Company: EAI
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000065984-25-000132
Chunk: 376

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 1
Chunk 376
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, System Energy, and the relevant affiliates, as necessary, have submitted filings or are preparing to file with the FERC and their respective retail regulators to determine a fair and reasonable approach, including risk-sharing and timing, to incorporate the net cash proceeds received for nuclear production tax credits into future customer rates, particularly in light of the related provision for the uncertain tax position.  In August 2025 the LPSC issued an order approving an agreement between Entergy Louisiana and the LPSC staff regarding the monetization of 2024 nuclear production tax credits.  The order allows Entergy Louisiana to retain the net proceeds of the nuclear production tax credits while the associated tax position remains uncertain.  While it retains the net proceeds, Entergy Louisiana will accrue 

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Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements

a liability to its customers at its weighted average cost of capital.  It further provides that customers will be responsible for the associated costs should the IRS reduce some or all of the value of the nuclear production tax credits transferred to third parties.  Once the IRS makes a final determination affirming the value of the nuclear production tax credits or the audit period expires without the IRS making a final determination disallowing some or all of the value of the nuclear production tax credits, Entergy Louisiana will commence flowing to its customers the value of the nuclear production tax credits, including carrying charges.  Entergy will continue to monitor further developments and reassess the uncertain tax position as additional guidance or other information emerges.Additional cash receipts for the transfer of the remaining 2024 nuclear production tax credits to third parties were received in October 2025 of $55 million, $51.9 million, and $35.1 million by Entergy Arkansas, Entergy Louisiana, and System Energy, respectively, resulting in additional Entergy cash receipts of $142 million.  The proceeds from these transfers also reflected a market-based discount.Sale of Natural Gas Distribution BusinessesSee Note 13 to the financial statements herein for discussion of the sale of the Entergy New Orleans and Entergy Louisiana natural gas distribution businesses on July 1, 2025.  Entergy recognized a gain of approximately $327 million for tax purposes, with Entergy Louisiana and Entergy New Orleans recognizing $148 million and $179 million, respectively.  Both Entergy and Entergy Louisiana have sufficient federal tax net operating loss carryforwards to offset their respective gains.  Accordingly, Entergy does not have a resulting federal income