Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 560

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 560
---
 reduction in income tax expense.  This manner of regulatory accounting affects the effective tax rate for the period as compared to the statutory tax rate.  The return of unprotected excess accumulated deferred income taxes was substantially completed by Entergy and the Registrant Subsidiaries during 2022.Inflation Reduction Act of 2022The Inflation Reduction Act of 2022, signed into law on August 16, 2022, significantly expanded federal tax incentives for clean energy production, including the extension of production tax credits to solar projects and certain qualified nuclear power facilities.  Additionally, the Inflation Reduction Act of 2022 enacted a 1% excise tax on the buyback of public company stock and a new corporate alternative minimum tax.  Entergy Arkansas has accrued approximately $5 million of solar production tax credits associated with the Walnut Bend Solar facility, the Driver Solar facility, and the West Memphis Solar facility in 2024.  As the value of such credits is expected to be provided to customers, a regulatory liability has been recorded for all credits recognized in 2024.Entergy Arkansas, Entergy Louisiana, and System Energy have the potential to generate zero-emission nuclear power production tax credits for electricity generated by their respective nuclear power facilities.  Based on guidance provided by the U.S. Treasury and the IRS, the nuclear production tax credits will be calculated by multiplying the kWh of qualifying electricity by $0.003, with the value of the credits decreasing ratably, or phasing out, once the annual gross receipts from the sale of nuclear power exceed a certain threshold.  If certain prevailing wage requirements are satisfied, the calculation of the credit, as described in the preceding sentence, is multiplied by a factor of five.  Additional guidance is needed from the U.S. Treasury and/or the IRS to determine how the value of these credits will be calculated for power generated from nuclear facilities of rate-regulated utilities.  Due to the uncertainty of value, if any, of credits Entergy Arkansas, Entergy Louisiana, or System Energy may receive, such credits have not been recognized for the nuclear power produced in 2024.  Depending on the specifics of the expected additional guidance from the U.S. Treasury and/or the IRS, Entergy Arkansas, Entergy Louisiana, or System Energy may not recognize any production tax credits for their nuclear facilities, or they could recognize a significant amount each year, beginning for 2024.  If the IRS does not issue any technical guidance before the due date of Entergy’s 2024