Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 492

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 492
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  Some of these rounds of testimony were precipitated by developments in an unrelated proceeding in which the FERC issued orders addressing the methodology for determining the return on equity applicable to transmission owners in MISO (Opinion Nos. 569 and 569-A).  The final positions of the parties, after the submission of all pre-filed testimony, were as follows.  With regard to the return on equity complaints for the first refund period, based on their respective interpretations and applications of the Opinion No. 569-A methodology, the LPSC argued for an authorized return on equity for System Energy of 7.97%; the MPSC and the APSC argued for an authorized return on equity of 9.24%; and the FERC trial staff argued for an authorized return on equity of 9.49%.  For the second refund period and on a prospective basis, based on their respective interpretations and applications of the Opinion No. 569-A methodology, the LPSC argued for an authorized return on equity for System Energy of 7.78%; the MPSC and the APSC argued that an authorized return on equity of 9.15% may be appropriate if the second complaint was not dismissed; and the FERC trial staff argued for an authorized return on equity of 9.09% if the second complaint was not dismissed.  The LPSC also continued to support as its primary recommendation, based on an alternative analysis to the Opinion No. 569-A methodology, an authorized return on equity for System Energy as low as 7.56% for the first complaint refund period and as low as 7.18% for the second complaint refund period and prospectively.  The MPSC and the APSC also continued to support as their primary recommendation, based on an alternative analysis to the Opinion No. 569-A methodology, an authorized return on equity for System Energy as low as 8.26% for the first complaint refund period and as low as 8.32% for the second complaint refund period and prospectively.  System Energy argued that strict application of the Opinion No. 569-A methodology produces results inconsistent with investor requirements and does not provide a sound basis on which to evaluate System Energy’s authorized return on equity.  Therefore, as its primary recommendation, System Energy argued for the use of a methodology that incorporates four separate financial models and, based on application of this recommended methodology, an authorized return on equity of 10.12% for the first refund period, which also fell within the presumptively just and