-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W2i2d6IP4uv/dARPXxygd3Tdh/eeWbdkmT1G5uRCuoqBWjdAfKZp903yEQz7LS9c P+qckEtwl2PKhHES8Lh7uQ== 0000065984-96-000077.txt : 19960517 0000065984-96-000077.hdr.sgml : 19960517 ACCESSION NUMBER: 0000065984-96-000077 CONFORMED SUBMISSION TYPE: U-1 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19960514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENTERGY CORP /DE/ CENTRAL INDEX KEY: 0000065984 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 135550175 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1 SEC ACT: 1935 Act SEC FILE NUMBER: 070-08863 FILM NUMBER: 96564566 BUSINESS ADDRESS: STREET 1: 639 LOYOLA AVE CITY: NEW ORLEANS STATE: LA ZIP: 70113 BUSINESS PHONE: 5045295262 FORMER COMPANY: FORMER CONFORMED NAME: ENTERGY GSU HOLDINGS INC /DE/ DATE OF NAME CHANGE: 19940329 FORMER COMPANY: FORMER CONFORMED NAME: ENTERGY CORP /FL/ DATE OF NAME CHANGE: 19940329 FORMER COMPANY: FORMER CONFORMED NAME: MIDDLE SOUTH UTILITIES INC DATE OF NAME CHANGE: 19890521 U-1 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM U-1 ______________________________________________ APPLICATION / DECLARATION WITH RESPECT TO POWER BROKERING AND MARKETING ACTIVITIES Under The PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ______________________________________________ Name of Company Filing This Statement And Address of Principal Executive Offices: Entergy Corporation 639 Loyola Avenue New Orleans, Louisiana 70113 Entergy Power Marketing Corp. 900 South Shackleford Road, Suite 210 Little Rock, Arkansas 72211 Name of Top Registered Holding Company Parent of Appli cant/Declarant: ENTERGY CORPORATION Name and Address of Agent for Service: Frederick F. Nugent, Esq. Laurence M.Hamric General Counsel General Attorney-- Corporate Entergy Power Marketing Corp. and Securities 900 South Shackleford Road, Suite 210 Entergy Services, Inc. Little Rock, Arkansas 72211 639 Loyola Avenue New Orleans, Louisiana 70113 The Commission also is requested to send copies of all notices, orders and communications to: William S. Scherman Kathleen A. Foudy Skadden, Arps, Slate, Meagher & Flom 1440 New York Avenue, N.W. Washington, D.C. 20005 ITEM 1: DESCRIPTION OF PROPOSED TRANSACTION A. Introduction Applicant/Declarant Entergy Power Marketing Corporation ("EPMC"), a Delaware corporation, is a wholly- owned subsidiary of Entergy Corporation ("Entergy"), a registered public utility holding company as defined in the Public Utility Holding Company Act of 1935 ("PUHCA"). EPMC hereby seeks authority, to the extent required, to engage in a variety of power brokering and marketing transactions, including traditional wholesale bulk power transactions as well as the provision of innovative value- added financial products and services designed to meet the evolving needs of customers in competitive markets. In addition, Entergy seeks authorization, to the extent necessary, for its investment in EPMC and to provide credit support, in the form of guarantees, for certain of EPMC's proposed transactions. B. Background Entergy directly owns 100 percent of the common stock of the following electric utilities, which operate in the states of Arkansas, Louisiana, Mississippi, and Texas: Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., and Entergy New Orleans, Inc. Other Entergy subsidiaries include: Entergy Services, Inc., a mutual service company that provides financial, technical, administrative, corporate, and other support services; System Energy Resources, Inc., a corporation established to own the Grand Gulf nuclear station; Entergy Operations, Inc., a corporation established to operate the Entergy nuclear-fueled electric generating units; System Fuels, Inc., a fuel acquisition corporation; Entergy Power Development Corporation, a corporation formed to hold certain Entergy interests in non-utility generating facilities and related ventures in the United States and overseas; Entergy Power Development International Corporation, a corporation owning a foreign utility company located in Melbourne, Australia; Entergy Power Inc., a corporation owning generating resources from which wholesale sales are made to non-affiliated entities at market-based rates; Entergy Enterprises, Inc. ("EEI"), a corporation organized to market the expertise and capabilities of the Entergy utility system to nonassociates and to investi gate and develop investment opportunities in power- related areas; and several exempt wholesale generators and foreign utility companies in accordance with the requirements of Sections 32 and 33, respectively, of PUHCA. C. Proposed Transactions EPMC proposes to engage in a variety of power brokering and marketing transactions, including traditional wholesale bulk power transactions as well as the provision of innovative value-added financial prod ucts and services designed to meet the evolving needs of customers in competitive markets. Like Energy Alliance Partnership, a Consolidated Natural Gas Co. subsidiary the Commission recently allowed to engage in power marketing and brokering activities, EPMC will provide choices to major customers with respect to the purchase, sale, borrowing and lending of electricity, natural gas and other fuels, and the management of their operations. In connection with these activities, [EPMC] will purchase, sell, supply, market, broker, or otherwise trade electrici ty, gas or other fuels, provide electricity or fuel management services, and engage in activities or perform services, related to the foregoing. Consolidated Natural Gas Company, Release No. 35-26512; 70-8631 (April 30, 1996), slip op. at 3 ("CNG"). In addition, EPMC will provide instantaneous supply and sales options to electric generators; ... help customers manage price changes in electricity and fuel relative to time and location; and assist electric utilities and nonutility generators by managing fuel supply and transportation contracts, banking electricity until needed and providing price and delivery flexibility. Id. at 3 n.10. EPMC's activities will include traditional power marketing and brokering activities. Traditional power marketing transactions typically will involve the purchase of electricity from and the sale of electricity to utilities, non-utility generators and other power marketers. In connection with such purchases and sales, EPMC anticipates that it may arrange for transmission capacity and services necessary to effectuate its sales of electricity. EPMC also anticipates that it may engage in fuel delivery, or fuel conversion, activities, whereby EPMC would deliver fuel supplies to a utility or non- utility generator for the conversion of such fuel into electric energy which then would be delivered to EPMC for resale. See Northeast Utilities Service Co., 60 SEC Docket 93 (1995) (authorizing subsidiary of registered holding company to engage in traditional power marketing and "fuel-for energy" transactions). With respect to traditional power brokering activities, EPMC will act as an agent or broker for utilities, non-utility generators and other power marketers, to effectuate such parties' sales and purchases of electric energy at wholesale. See id. (authorizing subsidiary of registered holding company to engage in such brokering activities). EPMC also intends to play a role in the increasingly competitive and integrated energy market described by the Commission in CNG. As the Commission noted, "[i]t appears that the restructuring of the electric industry now underway will dramatically affect all United States energy markets as a result of the growing interdependence of natural gas transmission and electric generation, and the interchangability of different forms of energy, particularly gas and electricity." CNG, slip op. at 11. Thus, like other power marketers, EPMC plans to deal in risk management transactions, including swaps, options and futures contracts that will assist its customers in hedging against adverse price impacts. See id. at 6-7. Like Energy Alliance Partnership, the Consolidated Natural Gas Co. subsidiary, EPMC "will employ risk-reduction measures to limit potential losses that could be incurred through its activities. Through market hedging techniques, matching of obligations to market prices, contractual limitation of damages and volume limitations, and relatively short-term contracts, [EPMC] will seek to minimize the financial exposure of [Entergy] through its guarantees. ... [EPMC] will not engage in speculative trading in the energy market ... [and] will use market hedging measures solely to minimize risk, and will limit hedging activity to no more than the total amount of commodities of [EPMC] that are subject to market price fluctuation." Id. at 7. EPMC plans to offer flexible and competitively packaged energy services, and to provide its customers alternatives with respect to the purchase, sale, borrowing and lending of electricity, natural gas and other fuels. Again like Energy Alliance Partnership, EPMC may engage in the above-described energy transactions with associate as well as nonassociate companies, includ ing the Entergy system public utility companies, on the same market terms that would be available to EPMC's nonassociates. See CNG at 4. In addition, EPMC will enter into a service contract with EEI, whereby EEI will provide EPMC with administrative services, including maintaining books and records and preparing corporate filings. In accordance with PUHCA, and unless and until the Commission approves two settlement agreements entered into in 1992 by Entergy and its state regulators, any service contracts between EPMC and EEI will provide for services to be rendered on an at-cost basis. With respect to retail activities, EPMC requests that the Commission reserve jurisdiction pending completion of the record as it did in CNG. See CNG at 9. As the Commission explained in CNG, "[p]ending the imple mentation of plans or programs permitting retail wheeling of electric power, the Commission is unable to determine whether the requirements of section 11(b)(1) ... would be satisfied." Id. at 9 n. 25. In accordance with the Commission's ruling in CNG, EPMC requests that the Commis sion be willing to "issue any supplemental order releas ing jurisdiction following receipt of confirmation that state approval of competition among suppliers at the retail level has been granted." Id.. EPMC has received an order from the Federal Energy Regulatory Commission ("FERC") determining that EPMC is an exempt wholesale generator ("EWG") in accordance with the requirements of Section 32 of PUHCA. In accordance with Section 32, Entergy was free to invest in EPMC without prior Commission approval, provided that Entergy's investment complied with the requirements of PUHCA and the Commission's rules implementing PUHCA, in particular Section 32 of PUHCA and Rule 53. Entergy did so comply. However, due to uncertainty surrounding the requirement that exempt wholesale generators be engaged solely and exclusively in the business of owning and/or operating eligible facilities and selling electric energy at wholesale, EPMC may elect not to maintain its status as an EWG. Accordingly, Entergy and EPMC seek Commission approval, if necessary, for the financing of EPMC's proposed activities. In addition, Entergy seeks Commission approval to serve as a guarantor for certain of EPMC's power marketing activities. Specifically, Entergy will hold 100% of the authorized and issued common stock of EPMC. Entergy requests authority to capitalize EPMC in an amount up to $20 million. At this time, Entergy has committed $5 million towards EPMC's capitalization, but requests authority for such additional capitalization in light of the developing nature of the power marketing industry. Entergy's invest ment will constitute EPMC's total capitalization. In addition, certain transactions in which EPMC proposes to engage require that EPMC's participation be guaranteed. Accordingly, EPMC and Entergy request that Entergy be permitted to provide up to $150 million in credit support, i.e., guarantees or other similar commitments, to EPMC. At this time, Entergy has committed $50 million in credit support to EPMC. Entergy requests the additional authorization because, as noted in CNG, with respect to energy marketing companies, "parent companies often guarantee their [subsidiary marketing company's] contractual obligations to provide financial stability and to enable them to compete effectively." CNG at 6 n.20. Both Entergy's proposed investment and credit support are de minimis in relation to Entergy's consolidated assets, as of December 31, 1995, of approxi mately $22.5 billion. D. Discussion EPMC's participation in the marketing and brokering activities discussed above may be construed as the acquisition of an interest in a business pursuant to Section 9(a) of PUHCA, and, therefore, be subject to Commission approval pursuant to Section 10 of PUHCA. Section 10 requires that the Commission approve an acquisition of an interest in a business only if such acquisition complies with Section 11 of PUHCA. Section 11, in turn, requires that the operations of a registered holding company system be limited to a single integrated public utility system and to such other businesses as are reasonably incidental or economically necessary or appropriate to the operations of such integrated public utility system. Pursuant to Section 11(b), the Commis sion also may permit, as reasonably incidental or economi cally necessary or appropriate to the operations of one or more integrated public utility systems, the retention of an interest in any business which the Commission finds necessary or appropriate in the public interest or for the protection of investors or consumers and not detrimental to the proper functioning of such public utility system. The activities, discussed above, in which EPMC plans to engage as a power marketer and broker satisfy the standards of Section 11. EPMC's proposed transactions are reasonably incidental and economically necessary and appropriate to the operations of Entergy's integrated public utility system and are in the public interest. Moreover, allowing EPMC to engage in the transactions proposed above is in accord with Commission precedent and policy. As noted above, in CNG, the Commission recently granted an application allowing the subsidiary of a registered utility holding company to engage in power marketing and brokering activities similar to EPMC's proposed transactions. In doing so, the Commission found that such transactions "would not be 'detrimental to the carrying out of the provisions of section 11' and so require an adverse finding under section 10(c)(1)." CNG at 14. The Commission also "note[d] that the transactions would appear to be within the plain meaning of the statute, viz, the proposed brokering and marketing and related activities are reasonably incidental, or economically necessary or appropriate on a finding that they are necessary or appropriate in the public interest or for the protection of investors or consumers and not detrimental to the proper functioning of the [integrated public-utility] system." Id. (citation omitted). Similarly, in Northeast Utilities Service Co., 60 SEC Docket 93 (1995), the Com mission