[Federal Register Volume 70, Number 165 (Friday, August 26, 2005)]
[Notices]
[Pages 50430-50431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4687]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-28018]


Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

August 22, 2005.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated under the Act. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendment(s) is/are available for public 
inspection through the Commission's Branch of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by September 16, 2005, to the Secretary, Securities and 
Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303, and 
serve a copy on the relevant applicant(s) and/or declarant(s) at the 
address(es) specified below. Proof of service (by affidavit or, in the 
case of an attorney at law, by certificate) should be filed with the 
request. Any request for hearing should identify specifically the 
issues of facts or law that are disputed. A person who so requests will 
be notified of any hearing, if ordered, and will receive a copy of any 
notice or order issued in the matter. After September 16, 2005, the 
application(s) and/or declaration(s), as filed or as amended, may be 
granted and/or permitted to become effective.

Entergy Corporation, et al. (70-9123)

    Entergy Corporation (``Entergy''), a registered holding company, 
639 Loyola Avenue, New Orleans, LA 70113; and Entergy's current and 
future nonutility companies (``Applicants'') have filed a post-
effective amendment (``Declaration'') under sections 6(a), 7, and 12(b) 
of the Act and rules 45, and 54 under the Act.
    Applicants request a supplemental order from the Commission for 
Entergy and its existing and future nonutility subsidiary companies to 
issue guarantees and provide other forms of credit support, as 
described below (collectively, ``Guarantees''). The Guarantees would be 
issued to or for the benefit of Entergy's nonutility subsidiaries which 
are: (a) ``New Subsidiaries,'' \1\ (b) ``exempt wholesale generators'' 
(``EWGs'') as defined in Section 32(a) of the Act, (c) ``foreign 
utility companies'' (``FUCOs'') as defined in Section 33(2) of the Act, 
(EWGs and FUCOs collectively referred to as ``Exempt Projects''), (d) 
``exempt telecommunication companies'' (``ETCs'') as defined in Section 
34(a) of the Act, (e) other subsidiary companies of Entergy (including 
``operating and management companies organized for the purpose of 
providing operations and maintenance services, ``O&M Subs'') and 
Entergy Power, Inc. (``EPI''), a company that markets and sells its 
electric generating capacity and energy at wholesale, principally to 
non-associate customers that are or may be authorized or permitted by 
rule, regulation or order of the Commission under the Act to engage in 
other businesses (``Authorized Subsidiary Companies''),\2\ and (f) 
``energy-related companies,'' as defined in Rule 58 under the Act 
(``Energy-related Companies''). New Subsidiaries, Exempt Projects, 
ETCs, Energy-related Companies and Authorized Subsidiary Companies are 
collectively referred to as Nonutility Companies.
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    \1\ New Subsidiaries are defined in the December 20, 2002 order 
(HCAR No. 27626) as direct or indirect subsidiary companies of 
Entergy organized (a) to engage in development activities and/or (b) 
to hold, acquire and/or finance the acquisition of one or more 
subsidiary companies of Entergy which are (i) ``exempt wholesale 
generators'', (ii) ``foreign utility companies'', (iii) ``exempt 
telecommunications companies'', (iv) ``energy-related companies'', 
(v) ``Authorized Subsidiary Companies'', (vi) other ``New 
Subsidiaries'' and/or (vii) Rule 58 Companies, as these terms are 
defined in the order.
    \2\ The Authorized Subsidiary Companies currently include, but 
are not limited to, Entergy Enterprises, Inc., EPI, Entergy Nuclear, 
Inc., Entergy Nuclear Operations, Inc., Entergy Operations Services, 
Inc., Entergy Operations Services North Carolina, Inc., Entergy 
Global Power Operations Corporation and Entergy Power Operations 
U.S., Inc.
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    In order to further facilitate the development, acquisition and 
ownership by Entergy of interests in Exempt Projects and other 
Nonutility Companies, as authorized or permitted under the Act from 
time to time, to the extent the transactions are not exempt from the 
Act or otherwise authorized or permitted by rule, regulation or order 
of the Commission, Entergy and the Nonutility Companies (exclusive of 
EPI) request authority to issue Guarantees to or for the benefit of 
Nonutility Companies \3\ from time to time through February 8, 2006 
(the ``Authorization Period''), in an aggregate amount not to exceed $3 
billion at any one time outstanding (including any Guarantees 
previously issued and outstanding under the prior order) \4\ (the 
``Aggregate Authorization''). The amount of a Guarantee shall not 
reduce the Aggregate Authorization to the extent that the provision of 
the Guarantee is exempt from the Act or is otherwise authorized or 
permitted by rule or regulation of the Commission issued under the Act.
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    \3\ EPI holds undivided ownership interests in certain non-
exempt electric generating stations and, as discussed above, is 
engaged in the business of generating and selling its capacity and 
related energy, at wholesale, principally to non-associate bulk 
power producers on negotiated (i.e. market based) terms and 
conditions. Therefore, EPI is a ``public-utility company'' for 
purposes of the Act.
    \4\ As of March 31, 2005, the aggregate amount of guarantees 
outstanding under the prior order is approximately $1.25 billion.
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    Guarantees may take the form of Entergy or a Nonutility Company 
agreeing to guarantee, undertake reimbursement obligations, assume 
liabilities or other obligations in respect of or act as surety on 
bonds, letters of credit, evidences of indebtedness, equity 
commitments, power purchase agreements, leases, liquidated damages 
provisions, and other obligations undertaken by Entergy's associate 
Nonutility Companies. For example, the associate companies may be 
called upon to furnish various types of bonds as security, including 
bid bonds, performance bonds, and material and payment bonds. 
Guarantees may also be necessary or desirable to satisfy the 
requirements of lenders or other project participants under financing 
documents or other project agreements to which an associate Nonutility 
Company of Entergy is or will become a party (including with respect to 
the provision of construction, interim or permanent debt or equity 
financing). These forms of credit enhancements are typical in the 
marketplace, and would significantly benefit Entergy's investments in

