Company: EAI
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000065984-25-000132
Chunk: 260

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 7
Chunk 260
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sidiariesManagement’s Financial Discussion and Analysis

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.

Other expenses decreased primarily due to decreased nuclear refueling outage expenses due to the amortization of lower costs associated with the most recent outages as compared to previous outages.

Other operation and maintenance expenses increased from $2,081 million for the nine months ended September 30, 2024 to $2,140 million for the nine months ended September 30, 2025 primarily due to:

•an increase of $44 million in power delivery expenses primarily due to higher vegetation maintenance costs;

•an increase of $19 million in non-nuclear generation expenses primarily due to a higher scope of work performed during plant outages in 2025 as compared to 2024;

•an increase of $16 million in bad debt expense;

•an increase of $11 million in transmission costs allocated by MISO.  See Note 2 to the financial statements in the Form 10-K for discussion of the recovery of these costs; and

•the expensing of $11 million at Entergy Louisiana of project costs associated with the Bayou Power Station project following Entergy Louisiana’s election in third quarter 2025 to cancel the project and instead to evaluate an alternative transmission solution.  See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources” below for discussion of Entergy Louisiana’s Bayou Power Station project.

The increase was partially offset by:

•contract costs of $39 million in 2024 related to operational performance, customer service, and organizational health initiatives; and

•a $13 million gain, recorded in third quarter 2025, resulting from the sale of the Entergy Louisiana and Entergy New Orleans natural gas distribution businesses on July 1, 2025, which included the derecognition of $7 million of goodwill attributed to the businesses sold.  See Note 13 to the financial statements herein for discussion of the sale of the Entergy Louisiana and Entergy