Entergy 2003 Annual Report Download - page 65

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ENTERGY CORPORATION AND SUBSIDIARIES 2003
The Office of Public Utility Counsel has appealed this
decision to the Texas courts. Management cannot predict
the ultimate outcome of the proceeding at this time.
In November 2003, Entergy Gulf States initiated a
proceeding to certify the Entergy Transmission
Organization as the independent organization. The PUCT
is scheduled to conduct a hearing on the certification appli-
cation in June 2004.
REGULATORY ASSETS
Other Regulatory Assets
The domestic utility companies and System Energy are
subject to the provisions of SFAS 71, “Accounting for the
Effects of Certain Types of Regulation.” Regulatory assets
represent probable future revenues associated with certain
costs that are expected to be recovered from customers
through the ratemaking process. In addition to the regula-
tory assets that are specifically disclosed on the face of the
balance sheets, the table below provides detail of “Other
regulatory assets” that are included on the balance sheets
as of December 31, 2003 and 2002 (in millions):
2003 2002
DOE Decommissioning
and Decontamination Fees - $ 32.9 $ 40.3
recovered through fuel rates
until December 2006 (Note 9)
Asset Retirement Obligation - 464.9 –
recovery dependent upon
timing of decommissioning (Note 9)
Removal costs - 72.4 79.6
recovered through depreciation rates
Provisions for storm damages - 123.3 93.9
recovered through cost of service
Postretirement benefits - 21.5 23.9
recovered through 2013 (Note 11)
Pension costs (Note 11) 134.0 157.8
Depreciation re-direct - 79.1 79.1
recovery begins at start of
retail open access (Note 1)
River Bend AFUDC - 39.4 41.3
recovered through August 2025 (Note 1)
Spindletop gas storage lease 38.0 35.0
recovered through December 2032
Low-level radwaste - 19.4 19.4
recovery timing dependent
upon pending lawsuit
1994 FERC Settlement - 4.0 12.1
recovered through June 2004 (Note 2)
Sale-leaseback deferral - 131.7 123.9
recovered through June 2014 (Note 10)
Deferred fuel - non-current - 28.2 17.3
recovered through rate riders
redetermined annually
Unamortized loss on reacquired debt - 164.4 155.2
recovered over term of debt
Other - various 71.9 94.4
Total $1,425.1 $973.2
Deferred fuel costs
The domestic utility companies are allowed to recover certain
fuel and purchased power costs through fuel mechanisms
included in electric rates that are recorded as fuel cost recovery
revenues. The difference between revenues collected and the
current fuel and purchased power costs is recorded as
“Deferred fuel costs” on the domestic utility companies’ finan-
cial statements. The table below shows the amount of
deferred fuel costs as of December 31, 2003 and 2002 that has
been or will be recovered or (refunded) through the fuel
mechanisms of the domestic utility companies (in millions):
2003 2002
Entergy Arkansas $ 10.6 $ (42.6)
Entergy Gulf States $118.4 $100.6
Entergy Louisiana $ 30.6 $ (25.6)
Entergy Mississippi $ 89.1 $ 38.2
Entergy New Orleans $ (2.7) $ (14.9)
ENTERGY ARKANSAS
Entergy Arkansas’ rate schedules include an energy cost
recovery rider to recover fuel and purchased energy costs in
monthly bills. The rider utilizes prior calendar year energy
costs and projected energy sales for the twelve-month
period commencing on April 1 of each year to develop an
annual energy cost rate. The energy cost rate includes a
true-up adjustment reflecting the over-recovery or under-
recovery, including carrying charges, of the energy cost for
the prior calendar year.
In March 2003, Entergy Arkansas filed with the APSC its
energy cost recovery rider for the period April 2003
through March 2004. The energy cost rate filed was
approximately the same as the interim energy cost rate that
was in effect since October 2002. The current energy cost
rate is designed to eliminate the over-recovery during the
annual rider period.
ENTERGY GULF STATES
In the Texas jurisdiction, Entergy Gulf States’ rate schedules
include a fixed fuel factor to recover fuel and purchased power
costs, including carrying charges, not recovered in base rates.
Under current methodology, semi-annual revisions of the
fixed fuel factor may be made in March and September based
on the market price of natural gas. Entergy Gulf States will
likely continue to use this methodology until the start of retail
open access. The amounts collected under Entergy Gulf States’
fixed fuel factor and any interim surcharge implemented until
the date retail open access commences are subject to fuel
reconciliation proceedings before the PUCT. In the Texas
jurisdiction, Entergy Gulf States’ deferred electric fuel costs
are $116.6 million as of December 31, 2003, which includes
the following:
Interim surcharge $87.0
Items to be addressed as part of unbundling $29.0
Imputed capacity charges $ 9.3
Other (includes over-recovery from 9/03 - 12/03) $ (8.7)