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Entergy Corporation and Subsidiaries
Notes to Financial Statements
84
Filings with the PUCT and Texas Cities (Entergy Texas)
Retail Rates
2009 Rate Case
In December 2009, Entergy Texas filed a rate case requesting a $198.7 million increase reflecting an 11.5%
return on common equity based on an adjusted June 2009 test year. The filing includes a proposed cost of service
adjustment rider with a three-year term beginning with the 2010 calendar year as the initial evaluation period. Key
provisions include a plus or minus 15 basis point bandwidth, with earnings outside the bandwidth reset to the bottom
or top of the band and rates changing prospectively depending upon whether Entergy Texas is under or over-earning.
The annual change in revenue requirement is limited to a percentage change in the Consumer Price Index for urban
areas, and the filing includes a provision for extraordinary events greater than $10 million per year that would be
considered separately. The filing also proposes a purchased power recovery rider and a competitive generation
service tariff and will establish test year baseline values to be used in the transmission cost recovery factor rider
authorized for use by Entergy Texas in the 2009 legislative session. The rate case also includes a $2.8 million
revenue requirement to provide supplemental funding for the decommissioning trust maintained for the 70% share of
River Bend for which Entergy Texas retail customers are responsible, in response to an NRC notification of a
projected shortfall of decommissioning funding assurance. Hearings in the proceeding are scheduled for July 2010,
and the PUCT is required to issue a final order by November 1, 2010. Beginning in May 2010, Entergy Texas will
be allowed to implement a $17.5 million interim rate increase, subject to refund. The rates set by a final order will be
effective back to September 13, 2010.
2007 Rate Case
Entergy Texas made a rate filing in September 2007 with the PUCT requesting an annual rate increase
totaling $107.5 million, including a base rate increase of $64.3 million and riders totaling $43.2 million. On
December 16, 2008, Entergy Texas filed a term sheet that reflected a settlement agreement that included the PUCT
Staff and the other active participants in the rate case. On December 19, 2008, the ALJs approved Entergy Texas'
request to implement interim rates reflecting the agreement. The agreement includes a $46.7 million base rate
increase, among other provisions. Under the ALJs' interim order, Entergy Texas implemented interim rates, subject
to refund and surcharge, reflecting the rates established through the settlement. These rates became effective with
bills rendered on and after January 28, 2009, for usage on and after December 19, 2008. In addition, the existing
recovery mechanism for incremental purchased power capacity costs ceased as of January 28, 2009, with purchased
power capacity costs then subsumed within the base rates set in this proceeding. The agreement adopted by the
PUCT also reconciles fuel and purchased power costs for the period January 1, 2006 through March 31, 2007.
Certain Texas municipalities exercised their original jurisdiction and took final action to approve rates consistent
with the interim rates approved by the ALJs. In March 2009, the PUCT approved the settlement, which made the
interim rates final.
Transition to Competition Costs
In August 2005, Entergy Texas filed with the PUCT an application for recovery of its transition to
competition costs. Entergy Texas requested recovery of $189 million in transition to competition costs through
implementation of a 15-year rider. The $189 million represents transition to competition costs Entergy Texas
incurred from June 1, 1999 through June 17, 2005 in preparing for the potential of competition in its Texas service
area, including attendant AFUDC, and all carrying costs projected to be incurred on the transition to competition
costs through February 28, 2006. The $189 million is before any gross-up for taxes or carrying costs over the 15-
year recovery period. Entergy Texas reached a unanimous settlement agreement, which the PUCT approved in June
2006, on all issues with the active parties in the transition to competition cost recovery case. The agreement allows
Entergy Texas to recover $14.5 million per year in transition to competition costs over a 15-year period. Entergy
Texas implemented rates based on this revenue level on March 1, 2006.
86