also allowed a subsidiary of a registered holding company to engage in power marketing, including fuel conversion, and power brokering transactions, recognizing that the proposed marketing and brokering activities "would not be 'detrimental to the carrying out of the provisions of section 11.'" The Commission's recent Notice of Proposed Rulemaking recognizes that the transactions proposed herein are economically necessary and appropriate to the operations of a public utility holding company system like Entergy and are in the public interest. Exemption of Acquisition by Registered Public Utility Holding Companies of Securities of Nonutility Companies Engaged in Certain Energy-Related and Gas-Related Businesses; Exemption of Capital Contributions and Advances to Such Companies, 59 SEC Docket 1490 (1995) (Notice of Proposed Rulemaking). Recognizing that "the utility industry is evolving toward a broadly based energy-related business that is no longer focused solely on the traditional, regulated, production and distribution functions of a utility" and that "almost all utilities engage in a variety of other energy-related activities that involve applications of resources and capabilities developed in the conduct of utility operations," the Commission has proposed a new Rule 58. Id. Proposed Rule 58 would allow a registered holding company to acquire the securities of an "energy-related company" without prior Commission approval. An energy-related company is defined as a company that derives substantially all of its revenues from certain categories of activities, including: the "brokering and marketing of energy commodities, including, but not limited to electricity or natural or manufactured gas." Id. Proposed rule 58 also would remove any geographic limits on such activities. Id. Thus, through its proposed Rule 58, the Commission has acknowledged the increasingly competitive and integrated nature and economic realities of the energy industry and recognized that in today's energy industry, power marketing and brokering activities are "closely related to a [public utility holding company] system's core utility business." Id. And, as the Commission stated in CNG, "[t]he participation of registered system companies in these activities should promote greater competition and thus further the public interest in a sound electric and gas utility industry." Id. at 12. Moreover, EPMC will offer several safeguards to protect the customers of the Entergy subsidiaries from harm. First, as noted above, Entergy's direct investment in EPMC and its proposed provision of credit support are quite limited, and are de minimis in relation to Entergy's consolidated assets. Second, no Entergy utility company will be compelled to enter into any transaction with EPMC. Third, Entergy will not seek recovery through higher rates to utility customers to compensate Entergy for any loss it may sustain on its investment in EPMC. And, like the risk reduction measures proposed by Energy Alliance to limit its parent holding company's exposure to contingent liabilities resulting from its guarantees of Energy Alliance's transactions, EPMC also will employ risk reduction mea sures to limit the exposure of Entergy. In particular, EPMC, like Energy Alliance, will employ "market hedging techniques, matching of obligations to market prices, contractual limitation of damages and volume limitations, and relatively short-term contracts" as means to limit Entergy's exposure in its role as guarantor of certain of EPMC's transactions. E. Financial Matters 1. EPMC is a direct, wholly-owned subsidiary of Entergy. Entergy will own 100% of the authorized and issued common stock of EPMC. Entergy requests authority to capitalize EPMC in an amount up to $20 million. At this time, Entergy has committed $5 million towards EPMC's capitalization, but requests authority for such additional capitalization in light of the developing nature of the power marketing industry. In addition, certain transactions in which EPMC proposes to engage require that EPMC's participation be guaranteed. Accordingly, EPMC and Entergy request that Entergy be permitted to provide up to $150 million in credit support, i.e., guarantees or other similar commitments, to EPMC. At this time, Entergy has committed $50 million in credit support to EPMC. As noted above, Entergy's potential total investment in EPMC and the potential aggregate amount of Entergy's guarantees of EPMC's transactions are quite de minimis when compared to Entergy's total consolidated assets of approximately $22.5 billion. ITEM 2: FEES, COMMISSIONS AND EXPENSES A. It is estimated that the fees, commissions or expenses paid or incurred, directly or indirectly, in connection with the proposed transaction will not exceed $30,000, consisting of the $2,000 filing fee under PUHCA, $10,000 payable to EEI for services, including regularly employed counsel, on a cost basis for the preparation of this application- declaration, $15,000 payable to non-affiliated professionals, and $3,000 for miscellaneous other expenses. B. The fees to be paid to EEI for services, including regularly employed counsel, on a cost basis for the preparation of this application-declaration will be, as discussed above, in connection with a service agreement between EEI and EPMC for EEI's provision of administrative services to EPMC. ITEM 3: APPLICABLE STATUTORY PROVISIONS A. The following sections of PUHCA are or may be applicable to the proposed transaction: 9(a), 10, 11(b). ITEM 4: REGULATORY APPROVAL A. The Federal Energy Regulatory Commission ("FERC") has jurisdiction over the rates and charges EPMC may impose with respect to wholesale power marketing activi ties. EPMC filed an application with the FERC for power marketer status, including authority to sell electricity at market-based rates, which was accepted by the Commission on February 14, 1996, subject to EPMC's accepting the conditions set forth in the FERC's order. EPMC made its compliance filing with the FERC on February 29, 1996. Such compliance filing currently is pending. ITEM 5: PROCEDURE A. It is hereby respectfully requested that the Commission issue an order with respect to the transactions proposed herein at the earliest possible date, but in any event not later than July 15. B. Applicant/Declarant respectfully submits that a recommended decision by a hearing or other responsible officer of the Commission is not necessary with respect to the proposed transactions. The Office of the Division of Investment Management may assist in the preparation of the Commission's decision. There should not be any waiting period between the issuance of the Commission's order and the date on which it is to become effective. ITEM 6: EXHIBITS AND FINANCIAL STATEMENTS The following exhibits and financial statements are made a part of this statement: Exhibits Certificate of Incorporation of Entergy Power Marketing Corp. By-laws of Entergy Power Marketing Corp. Order of Federal Energy Regulatory Commission regarding Entergy Power Marketing Corp.'s application for power marketer status Compliance Filing submitted by Entergy Power Marketing Corp. to the Federal Energy Regulatory Commission Opinion of counsel for Entergy Corporation(to be filed by amendment), and Entergy Power Marketing Corp. Draft of Notice - --------------------------------------------------------- Financial Statements Financial statements are deemed unnecessary with respect to the contents of this application and the authorizations sought herein due to the nature of the proposed transactions. However, Entergy Corporation and Entergy Power Marketing Corp. will attempt to furnish any financial information the Commission requests. ITEM 7: INFORMATION AS TO ENVIRONMENTAL EFFECTS A. The proposed transactions do not involve major federal action having a significant effect on the human environment. B. No federal agency has prepared or is preparing an environmental impact statement with respect to the proposed transactions. SIGNATURE: Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned company has duly caused this statement to be signed on its behalf by the undersigned thereunto duly authorized. Date: May 14, 1996 Entergy Power Marketing Corp. By: /s/ Frederick F. Nugent Frederick F. Nugent, Esq. General Counsel Entergy Corporation By: /s/ Michael G. Thompson Michael G. Thompson Senior Vice President, General Counsel and Secretary _______________________________ Like Energy Alliance, EPMC anticipates that such fuels will "include those likely to be involved in transactions concerning natural gas, such as oil and other hydrocarbons, wood chips, wastes and other combustible substances." CNG at 3 n.9. In the future, EPMC may "help electric utilities find the best way to met Clean Air Act requirements through a combination of new gas technologies, emission credits, cross-fuel management and wholesale electricity purchases and sales." CNG at 3 n.10. Such approvals have been sought in Docket No. 70- 8529, but have not been granted by the Commission. EX-3 2 State of Delaware Office of the Secretary of State I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY "ENTERGY POWER MARKETING CORP." IS DULY INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE AND IS IN GOOD STANDING AND HAS LEGAL CORPORATE EXISTENCE SO FAR AS THE RECORDS OF THIS OFFICE SHOW, AS OF THE EIGHTEENTH DAY OF APRIL, A.D. 1996. AND DO HEREBY FURTHER CERTIFY THAT THE ANNUAL REPORTS HAVE BEEN FILED TO DATE. AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE BEEN PAID TO DATE. /s/Edward J. Freel Edward J. Freel, Secretary of State 2422353 8300 AUTHENTICATION: 7911945 960111712 DATE: 04-18-96 State of Delaware Office of the Secretary of State I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF "EP YACYRETA, INC.", CHANGING ITS NAME FROM "EP YACYRETA, INC." TO "ENTERGY POWER MARKETING CORP.", FILED IN THIS OFFICE ON THE SEVENTEENTH DAY OF MAY, A.D. 1995, AT 11 O'CLOCK A.M. /s/Edward J. Freel Edward J. Freel, Secretary of State 2422353 8100 AUTHENTICATION: 7642863 950211020 DATE: 9-18-95 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION BEFORE PAYMENT OF CAPITAL OF EP YACYRETA, INC. I the undersigned being the incorporator of EP YACYRETA, INC., a corporation organized and existing under and by virtue of the General Corporation law of the State of Delaware, DO HEREBY CERTIFY: FIRST: That Article First of the Certificate of Incorporation be and it hereby is amended to read as follows: The name of corporation is Entergy Power Marketing Corp. SECOND: That the corporation has not received any payment for any of its stock. THIRD: That the amendment was duly adopted in accordance with the provisions of section 241 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, I have signed this certificate this 17th day of May 1995. /s/James M. Saxton James M. Saxton State of Delaware Office of the Secretary of State I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF "EP YACYRETA, INC." FILED IN THIS OFFICE ON THE SECOND DAY OF AUGUST A.D. 1994, AT 10 O'CLOCK A.M. /s/Edward J. Freel Edward J. Freel, Secretary of State 2422353 8100 AUTHENTICATION: 7198486 944142905 DATE: 08-02-94 CERTIFICATE OF INCORPORATION OF EP YACYRETA, INC. THE UNDERSIGNED, in order to form a corporation for the purposes hereinafter stated, under and pursuant to the provisions of the General Corporation Law of the State of Delaware does hereby certify as follows: FIRST: The name of the Corporation is EP Yacyreta Inc. SECOND: The registered office of the Corporation is to be located at 1209 Orange Street, in the City of Wilmington in the County of New Castle, in the State of Delaware. The name of its registered agent at that address is The Corporation Trust Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of Delaware as presently in effect or as may hereinafter be amended. FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is 1,000 shares of capital stock having no par value per share and of one class; such class is hereby designated as common stock. FIFTH: No stockholder shall be entitled as a matter of right to subscribe for, purchase or receive any shares of the stock or any rights or options of the Corporation which it may issue or sell, whether out of the number of shares authorized by this Certificate of Incorporation or by amendment thereof or out of the shares of the stock of the Corporation acquired by it after the issuance thereof, nor shall any stockholder be entitled as a matter of right to purchase or subscribe for or receive any bonds. debentures or other obligations which the Corporation may issue or sell that shall be convertible into or exchangeable for stock or to which shall be attached or appertain any warrant to warrant or other instrument or instruments that shall confer upon the holder or owner of such obligation the right to subscribe for or purchase from the Corporation any share of lt. capital stock, but all such additional issues of stock, rights, options, or of bonds, debentures or other obligations convertible into or exchangeable for stock or to which warrants shall be attached or appertain or which shall confer upon the holder the right to subscribe for or purchase any shares of stock may be issued and disposed of by the Board of Directors to such persons and upon such terms as in their absolute discretion they may deem advisable, subject only to such limitations as may be imposed in this Certificate of Incorporation or in any amendment thereto. SIXTH: An annual meeting of stockholders shall be held for the election of Directors and the transactions of such other business as may properly come before said meeting Special meetings of the stockholders of the Corporation shall be held whenever called in the manner required by the laws of the State of Delaware or for purposes as to which there are special statutory provisions, and for other purposes whenever called by resolution of the Board of Directors, or by the Chairman of the Board, the President or the holders of a majority of the issued and outstanding shares of the common stock of the Corporations. Except as otherwise provided herein, any such annual or special meeting of stockholders shall be held on a date and at a time and place as may be designated by or in the manner provided in the By-Laws. SEVENTH: The name and mailing address of the Incorporator is James M. Saxton, 2000 First Commercial Building, 400 West Capitol Avenue, Little Rock, Arkansas 72201. EIGHTH:: The number of directors which shall constitute the whole Board shall be not be less than one (1) nor more than ten (10). Within such limits, the number of directors shall be fixed and may be altered from time to time, as provide in the By-Laws. Election of Directors need not be by ballot unless the By-Laws so provide. Directors need not be stockholders. Directors shall be elected at the annual meeting of the stockholders of the Corporation, except as herein provided, to serve until the next annual meeting of stockholders and until the respective successors are duly elected and have qualified. Vacancies occurring among the Directors (other than in the case of removal of a Director) shall be filled by a majority vote of the Directors then in office with the consent of the holders of a majority of the