[[Page 50431]]

nonutility companies by, among other things, facilitating the making of 
proposals in respect of investments in nonutility companies, and 
helping to reduce the cost of necessary bonds, sureties, and other 
credit support. The terms and conditions of Guarantees would continue 
to be established at arm's length, based upon market conditions.
    Any Guarantees provided by Entergy to Exempt Projects would be 
subject to the limitation on aggregate investment in EWGs and FUCOs set 
forth in Rule 53(a), as modified by the Commission's authorization in 
File No. 70-9049. Specifically, in the absence of further 
authorization, Entergy would only issue Guarantees to Exempt Projects 
to the extent that the amount of any the Guarantee, when added to 
Entergy's aggregate investment in Exempt Projects, would not exceed 
100% of Entergy's consolidated retained earnings. Any Guarantees 
provided to Energy-related Companies would be subject to the limitation 
on ``aggregate investment'' in energy-related companies set forth in 
Rule 58.
    Entergy and any Nonutility Company issuing Guarantees pursuant to 
the authorization requested in this filing may elect to charge each 
Nonutility Company a fee for any Guarantee provided on its behalf, 
provided that the fee does not exceed the cost of obtaining the 
liquidity necessary to perform the Guarantee (for example, bank line 
commitment fees or letter of credit fees) for the period of time the 
Guarantee remains outstanding. Guarantees may, in some cases, be 
provided to support obligations of Nonutility Companies that are not 
capable of exact quantification or are subject to varying 
quantification. In that event, Entergy or the Nonutility Company 
issuing the Guarantee would determine the exposure under the Guarantee 
for purposes of measuring compliance with the Aggregate Authorization 
limit by appropriate means, including estimation of exposure based on 
loss experience or projected potential payment amounts. Any estimates 
would be made in accordance with generally accepted accounting 
principles, and would be reevaluated periodically.

Other Authorization Parameters

1. Common Equity Ratio
    Entergy represents that it will at all times during the 
Authorization Period maintain common equity (as reflected in the most 
recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K 
filed with the Commission adjusted to reflect changes in capitalization 
since the applicable balance sheet date) of at least 30% of its 
consolidated capitalization. The term ``consolidated capitalization'' 
is defined to include, where applicable, all common stock equity 
(comprised of common stock, additional paid in capital, retained 
earnings, accumulated other comprehensive income or loss, and/or 
treasury stock), minority interests, preferred stock, preferred 
securities, equity linked securities, long-term debt, short-term debt 
and current maturities.
2. Investment Grade Rating
    With respect to the securities issuance authority proposed in this 
Declaration: (a) Within four business days after the occurrence of a 
Ratings Event,\5\ Entergy would notify the Commission of its occurrence 
(by means of a letter, via fax, e-mail or overnight mail to the Office 
of Public Utility Regulation); and (b) within 30 days after the 
occurrence of a Ratings Event, Entergy would submit a post-effective 
amendment to this Declaration explaining the material facts and 
circumstances relating to that Ratings Event (including the basis on 
which, taking into account the interests of investors, consumers and 
the public as well as other applicable criteria under the Act, it 
remains appropriate for Entergy and/or the other Applicants to issue 
such securities, so long as Applicants continues to comply with the 
other applicable terms and conditions specified in the Commission's 
order authorizing the transactions requested in this Declaration). 
Furthermore, no securities authorized as a result of this Declaration 
will be issued any Applicant following the 60th day after a Ratings 
Event if the downgraded rating(s) has or have not been upgraded to 
investment grade. Applicants request that the Commission reserve 
jurisdiction through the remainder of the Authorization Period over the 
issuance of any such security that Applicants are prohibited from 
issuing as a result of the occurrence of a Ratings Event if no revised 
rating reflecting an investment grade rating has been issued.
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    \5\ A ``Ratings Event'' will occur if, during the Authorization 
Period, (i) an security issued by Entergy upon original issuance, if 
rated, is rated below investment grade; or (ii) any outstanding 
security of Entergy, that is rated is downgraded below investment 
grade. For purposes of this provision, a security will be deemed to 
be rated ``investment grade'' if it is rated investment grade by at 
least one nationally recognized statistical rating organization, as 
that term is used in paragraphs (c)(2)(vi)(E), (F) and (H) of rule 
15c3-1 under the Securities Exchange Act of 1934.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4687 Filed 8-25-05; 8:45 am]
BILLING CODE 8010-01-P