Entergy 2009 Annual Report Download - page 141

Entergy Corporation and Subsidiaries
Notes to Financial Statements
137
Amount
(In Millions)
Plant (including nuclear fuel) $727
Decommissioning trust funds 252
Other assets 41
Total assets acquired 1,020
Purchased power agreement (below market) 420
Decommissioning liability 220
Other liabilities 44
Total liabilities assumed 684
Net assets acquired $336
Subsequent to the closing, Entergy received approximately $6 million from Consumers Energy Company as part of
the Post-Closing Adjustment defined in the Asset Sale Agreement. The Post-Closing Adjustment amount resulted in
an approximately $6 million reduction in plant and a corresponding reduction in other liabilities.
For the PPA, which was at below-market prices at the time of the acquisition, Non-Utility Nuclear will
amortize a liability to revenue over the life of the agreement. The amount that will be amortized each period is based
upon the difference between the present value calculated at the date of acquisition of each year's difference between
revenue under the agreement and revenue based on estimated market prices. Amounts amortized to revenue were $53
million in 2009, $76 million in 2008, and $50 million in 2007. The amounts to be amortized to revenue for the next
five years will be $46 million for 2010, $43 million for 2011, $17 million in 2012, $18 million for 2013, and $16
million for 2014.
NYPA Value Sharing Agreements
Non-Utility Nuclear's purchase of the FitzPatrick and Indian Point 3 plants from NYPA included value
sharing agreements with NYPA. In October 2007, Non-Utility Nuclear and NYPA amended and restated the value
sharing agreements to clarify and amend certain provisions of the original terms. Under the amended value sharing
agreements, Non-Utility Nuclear will make annual payments to NYPA based on the generation output of the Indian
Point 3 and FitzPatrick plants from January 2007 through December 2014. Non-Utility Nuclear will pay NYPA
$6.59 per MWh for power sold from Indian Point 3, up to an annual cap of $48 million, and $3.91 per MWh for
power sold from FitzPatrick, up to an annual cap of $24 million. The annual payment for each year's output is due
by January 15 of the following year. Non-Utility Nuclear will record its liability for payments to NYPA as power is
generated and sold by Indian Point 3 and FitzPatrick. An amount equal to the liability will be recorded to the plant
asset account as contingent purchase price consideration for the plants. In 2009, 2008, and 2007, Non-Utility
Nuclear recorded $72 million as plant for generation during each of those years. This amount will be depreciated
over the expected remaining useful life of the plants.
In August 2008, Non-Utility Nuclear entered into a resolution of a dispute with NYPA over the applicability
of the value sharing agreements to its FitzPatrick and Indian Point 3 nuclear power plants after the planned spin-off
of the Non-Utility Nuclear business. Under the resolution, Non-Utility Nuclear agreed not to treat the separation as a
"Cessation Event" that would terminate its obligation to make the payments under the value sharing agreements. As
a result, after the spin-off transaction, Enexus will continue to be obligated to make payments to NYPA under the
amended and restated value sharing agreements.
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