File No. 70-9123
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
_____________________________
POST - EFFECTIVE AMENDMENT NO. 35
To
APPLICATION-DECLARATION
Under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
_____________________________
Entergy Corporation Entergy Power, Inc.
639 Loyola Avenue 20 Greenway Plaza
New Orleans, LA 70113 Suite 1025
Houston, TX 77046
Entergy Enterprises, Inc. Entergy Global Power
20 Greenway Plaza Operations Corporation
Suite 1025 20 Greenway Plaza
Houston, TX 77046 Suite 1025
Houston, TX 77046
Entergy Nuclear, Inc. Entergy Operations
1340 Echelon Parkway Services, Inc.
Jackson, MS 39213 110 James Parkway West
Suite 110
St. Rose, LA 70087
Entergy Power Operations U.S., Inc.
20 Greenway Plaza
Suite 1025
Houston, TX 77046
(Names of companies filing this statement
and addresses of principal executive offices)
____________________________
Entergy Corporation
(Name of top registered holding company parent of
each applicant or declarant)
_____________________________
Steven C. McNeal
Vice President and Treasurer
Entergy Corporation
639 Loyola Avenue
New Orleans, LA 70113
(Names and addresses of agents for service)
_____________________________
The Commission is also requested to send copies
of any communications in connection with this matter to:
Steven C. McNeal
Vice President and Treasurer
Entergy Services, Inc.
639 Loyola Avenue
New Orleans, LA 70113
Mark W. Hoffman, Esq.
Entergy Services, Inc.
639 Loyola Avenue
New Orleans, LA 70113
Kent R. Foster, Esq.
Vice President
Entergy Services, Inc.
P.O. Box 8082
Little Rock, AR 72203
Item 1. Description of Proposed Transactions
A. Section IB of Item 1 of the Application-Declaration in
this File, as previously amended, is hereby amended and restated
to read in its entirety as follows:
"B. Issuance of Securities.
To the extent such transactions are not exempt from the Act
or otherwise authorized or permitted by rule, regulation or order
of the Commission issued thereunder, Entergy also requests an
extension of its existing authorization for Non-utility Companies
to issue and/or sell equity or debt securities, including common
stock, LLC member interests, partnership and limited partnership
interests, preferred stock or other preferred or equity-linked
securities (collectively, "preferred securities"), short-term
debt securities, such as promissory notes or commercial paper,
and long-term debt securities (collectively, "Other Securities")
to Entergy, to other Non-utility Companies or to non-associate
companies, including banks, insurance companies, and other
financial institutions.8 Entergy proposes that Other Securities
be issued and sold by Non-utility Companies to Entergy, to other
Non-utility Companies or to non-associate companies pursuant to
the authorization requested herein in one or more transactions
from time to time during the New Authorization Period.
Such Other Securities will be subject to the following
financing parameters:
(1) The effective cost of money on long-term debt borrowings
will not exceed the greater of (i) 500 basis points over the
comparable-term U.S. Treasury securities or (ii) a gross spread
over U.S. Treasuries that is consistent with similar securities
of comparable credit quality and maturities issued by other
companies.
(2) The effective cost of money on short-term debt borrowings
will not exceed the greater of (i) 500 basis points over the
comparable-term London Interbank Offered Rate ("LIBOR") or (ii) a
gross spread over LIBOR that is consistent with similar
securities of comparable credit quality and maturities issued by
other companies.
(3) The dividend rate on any series of preferred securities will
not exceed the greater of (i) 500 basis points over the yield to
maturity of a U.S. Treasury security having a remaining term
equal to the term of the series of preferred securities or (ii) a
rate that is consistent with similar securities of comparable
credit quality and maturities issued by other companies.
Also, in the case of the issuance of any Other Securities that
involve loans by Entergy or a Non-Utility Company to a Non-
utility Company at interest rates and maturities designed to
provide a return to the lending company in excess of its
effective cost of capital, the borrowing Non-utility Company will
not provide any services to any associate Non-utility Company
except a company which meets one of the conditions for the
rendering of services on a basis other than "at cost", as
described above and in the June 1999 Order.
In the event any Other Securities are issued, Entergy will
include in the next certificate filed pursuant to Rule 24 in this
File substantially the same information as that required on Form
U-6B-2 with respect to such transaction.9 In addition, the
outstanding principal amount of any such Other Securities that
are issued during the New Authorization Period will be included
in the $750 million Aggregate Authorization requested herein.
The net proceeds from the issuance and sale of Other
Securities would be used for general corporate purposes,
including without limitation (1) for loans to and/or equity
investments in Non-utility Companies; (2) for the repayment,
refinancing or redemption of outstanding securities of Entergy or
Non-utility Companies originally issued for purposes of acquiring
interests in Non-utility Companies or providing funds for the
authorized or permitted business activities of such companies;
and (3) for working capital or other cash requirements of Non-
utility Companies, provided that such net proceeds will only be
applied to finance activities that are exempt under the Act or
are otherwise authorized or permitted by rule, regulation or
order of the Commission issued thereunder, and provided further,
that at the time of issuance of any Other Securities authorized
by the Commission herein that are recourse to Entergy, directly
or indirectly, the proceeds of which are to be used to invest in
any Exempt Project, Entergy will be in compliance with Rule 53
(as modified by order of the Commission, dated June 13, 2000
(HCAR No. 27184)).10
Entergy represents and agrees that no System operating
company will incur any indebtedness, extend any credit, or sell
or pledge its assets, directly or indirectly, to or for the
benefit of any Non-utility Company, and that any Other Securities
that may be issued by a Non-utility Company, and any Guarantees
that may be issued by Entergy or a Non-utility Company, will not
be recourse to any System operating company."
B. Section II of Item 1 of the Application-Declaration in
this File, as previously amended, is hereby amended and restated
to read in its entirety as follows:
"II. Compliance With Rules 53 and 54.
The proposed transactions are subject to Section
32(h)(4) of the Act and Rule 54 thereunder. In determining
whether to approve the issue or sale of a security by a
registered holding company for purposes other than the
acquisition of an EWG or FUCO, or other transactions by such
registered holding company or its subsidiaries other than with
respect to EWGs or FUCOs, the Commission shall not consider the
effect of the capitalization or earnings of any subsidiary which
is an EWG or FUCO upon the registered holding company system if
Rules 53(a), (b) and (c) are satisfied. Entergy hereby represents
that, pursuant to Rule 54 under the Act, (1) for the reasons
discussed below, the condition set forth in Rule 53(a)(1) that
Entergy's "aggregate investment" in EWGs and FUCOs not exceed 50%
of Entergy's "consolidated retained earnings" is not currently
satisfied, and (2) all of the other criteria of Rule 53(a) and
(b) are satisfied. Specifically, Entergy and its subsidiary
companies ("the Entergy System") have complied with, and will
continue to comply with, the record keeping requirements of Rule
53(a)(2), the limitation in Rule 53(a)(3) on the use of Entergy
System domestic public utility subsidiary companies' personnel in
rendering services to affiliated EWGs and FUCOs, and the
requirements of Rule 53(a)(4) concerning the submission of
certain filings and reports under the Act to retail regulatory
commissions. Finally, none of the conditions set forth in Rule
53(b), under which the provisions of Rule 53 would not be
available, have been met.
With respect to the condition set forth in clause (1) of
Rule 53(a), Entergy's "aggregate investment" in Exempt Projects
(approximately $1.9 billion) is equal to approximately 51.7% of
Entergy's "consolidated retained earnings" as of September 30,
2002 (approximately $3.7 billion). Entergy's aggregate
investment in Exempt Projects currently exceeds the 50%
limitation in Rule 53(a)(1) as a result of increased investments
in EWGs relating to the acquisition and/or construction of
Eligible Facilities (as defined in Section 32 under the Act).
