Company: EAI
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000065984-25-000087
Chunk: 75

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-08-01
Form: 10-Q
Item: Item 3
Chunk 75
---
 case.  The decrease was partially offset by additions to plant in service.

Other income increased primarily due to an increase in the allowance for equity funds used during construction due to higher construction work in progress in 2025, including the Orange County Advanced Power Station project and the Legend Power Station project.

Interest expense increased primarily due to the issuance of $500 million of 5.25% Series mortgage bonds in February 2025 and the issuance of $350 million of 5.55% Series mortgage bonds in August 2024, partially offset by an increase in the allowance for borrowed funds used during construction due to higher construction work in progress in 2025, including the Orange County Advanced Power Station project and the Legend Power Station project.

155

Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and Analysis

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Purchased power includes an increase in 2025 of $21 million in costs related to the procurement of capacity through MISO’s annual planning resource auction, including the effect of a significant increase in MISO’s seasonal auction clearing price, due to the implementation of a reliability-based demand curve, for capacity transactions during the summer months.  Although Entergy Texas does not have the ability to recover its MISO capacity costs incurred to date beyond the level included in base rates, in June 2025, Texas legislation established a capacity cost recovery rider mechanism that would allow for the recovery of costs related to the procurement of capacity through MISO’s annual planning resource auction outside of base rates, through a rider that is updated annually.  Entergy Texas plans to file for such a rider to recover future capacity procurement costs at the earliest opportunity in 2026.

Taxes other than income taxes increased primarily due to an increase in local franchise taxes as a result of higher retail revenues in 2025 as compared to 2024.

Depreciation and amortization expenses decreased primarily due to the recognition of $27.6 million in depreciation expense in 2024 for the 2022 base rate case relate back period, effective over six months beginning January 2024.  The recognition of depreciation expense for the relate back period was effective over the same period as collections from the relate back surcharge rider and resulted in no effect on net income.  See Note 2 to the financial statements in the Form 10-K for discussion of the 2022 base rate case.  The decrease was partially