Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 562

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 562
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 million, respectively.  The regulatory liabilities include a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and are expected to be included in future rate mechanisms.  In fourth quarter 2024, as a result of the net reduction in certain deferred tax assets and liabilities, Entergy Louisiana and Entergy New Orleans recorded an increase of income tax expense of approximately $16.3 million and $0.2 million, respectively, with an additional $12.1 million increase of income tax expense recorded by other Entergy subsidiaries.Act 293 SecuritizationsAs described in Note 2 to the financial statements, Entergy Louisiana has implemented two separate securitization transactions authorized under Act 293 of the Louisiana Legislature’s Regular Session of 2021.  The first transaction occurred in May of 2022 and the second occurred in March of 2023.  Act 293 provides that the LURC contribute the net bond proceeds to a LURC-sponsored trust.  Over the 15-year term of the Act 293 bonds, the respective storm trusts will make distributions to Entergy Louisiana, a beneficiary of the storm trusts, that will not be taxable to Entergy Louisiana.  Additionally, Entergy Louisiana will not include the receipt of the system restoration charges in taxable income because the right to receive the system restoration charges has been granted directly to the LURC, and Entergy Louisiana only acts as an agent to collect those charges on behalf of the LURC.Accordingly, the securitizations provided for a tax accounting permanent difference resulting in net reductions of income tax expense for Entergy Louisiana of approximately $133 million in March 2023 and $290 million in May 2022, both after taking into account a provision for uncertain tax positions.  Entergy’s recognition of reduced income tax expense was offset by other tax changes resulting in a net reduction of income tax expense for Entergy of approximately $129 million in March 2023 and $283 million in May 2022, both after taking into account a provision for uncertain tax positions.In recognition of its obligations described in LPSC ancillary orders issued as part of the securitization regulatory proceedings, Entergy Louisiana recorded regulatory liabilities of $103 million ($76 million net-of-tax) in first quarter 2023 and $224 million ($165 million net-of-tax) in second quarter 2022 to reflect its obligation to provide credits to its customers.