Entergy 2010 Annual Report Download - page 72

Notes to Consolidated Financial Statements continued
In October 2009, Entergy Texas filed with the PUCT a request
to refund approximately $71 million, including interest, of
fuel cost recovery over-collections through September 2009.
Entergy Texas requested that the proposed refund be made
over a six-month period beginning January 2010. Pursuant to a
stipulation among the various parties, the PUCT issued an order
approving a refund of $87.8 million, including interest, of fuel cost
recovery overcollections through October 2009. The refund was
made for most customers over a three-month period beginning
January 2010.
In June 2010, Entergy Texas filed with the PUCT a request to
refund approximately $66 million, including interest, of fuel cost
recovery over-collections through May 2010. In September 2010
the PUCT issued an order providing for a $77 million refund
for fuel cost recovery over-collections through June 2010. The
refund was made for most customers over a three-month period
beginning with the September 2010 billing cycle.
In December 2010, Entergy Texas filed with the PUCT a request
to refund approximately $52 million, including interest, of fuel
cost recovery over-collections through October 2010. Pursuant to
a stipulation among the parties that was approved on an interim
basis and is pending final action by the PUCT, Entergy Texas will
refund over-collections of approximately $72.7 million through
November 2010. The refund will be made for most customers
over a three-month period beginning with the February 2011
billing cycle.
Entergy Texas’s December 2009 rate case filing, which is
discussed below, also included a request to reconcile $1.8 billion
of fuel and purchased power costs covering the period April 2007
through June 2009.
Storm Cost Recovery Filings with Retail Regulators
ENTERGY ARKANSAS
Entergy Arkansas January 2009 Ice Storm
In January 2009 a severe ice storm caused significant damage
to Entergy Arkansas’s transmission and distribution lines,
equipment, poles, and other facilities. A law was enacted in April
2009 in Arkansas that authorizes securitization of storm damage
restoration costs. In June 2010 the APSC issued a financing
order authorizing the issuance of approximately $126.3 million
in storm cost recovery bonds, which includes carrying costs of
$11.5 million and $4.6 million of up-front financing costs. See
Note 5 to the financial statements for a discussion of the
August 2010 issuance of the securitization bonds.
ENTERGY GULF STATES LOUISIANA AND
ENTERGY LOUISIANA
Hurricane Gustav and Hurricane Ike
In September 2008, Hurricane Gustav and Hurricane Ike caused
catastrophic damage to Entergy’s service territory. Entergy Gulf
States Louisiana and Entergy Louisiana filed their Hurricane
Gustav and Hurricane Ike storm cost recovery case with the LPSC
in May 2009. In September 2009, Entergy Gulf States Louisiana
and Entergy Louisiana and the Louisiana Utilities Restoration
Corporation (LURC), an instrumentality of the State of Louisiana,
filed with the LPSC an application requesting that the LPSC grant
financing orders authorizing the financing of Entergy Gulf States
Louisiana’s and Entergy Louisiana’s storm costs, storm reserves,
and issuance costs pursuant to Act 55 of the Louisiana Regular
Session of 2007 (Act 55 financings). Entergy Gulf States Louisiana’s
and Entergy Louisiana’s Hurricane Katrina and Hurricane
Rita storm costs were financed primarily by Act 55 financings,
as discussed below. Entergy Gulf States Louisiana and Entergy
Louisiana also filed an application requesting LPSC approval for
ancillary issues including the mechanism to flow charges and Act
55 financing savings to customers via a Storm Cost Offset rider.
In December 2009, Entergy Gulf States Louisiana and Entergy
Louisiana entered into a stipulation agreement with the LPSC
Staff that provides for total recoverable costs of approximately
$234 million for Entergy Gulf States Louisiana and $394 million
for Entergy Louisiana, including carrying costs. Under this
stipulation, Entergy Gulf States Louisiana agrees not to recover
$4.4 million and Entergy Louisiana agrees not to recover $7.2
million of their storm restoration spending. The stipulation
also permits replenishing Entergy Gulf States Louisiana’s storm
reserve in the amount of $90 million and Entergy Louisiana’s
storm reserve in the amount of $200 million when the Act 55
financings are accomplished. In March and April 2010, Entergy
Gulf States Louisiana, Entergy Louisiana, and other parties to
the proceeding filed with the LPSC an uncontested stipulated
settlement that includes these terms and also includes Entergy
Gulf States Louisiana’s and Entergy Louisiana’s proposals under
the Act 55 financings, which includes a commitment to pass on
to customers a minimum of $15.5 million and $27.75 million of
customer benefits, respectively, through prospective annual
rate reductions of $3.1 million and $5.55 million for five years.
A stipulation hearing was held before the ALJ on April 13,
2010. On April 21, 2010, the LPSC approved the settlement and
subsequently issued two financing orders and one ratemaking
order intended to facilitate the implementation of the Act 55
financings. In June 2010 the Louisiana State Bond Commission
approved the Act 55 financings.
In July 2010 the Louisiana Local Government Environmental
Facilities and Community Development Authority (LCDA) issued
$468.9 million in bonds under Act 55. From the $462.4 million
of bond proceeds loaned by the LCDA to the LURC, the LURC
deposited $200 million in a restricted escrow account as a storm
damage reserve for Entergy Louisiana and transferred $262.4
million directly to Entergy Louisiana. From the bond proceeds
received by Entergy Louisiana from the LURC, Entergy Louisiana
used $262.4 million to acquire 2,624,297.11 Class B preferred, non-
voting, membership interest units of Entergy Holdings Company
LLC, a company wholly-owned and consolidated by Entergy,
that carry a 9% annual distribution rate. Distributions are
payable quarterly commencing on September 15, 2010, and the
membership interests have a liquidation price of $100 per unit.
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