issued and outstanding common stock of the Corporation, or by the sole remaining Director With the consent of the holders of a majority of the issued and outstanding common stock of the Corporation, or by resolution duly adopted by the holders of a majority of the issued and outstanding common stock of the Corporation, at a special meeting held for such purpose, or by action taken in lieu of such meeting, or at the next annual meeting of stockholders following any vacancy. At any meeting of stockholders of the corporation called for the purpose, the holders of a majority of the issued and outstanding shares of the common stock of the Corporation may remove from office, with or without cause, any or all of the Directors and the successor of any Director so removed shall be elected by the holders of a majority of the issued and outstanding common stock of the Corporation at such meeting or at a later meeting. NINTH: All corporate powers shall be exercised by the Board of Directors of the Corporation except as otherwise provided by law or by this Certificate of Incorporation or by any By-Laws from time to time passed by the stockholders (provided, however, that no By-Law so created shall invalidate any prior act of the Directors which was valid in the absence of such By-Law). In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized (a) to make, alter, amend, and repeal the By-Laws of the Corporation, subject to the power of the stockholders, to alter, amend or repeal such By-Laws) to authorize and cause to be executed mortgages and liens upon all or any part of the property of the Corporation; (c) to determine the use and disposition of any surplus or net profits; and (d) to fix the times for the declaration and payment of dividends. TENTH: Directors, as such, shall not receive any stated salary for their services, but, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular, special or committee meeting of the Board, provided that nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. ELEVENTH: When and as authorized by the affirmative vote of the holders of a majority of the common stock of the Corporation, issued and outstanding, given at a stockholders' meeting duly called for that purpose, or when authorized by the written consent of the holders of a majority of the common stock of the Corporation issued and outstanding, the Board of Directors may cause the Corporation to sell, lease or exchange all or substantially all, of its property and assets, including its good will and its corporate franchises, upon such terms and conditions and for such consideration, which may be whole or in ,part shares of stock in, and/or other securities of, any other corporation or corporations, as the Board of Directors shall deem expedient and for the best interests of the Corporation. TWELFTH: The Board of Directors may not cause the Corporation to merge or consolidate with or into any other corporation or corporations, unless such merger or consolidation shall have been authorized by the affirmative vote of the holders of a majority of the common stock of the Corporation, issued and outstanding, given at a stockholders' meeting called for that purpose, or authorized by the written consent of the holders of a majority of the common stock of the Corporation issued and outstanding. THIRTEENTH: To the fullest permitted by the laws of the state of Delaware, or any other applicable law presently or hereafter in affect, a Director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for or with respect to any acts or omissions in the performance of his duties. Any repeal or modifications of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a Director of the Corporation existing at the time of such repeal or modification. FOURTEENTH: If after the date of adoption of this Certificate of Incorporation any provision of this Certificate of Incorporation is invalidated on any grounds by any court of competent jurisdiction, then only such provision shall be deemed inoperative and null and void and the remainder of this Certificate of Incorporation shall not be affected thereby. FIFTEENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by law, and all rights and powers conferred herein on stockholders, Directors and officers are subject to this reserved power. IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of, August 1994. Incorporator: /s/James M. Saxton James M. Saxton 2000 First Commercial Bldg. 400 W. Capitol Ave. Little Rock, Arkansas 72201 In the presence of: /s/Pat Soret EX-3 3 BY-LAWS OF ENTERGY POWER MARKETING CORP. ARTICLE I Offices The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The Corporation also may have offices at such other places, both within and without the State of Delaware as from time to time may be designated by the Board of Directors. ARTICLE II Books The books and records of the Corporation may be kept (except as otherwise provided by the laws of the State of Delaware? outside the State of Delaware and at such place or places as from time to time may be designated by the Board of Directors ARTICLE III Meetings of Stockholders Section l Annual Meetings Each annual meeting of the stockholders shall be held (i) at a time fixed by the Board of Directors on the third Friday in May if not a legal holiday; ii) if a legal holiday, then at the same time on the next business day which is not a legal holiday; or (iii) at such date and time during such calendar year as shall be stated in the notice of the meeting, or in a duly executed waiver of notice thereof. The annual meeting of the stockholders shall be held at the principal business office of the Corporation or at such other place or places either within or without the State of Delaware as may be designated by the Board of Directors and stated in the notice of the meeting. At each such meeting, the stockholders shall elect by a plurality vote a Board of Directors and transact such other business as may come before the meeting. Written notice of the time and place designated for the annual meeting of the stockholders of the Corporation shall be delivered personally or mailed to each stockholder entitled to vote thereat not less than ten (10) and not more than sixty (60) days prior to said meeting, but at any meeting at which all stockholders shall be present, or of which all stockholders not present have waived notice in writing the giving of notice as above described may be dispensed with. If mailed, said notice shall be directed to each stockholder at his address as the same appears on the stock ledger of the Corporation unless he shall have filed with the Secretary of the Corporation a written request that notices intended for him be mailed to some other address, in which case ,it shall be mailed to the address designated in such request. Section 2. Special Meetings. Special meetings of the stockholders of the Corporation shall be held whenever called in the manner required by the laws of the State of Delaware for purposes as to which there are special statutory provisions, and for such other purposes as required or permitted by the Certificate of Incorporation or otherwise, whenever called by resolution of the Board of Directors, or by the Chairman of the Board, the President. or the holders of a majority of the issued and outstanding shares of the common stock of the Corporation. Any such special meeting of stockholders may be held at the principal business office of the Corporation or at such other place or places either within or without the state of Delaware, as may be specified in the notice thereof. Business transacted at any special meeting of stockholders of the Corporation shall be limited to the purposes stated in the notice thereof. except as otherwise expressly required by the laws of the State of Delaware or the Certificate of Incorporation, written notice of each special meeting, stating, the day, hour and place, and in general terms the business to be transacted thereat, shall be delivered personally or mailed to each stockholder entitled to vote thereat not less than ten (l0) and not more than sixty (60) days before the meeting. If Mailed, said notice shall be directed to each stockholder at his address as the same appears on the stock ledger of the (corporation unless he shall have filed with the Secretary of the Corporation a written request that notices intended for him be mailed to some other address, in which case it shall be mailed to the address designated in said request. At any special meeting at which all stockholders shall be present, or of which all stockholders not present have waived notice in writing, the giving of notice as above described may be dispensed with. Section 3. Quorum. At any meeting of the stockholders of the Corporation, except as otherwise expressly provided by the laws of the State of Delaware or the Certificate of Incorporation. there must be present, either in person or by proxy, in order to constitute a quorum, stockholders having a majority of the issued and outstanding shares of the common stock of the Corporation entitled to vote at said meeting. At any meeting of stockholders at which a quorum is not present, the holders of, or proxies for, a majority of the common stock which is represented at such meeting, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 4. Voting. Each holder of record of the common stock of the Corporation shall, at every meeting of the stockholders of the Corporation, be entitled to one (l) vote or each share of common stock standing in his name on the books of the Corporation, and such votes may be cast either in person or by proxy, appointed by an instrument in writing, subscribed by such stockholder or by his duly authorized attorney, and filed with the Secretary before being voted on, but no proxy shall be voted after three (3) years from its date, unless said proxy provides for a longer period. Except as otherwise required by the laws of the State of Delaware or the Certificate of Incorporation, the holders of the common stock of the Corporation shall exclusively possess all voting power for the election of Directors and for all other purposes and are entitled to vote on each matter to be voted on at a stockholders' meeting. The vote on all elections of Directors and other questions before the meeting need not be by ballot except upon demand by the holders of the majority of the shares of the common stock of the Corporation present in person or by proxy. When a quorum is present at any meeting of the stockholders of the Corporation. the vote of the holders of a majority of the shares of the common stock of the Corporation and present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which, under any provision of the laws of the State of Delaware or of the Certificate of Incorporation, a different vote is required, in which case such provision shall govern and control the decision of such question. Whenever the vote of the holders of the common stock of the Corporation at a meeting thereof is required or permitted to be taken in connection with any corporate action by any provision of the laws of the State of Delaware or of the Certificate of Incorporation, such corporate action may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding common stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented thereto in writing. Section 5. List of Stockholders. The officer of the Corporation who shall have charge of the stock ledger of the Corporation shall prepare and make at least ten (l0) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten (l0) days prior to the meeting either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list also shall be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. Section 6. Organization. The Chairman of the Board or the President, or in their absence; any Vice President, shall call to order meetings of the stockholders and shall act as chairman of such meetings. The Board of Directors or the stockholders may appoint any stockholder or any Director or officer of the Corporation to act as chairman of any meeting in the absence of the Chairman of the Board, the President and all of the Vice Presidents. The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but in the absence of the Secretary the presiding officer may appoint any other person to act as secretary of any meeting. ARTlCLE IV Directors Section 1. Powers. The business and affairs of the Corporation shall be managed by the Board of Directors which may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation; subject, nevertheless, to the provisions of the laws of the State of Delaware, the Certificate of Incorporation, and any By-Laws from time to time passed by the stockholders, provided, however. that no By-Law so created shall invalidate any prior act of the Directors which was valid in the absence of such By-Law. Section 2. Number of Directors. The number of Directors which shall constitute the whole Board shall be not less than one (1) nor more than ten (10). Within such limits, the number of Directors may be fixed from time to time by vote of the stockholders or of the Board of Directors at any regular or special meeting. Directors need not be stockholders. Directors shall be elected at the annual meeting of the stockholders of the Corporation, except as herein provided, to serve until the next annual meeting of stockholders and until their respective successors are duly elected and have qualified. Section 3. Vacancies. Vacancies occurring among the Directors (other than in the case of removal of a Director) shall be filled by a majority vote of the Directors then in office with the consent of the holders of a majority of the issued and outstanding common stock of the Corporation; or by the sole remaining; Director with the consent of the holders of a majority of the issued and outstanding common stock of the Corporation, or by resolution duly adopted by the holders of a majority of the issued and outstanding common stock of the corporation, at a special meeting held for such purpose, or by action taken in lieu of such meeting, or at the next annual meeting of stockholders following any vacancy. Section 4. Removal. At any meeting of stockholders of the Corporation called for the purpose, the holders of a majority of the issued and outstanding shares of the common stock of the Corporation may remove from office, with or without cause, any or all of the Directors and the successor of any Director so removed shall be elected by the holders of a majority of the issued and outstanding common stock of the Corporation at such meeting or at a later meeting. Section 5. Meetings. The first meeting of each newly elected Board of Directors shall be held immediately following the annual meeting of stockholders and at the same place at which regular meetings of the Board of Directors are held, or at such other time and place as may be provided by resolution of the Board of Directors. and no notice of such meeting shall be necessary to the newly elected Directors in order legally to constitute a meeting, provided a quorum is present. In the event that such first meeting of the newly elected Board of Directors is not held at the time and place authorized by the foregoing provision, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all the Directors. Regular meetings of the Board of Directors may be held without notice at such time and place, either within or without the State of Delaware, as shall from time to time be determined by resolutions of the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman of the Board or by the President on reasonable notice as provided in these By-Laws, and such meetings shall be held at the principal business office of the Corporation or at such other place or places, either within or without the State of Delaware, as shall be specified the notice thereof. Directors present thereat, by majority vote, may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum shall be present. Except as may be otherwise specifically provided by the laws of the State of Delaware, the Certificate of Incorporation or these By-Laws, the affirmative vote of a majority of the Directors present at the time of such vote shall be the act of the Board of Directors if a quorum is present. Section 6. Notice of Meeting. Notice of any meeting of the Board of Directors requiring notice shall be given to each Director by personal delivery or by mail or by telegram, in any case at least forty-eight (48) hours before the time fixed for the meeting. At any meeting at which all Directors shall be present, or at which all Directors not present have waived notice in writing, the giving of notice as above described may be dispensed with. Attendance of a Director at a meeting shall constitute waiver of notice of such meeting, except when such Director attends such meeting for the express purpose of objecting, at the beginning of such meeting, to the transaction of any business because such meeting is not lawfully called or convened. Section 7. Action by Consent. