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 December 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 4th
quarter and year to date are indicated below:
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
1996 Fuel Supply Program:
1.Gas and Oil Development and Production .$ - $ 494
2.Nuclear Fuel Procurement ............... (8,772) 3,340
3.Fuel Oil Program ....................... 13,410 6,222
------ ------
Total Expenditures .......................... 4,638 10,056
------ ------
Less funds derived through amortization and
depreciation charges:
Amortization of Gas and Oil Development and
Production Costs ....................... 3,384 134
Depreciation and other amortization ...... (115) (481)
------ ------
Total depreciation and amortization .......... 3,269 (347)
------ ------
Net Expenditures ............................. 7,907 9,709
(Increase) decrease in:
Outside financing ......................... - 30,000
System Money Pool borrowings .............. (23,393) (53,605)
------ ------
Total (increase) decrease in borrowings ...... (23,393) (23,605)
------ ------
Increase (decrease) in working capital $ 15,486 $ 13,896
======= =======
1. Gas and Oil Development and Production
Net Expenditures
During Year
4th 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 (the "program"),
and recognized a net gain, after tax, of approximately
$1.3 million.
During this quarter, SFI recorded a net $.1
million to excess proceeds. This activity increased
accumulated excess proceeds to approximately $3.8 million
as of December 31, 1996. SFI and the purchaser of the oil
& gas properties finalized all outstanding transactions on
December 6, 1996. SFI distributed $3.5 million of the
accumulated net proceeds to its parent companies, on
December 31, 1996. The remaining accumulated proceeds of
$.3 million have been retained by SFI to cover continuing
shut down expenses expected to be incurred during the
first quarter of 1997. Following completion of this work,
any remaining proceeds, or costs, will be distributed to
the parent companies.
Calculation of net proceeds from sales to
non-System parties from the Program, including net
proceeds from the sale of Program assets, is:
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Sales to non-System parties:
Natural gas .............................. $ (154) $ 1,583
Condensate ............................... 0 33
Crude oil ................................ 0 395
------- -------
Total ...................................... (154) 2,010
Miscellaneous income(including sale of assets) 0 7,253
------- -------
Total ...................................... (154) 9,263
General and administrative expense ......... 535 (5,595)
Operating expense .......................... (16) (528)
Interest expense ........................... (218) (129)
Amortization adjustment (includes distribution)(3,531) (3,146)
------ ------
Net proceeds ............................... $ (3,384) $ (134)
======= =======
2. Nuclear Fuel Procurement (See Item III)
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Nuclear Fuel Procurement ................. $ (8,772) $ 3,340
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Activities during the period:
Expenditures for nuclear materials and processing
services ................................... $ 49,543 $109,122
General and administrative expense ........... 815 887
Interest expense ............................. 1,055 4,522
------- -------
Total ........................................ 51,413 114,531
------- -------
Sales of nuclear materials and processing
services to System companies ............... 60,185 111,191
------- -------
Net effect on inventory ...................... $(8,772) $ 3,340
======= ======
During the 4th quarter of 1996, SFI's purchases of nuclear
materials and services totaled $49.5 million. No new contracts
for nuclear materials and services were entered into during
this period.
During this reporting period, SFI sold nuclear materials and
services costing $60.1 million for use in System Companies'
nuclear generating units.
3. Fuel Oil Program (See Item II)
Net Expenditures
During Year
4th Qtr To Date
(In Thousands)
Fuel Oil Inventory .......................... $13,410 $ 6,222
====== =======
a) Fuel Oil Inventory:
Book
Inventory as of: Barrels Value
(In Thousands)
December 31, 1996.................... 1,657 $ 34,171
September 30, 1996................... 1,008 $ 20,761
June 30, 1996 ....................... 1,038 $ 20,898
March 31, 1995 ...................... 949 $ 19,764
December 31, 1995 ................... 1,747 $ 27,950
During 4th Qtr.
