Entergy 2003 Annual Report Download - page 66

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ENTERGY CORPORATION AND SUBSIDIARIES 2003
The PUCT has ordered that the imputed capacity charges be
excluded from fuel rates and therefore recovered through
base rates. It is uncertain, however, as to when and if
Entergy Gulf States will initiate a base rate proceeding
before the PUCT. The current PUCT-approved settlement
agreement delaying retail open access in Texas requires a
rate freeze during the delay period. If Entergy Gulf States
implements retail open access without a Texas base rate
proceeding, it is possible that Entergy Gulf States will not be
allowed to recover imputed capacity charges in Texas retail
rates in the future.
In January 2001, Entergy Gulf States filed a fuel reconcil-
iation case covering the period from March 1999 through
August 2000. Entergy Gulf States was reconciling approxi-
mately $583 million of fuel and purchased power costs. As
part of this filing, Entergy Gulf States requested authority
to collect $28 million, plus interest, of under-recovered fuel
and purchased power costs. The PUCT decided in August
2002 to reduce Entergy Gulf States’ request to approximately
$6.3 million, including interest through July 31, 2002.
Approximately $4.7 million of the total reduction to the
requested surcharge relates to nuclear fuel costs that the
PUCT deferred ruling on at this time. In October 2002,
Entergy Gulf States appealed the PUCT’s final order in Texas
District Court. In its appeal, Entergy Gulf States is challenging
the PUCT’s disallowance of approximately $4.2 million related
to imputed capacity costs and its disallowance related to
costs for energy delivered from the 30% non-regulated share
of River Bend. The case was argued before the Travis County
Texas District Court in August 2003 and the Travis County
District Court judge affirmed the PUCT’s order. In October
2003, Entergy Gulf States appealed this decision to the
Court of Appeals.
In September 2003, Entergy Gulf States filed an applica-
tion with the PUCT to implement an $87.3 million interim
fuel surcharge, including interest, to collect under-recovered
fuel and purchased power expenses incurred from
September 2002 through August 2003. Hearings were held
in October 2003 and the PUCT issued an order in December
2003 allowing for the recovery of $87 million. The surcharge
will be collected over a twelve-month period that began in
January 2004.
In March 2004, Entergy Gulf States filed with the PUCT a
fuel reconciliation case covering the period September 2000
through August 2003. Entergy Gulf States is reconciling
$1.43 billion of fuel and purchased power costs on a Texas
retail basis. The reconciliation includes $8.6 million of
under-recovered costs that Entergy Gulf States is asking
to roll into its fuel over/under-recovery balance to be
addressed in the next appropriate fuel proceeding. Hearings
are expected to occur in the third quarter of 2004 with a
final PUCT decision expected in early 2005.
ENTERGY GULF STATES (LOUISIANA)
AND ENTERGY LOUISIANA
The Louisiana jurisdiction of Entergy Gulf States and
Entergy Louisiana recover electric fuel and purchased
power costs for the upcoming month based upon the level of
such costs from the prior month. Entergy Gulf States’ gas
rate schedules include estimates for the billing month
adjusted by a surcharge or credit for deferred fuel expense
arising from monthly reconciliations.
In August 2000, the LPSC authorized its staff to initiate
a proceeding to audit the fuel adjustment clause filings of
Entergy Louisiana pursuant to a November 1997 LPSC
general order. The time period that is the subject of the
audit is January 1, 2000 through December 31, 2001. In
September 2003, the LPSC staff issued its audit report and
recommended a disallowance with regard to one item. The
issue relates to the alleged failure to uprate Waterford 3 in
a timely manner. The LPSC staff has quantified the possible
disallowance as between $7.6 and $14 million. Entergy
Louisiana is currently evaluating the LPSC staff report and
expects to contest the recommendation. A procedural schedule
has been adopted and hearings, which also will address
issues relating to the reasonableness of transmission
planning and purchases of power from affiliates, the
potential value of which issues cannot yet be quantified, are
scheduled to begin in September 2004, but the LPSC staff
has requested a delay until April 2005.
In January 2003, the LPSC authorized its staff to initiate
a proceeding to audit the fuel adjustment clause filings of
Entergy Gulf States and its affiliates pursuant to a
November 1997 LPSC general order. The audit will include
a review of the reasonableness of charges collected by
Entergy Gulf States through its fuel adjustment clause
in Louisiana for the period January 1, 1995 through
December 1, 2002. The discovery process is underway, but
a detailed procedural schedule extending beyond the discovery
stage has not yet been established and the LPSC staff has
not yet issued its audit report.
ENTERGY MISSISSIPPI
Entergy Mississippi’s rate schedules include an energy cost
recovery rider which is adjusted quarterly to reflect accumu-
lated over- or under-recoveries from the second prior quarter.
In May 2003, Entergy Mississippi filed and the MPSC
approved a change in Entergy Mississippi’s energy cost
recovery rider. Under the MPSC’s order, Entergy Mississippi
has deferred until 2004 the collection of fuel under-recoveries
for the first and second quarters of 2003 that would have
been collected in the third and fourth quarters of 2003,
respectively. The deferred amount of $77.6 million plus
carrying charges will be collected through the energy cost
recovery rider over a twelve-month period beginning
January 2004.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued