0000065984-95-000045.txt : 19950816
0000065984-95-000045.hdr.sgml : 19950816
ACCESSION NUMBER: 0000065984-95-000045
CONFORMED SUBMISSION TYPE: 35-CERT
PUBLIC DOCUMENT COUNT: 2
FILED AS OF DATE: 19950815
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: 35-CERT
SEC ACT: 1935 Act
SEC FILE NUMBER: 070-08010
FILM NUMBER: 95564382
BUSINESS ADDRESS:
STREET 1: PO BOX 61000
CITY: NEW ORLEANS
STATE: LA
ZIP: 70161
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
35-CERT
1
UNITED STATES OF AMERICA
BEFORE THE SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
* * * * * * * * * * * * * * * * *
In the Matter of *
*
ENTERGY CORPORATION * CERTIFICATE
ENTERGY ENTERPRISES, INC. * PURSUANT TO RULE 24
*
File No. 70-7851 *
File No. 70-8002 *
File No. 70-8010 *
File No. 70-8105 *
*
(Public Utility Holding Company *
Act of 1935) *
* * * * * * * * * * * * * * * * *
Pursuant to Rule 24 promulgated by the Securities and
Exchange Commission (SEC) under the Public Utility Holding
Company Act of 1935, as amended (Act), modified by the
application(s) - declaration(s), as amended, in the above
referenced files and the related orders dated July 25, 1991,
December 14, 1992(2), December 28, 1992, July 8, 1993, and June
30, 1995, respectively, this is to certify that the following
transactions were carried out during the three (3) months ended
June 30, 1995 by Entergy Enterprises, Inc. (formerly Electec,
Inc.) pursuant to the authorization of the SEC.
Programs Authorized
Pursuant to the Orders, Entergy Enterprises, Inc.
(Enterprises) is authorized to (a) conduct preliminary
development activities with respect to various investment
opportunities for the Entergy System, (b) market to non-
associates the System's expertise and capabilities in energy-
related areas, including the expertise of Entergy Power, Inc.
(EPI) gained from its bulk power business, (c) market to non-
associates intellectual property developed by System companies,
(d) provide various consulting, management, administrative and
support services to associate companies, excluding certain
associate companies (Excluded Companies), (e) provide directly,
or indirectly through one or more special purpose subsidiary
companies of Entergy or Enterprises, various operations and
maintenance services to non-associate or associate companies
(other than Excluded Companies), and (f) develop and field test a
proposed telecommunications system for advanced energy management
and other utility applications.
_______________________________
The Excluded Companies are Entergy's retail operating
companies (Arkansas Power & Light Company, Louisiana Power &
Light Company, Mississippi Power & Light Company, New Orleans
Public Service Inc. and Gulf States Utilities Company), System
Energy Resources, Inc. System Fuels, Inc., Entergy Operations,
Inc., Entergy Services, Inc., and any other subsidiaries that
Entergy may create whose activities and operations are primarily
related to the domestic sale of electric energy at retail or at
wholesale to affiliates or the provision of goods or services
thereto.
During the quarter, Enterprises participated in the
following:
I. Preliminary Development Activities
Enterprises has been engaged in preliminary development
activities relating to investigating sites, research, contract
drafting and negotiations, acquiring options or rights,
partnership selection and other activities necessary to identify
and analyze investment opportunities for Entergy Corporation
(Entergy). These development activities include domestic and
international opportunities.
During the quarter, Enterprises expended $1,307,064 for
preliminary development activities associated with potential
investments that would qualify as "exempt wholesale generators"
under Section 32(a) of the Act. In addition, Enterprises
expended $275,740 for preliminary development activities
associated with potential investments that would qualify as
"foreign utility companies" under Section 33 of the Act.
Enterprises also expended $665,640 for preliminary development
activities associated with potential investments that would
qualify as "nonutility business." Finally, Enterprises expended
$771,078 and $164,118 for preliminary development activities
associated with demand side management activities and non-exempt
domestic wholesale generating and transmission facilities,
respectively.
II. Management Services Provided to Associate Companies
Enterprises provided certain management and support services
to its associate companies, EPI, Entergy S.A., Entergy Argentina
S.A., Entergy Systems and Service, Inc. (Entergy SASI), Entergy
Power Development Corporation (EPDC), and Entergy Pakistan, Ltd.
