Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 509

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 509
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 LPSC, the APSC, and the City Council, the FERC trial staff recommended either no refunds or no modification to the Unit Power Sales Agreement.In April 2022, System Energy filed cross-answering testimony in response to the FERC trial staff’s recommendations of refunds for the accumulated deferred income taxes issues and proposed modifications to the Unit Power Sales Agreement for the executive incentive compensation issues.  In June 2022 the FERC trial staff submitted revised answering testimony, in which it recommended additional refunds associated with the accumulated deferred income tax balances in account 190 associated with a deemed contract satisfaction and reissuance that occurred in 2005.  Based on the testimony revisions, the FERC trial staff’s recommended refunds total $106.6 million, exclusive of any tax gross-up or FERC awarded interest.  Also in June 2022, System Energy 

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Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements

filed revised and supplemental cross-answering testimony to respond to the FERC trial staff’s testimony and oppose its revised recommendation.In May 2022 the LPSC, the APSC, and the City Council filed rebuttal testimony.  The LPSC’s testimony asserted new claims, including that: (1) certain of the sale-leaseback transaction costs may have been imprudently incurred; (2) accumulated deferred income taxes associated with sale-leaseback transaction costs should have been included in rate base; (3) accumulated deferred income taxes associated with federal investment tax credits should have been excluded from rate base; (4) monthly net operating loss accumulated deferred income taxes should have been excluded from rate base; and (5) several categories of proposed rate changes, including executive incentive compensation, air travel, industry dues, and legal costs, also warranted historical refunds.  The LPSC’s rebuttal testimony argued that refunds for the alleged tariff violations and other claims must be calculated by rerunning the Unit Power Sales Agreement formula rate; however, it included estimates of refunds associated with some, but not all, of its claims, totaling $286 million without interest.  The City Council’s rebuttal testimony also proposed a new, alternate theory and claim for relief regarding System Energy’s participation in the Entergy system money pool, under which it calculates estimated refunds of approximately $51.7 million.  The APSC’s rebuttal testimony agreed with the LPSC’s direct testimony that retained earnings should be adjusted in a comprehensive refund calculation.  The testimony quantified the