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if all members of the Board consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board. Section 8. Telephonic Meetings. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, members of the Board of Directors may participate in a meeting, of the Board by means of conference telephone or similar communications equipment by means of which all persons participating in such meeting can hear each other, and participation in a meeting pursuant to this Section 8 of Article IV shall constitute presence in person at such meeting. Section 9 Resignations. Any Director of the Corporation may resign at any time by giving written notice to the Board of Directors or to the Chairman of the Board, the president or the Secretary of the Corporation. As may such resignation shall take effect at the time specified therein, or, if the time be not specified, upon receipt thereof; and unless otherwise specified therein acceptance of such resignation shall not be necessary to make it effective. ARTICLE V Executive Committee and Other Committees Section 1. Executive Committee. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, appoint an Executive Committee of not less than two or more than five members, to serve during the pleasure of the Board of Directors, to consist of the Chairman of the Board, and such additional Director(s) the Board of Directors may from time to time designate. The Chairman of the Board of the Corporation shall be Chairman of the Executive Committee. Section 2 Procedure. The Executive Committee shall meet at the call of the Chairman of the Executive Committee or of any two members. A majority of the members shall be necessary to constitute a quorum and action shall be taken by a majority vote of those present. Section 3, Powers and Reports During the intervals between the meetings of the Board of Directors, the Executive Committee shall possess and may exercise, to the fullest extent permitted by law, all the powers of the Board of Directors in the management and direction of the business and affairs of the Corporation, may authorize the seal of the Corporation to be affixed to all papers which may require it. The taking of action by the Executive Committee shall be conclusive evidence that the Board of Directors was not in session when such action was taken. The Executive Committee shall keep regular minutes of its proceedings and all action by the Executive Committee shall be reported to the Bard of Directors at its meeting next following the meeting of the Executive Committee and shall be subject to revision or alteration by the Board of Directors; provided, that no rights of third parties shall be affected by such revision or alteration. Section 4. Other Committees. From time to time the Board of Directors, by the affirmative vote of a majority of the whole Board of Directors, may appoint other committees for any purpose or purposes, and such Committees shall have such powers as shall be conferred by the resolution of appointment. In the absence or disqualification of a member of any committee (including the Executive Committee), the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. ARTICLE VI Officers Section 1 Number Election and Term of Office. The Board of Directors may elect a Chairman of the Board, a Chief Executive Officer, and/or a Chief Operating Officer, and shall elect a President, a Secretary, a Treasurer, and in their discretion, one or more Vice Presidents. The Chief Executive Officer or, if no Chief Executive Officer is elected, the President. subject to the direction of the Board of Directors, shall have direct charge of and general supervision over the business and affairs of the Corporation. The officers of the Corporation shall be ejected annually by the Board of Directors at its meeting held immediately after the annual meeting of the stockholders (other than the initial officers elected by unanimous consent of the initial Board of Directors), and each shall hold his office until his successor shall have been duly elected and qualified or until he shall have died or resigned or shall have been removed by majority vote of the entire Board of Directors. Any number of offices may be held by the same person. The Board of Directors may from time to time appoint such other officers and agents as the interest of the Corporation may require and may fix their duties and terms of office. Section 2. Chairman of the Board. The Chairman of the Board shall be a member of the Board of Directors. He shall preside at all meetings of the Board of Directors. and shall have such other duties as from time to time may be assigned to him by the Board of Directors, by the Executive Committee or, if the President shall have been designated chief executive officer of the Corporation, by the President Section 3. President The President shall perform all duties incident to the office of a president of a corporation and such other duties as from time to time may be assigned to him by the Board of Directors or by the Executive Committee, or if the Chairman of the Board shall have been designated chief executive officer of the Corporation. by the Chairman of the Board. At any time when the office of the Chairman of the Board shall be vacant or if the Board of Directors shall not elect a Chairman of the Board, the President of the Corporation shall be the chief executive officer of the Corporation. Section 4 Vice Presidents. Each Vice President shall have such powers and shall perform such duties incident to the office of a vice president of a corporation and such other duties from time to time may be conferred upon or assigned to him by the Board of Directors or as may be delegated to him by the Chairman of the Board (if chief executive officer of the President Section 5 Secretary The Secretary shall keep the minutes of all meetings of the stockholders and other Board of Directors in books provided for the purpose, shall see that all notices are duly given in accordance with the provisions of the law and these By-Laws; shall be custodian of the records and of the corporate seal of the Corporation shall see that the corporate seal is affixed to all documents the execution of which under the seal is duly authorized and when the seal is so affixed may attest the same, may sign, with the Chairman of the Board (if chief executive officer, the President or a Vice President, certificates of stock of the Corporation; and in general, shall perform all duties incidental to the office of a secretary of a corporation, and such other duties as from time to time may be assigned by the Chairman of the Board (if chief executive officer), the President or the Board of Directors. The Secretary shall also keep or cause to be kept. a stock book containing the names, alphabetically arranged, if all persons who are stockholders of the Corporation, showing their places of residence, the number of shares }held by them respectively and the time when they respectively became owners thereof. Section 6. Treasurer. The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Corporation, and shall deposit, or cause to be deposited, in the name of the Corporation, all monies or other valuable effects in such banks, trust companies or other depositories as shall. from time to time be selected by the Board of Directors or by the Treasurer if so authorized by the Board of Directors; may endorse for collection on behalf of the Corporation, checks notes and other obligations, may sign receipts and vouchers for payments made to the Corporation; singly or jointly with another person as the Board of Directors shall authorize, may sign checks on the Corporation and pay out and dispose of the proceeds under the direction of the Board, shall render or cause to be rendered to the Chairman of the Board (if chief executive officer), the President and the Board of Directors, whenever requested, an account of the financial; condition of the Corporation, may sign, with the Chairman of the Board (if chief executive officer), the President or a Vice President, certificates of stock of the Corporation; and in general, shall perform all the duties incident to the office of a treasurer of a corporation, and such other duties as from time to time may ~e assigned ~y the Chairman of the Board (if chief executive officer), the President or the Board of Directors. Section 7. Subordinate Officers. The Board of Directors may appoint such assistant secretaries, assistant treasurers and other subordinate officers as it may deem desirable. Each such officer shall hold office for such period, have such authority and perform such duties as the Board of Directors may prescribe. The Board of Directors may from time to time, authorize the chief executive officer to appoint and remove subordinate officers and to prescribe the powers and duties thereof. Section 8 Transfer of Duties. The Board of Directors in its absolute discretion may transfer the powers and duties in whole or in part, of any officer. to any other officer, or persons, notwithstanding the provisions of these By-Laws, except as otherwise provided by the laws of the State of Delaware. Section 9 Vacancies Absences. If the office of Chairman of the Board, President, Vice President, Secretary or Treasurer, or of any other officer or agent becomes vacant for any reason, the Board of Directors may, but is not required to, choose a successor to hold office for the remainder of the unexpired term. Except when the law requires the act of a particular officer, the Board of Directors whenever necessary may, in the absence of any officer, designate any other officer or properly qualified employee, to perform the duties of the one absent for the time being, and such designated officer or employee shall have, when so acting, all the powers herein given to such absent officer. Section 10. Removals. At any meeting of the Board of Directors called for the purpose, any of officer or agent of the Corporation may be removed from office, with or without cause, by the affirmative vote of a majority of the entire Board of Directors Section 11. Resignations. Any officer or agent of the Corporation may resign at any time by giving written notice to the Board of Directors, the Chairman of the Board, the President or the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein or, if the time is not specified upon receipt thereof, and unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective. Section 12. Compensation of Officers. The officers shall receive such salary or compensation as may be determined by the affirmative vote of the majority of the Board of Directors. No officer shall be prevented from receiving such salary or compensation by reason of the fact that he is also a Director of the Corporation. Section 13 Delegation of Powers. Each officer may delegate to any other officer and to any official, employee or agent of the corporation, such portions of his powers as he shall deem appropriate, subject to such limitations and expirations as he shall specified, and may revoke such delegation at any time. ARTICLE VII Contracts , Checks and Notes Unless the Board of Directors shall otherwise specifically direct, all contracts, checks, drafts! bills of exchange and promissory notes and other negotiable instruments of the corporation shall be executed in the name of the Corporation by the Chairman of the Board. the President. a Vice President, Secretary or Treasurer or any officer as may be designated by the Board of Directors ARTICLE VIII Capital Stock Section 1. Certificates of Stock. The certificates for shares of the stock of the corporation shall be in such form, not inconsistent with the Certificate of Incorporation, as shall be prepared or approved by the Board of Directors, Every holder of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation by the Chairman of the Board if chief executive officer), the President or a vice President, and by the Treasurer or the Secretary certifying the number of shares owned by him and the date of issue, and no certificate shall be valid unless so signed. All certificates shall be consecutively numbered and shall be entered in the books of the corporation as they are issued. All signatures on the certificates may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. Section 2. Transfer of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 3. Registered Stockholders. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly shall not be bound to recognize any equitable or other claim to, or interest in, such share or shares on the part of any other person, whether or not it shall have express or other notice thereto, save as expressly provided by the laws of the State of Delaware. Section 4. Lost Certificates Any person claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation of the fact and advertise the same in such manner as the Board of Directors may require, and the Board of Directors. in its discretion, may require the owner of the lost or destroyed certificate, or his legal representative. to give the Corporation a bond in a sum sufficient in the opinion. of the Board of Directors, to indemnify the Corporation against any claim that may be made against. it on account of the alleged loss of any such certificate. A new certificate of the same tenor and for the same number of shares as the one alleged to be lost or destroyed may be issued without requiring any bond when, in the judgment of the Directors, it is proper so to do. Section 5. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date. which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of tile meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. ARTICLE IX Dividends Dividends upon the common stock of the Corporation may be declared by the Board of Directors at any regular or special meeting. pursuant to law. Dividends may be paid in cash, in property, or in shares of the common stock of the Corporation, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sums as the Directors from time to time, in their absolute discretion think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interest to the Corporation, and the Directors may modify; or abolish any such reserve in the manner in which it was created. ARTICLE X Waiver of Notice Whenever any notice whatever is required to be given by statute or under the provision, of the Certificate of Incorporation or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be equivalent thereto, unless expressly provided otherwise in such statute, Certificate of Incorporation or these By-Laws ARTICLE XI Seal The corporate seal of the Corporation shall have inscribed thereon the name of the Corporation the year of its organization and the words "Corporate Seal, Delaware", or shall be in such other form as the Board of Directors may prescribe ARTICLE XII Fiscal Year The fiscal year of the Corporation shall be the calendar year, ARTICLE XIII Indemnification, Advancement of Expenses, Insurance and Other Funding Arrangements Section I Mandatory Indemnification - Third Party Actions. The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action suit or proceeding ("Action"), whether civil, criminal, administrative or investigative (other than an Action by or in the name of the Corporation) by reason of the fact that he is or was a Director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a Director, officer or employee of another corporation, partnership joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments. fines and amounts and in settlement actually and reasonably incurred by him in connection with such Action if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to criminal Action, had no reasonable cause to believe his conduct was unlawful. The termination of any Action by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent. shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the Corporation, and, with respect to ally criminal Action, had reasonable cause to believe that his conduct was unlawful, The right to indemnification under this Section I of Article XIII shall be a contract right that may be enforced in any lawful manner by a person entitled to such indemnification. Section 2. Mandatory Indemnification - Derivative, ,Actions. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed .action by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a Director, officer, or employee of the Corporation, or is or was serving at the request of the Corporation as a Director, officer; or employee of another corporation. partnership, joint venture, trust or other enterprise, against expenses (including, attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such Action if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification. under these By-Laws shall be made in respect of any claim issue or matter as to which such person shall have been adjudged to be liable to the Corporation, unless and only to the extent that the (Court of Chancery of the State of Delaware or the court in which such Action was brought, shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper. The right to indemnification under this Section 2 of Article XII shall be a contract right that may be enforced in any lawful manner by a person entitled to such indemnification. Section 2. Mandatory Indemnification - Successful Party. To the extent that a Director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any Action referred to in Sections 1 or 2 of this Article in or in defense of any claim issue or matter therein, he shall be indemnified against expenses including attorneys' fees, actually and reasonably incurred by him in connection therewith. The right to indemnification under this Section 3 of Article XIII shall be a contract right that may be enforced in any lawful manner by a person entitled to such indemnification. Section 4. Permissive Indemnification. Except as otherwise expressly provided in Section 2 of this Article XIII the Corporation ;may also indemnify any; person who is or was a party or is threatened to be made a party to any Action by reason of the fact that he is or was a Director, officer, employee or agent of the Corporation is or was serving at the request of the Corporation as a Director, officer, employee or agent of any other corporation, partnership, joint venture trust or other enterprise, against all or part of any expenses including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such Action if it shall be determined in accordance with the applicable procedures set forth in Section 5 that such person is fairly and reasonably entitled to such indemnification. Section 5. Permissive Indemnification.. Any indemnification under the foregoing provisions of this Article XIII (unless ordered in a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer; employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Sections 1 or 2, or is entitled to indemnification under Section 4. of this Article XIII. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum, as defined in the Certificate of Incorporation or these By-Laws. consisting of Directors who are not or were not parties to any pending or completed Action giving rise to the proposed indemnification, or (ii) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. Section 6 Advance Payments. Expenses including attorneys' fees) incurred or reasonably expected to be incurred by a Director or officer of the Corporation in defending any Action referred to in Sections 1 or 2 of this Article XIII shall be paid by the Corporation in advance of the final determination whereof upon receipt by, the Corporation of his written request therefor and his written promise to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized or required by this Article XIII. The right of Directors or officers to advancement of expenses under this Section 6 of Article XIII shall be a contract light that may be enforced in any lawful manner by a Director or officer of the Corporation. Such expenses incurred by other employees and agents may be paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 7. Provisions Not Exclusive. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article shall not be deemed exclusive of any other rights to which any person. seeking indemnification and advancement of expenses, may be entitled under any law, by-law, agreement, vote of stockholders or disinterested Directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Section 8. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a Director, officer employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the powe to indemnify him against such liability under the provisions of this Article XIII. Section 9. Other Arrangements The Corporation also may obtain a letter of credit, act as a self-insurer, create a reserve, trust, escrow, cash collateral or other fund or account, enter into indemnification agreements, pledge or grant security interest in any assets or properties of the Corporation, or use any other mechanism or arrangement whatsoever in such amounts, at such costs, and upon such other terms and conditions as the Board of Directors shall deem appropriate for the protection of any or all such persons. Section 10. .Severability. If this Article XIII or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction then the Corporation shall nevertheless indemnify each parson as to whom the Corporation has agreed to grant indemnity as to liabilities and expenses, and amounts paid or to be paid in settlement with respect to any proceeding, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Article XIII that shall not have been invalidated any to the full extent permitted by applicable law. Section 11. Miscellaneous. (a) For the purposes of this Article XIII, references to "the Corporation" include all; constituent corporations absorbed in a consolidation or merger, as well as the resulting or surviving corporation, so that any person who is or was a Director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a Director, officer, employee or agent of another corporation partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article XIII with .respect to the resulting or surviving corporation as he would if he had served the resulting or surviving corporation in the same capacity. (b) For purposes of this Article XIII, references to "other enterprises" shall include employee benefit plans, references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the Corporation" shall include any services as a Director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such Director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries, and a person who acted in good faith in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Article XIII. (c) The indemnification and advancement of expenses provided by or granted pursuant to, this Article XIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a Director, officer. employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. Article XIV General Provisions Section 1. The Chairman of the Board, the President, any Vice President or the Treasurer of the Corporation may attend any meeting of the holders of stock or other securities of any other corporation, any of whose stock or other securities are held by the Corporation, and cast the votes which the Corporation is entitled to cast as a stockholder or otherwise at such meeting, or may consent in writing to any action by any such corporation, and may execute on behalf of the Corporation and under its corporate seal, or otherwise. such written proxies, consents, waivers or other instruments as he may deem necessary or appropriate. Any of the foregoing acts or functions may also be performed by any one or more of such persons as shall from time to time be authorized by the Board of Directors or by a writing executed by the chief executive officer of the Corporation. Section 2. The moneys of the Corporation shall be deposited in the name of the Corporation in such bank or banks or trust company or trust companies as the Board of Directors shall from time to time designate, and shall be drawn out only by signed checks or by telephonic or other electronic advice given and subsequently confirmed by means which the bank or trust company may require, by persons designated in a resolution or resolutions of the Board of Directors or by such other persons designated by a writing executed by persons authorized to so designate in a resolution or resolutions of the Board of Directors. Section 3. Notices to Directors and stockholders shall be in writing and delivered personally or mailed to the Directors or stockholders at their addresses appearing on the books of the Corporation, notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to Directors may also be given by telegraph, and any such notice shall be deemed to be given when delivered to an office of the transmitting company with all charges prepaid Section 4. Alterations, amendments or repeals of these By-Laws, or any of them, may be made by a majority of the stockholders entitled to vote at any meeting thereof, if the notice of such meeting contains a statement of the proposed alteration, amendment or repeal, or by the Board of Directors by a majority vote of the whole Board of Directors at any meeting thereof, provided notice of such alteration, amendment or repeal has been given to each Director in writing. No notice of any alteration, amendment; or repeal need be given if adopted by action taken at a meeting duly held on waiver of notice. EX-23 4 [Letterhead Entergy Power Marketing Corp.] May 13, 1996 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 RE: Entergy Power Marketing Corp. Ladies and Gentlemen: Entergy Corporation, a Delaware corporation ("Entergy"), a registered holding company under the Public Utility Holding Company Act of 1935, as amended (the "Act"), proposes to finance a subsidiary, Entergy Power Marketing Corp. ("EPMC"), a Delaware corporation, which will engage in a variety of power brokering and marketing transactions, including traditional wholesale bulk power transactions as well as the provision of innovative value- added financial products and services designed to meet the evolving needs of customers in competitive markets. EPMC seeks authority, to the extent necessary, to engage in such transactions. Entergy's investment in EPMC will constitute EPMC's total capitalization. Entergy seeks authority to capitalize EPMC in an amount up to $20 million and to provide up to $150 million in credit support, i.e. guarantees or other similar commitments, to EPMC. This opinion letter is in reference to the actions to be taken by EPMC. In this connection, and in accordance with the requirements of Exhibit F to Form U-1, I have examined the Certificate of Incorporation of EPMC, the bylaws of EPMC, each as amended, and such other documents, certificates and corporate records, and such matters of law as I have deemed necessary for the purpose of rendering this opinion. Based upon the foregoing, I am of the opinion that: 1. EPMC is a corporation validly organized and existing under the laws of the State of Delaware. 2. All actions necessary to make valid Entergy's investment in EPMC and provision of credit support for EPMC and EPMC's participation in the power brokering and marketing transactions described in the Application-Declaration will have been taken when: a. the Application-Declaration shall have been granted and permitted to become effective in accordance with the applicable provisions of the Act; b. all appropriate final action shall have been taken by the board of directors, or duly appointed committee thereof, and/or an authorized officer of Entergy and of EPMC with respect to the proposed transactions. 