(EPL). Enterprises charged these companies for costs incurred
plus an indirect loading based upon current month EEI
administrative charges. In regard to EPI ($210,000.22), these
services included marketing of EPI capacity and energy to other
utilities at wholesale, preparation of contracts and regulatory
filings, oversight of plant operations and maintenance by plant
operators, and procurement of transmission services. In regard
to Entergy S.A.($28,643.90), Entergy Argentina S.A. ($68,212.46),
Entergy SASI ($46,337.98), EPDC ($3,844,915.29),and EPL
($85,445.30), these services were related to management oversight
and project development.
III. Consulting Activities with Non-Associate Companies
Enterprises, under contract with Louisiana Hydroelectric
Ltd. Partnership, continues to provide an array of technical
services/support for a hydro electric transmission line project.
Certain Entergy Services, Inc. personnel are providing the
services. The Louisiana Hydroelectric Ltd. Partnership was
charged $11,000 for services rendered during this quarter.
IV. First Pacific Networks, Inc. Transactions
A. Description of Progress in Development and Testing of
CCLM/AFS
During the second quarter of 1995, Enterprises and First
Pacific Networks, Inc. ("FPN") continued their efforts in the
development, modification and testing of FPN's PX System in order
to create a Customer Controlled Load Management/Automatic
Feedback System ("CCLM/AFS" or the "System") for advanced energy
management applications. During this period, testing of
CCLM/AFS continued to reveal problems which, in Enterprises'
opinion, adversely affect the reliability of the System. In
light of this, on May 24, 1995, Enterprises and FPN entered into
an amendment to the Product License Agreement (as so amended, the
"Second Amended Agreement") terminating the parties' joint
effort to complete the development of CCLM/AFS.
Notwithstanding the Second Amended Agreement, FPN may proceed
independently with the development of the System.
Additionally, FPN will continue to provide support for System
testing through September, 1995. Pursuant to the Second Amended
Agreement, Enterprises' exclusive license to make, use and
market CCLM/AFS within the territorial limits of the Entergy
Electric System ("Entergy System") is retained and expanded (as
provided below). Enterprises also retains, in modified form, a
right to share in revenues derived from the marketing of
CCLM/AFS outside the Entergy System. In general, the Second
Amended Agreement modifies the Product License Agreement, as
previously amended, in the following respects:
(1) Modification of Enterprises' License Rights
(a) Enterprises agrees not to exercise its license
rights pertaining to the marketing of CCLM/AFS outside
the Entergy System unless FPN fails (i) to actively
market CCLM/AFS products for a period of one year or
(ii) becomes the subject of bankruptcy proceedings.
(b) The following license rights of Enterprises will
expire fourteen (14) months following Enterprises'
receipt from FPN of the sum of $7 million (i.e. the
balance of $9 million agreed to be paid by FPN pursuant
to the Amended Agreement): (i) certain rights to
preferential pricing for purchase of CCLM/AFS
components, and maintenance services related thereto,
for use or marketing within the Entergy System
(subject to Enterprises' retained right to purchase
Products and services from FPN on terms no less
favorable than those made available to any other party
for similar transactions); and (ii) Enterprises' right
to market CCLM/AFS to Qualifying Utilities outside the
Entergy System.
(c) Enterprises license rights are expanded by
granting Enterprises an exclusive license to
sublicense, sell, lease or otherwise provide CCLM/AFS
to non-affiliated entities whose principal business is
the electric, gas or water utility business
("Qualifying Utilities") within the Entergy System.
Enterprises agrees to pay FPN 10% of any license or
sublicense fees received from Qualifying Utilities for
use of CCLM/AFS in the Entergy System.
(2) License Fees Paid by Enterprises and Other Payments
Between the Parties
In consideration of Enterprises' being discharged from
any further obligations under the Agreement (including
the $850,000 remaining balance of the $8.5 million
License Fee that otherwise would have been required to
be paid by Enterprises to FPN), pursuant to the Second
Amended Agreement, Enterprises (a) has made payment to
FPN of the sum of $520,000, and (b) agrees to pay FPN
the additional sum of $100,000 for support provided by
FPN in connection with the Chenal Valley testing of
CCLM/AFS. The parties further agree that the
remaining $7 million, which FPN agreed under the
Amended Agreement to pay Enterprises on March 15, 1998
(assuming Enterprises had performed its obligations
under the Amended Agreement) will now be paid by FPN
without condition as follows: $3,500,000 on March 15,
1998 and $3,500,000 on March 15, 1999 (the "FPN
Payments"); provided, however, that any royalty or
license fee revenues received by Enterprises prior to
March 15, 1999 will be credited against and reduce the
amount of the FPN Payments otherwise payable to
Enterprises.
