Entergy 2011 Annual Report Download - page 87

Entergy Corporation and Subsidiaries 2011
reimbursement for previously-incurred investment recovery costs.
The investment recovery property is reflected as a regulatory
asset on the consolidated Entergy Louisiana balance sheet. The
creditors of Entergy Louisiana do not have recourse to the assets or
revenues of Entergy Louisiana Investment Recovery Funding,
including the investment recovery property, and the creditors
of Entergy Louisiana Investment Recovery Funding do not have
recourse to the assets or revenues of Entergy Louisiana. Entergy
Louisiana has no payment obligations to Entergy Louisiana
Investment Recovery Funding except to remit investment recovery
charge collections.
Entergy Texas Securitization Bonds – Hurricane Rita
In April 2007 the PUCT issued a financing order authorizing the
issuance of securitization bonds to recover $353 million of Entergy
Texas’s Hurricane Rita reconstruction costs and up to $6 million of
transaction costs, offset by $32 million of related deferred income tax
benefits. In June 2007, Entergy Gulf States Reconstruction Funding
I, LLC, a company that is now wholly-owned and consolidated
by Entergy Texas, issued $329.5 million of senior secured
transition bonds (securitization bonds) as follows (in thousands):
Senior Secured Transition Bonds, Series A:
Tranche A-1 (5.51%) due October 2013 $ 93,500
Tranche A-2 (5.79%) due October 2018 121,600
Tranche A-3 (5.93%) due June 2022 114,400
Total senior secured transition bonds $329,500
Although the principal amount of each tranche is not due until
the Although the principal amount of each tranche is not due
until the dates given above, Entergy Gulf States Reconstruction
Funding expects to make principal payments on the bonds over
the next five years in the amounts of $20.8 million for 2012, $21.9
million for 2013, $23.2 million for 2014, $24.6 million for 2015, and
$26.0 million for 2016. Of the scheduled principal payments for 2012,
$18.5 million are for Tranche A-1 and $2.3 million are for Tranche
A-2, and all of the scheduled principal payments for 2013-2016 are
for Tranche A-2.
With the proceeds, Entergy Gulf States Reconstruction Funding
purchased from Entergy Texas the transition property, which is the
right to recover from customers through a transition charge amounts
sufficient to service the securitization bonds. The transition property
is reflected as a regulatory asset on the consolidated Entergy Texas
balance sheet. The creditors of Entergy Texas do not have recourse
to the assets or revenues of Entergy Gulf States Reconstruction
Funding, including the transition property, and the creditors of
Entergy Gulf States Reconstruction Funding do not have recourse
to the assets or revenues of Entergy Texas. Entergy Texas has no
payment obligations to Entergy Gulf States Reconstruction Funding
except to remit transition charge collections.
Entergy Texas Securitization Bonds –
Hurricane Ike and Hurricane Gustav
In September 2009 the PUCT authorized the issuance of securitization
bonds to recover $566.4 million of Entergy Texas’s Hurricane Ike
and Hurricane Gustav restoration costs, plus carrying costs and
transaction costs, offset by insurance proceeds. In November 2009,
Entergy Texas Restoration funding, LLC (Entergy Texas Restoration
Funding), a company wholly-owned and consolidated by Entergy
Texas, issued $545.9 million of senior secured transition bonds
(securitization bonds), as follows (in thousands):
Senior Secured Transition Bonds, Series A:
Tranche A-1 (2.12%) due February 2016 $ 182,500
Tranche A-2 (3.65%) due August 2019 144,800
Tranche A-3 (4.38%) due November 2023 218,600
Total senior secured transition bonds $545,900
Although the principal amount of each tranche is not due until the
dates given above, Entergy Texas Restoration Funding expects to
make principal payments on the bonds over the next five years in
the amount of $38.6 million for 2012, $39.4 million for 2013, $40.2
million for 2014, $41.2 million for 2015, and $42.6 million for 2016. All
of the scheduled principal payments for 2012-2014 are for Tranche
A-1, $13.8 million of the scheduled principal payments for 2015 are
for Tranche A-1 and $27.4 million are for Tranche A-2, and all of the
scheduled principal payments for 2016 are for Tranche A-2.
With the proceeds, Entergy Texas Restoration Funding purchased
from Entergy Texas the transition property, which is the right
to recover from customers through a transition charge amounts
sufficient to service the securitization bonds. The transition property
is reflected as a regulatory asset on the consolidated Entergy Texas
balance sheet. The creditors of Entergy Texas do not have recourse
to the assets or revenues of Entergy Texas Restoration Funding,
including the transition property, and the creditors of Entergy Texas
Restoration Funding do not have recourse to the assets or revenues
of Entergy Texas. Entergy Texas has no payment obligations to
Entergy Texas Restoration Funding except to remit transition
charge collections.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
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