3. When the foregoing steps have been taken and assuming that the proposed transaction is consummated in accordance with the Application-Declaration and related orders of the Commission, a. EPMC will have complied with all state laws applicable to the proposed transactions; b. Entergy will legally acquire the common stock of EPMC; EPMC's common stock will be validly issued, fully paid and nonassessable; and Entergy will be entitled to the rights and privileges appertaining thereto set forth in EPMC's Articles of Incorporation; c. The consummation of the proposed transactions will not violate the rights of the holders of any securities issued by EPMC or any associate company thereof. I consent to the filing of this opinion as an exhibit to the Application-Declaration. Very truly yours, /s/Fredrick F. Nugent Frederick F. Nugent General Counsel Entergy Power Marketing Corp. EX-99 5 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION CERTIFICATION I hereby certify that the attached 14 pages are true and correct copies of a document on file with the Commission. May 7, 1996 Date Custodian I hereby certify that the Custodian, or his designee, which signature appears above, is the official custodian of the records of the Federal Energy Regulatory Commission which certification is made and was such official custodian at the time of executing the above certification. Lois A. Cashell, Secretary UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Elizabeth Anne Moler, Chair; Vicky A. Bailey, James J. Hoecker, William L. Massey, and Donald F. Santa, Jr. Entergy Services, Inc- ) Docket Nos. ER96-586-000 ) ER95-112-001, and ) ER95-1001-000 Entergy Power Marketing Corp. ) Docket No. ER95-1615-000 ORDER ACCEPTING FOR FILING AND SUSPENDING PROPOSED TRANSMISSION TARIFFS (AS MODIFIED), ESTABLISHING HEARING PROCEDURES, ACCEPTING FOR FILING (WITHOUT SUSPENSION OR HEARING) COMPLIANCE FILING, CONDITIONALLY ACCEPTING FOR FILING MARKET-BASED RATES, AND GRANTING WAIVERS AND AUTHORIZATIONS (Issued February 14, 1996) Entergy Services, Inc. (Entergy), on behalf of certain of its public utility associates, has filed in Docket No. ER96-586-000 revised open access point-to-point and network transmission tariffs. Entergy explains that the proposed tariffs are intended to revise the terms and conditions of the (previously-accepted) tariffs which are the subject of an ongoing hearing in Docket No. ER95-112-000 and to make them consistent with the pro forma tariffs in the Commission's Open Access NOPR proceeding. In this order, as explained below, we will accept for filing and suspend Entergy's revised transmission tariffs, as modified in one respect, and make them effective subject to refund and (as to non-rate terms and conditions) subject to the outcome of the final rule in the Open Access NOPR proceeding. We will set the proposed tariff rates for hearing. In addition, we will accept for filing, without suspension or hearing, the compliance filing made by Entergy in Docket No. ER95-112-001 and consider the related informational filing it made in Docket No. ER95-1001-000. Finally, as explained below, we will conditionally accept for filing, without suspension or hearing, the application by Entergy Power Marketing Corp. (Entergy Marketing), Entergy's power marketer associate, filed in Docket No. ER95-1615-000 for authorization to sell power at market-based rates. In addition, we will conditionally grant certain requested waivers and authorizations. Backqround A. Related Proceedings In Docket No. ER91-569-000, the Commission authorized Entergy and its associate, Entergy Power, Inc., to sell power at market-based rates. See Entergy Services, Inc., 58 FERC Paragraph 61,234, reh'g denied, 60 FERC paragraph 61,168 (1992). To meet the Commission's then-effective requirements concerning transmission market power, Entergy filed a tariff offering point-to-point transmission service. On appeal, the reviewing court remanded certain issues to the Commission, including the impact of stranded cost recovery on competition. See Cajun Electric Power Cooperative Inc. v. FERC (Caiun), 28 F.3d 173 (D.C. Cir. 1994). In Docket No. ER95-112-000, Entergy filed revised tariffs that were intended to meet the Commission's current standards for open access transmission tariffs, including network transmission service in addition to point-to-point service, as well as to address issues the court had identified in Cajun. The revised tariffs incorporate formula rates; among other things, Entergy proposed that it would make informational filings implementing the annual formula updates. In Entergy Services, Inc., et al., 70 FERC paragraph 61,006 (1995), reh'g pendinq, the Commission set the revised tariffs for hearing, but summarily directed Entergy to revise the tariffs in certain respects, e.q., to eliminate a variable equity return. B. Compliance Filinq/Informational Filinq Entergy has made a compliance filing in Docket No. ER95-112-001 which eliminates the variable equity return and adopts a stated return on equity of 11% as directed by the Commission's order. Entergy also has made its first annual informational filing in Docket No. ER95-1001-000. C. Revised Transmission Tariffs Entergy has filed revised transmission tariffs in Docket No. ER96-586-000. The stated purpose of the filing is to make the tariffs consistent with the terms and conditions of the pro forma tariffs in the Open Access NOPR so that, under the Commission's recent guidance orders on this subject, there would be no need for a refund condition for market-based rates. The tariffs adopt the same rates currently under investigation in Docket No. ER95-112-000. Entergy requests that the tariffs be made effective December 13, 1995, the date of the filing, and the rates be made subject to the outcome of Docket No. ER95-112-000. D. Market-Based Sales Rates Finally, Entergy Marketing has filed in Docket No. ER95-1615-000 an application to transact as a power marketer at market-based rates. Entergy Marketing explains that it satisfies all of the Commission's requirements for market-based rate authorization (explained below), and that it seeks the same waivers and authorizations as those afforded other power marketers. E. Notices. Interventions and Responsive Pleadinqs Notice of Entergy's filing of revised transmission tariffs in Docket No. ER96-586-000 was published in the Federal Register, 61 Fed. Reg. 409 (1996), with comments, protests and motions to intervene due on or before January 12, 1996. The following entities filed the following pleadings in Docket No. ER96-586-000 in response to Entergy's revised tariff filing: Sam Rayburn Municipal Power Agency, motion to intervene; Northeast Texas Electric Cooperative, Inc., motion to intervene and motion to consolidate; Cities of Campbell and Thayer, Missouri, motion to intervene; Council of the City of New Orleans, notice of intervention; Cities of Benton, North Little Rock, Osceola, and Prescott, Arkansas, the Conway Corporation, the West Memphis Utilities Commission and the Farmers Electric Cooperative Corporation (Arkansas Cities and Cooperative), joint motion to intervene, request for hearing, and motion for consolidation; Arkansas Electric Cooperative Corporation (AECC), motion to intervene; Arkansas Public Service Commission, notice of intervention; Ralph R. Mabey, Chapter 11 Trustee for Cajun Electric Power Cooperative, Inc. (Cajun), motion to intervene and protest; Electric Clearinghouse, Inc. (Electric Clearinghouse), motion to intervene and comments; Municipal Energy Agency of Mississippi, the Lafayette Utilities System and the Lafayette Public Power Authority (Lafayette), joint motion to intervene, protest and motion for summary disposition; Occidental Chemical Corporation (Occidental), motion to intervene; Southwestern Electric Power Agency, motion to intervene; and South Mississippi Electric Power Association (South Mississippi), motion to intervene and protest. Entergy subsequently filed answers to various motions to intervene, motions to consolidate, and motions for summary disposition. (To the extent the parties raise issues that require resolution in this order, we discuss such matters below.) Notice of Entergy's informational filing in Docket No. ER95-1001-000 was published in the Federal Register, 60 Fed. Reg. 27,500 (1995), with comments, protests, and motions to intervene due on or before May 31, 1995. The following entities filed the following pleadings in Docket No. ER95-1001-000 in response to Entergy's informational filing: Arkansas Public Service Commission, notice of intervention; Arkansas Cities and Cooperative, joint motion to intervene; Noram Energy Services, Inc., motion to intervene; South Mississippi, motion to intervene, protest, motion for summary disposition and motion to consolidate; and Electric Clearinghouse, late motion to intervene. Entergy subsequently filed in Docket No. ER95-1001-000 an answer to the intervenors protests and requests for summary action. Notice of Entergy's compliance filing in Docket No. ER95-112-001 was published in the Federal Register, 60 Fed. Reg. 8352 (1995), with comments, protest, and motions to intervene due on or before February 21, 1995. Cajun filed comments on the compliance filing, and South Mississippi filed a protest. Finally, notice of Entergy Marketing's application in Docket No. ER95-1615-000 for market-based rates was published in the Federal Register, 60 Fed. Reg. 46,272 (1995), with comments, protests, and motions to intervene due on or before September 14, l995. Southwestern Electric Power Company (Southwestern) filed a late motion to intervene, raising no substantive issues. Discussion Pursuant to Rule 214 of the Commission's Rule of Practice and Procedure, 18 C.F.R. Section 385.214 (1995), the notices of intervention and the timely, unopposed motions to intervene serve to make the movants parties to the respective proceedings in which they intervened. We will grant the untimely, unopposed motions to intervene of Southwestern in Docket No. ER95-1615-000 and of Electric Clearinghouse in Docket No. ER95-1001-000, given the interests the movants represent and the absence of any prejudice or delay. Further, we will consider Entergy's responsive pleadings to the extent they do not represent impermissible answers to protests or to other answers; we do not see good cause to waive this general rule. See 18 C.F.R. Section 385.213(a)(2) (1995). A. Docket No. ER96-586-000 -- Transmission Tariffs Entergy has generally modelled its open access transmission tariffs after the terms and conditions of the pro forma tariffs in the Open Access NOPR. As noted above, the transmission tariffs adopt the same rates as those currently under investigation in Docket No. ER95-112-000. l. Transmission Tariff Terms and Conditions Arkansas Cities and Cooperative concedes that Entergy's adoption of the pro forma tariffs eliminates the existing tariff restrictions on when Entergy will provide certain ancillary services and when customers can obtain them elsewhere. Arkansas Cities and Cooperative complains, however, that Entergy has not resubmitted a revised network operating agreement (NOA) and that the existing NOA at issue in Docket No. ER95-112-000 includes such restrictions. Arkansas Cities and Cooperative argues that, if Entergy's restrictions on ancillary services are continued, Entergy's filing does not mitigate its transmission market power. Arkansas Cities and Cooperative asks that the Commission direct Entergy to revise the existing NOA because it is claimed to be inconsistent with the revised tariffs. Arkansas Cities and Cooperative also asks that the Commission allow intervenors to explore at hearing the terms and conditions under which Entergy would allow existing customers to terminate existing wholesale power service arrangements and to begin service under the transmission tariffs. Alternatively, Arkansas Cities and Cooperatives asks the Commission to initiate a hearing on competitive issues as contemplated by the court remand in Cajun. Consistent with our recent guidance orders on this subject (see supra note 3), we will resolve non-rate terms and conditions on a generic basis in the Open Access NOPR proceeding. All nonrate terms and conditions of Entergy's revised transmission tariffs will remain subject to the outcome of the Open Access NOPR proceeding. If the parties wish to litigate any case-specific issues after we have issued a final rule in the Open Access NOPR proceeding, the parties may raise them at that time. 2. Transmission Tariff Rates Intervenors request summary disposition of the proposed pricing in the revised network tariff to the extent it permits the sum of a rate reflecting average system costs and incremental opportunity costs. They contend that Entergy's position is that the Commission's established prohibition on duplicative "and" pricing applies only to point-to-point service, not to network service. We will grant this request for summary disposition. Nothing in our Transmission Pricing Policy Statement or orders on this subject supports Entergy's position that postage stamp "and" pricing is prohibited only for point-to-point service and is permitted for network transmission service. We will direct Entergy to revise its tariffs to eliminate any provisions permitting "and" pricing for network service. Lafayette, among other intervenors, requests summary disposition with respect to Entergy's failure to include specific tariff provisions providing credits for customer-owned transmission facilities. Lafayette complains that, under the standards recently applied by the Commission in Florida Municipal Power Agency v. Florida Power & Liqht Company, 74 FERC paragraph 61,006 (1996), reh'g pendinq, its facilities are eligible for credit. Lafayette contends that, unless the Commission resolves this issue summarily, it will be foreclosed from competing with Entergy because the cost of transmission otherwise would be too expensive. As an alternative to its preferred resolution of the crediting issue, Lafayette asks that the Commission direct Entergy to revise the rate in an existing power sales agreement. Lafayette explains that it purchases nonfirm power from Entergy under a rate that recovers both production and transmission costs. Lafayette contends that Entergy intends to assess a separate tariff transmission charge for that power, thereby charging Lafayette for transmission twice. Lafayette asks that the Commission direct Entergy to reduce the power sales rate so that it will only pay one transmission charge. We will deny Lafayette's request for summary disposition. Lafayette's request to revise the rate in an existing power sale agreement is premature because Entergy has not proposed a separate charge and is beyond the scope of this proceeding. If Entergy assesses a separate charge, Lafayette can raise its concerns at that time. Also, intervenors' concern that, absent a credit for customer-owned transmission facilities, transmission service will be too expensive provides no basis to direct credits at this time. The appropriate level of credit, if any, for a particular customer must be based on the facts presented. Here, the intervenors have presented no facts in their pleadings that support summary disposition in their favor. Entergy's proposed tariff rates employ the same methodology as that reflected in its rates filed in Docket No. ER95-112-000. Our preliminary examination of Entergy's proposed tariff rates in Docket No. ER96-586-000 indicates that the proposed rates (as modified above) have not been shown to be just and reasonable and may be unjust, unreasonable, unduly discriminatory or preferential, or otherwise unlawful. Accordingly, we will accept the tariff rates (as modified) for filing, suspend them for a nominal period and set them for hearing, subject to refund. Because Entergy's new filing involves the same rate issues as those set for hearing in Docket No. ER95-112-000, we will consolidate Docket Nos. ER96-586-000 and ER95-112-000 for purposes of hearing and decision. We leave to the presiding administrative law judge the discretion how best to accommodate consolidation. Finally, we will grant waiver of the prior notice requirement to allow the revised tariffs to