Barrels Cost
Sales price per barrel to System companies
excluding period cost:
#2 Fuel Oil ..................... 32,439 $ 25.82
#6 Fuel Oil ..................... 418,970 $ 16.56
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 1996, SFI and Marathon reached a
negotiated settlement to the dispute, and Marathon resumed
delivery. However, a different grade of fuel oil was substituted
for the fuel oil originally required to be delivered under the
contract. Deliveries of the substitute fuel oil began on March 1,
1996 and will continue through February 28, 1999. The product
delivered is being sold to a third party.
4. Other Items:
a) As of December 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 ............................ 56,438
Banks ........................................ 0
-------
Total ........................................ $ 90,458
=======
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 4th
quarter of 1996, SFI was billed by Entergy Services for
the following amounts:
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.. $ 18,661 $ 19,564 $ 16,232 $ 54,457
Other direct cost ....... 3,387 3,859 6,158 13,404
Indirect cost ............ 836 993 5,962 7,732
------- -------- -------- -------
Total ................ 22,884 24,356 28,352 75,593
------- -------- -------- -------
Cost of services charged to
Service Requests not related
to transfer of SFI personnel: 144,527 111,685 226,448 482,659
------- -------- -------- -------
Total cost of services
performed by Entergy
Services ................... $167,411 $136,041 $ 254,800 $558,252
======== ======== ========= ========
Amounts billed to Operating
Companies for the Fuel Oil
Program * .................. $117,242 $ 64,275 $ 128,690 $310,207
Deferred Cost and services . 0 631 (631) 0
Charged to Nuclear Fuel
Procurement ................ 9,178 68,587 137,440 215,205
Charged to Gas and Oil
Development and Production . 40,991 2,548 (10,700) 32,839
-------- -------- --------- --------
Total ................... $167,411 $136,041 $ 254,800 $558,251
======== ======== ========= ========
* 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 shut down, 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
December 31, 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 any funds,
under this financing agreement. Commitment fees of $17,230 were
incurred on the unused portion of the agreement. There were no
outstanding principal balance, no accrued interest cost for the
4th quarter.
The Yasuda credit agreement has been amended, pursuant to
SEC authorization, to extend the termination date of the
agreement to September 26, 1997. A copy of the amended credit
agreement has previously been filed with the SEC.
As of December 31, 1996, the book value of the nuclear fuel
was $50,933,000 and there was no amount outstanding under the
Yasuda financing agreement.
Consistent with the order issued by the SEC, dated November
27, 1996 (Release No. 35-26617) in File No. 70-8899, effective
after this reporting period SFI will no longer report on this
loan agreement. Activity pertaining to this loan agreement will
be reported by Entergy Services, Inc. under File No. 70-8899.
IV. File No 70-8331 Entergy Corporation Revolving Credit
Agreement (Entergy)
Pursuant to the Order issued on March 16, 1994, (Release No.
35-26006), SFI entered into a loan agreement with Entergy
Corporation dated March 21, 1994. As originally executed, this
agreement permitted SFI to borrow and reborrow from Entergy
Corporation amounts not in excess of $30,000,000 at any one.
Pursuant to the Commission's order dated November 27, 1997
(Release No. No. 35-26617) in File No. 70-8899, this agreement
has been extended through November 30, 2001 and amended to
increase SFI's aggregate borrowing limit to $95,000,000.
As of the period ended December 31, 1996, SFI has not
borrowed funds under this loan agreement.
Consistent with the order issued by the SEC, dated November
27, 1996 (Release No. 35-26617) in File No. 70-8899, effective
after this reporting period SFI will no longer report on this
loan agreement. Activity pertaining to this loan agreement will
be reported by Entergy Services, Inc. under File No. 70-8899.
<PAGE>
IN WITNESS WHEREOF, SFI has caused this certificate to be
executed as of the 31st of January, 1997.
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
