Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 753

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 753
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 the Availability Agreement would require that the Availability Agreement be submitted to the FERC for approval with respect to the terms of such sale.  No such filing with the FERC has been made because sales of capacity and energy from Grand Gulf are being made pursuant to the Unit Power Sales Agreement.  If, for any reason, sales of capacity and energy are made in the future pursuant to the Availability Agreement, the jurisdictional portions of the Availability Agreement would be submitted to the FERC for approval.

Since commercial operation of Grand Gulf began, payments under the Unit Power Sales Agreement to System Energy have exceeded the amounts payable under the Availability Agreement and, therefore, no payments under the Availability Agreement to System Energy have ever been required.  However, if Entergy Arkansas or Entergy Mississippi fails to make its Unit Power Sales Agreement payments, and System Energy is unable to obtain funds from other sources, Entergy Louisiana and Entergy New Orleans could become subject to claims or demands by System Energy or certain of its creditors for payments or advances under the Availability Agreement (or the assignments thereof) equal to the difference between their required Unit Power Sales Agreement payments and their required Availability Agreement payments because their allocated shares under the Availability Agreement exceed their allocated shares under the Unit Power Sales Agreement.

The Availability Agreement may be terminated, amended, or modified by mutual agreement of the parties thereto, without further consent of any assignees or other creditors.  Effective January 1, 2025, Entergy Mississippi entered into a Reimbursement Agreement with Entergy Louisiana, under which it agreed to assume Entergy Louisiana’s rights and obligations under and to hold Entergy Louisiana harmless with respect to the Availability Agreement.  That Reimbursement Agreement is intended to be in effect until the Unit Power Sales Agreement is modified to reflect Entergy Mississippi’s increased entitlements to System Energy’s share of Grand Gulf energy and capacity, following Entergy Louisiana’s divestiture of its combined 16.43% share of the Unit Power Sales Agreement and purchased power agreement entitlements to energy and capacity to Entergy Mississippi.  When the Unit Power Sales Agreement modifications become effective, System Energy also anticipates implementing an Availability Agreement that reflects the Unit Power Sales Agreement entitlements of Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans.

In December 2024, System Energy, Entergy Louisiana, Entergy Arkansas, Entergy Mississippi, and Entergy New Orleans agreed to terminate the Reallocation Agreement.  See Note 8 to the financial statements for further discussion of the reallocation agreement.

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