591 19,991
3. Fuel Oil Program ....................... 1,678 (7,051)
-------- -------
Total Expenditures .......................... 3,352 13,434
-------- -------
Less funds derived through amortization and
depreciation charges:
Amortization of Gas and Oil Development and
Production Costs ........................... (956) (1,591)
Depreciation and other amortization ......... (124) (253)
-------- -------
Total depreciation and amortization ........... (1,080) (1,844)
-------- -------
Net Expenditures .............................. 2,272 11,590
(Increase) decrease in:
Outside financing ........................... 30,000 30,000
System Money Pool borrowings ................(23,732) (45,854)
-------- -------
Total (increase) decrease in borrowings ....... 6,268 (15,854)
-------- -------
Increase (decrease) in working capital $ (8,540) $ 4,264
========= =======
1. Gas and Oil Development and Production
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Gas and Oil Development and Production ....$ 83 $ 494
======== =======
a) During the quarter, there was no drilling activity.
b) During the 2nd quarter of 1996, SFI produced 277,973
MCFs of natural gas and 14,974 barrels of oil from it's Gas
and Oil Development and Production Program (Program) which
were sold to non-System parties.
During the 2nd quarter of 1996, SFI placed its
Gas and Oil Development and Production properties for sale
on the open market. Several bids were received, and
reviewed, before one was accepted. As is the usual custom
in these type proceedings, a deposit was tendered by the
prospective buyer, and negotiations are in progress. 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 $83,000 to
expenditures and $956,000 to excess amortization. This
activity increased accumulated excess proceeds to
approximately $2,067,000, at June 30, 1996.
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 ............................... $ 710 $ 1,507
Condensate ................................ 25 39
Crude oil ................................. 233 327
-------- --------
Total ....................................... 968 1,873
Miscellaneous income from non-System parties.. 62 119
-------- --------
Total ........................................ 1,030 1,992
General and administrative expense ........... (44) (167)
Operating expense ............................ (273) (524)
Interest expense ............................. 41 55
Amortization adjustment ...................... 202 235
-------- -------
Net proceeds .................................$ 956 $ 1,591
======== ========
2. Nuclear Fuel Procurement (See Item III)
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Nuclear Fuel Procurement ................... $ 1,591 $ 19,991
======== ========
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Activities during the period:
Expenditures for nuclear materials and processing
services ..................................$ 522 $ 36,051
General and administrative expense .......... 22 49
Interest expense ............................ 1,047 2,361
-------- --------
Total ....................................... 1,591 38,461
-------- --------
Sales of nuclear materials and processing
services to System companies .............. 0 18,470
-------- --------
Net effect on inventory ....................$ 1,591 $ 19,991
======== ========
During the 2nd quarter of 1996, SFI's purchases totaled $.5
million for nuclear materials and services. Also, no new
contracts were entered into during this period.
During this reporting period, SFI did not sell any nuclear
materials and services.
3. Fuel Oil Program (See Item II)
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Fuel Oil Inventory ......................... $ 1,678 $ (7,051)
======== ========
a) Fuel Oil Inventory:
Book
Inventory as of: Barrels Value
(In Thousands)
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
June 30, 1995 ....................... 1,755 $ 28,459
During 2nd Qtr.
Barrels Cost
Sales price per barrel to System companies
excluding period cost:
#2 Fuel Oil ...................... 26,186 $ 24.61
#6 Fuel Oil ...................... 16,341 $ 14.56
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 June 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 ................... 48,687
Banks ............................... 0
--------
Total ............................... $ 82,707
========
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
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 $ 18,533 $ 19,690 $ 18,526 $ 56,749
Other direct cost ........ 1,991 2,941 3,194 8,126
Indirect cost ....... 0 0 0 0
-------- -------- -------- --------
Total ............. 20,524 22,631 21,720 64,875
-------- -------- -------- --------
Cost of services charged to
Service Requests not related
to transfer of SFI personnel: 161,168 123,611 (31,023) 253,756
-------- -------- -------- --------
Total cost of services
performed by Entergy
Services ................... $181,692 $146,242 $ (9,303) $318,631
======== ======== ======== ========
Amounts billed to Operating
Companies for the Fuel Oil
Program * .................. $130,066 $ 92,643 $ (8,924) $213,785
Deferred Cost and services . 0 0 0 0
Charged to Nuclear Fuel
Procurement ................ 9,384 9,849 2,592 21,825
Charged to Gas and Oil
Development and Production . 42,242 43,750 (2,971) 83,021
-------- -------- -------- --------
Total ................... $181,692 $146,242 $ (9,303) $318,631
======== ======== ========= ========
* 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
June 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 under this financing
agreement, but, repaid the $30.0 million which was outstanding at
last reporting. Commitment fees of $11,819 were incurred on the
unused portion of the agreement. The average outstanding
principal balance, was $14,835,000 and accrued interest cost was
$143,551 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 June 30, 1996, the book value of the nuclear fuel was
$67,585,000 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 June 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 July, 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
William J. Regan
Vice President and Treasurer
SYSTEM FUELS, INC.
BY: /s/William J. Regan
William J. Regan
Vice President, Treasurer
and Assistant Secretary
