Rate And Regulatory Matters

12 Months Ended

Dec. 31, 2012

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets

Other Regulatory Assets

Regulatory assets represent probable future revenues associated with costs that are expected to be recovered from customers through the regulatory ratemaking process affecting the Utility business. In addition to the regulatory assets that are specifically disclosed on the face of the balance sheets, the tables below provide detail of "Other regulatory assets" that are included on Entergy's and the Registrant Subsidiaries' balance sheets as of December 31, 2012 and 2011:

Entergy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$422.6	$395.9
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
Grand Gulf fuel - non-current and power management rider - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	35.1	12.4
New nuclear generation development costs (Note 2)	56.8	56.8
Gas hedging costs - recovered through fuel rates	8.3	30.3
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	2,866.3	2,542.0
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 – Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	970.8	996.4
Removal costs - recovered through depreciation rates (Note 9) (b)	155.7	81.2
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Incremental ice storm costs - recovered through 2032	10.0	10.5
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Unamortized loss on reacquired debt - recovered over term of debt	95.9	108.8
Other	75.1	44.4
Total	$5,025.9	$4,636.9

Entergy Arkansas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$210.2	$187.7
Incremental ice storm costs - recovered through 2032	10.0	10.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	831.2	768.3
Grand Gulf fuel - non-current - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.3	4.6
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages - recovered either through securitization or retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	115.2	114.7
Unamortized loss on reacquired debt - recovered over term of debt	31.5	34.7
Other	6.2	4.0
Entergy Arkansas Total	$1,221.6	$1,126.9

Entergy Gulf States Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$6.1	$12.8
Gas hedging costs - recovered through fuel rates	2.6	8.6
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	300.5	231.3
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	18.9	10.2
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Unamortized loss on reacquired debt - recovered over term of debt	9.9	11.6
Other	13.1	4.1
Entergy Gulf States Louisiana Total	$409.7	$333.9

Entergy Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$136.9	$125.8
Gas hedging costs - recovered through fuel rates	3.4	12.4
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	475.6	427.9
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	74.5	9.7
Unamortized loss on reacquired debt - recovered over term of debt	17.6	20.0
Other	28.0	20.3
Entergy Louisiana Total	$913.6	$814.5

Entergy Mississippi

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$5.6	$5.3
Gas hedging costs - recovered through fuel rates	2.2	7.8
Removal costs - recovered through depreciation rates (Note 9) (b)	57.4	48.5
Grand Gulf fuel - non-current and power management rider- recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.8	7.8
New nuclear generation development costs (Note 2)	56.8	56.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	234.6	221.1
Provision for storm damages - recovered through retail rates	9.2	30.7
Unamortized loss on reacquired debt - recovered over term of debt	9.6	10.7
Other	8.3	4.7
Entergy Mississippi Total	$401.5	$393.4

Entergy New Orleans

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$3.6	$3.4
Removal costs - recovered through depreciation rates (Note 9) (b)	29.9	16.3
Gas hedging costs - recovered through fuel rates	-	1.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	134.6	127.6
Provision for storm damages, including hurricane costs - recovered through insurance proceeds and retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	15.1	8.6
Unamortized loss on reacquired debt - recovered over term of debt	2.3	2.6
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Other	5.5	5.9
Entergy New Orleans Total	$202.0	$178.8

Entergy Texas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$1.2	$1.3
Removal costs - recovered through depreciation rates (Note 9) (b)	11.5	4.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	258.8	244.9
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	737.9	822.5
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Unamortized loss on reacquired debt - recovered over term of debt	9.4	10.8
Other	13.6	4.9
Entergy Texas Total	$1,114.5	$1,178.1

System Energy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$58.9	$59.6
Removal costs - recovered through depreciation rates (Note 9) (b)	56.8	11.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Other Postretirement Benefits) (b)	198.2	197.6
Unamortized loss on reacquired debt - recovered over term of debt	15.6	18.2
Other	0.6	0.6
System Energy Total	$330.1	$287.8

(a)

The jurisdictional split order assigned the regulatory asset to Entergy Texas. The regulatory asset, however, is being recovered and amortized at Entergy Gulf States Louisiana. As a result, a billing occurs monthly over the same term as the recovery and receipts will be submitted to Entergy Texas. Entergy Texas has recorded a receivable from Entergy Gulf States Louisiana and Entergy Gulf States Louisiana has recorded a corresponding payable.

