Entergy 2009 Annual Report Download - page 15

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Entergy Corporation and Subsidiaries
Management's Financial Discussion and Analysis
11
both the large customer industrial segment as well as small and mid-sized industrial customers, who are also being
affected by overseas competition. The effect of the industrial sales volume decrease is mitigated, however, by the
fixed charge basis of many industrial customers' rates, which causes average price per KWh sold to increase as the
fixed charges are spread over lower volume.
The retail electric price increase is primarily due to:
rate increases that were implemented at Entergy Texas in January 2009;
an increase in the formula rate plan rider at Entergy Gulf States Louisiana and Entergy Louisiana effective
September 2008 and November 2009;
the recovery of 2008 extraordinary storm costs at Entergy Arkansas as approved by the APSC, effective
January 2009. The recovery of 2008 extraordinary storm costs is discussed in Note 2 to the financial
statements;
an increase in the capacity acquisition rider related to the Ouachita plant acquisition at Entergy Arkansas.
The net income effect of the Ouachita plant cost recovery is limited to a portion representing an allowed
return on equity with the remainder offset by Ouachita plant costs in other operation and maintenance
expenses, depreciation expenses and taxes other than income taxes;
an increase in the formula rate plan rider at Entergy Mississippi in July 2009;
an Energy Efficiency rider at Entergy Texas, which was effective December 31, 2008, that is substantially
offset in other operation and maintenance expenses; and
an increase in the Attala power plant costs recovered through the power management rider by Entergy
Mississippi. The net income effect of this recovery is limited to a portion representing an allowed return on
equity with the remainder offset by Attala power plant costs in other operation and maintenance expenses,
depreciation expenses, and taxes other than income taxes.
The retail electric price increase was partially offset by:
a credit passed on to Louisiana retail customers as a result of the Act 55 storm cost financings that began in
the third quarter of 2008;
a formula rate plan refund of $16.6 million to customers in November 2009 in accordance with a settlement
approved by the LPSC. See Note 2 to the financial statements for further discussion of the settlement; and
a net decrease in the formula rate plans effective August 2008 at Entergy Louisiana and Entergy Gulf States
Louisiana to remove interim storm cost recovery upon the Act 55 financing of storm costs as well as the
storm damage accrual. A portion of the decrease is offset in other operation and maintenance expenses. See
Note 2 to the financial statements for further discussion of the formula rate plans.
The fuel recovery variance resulted primarily from an adjustment to deferred fuel costs in the fourth quarter
2009 relating to unrecovered nuclear fuel costs incurred since January 2008 that will now be recovered after a
revision to the fuel adjustment clause methodology.
The provision for regulatory proceedings variance is primarily due to provisions recorded in 2009 at Entergy
Arkansas. See Note 2 to the financial statements for a discussion of regulatory proceedings affecting Entergy
Arkansas.
13