(3) Termination of Obligations Re: Joint Development
of CCLM/AFS
The provisions of the Agreement providing for the joint
development of CCLM/AFS have been deleted in their
entirety, including Enterprises' commitment under the
Amended Agreement to co-fund with FPN further
development costs relating to CCLM/AFS up to a maximum
of $1 million of development costs. Accordingly,
pursuant to the Second Amended Agreement, there is no
longer any schedule for the development of CCLM/AFS,
and CCLM/AFS will not be subject to acceptance by
Enterprises.
(4) Sharing of Revenues from Licensing and Other Marketing
of CCLM/AFS to Qualifying Utilities Outside the Entergy
System
Under the Amended Agreement, the parties agreed that
all revenues from licenses or sublicenses of CCLM/AFS
(including intellectual property contained therein)
would be divided equally. Enterprises would also
receive 5% of gross revenues derived from the sale,
lease or other marketing of CCLM/AFS hardware
components. Under the Second Amended Agreement, the
parties agree that, in lieu of the previous
arrangement, Enterprises will be paid 10% of gross
revenues received by FPN from licenses and sublicenses
to Qualifying Utilities which will continue for a ten-
year period following receipt by Enterprises of the FPN
Payments. Additionally, Enterprises will receive 2%
of net receipts received by FPN from CCLM/AFS sales to
Qualifying or Non-Qualifying Utilities until receipt of
the FPN Payments and 1% of gross receipts received by
FPN from sales/leases of CCLM/AFS hardware components
for a period of ten years thereafter.
(5) Term and Termination
The Second Amended Agreement provides that the term of
Enterprises' exclusive license (a) to make, use, sell,
lease or otherwise provide CCLM/AFS to customers and end
users within the Entergy System, and (b) to sublicense,
sell, lease or otherwise provide CCLM/AFS to Qualifying
Utilities within the Entergy System, is perpetual.
Enterprises' other license rights expire 14 months following
receipt of the FPN Payments (as provided above). Inasmuch
as FPN has no further obligations to Enterprises with
respect to the development and support of CCLM/AFS, the
provisions of the Agreement providing for Enterprises' right
to terminate the Agreement by reason of the default of FPN
have been deleted in their entirety.
Despite the termination of the joint development effort with
FPN, consistent with Enterprises' authorization to engage in
preliminary development activities, Enterprises is continuing to
investigate other products/technologies that can be used to
establish a low cost and reliable customer controlled load
management ("CCLM") system and is seeking to identify other
providers of technology that can assist in development of such a
system. It is anticipated that FPN's future role in
Enterprises' CCLM system development effort may be limited to
supplying certain components. Enterprises is preparing to
test a system that uses FPN equipment as a means of data
transport, with hardware/software for the evaluation and test
being provided by a number of other vendors and software being
developed by Entergy System personnel.
B. Costs and Revenues Re: CCLM/AFS
Total costs incurred by Enterprises in connection with the
development, field testing and marketing of CCLM/AFS during the
three month period ending June 30, 1995 were $771,078.
Enterprises has no information on costs incurred by FPN in
connection with the development and marketing of CCLM/AFS during
this period. Total costs incurred by FPN and billed for the
three month period ending June 30, 1995 with respect to the field
testing of CCLM/AFS were $592,425.
C. Future Reporting Re: CCLM/AFS
Inasmuch as Enterprises will no longer jointly develop
CCLM/AFS with FPN or provide development funding for FPN,
Enterprises proposes to discontinue quarterly reports on the
joint development of CCLM/AFS with FPN following the report
covering the calendar quarter ending September 30, 1995. Future
Rule 24 Certificates filed by Enterprises will report on any
revenues derived from sales and licenses of CCLM/AFS, and related
products and services, to non-affiliated companies, as well as
costs incurred in connection therewith, as required pursuant to
the Commission's orders dated July 25, 1991 (HCAR No. 25353) and
July 13, 1992 (HCAR No. 25580).
V. Financing, Amortization and Financial Statements
During the three months ended June 30, 1995:
A. Enterprises incurred amortization expenses relating to
the FPN license in the amount of $156,517 and to the organization
of Entergy SASI in the amount of $6,307.
B. Enterprises' unaudited unconsolidated Balance Sheet and
unconsolidated Income Statement for the three month period ended
June 30, 1995 are included as Exhibit 1.
IN WITNESS WHEREOF, the undersigned companies have caused
this certificate to be executed on this 15th day of August, 1995.
ENTERGY CORPORATION
By: /s/ Gerald D. McInvale
Gerald D. McInvale
Executive Vice President and
Chief Financial Officer
ENTERGY ENTERPRISES, INC.
By: /s/ Terry L. Ogletree
Terry L. Ogletree
Executive Vice President
EX-99
2
ENTERGY ENTERPRISES, INC.
UNCONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1995
(UNAUDITED)
ASSETS
PROPERTY
Furniture and Equipment $ 1,006,775.36
Intangible Assets 63,071.28
-------------------
Total Property 1,069,846.64
-------------------
INVESTMENTS
Investment in FPN 4,716,896.25
Investment in Entergy SASI, Inc. 138,500,000.00
Earnings from Entergy SASI, Inc. (26,837,883.77)
Special Deposits 30,000.00
-------------------
116,409,012.48
-------------------
CURRENT & ACCRUED ASSETS
Cash 660,873.57
Working Funds/Travel Advances 68,798.59
Temporary Cash Investments 999,091.67
Accounts Receivable 43,000.32
Accounts Receivable - Associated Companies 12,326,290.79
Accrued Interest 151.39
-------------------
Total Current and Accrued Assets 14,098,206.33
-------------------
DEFERRED DEBITS
FPN License (Net of Amortization) 1,930,376.70
Accumulated Deferred Income Tax-Fed & State 4,978,623.75
Miscellaneous Deferred Debits (421,136.73)
-------------------
Total Deferred Debits 6,487,863.72
-------------------
Total Assets $ 138,064,929.17
===================
These are interim financial statements prepared without notes.
ENTERGY ENTERPRISES, INC.
UNCONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1995
(UNAUDITED)
CAPITAL
Common Stock $ 54,400,000.00
Miscellaneous Paid-in Capital 125,000,000.00
Retained Earnings (41,363,680.93)
Retained Earnings - Unrealized Holding Losses (2,925,917.75)
-------------------
Total Capital 135,110,401.32
-------------------
LIABILITIES
CURRENT & ACCRUED LIABILITIES
Accounts Payable 798,785.74
Accounts Payable to Associated Companies 1,011,442.05
Taxes Accrued (3,403,865.47)
Tax Collections Payable (25,623.43)
Miscellaneous Current & Accrued Liabilities 1,388,047.73
-------------------
Total Current & Accrued Liabilities (231,213.38)
-------------------
DEFERRED CREDITS
Other Deferred Credits 3,185,741.23
-------------------
Total Deferred Credits 3,185,741.23
-------------------
Total Liabilities 2,954,527.85
-------------------
Total Capital & Liabilities $ 138,064,929.17
===================
These are interim financial statements prepared without notes.
ENTERGY ENTERPRISES, INC.
UNCONSOLIDATED INCOME STATEMENT
SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
REVENUE
Services Rendered Non-Associates $ 97,973.99
Services Rendered Associates 6,984,358.34
Equity in Earnings of Subsidiaries (10,590,936.54)
Miscellaneous Income 0.00
-------------------
Interest Income 104,373.35
-------------------
Total Revenue (3,404,230.86)
-------------------
EXPENSES
Salaries, Wages and Benefits 4,928,240.98
Outside Services 2,369,412.58
Rent 554,140.76
Administrative and General 1,668,076.59
Insurance 42,000.30
Directors' Fees and Expenses 13,937.00
-------------------
Total Administrative and General Expense 9,575,808.21
Taxes Other Than Income 11,756.32
Depreciation and Amortization 230,262.20
Amortization of SASI Organization Costs 12,613.61
Amortization of FPN Organization Costs 313,034.10
Miscellaneous Expenses 30,712.94
-------------------
Total Expenses 10,174,187.38
-------------------
Interest Expense 0.00
-------------------
Income (Loss) Before Income Taxes (13,578,418.24)
Income Taxes - Federal (Benefit) (131,368.62)
Income Taxes - State (Benefit) (393,073.57)
Provision for Deferred Income Taxes - Federal (881,571.81)
Provision for Deferred Income Taxes - State (174,968.44)
-------------------
Net Income (Loss) $ (11,997,435.80)
===================
These are interim financial statements prepared without notes.