(b)

Does not earn a return on investment, but is offset by related liabilities.

Hurricane Isaac

In August 2012, Hurricane Isaac caused extensive damage to portions of Entergy's service area in Louisiana, and to a lesser extent in Mississippi and Arkansas. The storm resulted in widespread power outages, significant damage primarily to distribution infrastructure, and the loss of sales during the power outages. Total restoration costs for the repair or replacement of Entergy's electric facilities in areas with damage from Hurricane Isaac are currently estimated to be approximately $370 million, including approximate amounts of $7 million at Entergy Arkansas, $70 million at Entergy Gulf States Louisiana, $220 million at Entergy Louisiana, $22 million at Entergy Mississippi, and $48 million at Entergy New Orleans.

The Utility operating companies are considering all reasonable avenues to recover storm-related costs from Hurricane Isaac, including, but not limited to, accessing funded storm reserves; securitization or other alternative financing; and traditional retail recovery on an interim and permanent basis. Each Utility operating company is responsible for its restoration cost obligations and for recovering or financing its storm-related costs. In November 2012, Entergy New Orleans drew $10 million from its funded storm reserves. In January 2013, Entergy Gulf States Louisiana and Entergy Louisiana drew $65 million and $187 million, respectively, from their funded storm reserves. Storm cost recovery or financing may be subject to review by applicable regulatory authorities.

Entergy recorded accruals for the estimated costs incurred that were necessary to return customers to service. Entergy recorded corresponding regulatory assets of approximately $120 million and construction work in progress of approximately $250 million. Entergy recorded the regulatory assets in accordance with its accounting policies and based on the historic treatment of such costs in its service area because management believes that recovery through some form of regulatory mechanism is probable. Because Entergy has not gone through the regulatory process regarding these storm costs, however, there is an element of risk, and Entergy is unable to predict with certainty the degree of success it may have in its recovery initiatives, the amount of restoration costs that it may ultimately recover, or the timing of such recovery.

Correction of Regulatory Asset for Income Taxes

In the first quarter 2012, Entergy Gulf States Louisiana determined that its regulatory asset for income taxes was overstated because of a difference between the regulatory treatment of the income taxes associated with certain items (primarily pension expense) and the financial accounting treatment of those taxes. Beginning with Louisiana retail rate filings using the 1994 test year, retail rates were developed using the normalization method of accounting for income taxes. With respect to these items, however, the financial accounting for income taxes was computed using the flow-through method of accounting. As a result, over the years Entergy Gulf States Louisiana accumulated a regulatory asset representing the expected future recovery of tax expense for the affected items even though the tax expense was being collected currently in rates from customers and would not be recovered in the future.

The effect was immaterial to the consolidated balance sheets, results of operations, and cash flows of Entergy for all prior reporting periods and on a cumulative basis. Therefore, a cumulative adjustment was recorded in the first quarter 2012 to remove the regulatory asset previously recorded. This adjustment increased 2012 income tax expense by $46.3 million, decreased the regulatory asset for income taxes by $75.3 million, and decreased accumulated deferred income taxes by $29 million.

The effect was also immaterial to the balance sheets, results of operations, and cash flows of Entergy Gulf States Louisiana for all prior reporting periods. Correcting the cumulative effect of the error in the first quarter 2012 could have been material to the 2012 results of operations of Entergy Gulf States Louisiana and, therefore, Entergy Gulf States Louisiana is revising its prior period financial statements to correct the errors. The corrections affect the prior period financial statements of Entergy Gulf States Louisiana as shown in the tables below:


	Years Ended December 31,
	2011		2010
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Income Statement
Income taxes	$88,313	$89,736	$75,878	$92,297
Net income	$203,027	$201,604	$190,738	$174,319
Earnings applicable to common equity	$202,202	$200,779	$189,911	$173,492

Statement of Cash Flows
Net income	$203,027	$201,604	$190,738	$174,319
Deferred income taxes, investment tax credits, and non-current taxes accrued	($6,268)	($4,845)	$87,920	$104,339
Changes in other regulatory assets	($80,027)	($77,713)	$114,528	$141,216
Other operating activities	($35,248)	($37,562)	$30,717	$4,029