become effective December 13, 1995, because the revised tariffs adopt improved terms and conditions over the existing tariffs. B. Docket Nos. ER95-112-001 and ER95-1001-000 -- Compliance Filinq/Informational Filinq In Docket No. ER95-112-001 (compliance filing proceeding), intervenors complain that both the tariffs at issue in Docket No. ER95-112-000 and the compliance tariffs reflect prohibited "and" pricing for network transmission service. As explained above, we are ordering Entergy to eliminate "and" pricing from the revised tariffs. With this modification, we will accept for filing the compliance filing. In Docket No. ER95-1001-000 (informational filing proceeding), intervenors complain that the worksheets submitted in support of the informational filing fail to reflect one of the compliance revisions filed in Docket No. ER95-112-001, i.e., the elimination of the variable return on equity. Entergy responds that this was an oversight, notes that it properly computed the revised rates using the stated 11% return on equity under investigation in Docket No. ER95-112-000, and agrees to revise the worksheets in its next informational filing. This response resolves the intervenors' concerns. C. Docket No. ER95-1615-000 -- Market-Based Sales Rates In Heartland Energy Services, Inc., 68 FERC paragraph 61,223 (1994) (Heartland), and other cases, we have explained the general standards under which we review applications to sell at market-based rates. To obtain market-based rate authorization, the seller (and each of its associates) must not have, or must have mitigated, market power in generation and transmission and not control other barriers to entry. In order for its associate to demonstrate the requisite absence or mitigation of market power, the transmission-owning public utility must have on file with the Commission an open access transmission tariff for the provision of comparable services. In addition, the Commission considers whether there is evidence of associate abuse or reciprocal dealing. Entergy Marketing states that it meets the standards for market-based rate authorization. Entergy Marketing cites Entergy's most recent market analysis to demonstrate that its filing meets the Commission's requirements for market-based rate authorization. In support, Entergy Marketing states that it does not own or control any generating resources in the United States other than an indirect ownership interest in a cogeneration facility. Entergy Marketing also states that it has filed a code of conduct governing transactions between the power marketer and its franchised utility associates. It adds that the open access transmission tariffs filed by Entergy meet all of the requirements of the Open Access NOPR and the Commission's recent guidance orders on this subject. As explained below, we find that Entergy Marketing meets the requirements for approval of its market-based rate application. 1. Generation Market Power We agree with Entergy Marketing that, as demonstrated in Entergy's most recent market power analysis, Entergy Marketing lacks dominance in generation. 2. Transmission Market Power Earlier in this order, we accept for filing, suspend and (as to rate issues) set for hearing revised open access transmission tariffs proposed by Entergy in Docket No. ER96-586-000. We find that, as revised February 2, 1996, the non-rate terms and conditions of Entergy's revised open access transmission tariffs are consistent with the pro forma tariffs attached to the Open Access NOPR, and serve to mitigate its transmission market power. For this reason, and consistent with our recent guidance on this subject (see AEP, 72 FERC at 62,237), we find that Entergy Marketing's application meets the Commission's transmission market power requirements. 3. Affiliate Abuse/Other Barriers to Entry As required by Heartland, Entergy Marketing has developed a code of conduct which explicitly prohibits the private communication of competitive information to its parent or associates. The code requires Entergy Marketing to obtain transmission services from Entergy on a nondiscriminatory basis under the open access tariffs. In addition, Entergy Marketing has agreed not to sell power to, or purchase power from, other Entergy associates except pursuant to a separate Commission-approved rate schedule under Section 205 of the Federal Power Act (FPA), 16 U.S.C. Section 824d (1994). Consistent with a recent order on this subject, we will condition our approval of Entergy Marketing's market-based rate application on Entergy Marketing's agreement to obtain any non-power goods and services from Entergy at the higher of cost or market value. For the same reason, we condition our approval on Entergy Marketing's (and its associates') agreement not to sell any non-power goods and services to Entergy at a price above market value. Further, Entergy Marketing's commitment not to share market information with Entergy is not complete; Entergy itself must commit to share market information with its associates only if the same information also is made publicly available to non-associates simultaneously. We direct Entergy Marketing to revise its code of conduct accordingly. With these conditions, we find that associate abuse or reciprocal dealing issues are not of concern here. Further, we see no evidence to suggest that Entergy Marketing or any of its associates controls other barriers to entry. 4. Waivers Authorizations and Reportinq Requirements Entergy Marketing has requested the following authorizations and waivers of various Commission regulations consistent with those granted other power marketers: (1) Subparts B and C of Part 35, except Sections 35.12(a), 35.13(b), 35.15 and 35.16; (2) Parts 41, 101 and 141; (3) abbreviated filings with respect to interlocking directorships under Part 45; and (4) blanket authorization for issuances of securities or assumptions of liabilities pursuant to section 204 of the FPA. Conditioned on the requirements discussed in section C.3. above (concerning affiliate abuse), we will grant such authorizations and waivers to the extent granted to other power marketers. Consistent with previous Commission decisions, we will require Entergy Marketing to file quarterly reports. As we previously have explained, the requirement that marketers file quarterly reports detailing the purchase and sale transactions undertaken in the prior quarter is necessary to ensure that contracts relating to rates and services are on file as required by sectlon 205(c) of the FPA, 16 U.S.C. Section 824d(c) (1994), and to allow the Commission to evaluate the reasonableness of the charges and to provide for ongoing monitoring of the marketer's ability to exercise market power. We also will direct Entergy Marketing to inform the Commission promptly of any change in status that would reflect a departure from the characteristics the Commission has relied upon in approving market-based pricing. These include, but are not limited to: (1) ownership of generation or transmission facilities or inputs to electric power production other than fuel supplies; or (2) affiliation with any entity not disclosed in the instant filing that owns generation or transmission facilities or inputs to electric power production, or affiliation with any entity that has a franchised service area. Alternatively, we will allow Entergy Marketing the option of filing a new market analysis every three years. The Commission orders: (A) The untimely, unopposed motions to intervene of Southwestern in Docket No. ER95-1615-000 and of Electric Clearinghouse in Docket No. ER95-1001-000 are hereby granted. (B) Entergy is hereby directed to revise its compliance filing in Docket No. ER95-112-001 and the revised transmission tariffs in Docket No. ER96-586-000 to eliminate "and" pricing, as discussed in the body of this order, within 15 days of the date of issuance of this order. At the same time, Entergy is hereby directed to file revised rate sheets reflecting the February 2, 1996 amendment to its tariff filing in Docket No. ER96-586-000. (C) All other requests for summary disposition are hereby denied, as discussed in the body of order. (D) Entergy's proposed open-access transmission tariffs filed in Docket No. ER96-586-000 (as modified in Ordering Paragraph (B) above) are hereby accepted for filing and suspended for a nominal period, to become effective December 13, l995, subject to refund and (as to non-rate terms and conditions) subject to the outcome of the Open Access NOPR proceeding. (E) Pursuant to the authority contained in and subject to the jurisdiction conferred upon the Federal Energy Regulatory Commission by section 402(a) of the Department of Energy Organization Act and the Federal Power Act, particularly sections 205 and 206 thereof, and pursuant to the Commission's Rules of Practice and Procedure and the regulations under the Federal Power Act (18 C.F.R. Chapter I), a public hearing shall be held in Docket No. ER96-586-000 concerning the justness and reasonableness of Entergy's proposed rates for transmission service, as discussed in the body of this order. (F) Docket No. ER96-586-000 is hereby consolidated with Docket No. ER95-112-000 for purposes of hearing and decision. (G) The administrative law judge designated to preside in Docket No. ER95-112-000 shall determine procedures best suited to accommodate consolidation of Docket No. ER96-586-000 with the pending proceeding in Docket No. ER95-112-000. (H) Entergy's compliance filing in Docket No. ER95-112-001, as modified in Ordering Paragraph (B) above, is hereby accepted for filing. (I) Within 15 days of the date of this order, Entergy Marketing is hereby directed to revise its code of conduct, as discussed in the body of this order. (J) Entergy Marketing's proposed market-based rates application in Docket No. ER95-1615-000 is hereby accepted for filing, to become effective December 13, 1995 (the date the revised tariffs become effective), without suspension or hearing, subject to Entergy's Marketing's acceptance of the waivers, authorizations, and conditions agreed to in its filing and those ordered herein. (K) As discussed in the body of this order, Entergy Marketing's request for waiver of Parts 41, 101 and 141 of the Commission's regulations is hereby granted. (L) Within 30 days of the date of this order, any person desiring to be heard or to protest the Commission's blanket approval of issuances of securities or assumptions of liabilities by Entergy Marketing should file a motion to intervene or protest with the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure, 18 C.F.R. Section 385.211 and 385.214 (1995). (M) Absent a request to be heard within the period set forth in ordering paragraph (L) above, Entergy Marketing is hereby authorized, pursuant to section 204 of the FPA, to issue securities and assume obligations and liabilities as guarantor, endorser, surety, or otherwise in respect of any security of another person; provided that such issue or assumption is for some lawful object within the corporate purposes of Entergy Marketing, compatible with the public interest, and reasonably necessary or appropriate for such purposes. (N) Until further order of this Commission, the full requirements of Part 45 of the Commission's regulations, except as noted, are hereby waived with respect to any person now holding or who may hold an otherwise prescribed interlocking directorship involving Entergy Marketing. Any such person instead shall file a sworn application providing the following information: (1) full name and business address; and (2) all jurisdictional interlocks, identifying the affected companies and the positions held by that person. (O) The Commission reserves the right to modify this order to require a further showing that neither public nor private interests will be adversely affected by continued Commission approval of Entergy Marketing's issuances of securities or assumptions of liabilities, or by the continued holding of any affected interlocks. (P) The provisions of subparts B and C of Part 35 of the Commission's regulations, with the exception of sections 35.12(a), 35.13(b), 35.15 and 35.16, are hereby waived in Docket No. ER95-1615-000. As for those sections, waiver is hereby denied. (Q) Entergy Marketing is hereby directed to submit quarterly informational filings as discussed in the body of this order. The first quarterly report of transactions will be due within 30 days of the calendar quarter ending March 31, 1996. (R) Entergy and Entergy Marketing are hereby informed of the rate schedule designations shown on Attachment A to this order. By the Commission. ( S E A L ) /s/ Lois D. Cashell Lois D. Cashell, Secretary Attachment A Rate Schedule Designations Entergy Operatinq Companies: Description/ Designation Effective Date Docket No. ER95-112-001 (1)First Revised Sheet No. 53 Adopts a stated 11% Under FERC Electric Tariff, return on equity First Revised Volume No. 1 formula rate (Replaces Original Sheet No. 53) component/ January 9, 1995 (2) First Revised Sheet Nos. 62, 68 Adopts a stated 11% and 79 Under FERC Electric Tariff, return on equity First Revised Volume No. 2 formula rate (Replaces Original Sheet Nos. 62, 68 component/ January 9, 1995 and 79) Docket No. ER95-1001-000 (3)Original Sheet Nos. 58A-58G Under Redetermined Rates FERC Electric Tariff, First per Attachment A/ Revised Volume No. 1 June 1, 1995 (4)Original Sheet Nos.66A-66F, 77A-77K Redetermined Rates and 83A-83F Under FERC Electric Tariff, per Attachments A, B Original Volume No. 2 and C/ June 1, 1995 Docket No. ER96-586-000 (5) FERC Electric Tariff, Revised Point-to- Second Revised Volume No. 1 - Point Tariff/ Original Sheet Nos. 1 through 88 December 13, 1995 (Supersedes First Revised Volume No. 1) (6) FERC Electric Tariff, First Revised Network Revised Volume No. 2 - Original Tariff/ December 13, 1995 Sheet Nos. 1 through 74 (Supersedes Original Volume No. 2) Enterqy Power Marketinq Corporation: Docket No. ER95-1615-000 Rate Schedule FERC No. 1 _______________________________ Arkansas Power and Light Company, Gulf States Utilities Company, Louisiana Power & Light Company, Mississippi Power and Light Company, and New Orleans Public Service, Inc. (collectively, the Entergy operating companies). See Promoting Wholesale Competition Through Open Access Non- discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities, Notice of Proposed Rulemaking and Supplemental Notice of Proposed Rulemaking, 60 Fed. Reg. 17,662 (1995), IV FERC Stats. & Regs. Paragraph 32,514 (1995) (Open Access NOPR). See American Electric Power Service Corporation, 71 FERC paragraph 61,393, order on reh'g, 72 FERC paragraph 61,287 (1995), reh'g denied, 74 FERC paragraph 61,013 (1996). The parties to the ongoing proceeding in Docket No. ER95-112-000 have entered into partial settlements of certain of the issues raised in that proceedings. The Commission will act on those settlements at a later date. Due to unusual weather conditions, the Federal Government was closed on January 12, 1996. January 15, 1996 was a federal holiday. Therefore, all interventions received by January 16, 1996 are timely filed in Docket No. ER95-586-000. See Inquiry Concerning the Commission's Pricing Policy for Transmission Services