Although Entergy's current aggregate investment in EWGs and
FUCOs exceeds the limit specified in Rule 53(a)(1), by order
dated June 13, 2000 (HCAR No. 27184) (the "June 2000 Order"), the
Commission authorized Entergy to invest up to 100% of its
consolidated retained earnings in Exempt Projects and, therefore,
Entergy's aggregate investment in such Exempt Projects is within
the parameters authorized in the June 2000 Order. However, even
if Entergy was determined not to be in compliance with Rule 54 as
a result of its failure to satisfy the requirements set by Rule
53(a)(1), and the effect of the capitalization and earnings of
EWGs and FUCOs in which Entergy has an ownership interest upon
the Entergy System was considered, there would be no basis for
the Commission to withhold or deny approval for the proposal made
in this Application-Declaration. The action requested in the
instant filing, considered in conjunction with the effect of the
capitalization and earnings of Entergy's EWGs and FUCOs, would
not have a material adverse effect on the financial integrity of
the Entergy System, or an adverse impact on Entergy's public-
utility customers for the following reasons:
1. As of September 30, 2002, Entergy's aggregate investment in
Exempt Projects is equal to 11% of Entergy's total consolidated
capitalization, 11% of consolidated net utility plant and 21% of
the market value of Entergy's common stock. As of March 31,
2000, the most recent calendar quarter preceding the June 2000
Order, Entergy's aggregate investment in Exempt Projects was
equal to 7% of Entergy's total capitalization, 7% of Entergy's
consolidated net utility plant and 24% of the market value of
Entergy's outstanding common stock.
2. Entergy's consolidated retained earnings have grown by an
average of 11% annually during the period since the Commission
issued its June 2000 Order (i.e., from June 30, 2000 through June
30, 2002).
3. Income from Entergy's investments in Exempt Projects has
contributed positively to its overall earnings during the period
since the Commission issued the June 2000 Order.
4. As of March 31, 2000, the most recent calendar quarter
preceding the June 2000 Order, Entergy's consolidated
capitalization ratio was approximately 50.0% debt and
approximately 50.0% equity, consisting of approximately 5.0%
preferred stock and approximately 45.0% common stock. As of
September 30, 2002, Entergy's consolidated capitalization ratio
was approximately 50.5% debt and approximately 49.5% equity,
consisting of approximately 3.4% preferred stock and
approximately 46.1% common stock. These ratios are within
industry ranges set by the independent debt rating agencies for
BBB-rated electric utility companies.
5. Each of the considerations set forth in the June 2000 Order,
in support of Entergy's assertion that its existing and proposed
level of investment in Exempt Projects would not have an adverse
impact on any Entergy operating utility subsidiaries or their
ratepayers, or on the ability of interested state commissions to
protect the utilities and their customers, continues to apply, as
of the date of this Application-Declaration.
Accordingly, since the date of the June 2000 Order, the
capitalization and earnings attributable to Entergy's investments
in EWGs and FUCOs have not had an adverse impact on Entergy's
financial integrity.
Except to the extent otherwise authorized in the June 2000
Order or any subsequent order issued by the Commission, Entergy
will maintain compliance with all of the conditions of Rule 53."
Item 5. Procedure
Item 5 of the Application-Declaration in this File, as
previously amended, is hereby amended and restated to read in its
entirety as follows:
"Entergy respectfully requests that the Commission issue its
order granting and permitting this Application-Declaration to
become effective as soon as practicable, but in any event, no
later than December 31, 2002.
Entergy hereby (i) waives a recommended decision by a
hearing officer or any other responsible officer of the
Commission, (ii) agrees that the Division of Investment
Management may assist in the preparation of the decision of the
Commission, and (iii) requests that there be no waiting period
between the issuance of the order of the Commission and the day
on which such order is to become effective.