	December 31, 2011
	As previously reported	As corrected

Balance Sheet
Regulatory asset for income taxes - net	$249,058	$173,724
Accumulated deferred income taxes - current	$5,427	$5,107
Accumulated deferred income taxes and taxes accrued	$1,397,230	$1,368,563
Member's equity	$1,439,733	$1,393,386


	Years Ended December 31, 2011 and 2010
	Member's Equity		Total Equity
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Statement of Changes in Equity
Balance at December 31, 2009	$1,473,930	$1,445,425	$1,441,759	$1,413,254
2010 Net income	$190,738	$174,319	$190,738	$174,319
Balance at December 31, 2010	$1,539,517	$1,494,593	$1,509,213	$1,464,289
2011 Net income	$203,027	$201,604	$203,027	$201,604
Balance at December 31, 2011	$1,439,733	$1,393,386	$1,380,123	$1,333,776

Fuel and purchased power cost recovery

Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas are allowed to recover fuel and purchased power costs through fuel mechanisms included in electric and gas rates that are recorded as fuel cost recovery revenues. The difference between revenues collected and the current fuel and purchased power costs is generally recorded as "Deferred fuel costs" on the Utility operating companies' financial statements. The table below shows the amount of deferred fuel costs as of December 31, 2012 and 2011 that Entergy expects to recover (or return to customers) through fuel mechanisms, subject to subsequent regulatory review.

	2012	2011
	(In Millions)

Entergy Arkansas	$97.3	$209.8
Entergy Gulf States Louisiana (a)	$99.2	$2.9
Entergy Louisiana (a)	$94.6	$1.5
Entergy Mississippi	$26.5	($15.8)
Entergy New Orleans (a)	$1.9	($7.5)
Entergy Texas	($93.3)	($64.7)

(a)

2012 and 2011 include $100.1 million for Entergy Gulf States Louisiana, $68 million for Entergy Louisiana, and $4.1 million for Entergy New Orleans of fuel, purchased power, and capacity costs, which do not currently earn a return on investment and whose recovery periods are indeterminate but are expected to be over a period greater than twelve months.

Entergy Arkansas

Production Cost Allocation Rider

The APSC approved a production cost allocation rider for recovery from customers of the retail portion of the costs allocated to Entergy Arkansas as a result of the System Agreement proceedings, which are discussed in the "System Agreement Cost Equalization Proceedings" section below. These costs cause an increase in Entergy Arkansas's deferred fuel cost balance because Entergy Arkansas pays the costs over seven months but collects them from customers over twelve months.

Energy Cost Recovery Rider

Entergy Arkansas's retail rates include an energy cost recovery rider to recover fuel and purchased energy costs in monthly bills. The rider utilizes prior calendar year energy costs and projected energy sales for the twelve-month period commencing on April 1 of each year to develop an energy cost rate, which is redetermined annually and includes a true-up adjustment reflecting the over-recovery or under-recovery, including carrying charges, of the energy costs for the prior calendar year. The energy cost recovery rider tariff also allows an interim rate request depending upon the level of over- or under-recovery of fuel and purchased energy costs.

In October 2005 the APSC initiated an investigation into Entergy Arkansas's interim energy cost recovery rate. The investigation focused on Entergy Arkansas's 1) gas contracting, portfolio, and hedging practices; 2) wholesale purchases during the period; 3) management of the coal inventory at its coal generation plants; and 4) response to the contractual failure of the railroads to provide coal deliveries. In March 2006 the APSC extended its investigation to cover the costs included in Entergy Arkansas's March 2006 annual energy cost rate filing, and a hearing was held in the APSC energy cost recovery investigation in October 2006.

In January 2007 the APSC issued an order in its review of the energy cost rate. The APSC found that Entergy Arkansas failed to maintain an adequate coal inventory level going into the summer of 2005 and that Entergy Arkansas should be responsible for any incremental energy costs resulting from two outages caused by employee and contractor error. The coal plant generation curtailments were caused by railroad delivery problems and Entergy Arkansas has since resolved litigation with the railroad regarding the delivery problems. The APSC staff was directed to perform an analysis with Entergy Arkansas's assistance to determine the additional fuel and purchased energy costs associated with these findings and file the analysis within 60 days of the order. After a final determination of the costs is made by the APSC, Entergy Arkansas would be directed to refund that amount with interest to its customers as a credit on the energy cost recovery rider. Entergy Arkansas requested rehearing of the order. In March 2007, in order to allow further consideration by the APSC, the APSC granted Entergy Arkansas's petition for rehearing and for stay of the APSC order.

