Company: EAI
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000065984-25-000087
Chunk: 323

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-08-01
Form: 10-Q
Item: Item 1
Chunk 323
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 under the provisions of income tax accounting standards.  As such, the recognition of the credits included a corresponding provision for uncertain tax positions for the full amount of the credits recognized.The value of the credits was calculated based on the amount of electricity generated and sold by each nuclear generating unit owned by Entergy Arkansas, Entergy Louisiana, and System Energy during 2024, multiplied by the applicable credit rate (i.e. dollars per kW).  The applicable credit rate included the incremental amount of credit for meeting the “prevailing wages” criteria under the Inflation Reduction Act.  Entergy also applied the statutorily required reduction amount in arriving at the value of the credits.  This reduction amount was driven by the “Gross receipts” received by each unit for its 2024 energy production.  Entergy Arkansas, Entergy Louisiana, and System Energy recognized production tax credits of $221.4 million, $208.9 million, and $140.9 million, respectively, resulting in an Entergy consolidated production tax credit of $571.2 million.  To the extent future guidance allows Entergy to realize the value of the credits under the provisions of income tax accounting standards, the monetized value of the credits are expected to be shared with customers.Entergy Arkansas, Entergy Louisiana, and System Energy expect to transfer the credits to third parties for cash (including a reasonable discount) prior to the filing of the Entergy 2024 federal income tax return.  As such, Entergy Arkansas, Entergy Louisiana, System Energy, and the relevant affiliates are preparing or have submitted filings 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 these credits into future customer rates, particularly in light of the related provision for uncertain tax position.  Entergy will continue to monitor developments and reassess its tax position as additional guidance or other information emerges.Sale of Natural Gas Distribution BusinessesSee Note 13 to the financial statements herein for discussion of the sale of Entergy New Orleans’ and Entergy Louisiana’s natural gas distribution businesses on July 1, 2025.  Entergy is expected to recognize a gain of approximately $335 million for tax purposes, with Entergy Louisiana and Entergy New Orleans recognizing 

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Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements

$150 million and $185 million, respectively.  Both Entergy and Entergy Louisiana have sufficient federal