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, 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 3rd
quarter and year to date are indicated below:
Net Expenditures
(In Thousands)
4th Quarter Year to Date
1997 Fuel Supply Program:
1. Gas and Oil Development
and Production $ 0 $ (9)
2. Nuclear Fuel Procurement (10,501) (2,699)
3. Fuel Oil Program 17,605 6,908
________ __________
TOTAL EXPENDITURES 7,104 4,230
________ __________
Less funds derived through
amortization & depreciation
charges
Amortization of Gas & Oil
Development & Production Costs (5,624) (5,625)
Depreciation & Other
amortization (72) (363)
_______ _______
TOTAL depreciation & amortization (5,696) (5,988)
Net Expenditures 1,408 (1,758)
(Increase) decrease in:
Outside financing - -
System Money Pool borrowings (9,877) 583
_______ _______
TOTAL (increase)decrease
in borrowings (9,877) 583
_______ _______
Increase (decrease) in working
capital $ 8,469 $ 1,174
======== =========
1. Gas and Oil Development and
Production
Net Expenditures
(In Thousands)
4th Quarter Year to Date
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. At
December 31, 1997, Income tax benefits of approximately
$5.6 million were credited to this discontinued program
resulting from the adjustment needed to the recorded book
estimate for 1996's Income Tax Expense when compared to
the actual Return for the same period. As previously
reported, SFI distributed $3.5 million of the accumulated
net proceeds to its parent companies, on December 31,
1996. Currently, accumulated net proceeds of approximately
$6.0 are to be distributed to the parent companies.
Calculation of the net expenditures (proceeds) from the
continuing shutdown activities of the Program, is:
Net Expenditures
(In Thousands)
4th Quarter Year to Date
Sales to non-System parties:
Natural gas $ - $ -
Condensate - -
Crude oil - -
TOTAL - -
Miscellaneous income (including - (3)
sale of assets)
TOTAL - (3)
General and administrative
expense (5,613) (5,616)
Operating expense - (566)
Interest expense - -
Amortization adjustment 10 8
_________ ________
Net proceeds $(5,603) $(5,605)
========= ========
2. Nuclear Fuel Procurement
(See Item III)
Net Expenditures
(In Thousands)
4th Quarter Year to Date
Nuclear Fuel Procurement $(10,501) $(2,669)
_________ ________
Net Expenditures
(In Thousands)
4th Quarter Year to Date
Activities during the period:
Expenditures for nuclear
materials and processing
services $28,283 $32,993
General and administrative
expense (792) (318)
Interest expense 842 3,571
________ ________
TOTAL 28,333 36,246
________ ________
Sales of nuclear materials and
processing services to
System companies 38,834 38,915
________ _______
Net effect on inventory $(10,501) $(2,669)
========= ========
During the 4th quarter of 1997, SFI's purchases of nuclear
materials and services totaled $28.3 million.
During this reporting period, SFI had sales of nuclear
materials and services, totalling $38.8 million.
3. Fuel Oil Program
(See Item II)
Net Expenditures
(In Thousands)
4th Quarter Year to Date
Fuel Oil Inventory $17,605 $ 6,908
======= =======
a) Fuel Oil Inventory:
Barrels Book Value
Inventory as of: (In Thousands)
December 31, 1997 2,099 41,079
September 30, 1997 1,220 23,474
June 30, 1997 1,368 27,319
March 31, 1997 1,255 26,319
December 31, 1996 1,657 34,171
During 4th Quarter
(In Thousands)
Barrels Value
Sales price per barrel
to System companies
excluding period cost:
#2 Fuel Oil 16,539 25.35
#6 Fuel Oil 2,260,543 16.97
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
fourth quarter, SFI purchased 1,054,288 barrels of Bunker Grade
oil from Marathon, and sold this product to a third party for
approximately $16.7 million.
4. Other Items:
a) As of December 31, 1997, SFI's outstanding debt and Parent
Companies investment consisted of:
Parent Companies: In Thousands
Common Stock $ 20
Notes payable 34,000
_______
TOTAL 34,020
System Money Pool 55,854
Banks 0
_______
TOTAL $89,874
=======
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 1997, SFI was
billed by Entergy Services for the following amounts:
Total
October November December 4th Qtr
Cost of service
charged to
Service Requests
established to
track cost of functions
previously performed by
SFI personnel:
Direct Cost:
Labor and related
cost $ 5,377 $ 3,668 $ 4,201 $ 13,246
Other direct cost 944 569 511 2,024
Indirect Cost 460 329 420 1,209
_____ _____ _____ ______
TOTAL 6,781 4,566 5,132 16,479
_____ _____ _____ ______
Cost of services
charged to Service
Requests not related
to transfer of SFI
personnel: 91,141 46,871 98,791 236,803
______ ______ ______ _______
Total cost of services
performed by Entergy
Services $ 97,922 $ 51,437 $103,923 $253,282
======== ======== ======== ========
Amounts billed to
Operating Companies for
the Fuel Oil Program $ 51,932 $(8,856) $ 24,094 $ 67,170
Charged to Nuclear Fuel
Procurement 45,990 60,293 79,829 186,112
________ ________ ________ ________
TOTAL $ 97,922 $ 51,437 $103,923 $253,282
======== ======== ======== ========
* Charged to the Fuel Oil Program as a component of period
costs. For the 4th quarter of 1997 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.
During the third quarter, SFI filed an Application-Declaration,
on Form U-1 in File No. 70-9103 (the "U-1"), with the SEC
requesting authorization, among other things, (I) for SFI to
function as a supplier of transmission and distribution related
equipment and materials for the Entergy Corporation Operating
Companies, and (ii) for Entergy Gulf States, Inc. to acquire an
ownership interest in SFI and assume a share of the debt
financing for SFI on the same proportionate basis as the other
operating companies. The U-1 is pending, and an amendment id
forthcoming.
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. This
loan agreement expired September 26, 1997 and will not be
renewed.
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.
<PAGE>
IN WITNESS WHEREOF, SFI has caused this certificate to be
executed as of the 29th of January, 1998.
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