In October 2008, Entergy Arkansas filed a motion to lift the stay and to rescind the APSC's January 2007 order in light of the arguments advanced in Entergy Arkansas's rehearing petition and because the value for Entergy Arkansas's customers obtained through the resolved railroad litigation is significantly greater than the incremental cost of actions identified by the APSC as imprudent. In December 2008 the APSC denied the motion to lift the stay pending resolution of Entergy Arkansas's rehearing request and the unresolved issues in the proceeding. The APSC ordered the parties to submit their unresolved issues list in the pending proceeding, which the parties did. In February 2010 the APSC denied Entergy Arkansas's request for rehearing, and held a hearing in September 2010 to determine the amount of damages, if any, that should be assessed against Entergy Arkansas. A decision is pending. Entergy Arkansas expects the amount of damages, if any, to have an immaterial effect on its results of operations, financial position, or cash flows.

The APSC also established a separate docket to consider the resolved railroad litigation, and in February 2010 it established a procedural schedule that concluded with testimony through September 2010. Testimony has been filed, and the APSC will decide the case based on the record in the proceeding, including the prefiled testimony.

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Gulf States Louisiana and Entergy Louisiana recover electric fuel and purchased power costs for the billing month based upon the level of such costs incurred two months prior to the billing month. Entergy Gulf States Louisiana's purchased gas adjustments include estimates for the billing month adjusted by a surcharge or credit that arises from an annual reconciliation of fuel costs incurred with fuel cost revenues billed to customers, including carrying charges.

In January 2003 the LPSC authorized its staff to initiate a proceeding to audit the fuel adjustment clause filings of Entergy Gulf States Louisiana and its affiliates. The audit included a review of the reasonableness of charges flowed by Entergy Gulf States Louisiana through its fuel adjustment clause for the period 1995 through 2004. Entergy Gulf States Louisiana and the LPSC Staff reached a settlement to resolve the audit that requires Entergy Gulf States Louisiana to refund $18 million to customers, including the realignment to base rates of $2 million of SO2 costs. The ALJ held a stipulation hearing and in November 2011 the LPSC issued an order approving the settlement. The refund was made in the November 2011 billing cycle. Entergy Gulf States Louisiana had previously recorded provisions for the estimated outcome of this proceeding.

In December 2011 the LPSC authorized its staff to initiate another proceeding to audit the fuel adjustment clause filings of Entergy Gulf States Louisiana and its affiliates. The audit includes a review of the reasonableness of charges flowed by Entergy Gulf States Louisiana through its fuel adjustment clause for the period 2005 through 2009. Discovery is in progress, but a procedural schedule has not been established.

In April 2010 the LPSC authorized its staff to initiate an audit of Entergy Louisiana's fuel adjustment clause filings. The audit includes a review of the reasonableness of charges flowed through the fuel adjustment clause by Entergy Louisiana for the period from 2005 through 2009. The LPSC Staff issued its audit report in January 2013. The LPSC staff recommended that Entergy Louisiana refund approximately $1.9 million, plus interest, to customers and realign the recovery of approximately $1.0 million from Entergy Louisiana's fuel adjustment clause to base rates. Two parties have intervened in the proceeding. A procedural schedule has not yet been established. Entergy Louisiana has recorded provisions for the estimated outcome of this proceeding.

Entergy Mississippi

Entergy Mississippi's rate schedules include an energy cost recovery rider that, effective January 1, 2013, is adjusted annually to reflect accumulated over- or under-recoveries. Entergy Mississippi's fuel cost recoveries are subject to annual audits conducted pursuant to the authority of the MPSC.

Mississippi Attorney General Complaint

The Mississippi attorney general filed a complaint in state court in December 2008 against Entergy Corporation, Entergy Mississippi, Entergy Services, and Entergy Power alleging, among other things, violations of Mississippi statutes, fraud, and breach of good faith and fair dealing, and requesting an accounting and restitution. The complaint is wide ranging and relates to tariffs and procedures under which Entergy Mississippi purchases power not generated in Mississippi to meet electricity demand. Entergy believes the complaint is unfounded. In December 2008 the defendant Entergy companies removed the attorney general's suit to U.S. District Court in Jackson, Mississippi. The Mississippi attorney general moved to remand the matter to state court. In August 2012 the District Court issued an opinion denying the Attorney General's motion for remand, finding that the District Court has subject matter jurisdiction under the Class Action Fairness Act.

