Company: EAI
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000065984-25-000087
Chunk: 224

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-08-01
Form: 10-Q
Item: Item 7
Chunk 224
---
 the Orange County Advanced Power Station project and the Legend Power Station project, each at Entergy Texas.

Parent and Other

Other income (deductions) increased primarily due to a $317 million ($250 million net-of-tax) non-cash settlement charge recognized in second quarter 2024 as a result of a group annuity contract purchased in May 2024 to settle certain pension liabilities.  See Note 11 to the financial statements in the Form 10-K for discussion of the group annuity contract and settlement charge.

Income Taxes

The effective income tax rate was 22.2% for the six months ended June 30, 2025.  The difference in the effective income tax rate for the six months ended June 30, 2025 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes, partially offset by book and tax differences related to the allowance for equity funds used during construction and certain book and tax differences related to utility plant items.

The effective income tax rate was 29.9% for the six months ended June 30, 2024.  The difference in the effective income tax rate for the six months ended June 30, 2024 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes, the amortization of accumulated deferred income taxes as a result of tax rate changes, and a provision for uncertain tax positions, partially 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.

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” in the Form 10-K for discussion of income tax legislation and regulation.  The following is an update to that discussion.  See Note 10 to the financial statements herein for discussion of the nuclear production tax credits recorded in second quarter 2025.

One Big Beautiful Bill Act of 2025

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted.  The OBBBA is a wide ranging update to U.S. tax and spending policy.  In particular, the OBBBA modified and extended various clean energy tax incentives relevant to electric utilities, preserving production tax credits under Internal Revenue Code section 45U for existing nuclear facilities through 2032 and generally maintaining the current law phase-out schedule for new nuclear and battery storage under Internal Revenue Code