SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date earliest event reported) July 6, 2001
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
1-10764 ENTERGY ARKANSAS, INC. 71-0005900
(an Arkansas corporation)
425 West Capitol Avenue, 40th Floor
Little Rock, Arkansas 72201
Telephone (501) 377-4000
1-27031 ENTERGY GULF STATES, INC. 74-0662730
(a Texas corporation)
350 Pine Street
Beaumont, Texas 77701
Telephone (409) 838-6631
1-8474 ENTERGY LOUISIANA, INC. 72-0245590
(a Louisiana corporation)
4809 Jefferson Highway
Jefferson, Louisiana 70121
Telephone (504) 840-2734
0-320 ENTERGY MISSISSIPPI, INC. 64-0205830
(a Mississippi corporation)
308 East Pearl Street
Jackson, Mississippi 39201
Telephone (601) 368-5000
0-5807 ENTERGY NEW ORLEANS, INC. 72-0273040
(a Louisiana corporation)
1600 Perdido Building
New Orleans, Louisiana 70112
Telephone (504) 670-3674
1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777
(an Arkansas corporation)
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Telephone (601) 368-5000
Item 5. Other Events
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - SIGNIFICANT
FACTORS AND KNOWN TRENDS" in the Entergy Corporation and Subsidiaries
2000 Form 10-K for a discussion of the proposed amendments to the
System Agreement filed with the Federal Energy Regulatory Commission
(FERC) by Entergy Corporation's (Entergy's) domestic utility companies.
The proposed amendments were designed to facilitate the implementation
of retail competition in Arkansas and Texas. As discussed in the Form
10-K, the Louisiana Public Service Commission (LPSC) and the Council of
the City of New Orleans (Council) also filed a complaint with FERC
seeking revisions to the System Agreement.
In June 2001, in connection with these proceedings, the parties
filed an offer of settlement with FERC. The offer of settlement
provides for the following amendments to the System Agreement:
o the Texas retail jurisdictional division of Entergy Gulf States
will terminate its participation in the System Agreement, except for
the aspects related to transmission equalization, when Texas implements
retail open access, which is scheduled for January 1, 2002;
o five percent of the megawatt capacity allocated to the Texas
retail load by the LPSC will be made available to the domestic utility
companies in the System Agreement. Each company has until November 15,
2001 to elect to purchase its pro rata share of this capacity. Entergy
Arkansas' pro rata share is 27.3%, Entergy Gulf States - Louisiana's
pro rata share is 20.2%, Entergy Louisiana's pro rata share is 30.2%,
Entergy Mississippi's pro rata share is 15.9%, and Entergy New Orleans'
pro rata share is 6.4%. If a company elects to purchase capacity it
will be for the period January 1, 2002 through June 30, 2008. If a
company elects not to purchase, the other companies are not entitled to
purchase that company's share of the capacity; and
o the service schedule developed to track changes in energy costs
resulting from the Entergy-Gulf States Utilities merger is modified to
include one final true-up of fuel costs when the Texas retail
jurisdictional division of Entergy Gulf States ceases participation in
the System Agreement, after which the service schedule will no longer
be applicable for any purpose.
The proceeding on the complaint filed with FERC in 1995 by the LPSC
requesting modification of the System Agreement to exclude curtailable
load from the cost allocation determination was not settled. On July
6, 2001, an Administrative Law Judge issued decisions certifying the
offer of settlement to the FERC and generally continuing to include
curtailable load served during 1995 in cost allocation determinations.
As anticipated by the offer of settlement, the LPSC and the
Council commenced a new proceeding at FERC in June 2001. In this
proceeding, the LPSC and the Council allege that the rough production
cost equalization required by FERC under the System Agreement and the
Unit Power Sales Agreement has been disrupted by changed circumstances.
They allege that evidence introduced in the hearing in the System
Agreement proceeding described above indicates that Entergy Arkansas'
production costs are below the average of the costs of the other
Entergy domestic utility companies in the System Agreement. The LPSC
and the Council have requested that FERC amend the System Agreement or
the Unit Power Sales Agreement or both to achieve full production cost
equalization or to restore rough production cost equalization.
Responses to the complaint are due by July 19, 2001.
In their complaint, the LPSC and Council allege that the domestic
utility companies' annual production costs over the period 2002 to 2007
will be over or (under) the average for the Entergy domestic utility
companies by the following amounts:
Entergy Arkansas ($130) to ($278) million
Entergy Gulf States - LA $11 to $87 million
Entergy Louisiana $139 to $132 million
Entergy Mississippi ($27) to $13 million
Entergy New Orleans $7 to $46 million
This range of results is a function of assumptions regarding such
things as future natural gas prices, the future market price of
electricity, and other factors. If FERC grants the relief requested,
it may result in a material increase in production costs allocated to
companies whose costs currently are projected to be less than the
average and a material decrease in production costs allocated to
companies whose costs currently are projected to exceed the average.
Management believes that any changes in the allocation of production
costs resulting from a FERC decision should result in rate changes for
retail customers. Therefore, management does not believe that this
proceeding will have a material effect on the financial condition of
any of the Entergy domestic utility companies, although neither the
timing nor the outcome of the proceedings at FERC can be predicted at
this time.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Entergy Arkansas, Inc.
Entergy Gulf States, Inc.
Entergy Louisiana, Inc.
Entergy Mississippi, Inc.
Entergy New Orleans, Inc.
System Energy Resources, Inc.
By: /s/ Nathan E. Langston
Nathan E. Langston
Vice President and
Chief Accounting Officer
Dated: July 13, 2001