Entergy 2010 Annual Report Download - page 93

ENTERGY CORPORATION AND SUBSIDIARIES 2010
Notes to Consolidated Financial Statements continued
The cumulative decommissioning and retirement cost liabilities
and expenses recorded in 2009 by Entergy were as follows
(in millions):
Change
Liabilities in Cash Liabilities
as of Dec. Flow as of Dec.
31, 2008 Accretion Estimate Spending 31, 2009
Utility:
Entergy Arkansas $ 540.7 $34.6 $(8.9) $ – $ 566.4
Entergy Gulf States
Louisiana $ 222.9 $19.6 $78.7 $ – $ 321.2
Entergy Louisiana $ 276.8 $21.4 $ – $ – $ 298.2
Entergy Mississippi $ 4.8 $ 0.3 $ – $ – $ 5.1
Entergy
New Orleans $ 3.0 $ 0.2 $ – $ – $ 3.2
Entergy Texas $ 3.3 $ 0.1 $ – $ – $ 3.4
System Energy $ 396.2 $29.4 $(4.2) $ – $ 421.4
Entergy Wholesale
Commodities $1,229.9 $99.3 $ – $(8.6) $1,320.6
Entergy periodically reviews and updates estimated
decommissioning costs. The actual decommissioning costs may
vary from the estimates because of regulatory requirements,
changes in technology, and increased costs of labor, materials,
and equipment. As described below, during 2009 Entergy updated
decommissioning cost estimates for certain nuclear power
plants. There were no updates to decommissioning cost estimates
for 2010.
In the first quarter 2009, Entergy Arkansas recorded a revision
to its estimated decommissioning cost liabilities for ANO 1
and 2 as a result of a revised decommissioning cost study. The
revised estimates resulted in an $8.9 million reduction in its
decommissioning liability, along with a corresponding reduction
in the related regulatory asset.
In the second quarter 2009, System Energy recorded a
revision to its estimated decommissioning cost liabilities for
Grand Gulf as a result of a revised decommissioning cost study.
The revised estimate resulted in a $4.2 million reduction in its
decommissioning liability, along with a corresponding reduction
in the related regulatory asset.
In the fourth quarter 2009, Entergy Gulf States Louisiana
recorded a revision to its estimated decommissioning cost
liabilities for River Bend as a result of a revised decommissioning
cost study. The revised estimate resulted in a $78.7 million increase
in its decommissioning liability, along with a corresponding
increase in the related asset retirement obligation asset that will
be depreciated over the remaining life of the units.
For the Indian Point 3 and FitzPatrick plants purchased
in 2000, NYPA retained the decommissioning trusts and the
decommissioning liability. NYPA and Entergy subsidiaries executed
decommissioning agreements, which specify their decommissioning
obligations. NYPA has the right to require the Entergy subsidiaries
to assume the decommissioning liability provided that it assigns
the corresponding decommissioning trust, up to a specified
level, to the Entergy subsidiaries. If the decommissioning liability
is retained by NYPA, the Entergy subsidiaries will perform the
decommissioning of the plants at a price equal to the lesser of a
pre-specified level or the amount in the decommissioning trusts.
Entergy recorded an asset representing its estimate of the present
value of the difference between the stipulated contract amount
for decommissioning the plants less the decommissioning cost
estimated in an independent decommissioning cost study. The
asset is increased by monthly accretion based on the applicable
discount rate necessary to ultimately provide for the estimated
future value of the decommissioning contract. The monthly
accretion is recorded as interest income.
Entergy maintains decommissioning trust funds that are
committed to meeting the costs of decommissioning the nuclear
power plants. The fair values of the decommissioning trust funds
and the related asset retirement obligation regulatory assets of
Entergy as of December 31, 2010 are as follows (in millions):
Decommissioning Trust Fair Values Regulatory Asset
Utility:
ANO 1 and ANO 2 $ 520.8 $161.4
River Bend $ 393.6 $ 10.9
Waterford 3 $ 240.5 $104.2
Grand Gulf $ 387.9 $ 98.3
Entergy Wholesale Commodities $2,052.9 $ –
The fair values of the decommissioning trust funds and the
related asset retirement obligation regulatory assets of Entergy
as of December 31, 2009 are as follows (in millions):
Decommissioning Trust Fair Values Regulatory Asset
Utility:
ANO 1 and ANO 2 $ 440.2 $173.7
River Bend $ 349.5 $ 11.0
Waterford 3 $ 209.1 $ 91.0
Grand Gulf $ 327.0 $ 97.8
Entergy Wholesale Commodities $1,885.4 $ –
Note 10. Leases
General
As of December 31, 2010, Entergy had capital leases and non-
cancelable operating leases for equipment, buildings, vehicles,
and fuel storage facilities (excluding nuclear fuel leases and the
Grand Gulf and Waterford 3 sale and leaseback transactions) with
minimum lease payments as follows (in thousands):
Operating Capital
Year Leases Leases
2011 $ 88,316 $ 6,494
2012 77,006 6,494
2013 69,160 6,494
2014 70,589 4,694
2015 53,828 4,694
Years thereafter 187,404 43,497
Minimum lease payments 546,303 72,367
Less: Amount representing interest – 29,405
Present value of net minimum
lease payments $546,303 $42,962
91