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Entergy Corporation and Subsidiaries 2012
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
Geographic Areas
For the years ended December 31, 2012, 2011, and 2010, the amount
of revenue Entergy derived from outside of the United States was
insignificant. As of December 31, 2012 and 2011, Entergy had no
long-lived assets located outside of the United States.
NOTE 14. EQUITY METHOD INVESTMENTS
As of December 31, 2012, Entergy owns investments in the following
companies that it accounts for under the equity method of accounting:
Investment Ownership Description
RS Cogen LLC 50% member interest Co-generation project that
produces power and steam on
an industrial and merchant
basis in the Lake Charles,
Louisiana area.
Top Deer 50% member interest Wind-powered electric
generation joint venture.
Following is a reconciliation of Entergy’s investments in equity
affiliates (in thousands):
2012 2011 2010
Beginning of year $44,876 $40,697 $39,580
Income (loss) from
the investments 1,162 (88) (2,469)
Dispositions and
other adjustments 700 4,267 3,586
End of year $46,738 $44,876 $40,697
Transactions with Equity Method Investees
Entergy Gulf States Louisiana purchased approximately $2.8 mil-
lion, $41.1 million, and $50.8 million of electricity generated from
Entergy’s share of RS Cogen in 2012, 2011, and 2010, respectively.
Entergy’s operating transactions with its other equity method invest-
ees were not significant in 2012, 2011, or 2010.
NOTE 15. ACQUISITIONS AND DISPOSITIONS
Acquisitions
HOT SPRING ENERGY FACILITY
In November 2012, Entergy Arkansas purchased the Hot Spring
Energy Facility, a 620 MW combined-cycle natural gas turbine
unit located in Malvern, Arkansas, from KGen Hot Spring LLC
for approximately $253 million. The FERC and the APSC approved
the transaction.
HINDS ENERGY FACILITY
In November 2012, Entergy Mississippi purchased the Hinds Energy
Facility, a 450 MW combined-cycle natural gas turbine unit located
in Jackson, Mississippi, from KGen Hinds LLC for approximately
$206 million. The FERC and the MPSC approved the transaction.
ACADIA
In April 2011, Entergy Louisiana purchased Unit 2 of the Acadia
Energy Center, a 580 MW generating unit located near Eunice,
Louisiana, from an independent power producer. The Acadia Energy
Center, which entered commercial service in 2002, consists of two
combined-cycle gas-fired generating units, each nominally rated at
580 MW. Entergy Louisiana purchased 100 percent of Acadia Unit
2 and a 50 percent ownership interest in the facility’s common assets
for approximately $300 million. In a separate transaction, Cleco
Power acquired Acadia Unit 1 and the other 50 percent interest in
the facility’s common assets. Cleco Power will serve as operator for
the entire facility. The FERC and the LPSC approved the transaction.
RHODE ISLAND STATE ENERGY CENTER
In December 2011 a subsidiary in the Entergy Wholesale Commodities
business segment purchased the Rhode Island State Energy Center, a
583 MW natural gas-fired combined-cycle generating plant located
in Johnston, Rhode Island, from a subsidiary of NextEra Energy
Resources, for approximately $346 million. The Rhode Island State
Energy Center began commercial operation in 2002.
PALISADES PURCHASED POWER AGREEMENT
Entergy’s purchase of the Palisades plant in 2007 included a unit-con-
tingent, 15-year purchased power agreement (PPA) with Consumers
Energy for 100% of the plant’s output, excluding any future uprates.
Prices under the PPA range from $43.50/MWh in 2007 to $61.50/
MWh in 2022, and the average price under the PPA is $51/MWh. For
the PPA, which was at below-market prices at the time of the acquisi-
tion, Entergy will amortize a liability to revenue over the life of the
agreement. The amount that will be amortized each period is based
upon the difference between the present value calculated at the date
of acquisition of each year’s difference between revenue under the
agreement and revenue based on estimated market prices. Amounts
amortized to revenue were $17 million in 2012, $43 million in 2011,
and $46 million in 2010. The amounts to be amortized to revenue
for the next five years will be $18 million in 2013, $16 million for
2014, $15 million for 2015, $13 million for 2016, and $12 million
for 2017.
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