Entergy 2009 Annual Report Download - page 44

Entergy Corporation and Subsidiaries
Management's Financial Discussion and Analysis
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ordered under Section 206(c) of the Federal Power Act; and (3) exercised appropriately its discretion to defer
addressing the cost of sulfur dioxide allowances until a later time. The D.C. Circuit remanded the matter to the
FERC for a more considered determination on the issue of refunds. The FERC issued its order on remand in
September 2007, in which it directs Entergy to make a compliance filing removing all interruptible load from the
computation of peak load responsibility commencing April 1, 2004 and to issue any necessary refunds to reflect this
change. In addition, the order directs the Utility operating companies to make refunds for the period May 1995
through July 1996. Entergy, the APSC, the MPSC, and the City Council requested rehearing of the FERC's order on
remand. The FERC granted the Utility operating companies' request to delay the payment of refunds for the period
May 1995 through July 1996 until 30 days following a FERC order on rehearing. The FERC issued in September
2008 an order denying rehearing. The refunds were made by the Utility operating companies that owed refunds to
the Utility operating companies that were due a refund on October 15, 2008. The APSC and the Utility operating
companies appealed the FERC decisions to the D.C. Circuit. Because of its refund obligation to customers as a
result of this proceeding and a related LPSC proceeding, Entergy Louisiana recorded provisions during 2008 of
approximately $16 million, including interest, for rate refunds. The refunds were made in the fourth quarter of 2009.
Following the filing of petitioners' initial briefs, the FERC filed a motion requesting the D.C. Circuit hold the
appeal of the FERC's decisions ordering refunds in the interruptible load proceeding in abeyance and remand the
record to the FERC. The D.C. Circuit granted the FERC's unopposed motion on June 24, 2009, and directed the
FERC to file status reports at 60-day intervals beginning August 24, 2009. The D.C. Circuit also directed the
parties to file motions to govern future proceedings in the case within 30 days of the completion of the FERC
proceedings. In December 2009 the FERC established a paper hearing to determine whether the FERC had the
authority and, if so, whether it would be appropriate to order refunds resulting from changes in the treatment of
interruptible load in the allocation of capacity costs by the Utility operating companies. Pursuant to the paper
hearing schedule, initial briefs were filed on January 19, 2010 and reply briefs were filed on February 9, 2010.
Entergy Arkansas and Entergy Mississippi Notices of Termination of System Agreement Participation and Related
APSC Investigation
Citing its concerns that the benefits of its continued participation in the current form of the System
Agreement have been seriously eroded, in December 2005, Entergy Arkansas submitted its notice that it will
terminate its participation in the current System Agreement effective ninety-six (96) months from the date of the
notice or such earlier date as authorized by the FERC. Entergy Arkansas indicated, however, that a properly
structured replacement agreement could be a viable alternative.
In October 2007 the MPSC issued a letter confirming its belief that Entergy Mississippi should exit the
System Agreement in light of the recent developments involving the System Agreement. The MPSC letter also
requested that Entergy Mississippi advise the MPSC regarding the status of the Utility operating companies' effort to
develop successor arrangements to the System Agreement and advise the MPSC regarding Entergy Mississippi's
position with respect to withdrawal from the System Agreement. In November 2007, pursuant to the provisions of
the System Agreement, Entergy Mississippi provided its written notice to terminate its participation in the System
Agreement effective ninety-six (96) months from the date of the notice or such earlier date as authorized by the
FERC.
On February 2, 2009, Entergy Arkansas and Entergy Mississippi filed with the FERC their notices of
cancellation to effectuate the termination of their participation in the Entergy System Agreement, effective
December 18, 2013 and November 7, 2015, respectively. While the FERC had indicated previously that the notices
should be filed 18 months prior to Entergy Arkansas' termination (approximately mid-2012), the filing explains that
resolving this issue now, rather than later, is important to ensure that informed long-term resource planning decisions
can be made during the years leading up to Entergy Arkansas' withdrawal and that all of the Utility operating
companies are properly positioned to continue to operate reliably following Entergy Arkansas' and, eventually,
Entergy Mississippi's, departure from the System Agreement. Entergy Arkansas and Entergy Mississippi requested
that the FERC accept the proposed notices of cancellation without further proceedings. Various parties intervened or
filed protests in the proceeding, including the APSC, the LPSC, the MPSC, and the City Council.
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