Entergy proposes to continue to provide the Commission, on a
quarterly basis, within 60 days after the end of each calendar
quarter, a report pursuant to Rule 24, which shall continue to
include the following: (1) balance sheets and income statements
of Entergy for the three, six, or nine month period then ended;
(2) all payments of dividends out of capital or unearned surplus
during the quarter; (3) information concerning the nature and
extent of Administrative Services, Consulting Services and O&M
Services provided by Entergy Enterprises and other Non-utility
Companies during the quarter, identifying the customer company,
the service and the charge, and stating whether the charge was
computed at cost, market or pursuant to another method, which
shall be specified; (4) information concerning the formation and
capitalization of any New Subsidiaries during the quarter; (5)
information concerning the formation and capitalization of any
O&M Subs during the quarter; (6) information concerning the
completion during the quarter of any consolidation or other
reorganization of Entergy's ownership interests in Non-utility
Companies and the organizational structure of Entergy's Non-
utility Companies as of the end of such quarter; (7) information
concerning any loans made by Entergy or Non-utility Companies to
associate Non-utility Companies during the quarter that are not
exempt under Rule 52(b), to the same extent such reporting is
required by Rule 52(c); (8) information concerning the issuance
of any Other Securities by Non-utility Companies during the
quarter, to the same extent that such reporting is required by
Rule 52(c); and (9) information concerning any Charter Amendments
during the quarter.
In addition to the foregoing, in the event that any New
Subsidiary issues securities to any non-affiliate for the purpose
of financing investments in Non-utility Companies, the quarterly
reports filed pursuant to Rule 24 will include a representation
that the financial statements of Entergy shall account for such
New Subsidiary in accordance with generally accepted accounting
principles and shall further disclose, with respect to each such
New Subsidiary, (i) the name of the subsidiary; (ii) the value of
Entergy's investment account in the subsidiary; (iii) the balance
sheet account where the investment and the cost of the investment
are booked; (iv) the amount invested in the subsidiary by
Entergy; (v) the type of corporate entity; (vi) the percentage
owned by Entergy; (vii) the identification of other owners if not
100% owned by Entergy; (viii) the purpose of the investment in
the subsidiary; and (ix) the amounts and types of securities to
be issued by the subsidiary. Also, to the extent any securities
are issued by any such New Subsidiary and are not set forth on
the balance sheet of the issuer, the terms and conditions of the
securities will be included in the applicable report filed under
Rule 24. Entergy further states that, regardless if any duty to
file is triggered, Entergy maintains sufficient internal controls
to enable it to monitor the creation and use of any New
Subsidiary."
Item 6. Exhibits and Financial Statements.
(a) Exhibits:
F - Opinion of Counsel
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this amendment to be signed on their behalf by the undersigned
thereunto duly authorized.
ENTERGY CORPORATION
ENTERGY ENTERPRISES, INC.
ENTERGY NUCLEAR, INC.
ENTERGY OPERATIONS SERVICES, INC.
ENTERGY GLOBAL POWER OPERATIONS
CORPORATION
ENTERGY POWER OPERATIONS U.S., INC.
By: /s/ Steven C. McNeal
Steven C. McNeal
Vice President and Treasurer
ENTERGY POWER, INC.
By: /s/ Steven C. McNeal
Steven C. McNeal Treasurer
Dated: December 19, 2002
_______________________________
8 Issuances of securities generally are not subject to prior
Commission approval under the Act pursuant to Rule 52(b),
provided that the conditions of the rule are satisfied,
including that the interest rate and maturity date of debt
securities that are issued to associate companies are designed
to parallel the effective cost of capital of the lending
company. Under certain circumstances, however, it may be
desirable for Entergy or a Non-utility Company to make a loan
to a Non-utility Company at a rate of interest or with a
maturity that does not provide a return equivalent to the
lending company's cost of capital.
9 If an Energy-related Company issues Other Securities, it will
also report such issuance to the Commission as required under
Form U-9C-3.
10 In addition, to the extent such action is not exempt from the
Act or otherwise authorized or permitted by rule, regulation
or order of the Commission issued thereunder, Entergy requests
that Non-utility Companies be permitted to modify the terms of
their charters or other governing documents ("Charter
Amendments") as necessary to effectuate the issuance of Other
Securities. In the event that a Non-utility Company requiring
such Charter Amendment is not wholly owned by Entergy, either
directly or directly, Entergy represents that it will seek any
requisite approvals or authorization from the other co-owners
of such Non-utility Company to the extent required to effect
such Charter Amendments. Entergy would describe the general
terms of any Charter Amendment in the next quarterly
certificate filed with the Commission pursuant to Rule 24 in
this File.