Company: EAI
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000065984-25-000046
Chunk: 62

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 3
Chunk 62
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1,866,561 $3,154,888 Balance at December 31, 2024$38,750 $49,452 $1,200,125 $2,052,885 $3,341,212 Net income— — — 66,856 66,856 Preferred stock dividends— — — (518)(518)Balance at March 31, 2025$38,750 $49,452 $1,200,125 $2,119,223 $3,407,550 See Notes to Financial Statements.

132

SYSTEM ENERGY RESOURCES, INC.

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

System Energy’s principal asset consists of an ownership interest and a leasehold interest in Grand Gulf.  The capacity and energy from its 90% interest is sold under the Unit Power Sales Agreement to its only four customers, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans.  System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related costs associated with its 90% interest in Grand Gulf pursuant to the Unit Power Sales Agreement.  Payments under the Unit Power Sales Agreement are System Energy’s only source of operating revenues.  As discussed in “Complaints Against System Energy” in Note 2 to the financial statements in the Form 10-K, System Energy and the Unit Power Sales Agreement have been the subject of several litigation proceedings at the FERC.  Settlements that resolve all significant aspects of these complaints have been reached with the MPSC, the APSC, the City Council, and the LPSC, and these settlements have been approved by the FERC.

Results of Operations

Net Income

Net income decreased $7.7 million primarily due a lower rate of return on rate base, including the effects of  lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy New Orleans effective with the June 2024 service month per the settlement agreement with the City Council and the lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy Louisiana effective with the September 2024 service month per the settlement with the LPSC.  The decrease was partially offset by higher operating revenues resulting from an increase in rate base.  See Note 2 to the financial statements in the Form 10-K for discussion of the settlements with the City