Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 494

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 494
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 2018-December 2019) based on the difference between the actual equity ratio and the 48.15% equity ratio.In April 2021, System Energy filed its brief on exceptions, in which it challenged the initial decision’s findings on both the return on equity and capital structure issues.  Also in April 2021 the LPSC, the APSC, the MPSC, the City Council, and the FERC trial staff filed briefs on exceptions.  Reply briefs opposing exceptions were filed in May 2021 by System Energy, the FERC trial staff, the LPSC, the APSC, the MPSC, and the City Council.As discussed below in “System Energy Settlement with the MPSC,” “System Energy Settlement with the APSC,” “System Energy Settlement with the City Council,” and “System Energy Settlement with the LPSC,” the MPSC, the APSC, the City Council, and the LPSC have settled their claims related to these proceedings.  As part of the settlements with their respective retail regulators, effective July 2022 for Entergy Mississippi, November 2023 for Entergy Arkansas, June 2024 for Entergy New Orleans, and September 2024 for Entergy Louisiana, bills issued under the Unit Power Sales Agreement reflect a return on equity of 9.65% and a capital structure not to exceed 52% equity.In August 2022 the D.C. Circuit issued an order addressing appeals of FERC’s Opinion No. 569 and 569-A, which established the methodology applied in the ALJ’s initial decision in the proceeding against System Energy discussed above.  The appellate order addressed the methodology for determining the return on equity applicable to transmission owners in MISO.  The D.C. Circuit found the FERC’s use of the Risk Premium model as part of the methodology to be arbitrary and capricious, and remanded the case back to the FERC.  In October 2024, after System Energy had reached settlements with each of the retail regulators involved in the return on equity and capital structure proceeding discussed above, the FERC issued a remand order in the MISO transmission owners’ return on equity case, concluding that the record supported the methodology that it originally directed in Opinion No. 569 utilizing an equal weighting of the two-step discounted cash flow model and capital asset pricing model.  As a result, it determined that the just and reasonable return on equity for the MISO transmission owners is 9.98%.  In light of