Company: EAI
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000065984-25-000132
Chunk: 495

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 1
Chunk 495
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 related to the Unit Power Sales Agreement.  Also, as discussed in “Complaints Against System Energy” in Note 2 to the financial statements in the Form 10-K, System Energy and the Unit Power Sales Agreement have been the subject of several litigation proceedings at the FERC.  Settlements that resolve all significant aspects of these complaints have been reached with the MPSC, the APSC, the City Council, and the LPSC, and these settlements have been approved by the FERC.

Results of Operations

Net Income

Third Quarter 2025 Compared to Third Quarter 2024

Net income decreased $4.8 million primarily due to a lower rate of return on rate base, including the effects of the lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy Louisiana effective with the September 2024 service month per the settlement with the LPSC, and lower operating revenues resulting from changes in rate base.  See Note 2 to the financial statements in the Form 10-K for discussion of the settlements with the LPSC.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Net income decreased $16.1 million primarily due to a lower rate of return on rate base, including the effects of the lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy Louisiana effective with the September 2024 service month per the settlement with the LPSC and the lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy New Orleans effective with the June 2024 service month per the settlement agreement with the City Council.  The decrease was partially offset by higher operating revenues resulting from changes in rate base.  See Note 2 to the financial statements in the Form 10-K for discussion of the settlements with the City Council and the LPSC.

Income Taxes

The effective income tax rate was 21.1% for the third quarter 2025.  The difference in the effective income tax rate for the third quarter 2025 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes, offset by certain book and tax differences related to utility plant items and book and tax differences related to the allowance for equity funds used during construction.

The effective income tax rate was 20.6% for the nine months ended September 30, 2025.  The difference in the effective income tax rate for the