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 .
________________ .
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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 June 30, 1997, 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 - 1997 Fuel Supply Programs
Expenditures for SFI's fuel program for 1997 during the 2nd quarter and
year to date are indicated below:
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
1997 Fuel Supply Program:
1. Gas and Oil Development and Production $ 7 $ (8)
2. Nuclear Fuel Procurement ............ 1,129 6,719
3. Fuel Oil Program ..................... 1,000 (6,853)
----- -------
Total Expenditures ........................ 2,136 (142)
----- -------
Less funds derived through amortization and
depreciation charges:
Amortization of Gas and Oil Development and
Production Costs ......................... (7) (7)
Depreciation and other amortization ........ (91) (198)
---- -----
Total depreciation and amortization ........ (98) (205)
---- -----
Net Expenditures ........................... 2,038 (347)
(Increase) decrease in:
Outside financing .......................... - -
System Money Pool borrowings ............ (4,513) 7,971
------- -----
Total (increase) decrease in borrowings .... (4,513) 7,971
------- -----
Increase (decrease) in working capital $ 2,475 $(7,623)
========= ========
1. Gas and Oil Development and Production
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Gas and Oil Development and Production .. $ - $ -
======= =======
Effective July 1, 1996, SFI sold its interest in the properties
associated with its Gas and Oil Development and Production Program
(the "program").
During this quarter, SFI had insignificant expenditures
relative to the continuing shutdown of this operation. As previously
reported, SFI distributed $3.5 million of the accumulated net
proceeds to its parent companies, on December 31, 1996. The
remaining accumulated proceeds of approximately $300,000 are being
retained by SFI to cover continuing shut down expenses to be
completed in 1997. Following completion of this work, any remaining
proceeds, or costs, will be distributed to the parent companies.
Calculation of the net expenditures (proceeds) from the
continuing shutdown activities of the Program, is
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Sales to non-System parties:
Natural gas .................................. $ - $ -
Condensate ................................... - -
Crude oil ................................. - 0
------- ------
Total ........................................ - -
Miscellaneous income(including sale of assets). - 0
------- -----
Total ................................. - -
General and administrative expense ..... (7) (8)
Operating expense ...................... - -
Interest expense ....................... - -
Amortization adjustment - (7)
------ -------
Net proceeds ........................... $ (7) $ (15)
====== =======
2. Nuclear Fuel Procurement (See Item III)
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Nuclear Fuel Procurement .................... $ 1,129 $ 6,719
======= ======
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Activities during the period:
Expenditures for nuclear materials and processing
services .................................... $ 98 $ 4,709
General and administrative expense .............. 188 318
Interest expense ................................ 924 1,773
--------- --------
Total ........................................... 1,210 6,800
--------- --------
Sales of nuclear materials and processing
services to System companies ................. 81 81
-------- --------
Net effect on inventory ........................... $ 1,129 $ 6,719
======== ========
During the 2nd quarter of 1997, SFI's purchases of nuclear materials and
services totaled $1.1 million. No new contracts for nuclear materials
and services were entered into during this period.
Sales for this quarter were final true-up charges for enrichment
services purchased during the last quarter of 1996. During this
reporting period, SFI had no sales of nuclear materials and services.
3. Fuel Oil Program (See Item II)
Net Expenditures
During Year
2nd Qtr To Date
(In Thousands)
Fuel Oil Inventory ................................. $ 1,000 $(6,853)
======= =======
a) Fuel Oil Inventory:
Book
Inventory as of: Barrels Value
(In Thousands)
June 30, 1997 ................................ 1,368 $ 27,319
March 31, 1997 ............................... 1,255 $ 26,319
December 31, 1996............................. 1,657 $ 34,171
September 30, 1996 ........................... 1,008 $ 20,761
June 30, 1996 ................................ 1,038 $ 20,898
During 2nd Qtr.
Barrels Cost
Sales price per barrel to System companies
excluding period cost:
#2 Fuel Oil ............................... 37,750 $ 26.78
#6 Fuel Oil ............................... 143,821 $ 17.69
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.
During the second quarter 1997, SFI purchased 1,172,931 barrels of Bunker
Grade oil from Marathon, and sold this product to a third party for
approximately $15.9 million.
4. Other Items:
a) As of June 30, 1997, 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 ............................ 48,467
Banks ........................................ 0
--------
Total ........................................ $ 82,487
========
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 1997,
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 $ 6,291 $ 6,172 $ 3,973 $ 16,436
Other direct cost ..... 40 340 (850) (470)
Indirect cost ............ 634 509 320 1,463
-------- -------- --------- ---------
Total .............. 6,965 7,021 3,443 17,429
-------- -------- --------- ---------
Cost of services charged to
Service Requests not related
to transfer of SFI personnel: 163,516 73,975 133,590 371,081
-------- -------- -------- ---------
Total cost of services
performed by Entergy
Services .................... $170,481 $ 80,996 $ 137,033 $388,510
======== ======== ========= ========
Amounts billed to Operating
Companies for the Fuel Oil
Program * ................... $ 84,995 $ 35,901 $ 85,735 $206,631
Charged to Nuclear Fuel
Procurement ................. 85,486 45,095 51,298 181,879
-------- -------- -------- --------
Total .................... $170,481 $ 80,996 $ 137,033 $388,510
======== ======== ========= ========
* 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.
III. File No 70-7668 Yasuda Trust and Banking Co., Ltd. Agreement
(Yasuda)
As indicated in the previous filing pursuant to the SEC order dated
November 27, 1996, (Release No. 35-26617) in File No. 70-8899, 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)
As indicated in the previous filing pursuant to the SEC order dated
November 26, 1996, (Release No. 35-26617) in File No. 70-8899, activity
pertaining to this loan agreement will be reported by Entergy Services,
Inc. under File No. 70-8899.
IN WITNESS WHEREOF, SFI has caused this certificate to be executed as
of the 1st of August, 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