Provided by Public Utilities Under the Federal Power Act, Policy Statement, III FERC Stats. & Regs. paragraph 31,005, 59 Fed. Reg. 55,031 (1994). See Central Hudson Gas & Electric Corporation, 60 FERC paragraph 61,106 at 61,339, reh'g denied, 61 FERC paragraph 61,089 (1992). See, e.g., USGen Power Services, L.P., 73 FERC paragraph 61,302, slip op. at 2-3 (1995) (USGen); American Electric Power Service Corporation, et al., 72 FERC paragraph 61,287 at 62,237-38 (1995), reh'g denied, 74 FERC paragraph 61,013 (1996) (AEP). See Entergy Services, Inc., 58 FERC paragraph 61,234, reh'g denied, 60 FERC paragraph 61,168 (1992), remanded, Cajun Electric Power Cooperative, Inc. v. FERC, 28 F.3d 173 (D.C. Cir. 1994), in which the Commission required Entergy to update its market power analysis every three years. Entergy Marketing states, Application at 6, that an associate owns a 49 percent limited partnership interest and a 1 percent general partnership interest in the Richmond Cogeneration facility. Entergy Marketing has not indicated that it will broker power for the Entergy operating companies or broker or market power for other members of the Entergy Corporation system. Our action herein is based on the understanding that Entergy Marketing will not broker for the Entergy operating companies. See Wholesale Power Services, Inc., 72 FERC paragraph 61,284 (1995); Southern Company Services, Inc., et al., 72 FERC paragraph 61,324 (1995). See USGen, slip on. at 4-5. See, e.g., LG&E Power Marketing, Inc., 68 FERC paragraph 61,247 at 62,124 (1994). See Enron Power Marketing, Inc., 65 FERC paragraph 61,305 at 62,406 (1993), order on reh'g, 66 FERC paragraph 61,244 at 61,599 (1994); Morgan Stanley Capital Group, 69 FERC paragraph 61,175 at 61,694-95 (1994), order on reh'g, 72 FERC paragraph 61,082 at 61,436 n.8, 61,437 n.15 (1995) (Moraan Stanley). See, e.g., Morgan Stanley, 69 FERC at 61,694-95 and 72 FERC at 61,436-37; InterCoast Power Marketing Company, 68 FERC 61,248 at 62,134, order on clarification, 68 FERC paragraph 61,323 (1994). See, e.g., USGen, slip op. at 9; Morqan Stanley, 69 FERC at 61,695. EX-99 6 SKADDEN, ARPS, SLATE, MEAGHER & FLOM 1440 NEW YORK AVENUE N W WASHINGTON D.C 20005-2107 February 29, 1996 The Honorable Lois D. Cashell Secretary Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426 Re: Entergy Power Marketing Corp. Docket No. ER95 1615-001 Dear Secretary Cashell: Enclosed for filing please find an original and fourteen (14) copies of the Compliance Filing of Entergy Power Marketing Corp. Please acknowledge receipt of this application by stamping the additional copy included with this filing. Thank you for your attention to this matter. Sincerely, /s/Kathleen A. Foudy Kathleen A. Foudy UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Entergy Power Marketing Corp. ) Docket No. ER95-1615-001 COMPLIANCE FILING OF ENTERGY POWER MARKETING CORP. On February 14, 1996, the Commission issued an Order in the above-captioned proceeding conditionally accepting for filing the application of Entergy Power Marketing Corp. ("EPMC") for authorization to sell power at market-based rates. Enterqy Power Marketing Corp., 74 FERC 61,137 (1996). The Commission allowed EPMC's FERC Rate Schedule No. 1 to become effective as of December 13, 1995, provided that EPMC accepted the waivers, authorizations and conditions set forth in its application and in the Order. EPMC accepts such waivers, authorizations and conditions. The Commission also directed EPMC to revise its code of conduct on or before February 29, 1996. As EPMC stated in its application, EPMC is a subsidiary of Entergy Corp. ("Entergy"). Certain aspects of the relationships between the so-called regulated and non-regulated subsldiarles of Entergy currently are governed by certain agreements Entergy entered into with its state regulators ("State Agreements") as well as by a document entitled "Standards of Conduct Regarding the Relationship Between Entergy's Regulated and Nonregulated Subsidiaries" ("Standards of Conduct"). To comply with the Order, EPMC agrees to the following standards of conduct IN addition to those set forth in the State Agreements and revises its Standards of Conduct accordingly. Affiliate Sales of Goods and Services EPMC's Purchase of Goods or Services from Entergy Requlated Utiliti's In the Order, the Commission conditioned its approval of EPMC's market-based rates on EPMC's "agreement to obtain any non-power goods and services from Entergy at the higher of cost or market value." (Slip. Op. at 10). Section 6.0 of the Standards of Conduct states that "[a]ny transfer of assets, goods or services between Regulated Companies and Nonregulated Companies shall be in accordance with the" State Agreements. In turn, under the State Agreements any transfer of generating as sets, fuel and fuel-related assets, or real property or improvements with a fair market value exceeding $100,000 from an Entergy regulated utility to EPMC is to be priced at the higher of fair market value or book value. This provision of the State Agreements complies with the Order. To the extent EPMC purchases any non-power good from an Entergy regulated utility not covered by the State Agreements, EPMC agrees to purchase such good at the higher of cost or market value. To ensure compliance with the Order with re spect to the provision of services from a regulated utility to EPMC, EPMC agrees to obtain any services from the Entergy regulated utllit_es at the hlgher ot cost o~ market value. EPMC's Sale of Goods or Services to the Entergy Requlated Utilities In the Order, the Commission conditioned its approval of EPMC's market-based rates on EPMC's "(and its associates') agreement not to sell any non-power goods and services to Entergy at a price above market value." (Slip Op. at 10). Pursuant to Section 6.0 of the Standards of Conduct and the State Agreements, the Entergy regulated utilities may not make a procurement in excess of $100,000 from EPMC or any other "nonregulated" business of Entergy (i.e., subsidiaries of Entergy which are not domestic regulated electric utilities primarily engaged in the business of selling electric energy at retail or at wholesale or are not primarily engaged in the business of providing services or goods to regulated electric utility affiliates), except through a competitive bidding process or as authorized by an appropriate state regulatory commission. To ensure compliance with both the Order and the State Agreements, EPMC will supplement this requirement by agreeing that for procurements not in excess of $100,000, neither EPMC nor any other Entergy nonregulated buslness will sell ary non-power goods or services to an Entergy regulated utility at a price above market value. In the event the Entergy regulated utilities make a procurement in excess of $100,000 from EPMC or any other nonregulated business of Entergy, the market value will be determined by competitive bid or by an appropriate state regulatory commission. Limits on Information Sharinq In the Order, the Commission, citing USGen Power Services. L.P., 73 FERC 61,302 (1995) ("USGen"), stated that EPMC's "commitment not to share market infor mation with Entergy is not complete; Entergy itself must commit to share market information with its associates only if the same information also is made publicly available to non-associates simultaneously." (Slip Op. at 10). In assessing how to comply with this statement, EPMC is informed by the Compliance Filing made by USGen which was accepted by the Commission in a February 13, 1996 Letter Order. USGen modified its standards of conduct to state that its affiliated utility "may share market information with affiliated QFs, EWGs, or other traditional power marketers or generators without captive customers, only if the same information is made publicly available to non-affiliates simultaneously." Thus, in accordance with the Order and the USGen decision on which it relied, Entergy will modify Section 12 of its Stan dards of Conduct to state that the Entergy regulated utilities may share market information with affiliated QFs, EWGs, EPMC or other non-traditional power marketers or generators without captive customers only if the same information also is made publicly available to non-associates simultaneously, unless such information is provided in response to a request for service from an affiliated QF, EWG, EPMC, or another nontraditional power market er or generator without captive customers and such information pertains to the requested service. WHEREFORE, EPMC respectfully requests that the Commission accept these revisions to its code of conduct. Respectfully submitted, /S/Kathleen A. Foudy William S. Scherman Kathleen A. Foudy Skadden, Arps, Slate, Meagher & Flom 1440 New York Avenue, N.W. Washington, D.C. 20005 (202) 371-7000 February 29, 1996 _______________________________ The State Agreements are: (1) the October 1992 Settlement Agreement among Entergy, the Arkansas Public Service Commission, the Mississippi Public Service Commission and the Council for the City of New Orleans and (2) Appendix 3 to the Louisiana Public Service Commission's May 3, 1993 Order No. U19904. Nothing in this filing is intended to modify or terminate the State Agreements. As discussed below, Entergy believes the intent of both the Commission's Order and the State Agreements can be reconciled. The Securities and Exchange Commission ("SEC"), pursuant to the Public Utility Holding Company Act of 1935, as amended, also may have jurisdiction over certain transactions between EPMC and the Entergy regulated utilities, namely the sale of goods and services from an Entergy regulated utility to EPMC. However, with respect to the sale of goods from an Entergy regulated utility to EPMC, no such sales presently are contemplated. In an SEC order relating to the provision of services at fair market prices to nonutility affiliates of Entergy Enterprises, Inc., including EPMC, the SEC indicated that Entergy and Entergy Enterprises, Inc. acknowledged that the SEC's authorization of market prices with respect to such services would not be binding on this Commission or appropriate state regulatory commissions. Enterqy Corporation, SEC Release No. 35-26322; 73-al05 (June 30, 1995). As noted above, certain aspects of the relationship between EPMC and the regulated subsidiaries of Entergy are subject to the State Agreements, which currently are pending before the SEC. If necessary, the Standards of Conduct will be modifled accordlngly. ENTERGY CORPORATION REVISED STANDARDS OF CONDUCT REGARDING THE RELATIONSHIP BETWEEN ENTERGY'S REGULATED AND NONREGULATED SUBSIDIARIES February 1996 6.1 Any non-power goods or services Entergy Power Marketing Corp. purchases from any Entergy regulated utility will be priced at the higher of cost or market. 6.2 Neither Entergy Power Marketing Corp. nor any other nonregulated business will sell any non-power goods or services to an Entergy regulated utility at a price above market value. 12. Any Entergy regulated utility may share market information with affiliated qualifying facilities, exempt wholesale generators, Entergy Power Marketing Corp., or other nontraditional power marketers or generators without captive customers only if the same information also is made publicly available to nonassociates simultaneously, unless such information is provided in respcnse to a request for service from an affiliated qualifying facility, exempt wholesale generator, Entergy Power Marketing Corp., or another nontraditional power marketer or generator without captive customers and such information pertains to the requested service. UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Entergy Power Marketing Corp. ) Docket No. R95-1615-001 NOTICE OF FILING Take notice that on February 29, 1996, Entergy Power Marketing Corp. tendered for filing revisions to its Standards of Conduct which incorporate requirements specified in the Commission's February 14, 1995 Order concerning Entergy Power Marketing Corp.'s Application in Docket No. ER95-1615. Any persn desiring to be heard or to protest said filing should file a motion to intervene or protest with the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 C.F.R. 385.211 and 385.214). All such motions or protests should be filed on or before______________, 1996. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a motion to intervene. Copies of this filing are on file with the Commission and are available for public inspection. Lois D. Cashell Secretary Certificate of Service I, Kathleen A. Foudy, certify that I have this day served the foregoing Compliance Filing of Entergy Power Marketing Corp. by first-class mail, postage prepaid, to all parties on the official service list for this pro ceeding. Dated at Washington, D.C. this 29th day of February, 1996. /S/Kathleen A. Foudy Kathleen A. Foudy Skadden, Arps, Sla~te, Meagher & Flom 1440 New York Avenue, N.W. Washington, D.C. 20005 (202) 371-7000 EX-99 7 (DRAFT of NOTICE) UNITED STATES OF AMERICA BEFORE THE SECURITIES AND EXCHANGE COMMISSION PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 Release No. 35-_____; File No. 70-_____ In the Matter of: ENTERGY CORPORATION ENTERGY POWER MARKETING, CORP. NOTICE OF APPLICATION-DECLARATION CONCERNING POWER BROKERING AND MARKETING ACTIVITIES Entergy Corporation ("Entergy"), 639 Loyola Avenue, New Orleans, Louisiana 70113, a registered holding company, and Entergy Power Marketing Corp. ("EPMC"), 900 South Shackleford Road, Suite 210, Little Rock, Arkansas 72211, a Delaware corporation proposed to be a wholly-owned subsidiary of Entergy, have filed an application-declaration pursuant to Sections 9(a), 10 and 11(b) of the Act. Entergy proposes to finance a subsidiary, EPMC, which will engage in a variety of power brokering and marketing transactions, including traditional wholesale bulk power transactions as well as the provision of innovative value-added financial products and services designed to meet the evolving needs of customers in competitive markets. EPMC seeks authority, to the extent necessary, to engage in such transactions. Entergy's investment in EPMC will constitute EPMC's total capital ization. Entergy seeks authority to capitalize EPMC in an amount up to $20 million and to provide up to $150 million in credit support, i.e., guarantees or other similar commitments, to EPMC. The application-declaration and any amendments thereto are available for public inspection through the Commission's Office of Public Reference. Interested persons wishing to comment or request a hearing should submit their views in writing no later than ___________, to the Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and serve a copy on the declarants at the address specified above. Proof of service (by affidavit, or in, in case of an attorney at law, by certificate) should be filed with the request. Any request for a hearing shall identify specifically the issues of fact or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in this matter. After said date the declaration, as filed or as it may be amended, may be permitted to become effective. For the Commission, by the Office of Public Utility Regulation, pursuant to delegated authority. -----END PRIVACY-ENHANCED MESSAGE-----