The defendant Entergy companies answered the complaint and filed a counterclaim for relief based upon the Mississippi Public Utilities Act and the Federal Power Act. In May 2009 the defendant Entergy companies filed a motion for judgment on the pleadings asserting grounds of federal preemption, the exclusive jurisdiction of the MPSC, and factual errors in the attorney general's complaint. In September 2012 the District Court heard oral argument on Entergy's motion for judgment on the pleadings. The District Court's ruling on the motion for judgment on the pleadings is pending.

Entergy New Orleans

Entergy New Orleans's electric rate schedules include a fuel adjustment tariff designed to reflect no more than targeted fuel and purchased power costs, adjusted by a surcharge or credit for deferred fuel expense arising from the monthly reconciliation of actual fuel and purchased power costs incurred with fuel cost revenues billed to customers, including carrying charges.

Entergy New Orleans's gas rate schedules include a purchased gas adjustment to reflect estimated gas costs for the billing month, adjusted by a surcharge or credit similar to that included in the electric fuel adjustment clause, including carrying charges.

Entergy Texas

Entergy Texas's rate schedules include a fixed fuel factor to recover fuel and purchased power costs, including interest, not recovered in base rates. Semi-annual revisions of the fixed fuel factor are made in March and September based on the market price of natural gas and changes in fuel mix. The amounts collected under Entergy Texas's fixed fuel factor and any interim surcharge or refund are subject to fuel reconciliation proceedings before the PUCT.

In October 2009, Entergy Texas filed with the PUCT a request to refund approximately $71 million, including interest, of fuel cost recovery over-collections through September 2009. Pursuant to a stipulation among the various parties, the PUCT issued an order approving a refund of $87.8 million, including interest, of fuel cost recovery overcollections through October 2009. The refund was made for most customers over a three-month period beginning January 2010.

In June 2010, Entergy Texas filed with the PUCT a request to refund approximately $66 million, including interest, of fuel cost recovery over-collections through May 2010. In September 2010 the PUCT issued an order providing for a $77 million refund, including interest, for fuel cost recovery over-collections through June 2010. The refund was made for most customers over a three-month period beginning with the September 2010 billing cycle.

In December 2010, Entergy Texas filed with the PUCT a request to refund fuel cost recovery over-collections through October 2010. Pursuant to a stipulation among the parties that was approved by the PUCT in March 2011, Entergy Texas refunded over-collections through November 2010 of approximately $73 million, including interest through the refund period. The refund was made for most customers over a three-month period that began with the February 2011 billing cycle.

In December 2011, Entergy Texas filed with the PUCT a request to refund approximately $43 million, including interest, of fuel cost recovery over-collections through October 2011. Entergy Texas and the parties to the proceeding reached an agreement that Entergy Texas would refund $67 million, including interest and additional over-recoveries through December 2011, over a three-month period. Entergy Texas and the parties requested that interim rates consistent with the settlement be approved effective with the March 2012 billing month, and the PUCT approved the application in March 2012. Entergy Texas completed this refund to customers in May 2012.

In October 2012, Entergy Texas filed with the PUCT a request to refund approximately $78 million, including interest, of fuel cost recovery over-collections through September 2012. Entergy Texas requested that the refund be implemented over a six-month period effective with the January 2013 billing month. Entergy Texas and the parties to the proceeding reached an agreement that Entergy Texas would refund $84 million, including interest and additional over-recoveries through October 2012, to most customers over a three-month period beginning January 2013. The PUCT approved the stipulation in January 2013.

In July 2012, Entergy Texas filed with the PUCT an application to credit its customers approximately $37.5 million, including interest, resulting from the FERC's October 2011 order in the System Agreement rough production cost equalization proceeding which is discussed below in "System Agreement Cost Equalization Proceedings". In September 2012 the parties submitted a stipulation resolving the proceeding. The stipulation provided that most Entergy Texas customers would be credited over a four-month period beginning October 2012. The credits were initiated with the October 2012 billing month on an interim basis, and the PUCT subsequently approved the stipulation, also in October 2012.

In November 2012, Entergy Texas filed a pleading seeking a PUCT finding that special circumstances exist for limited cost recovery of capacity costs associated with two power purchase agreements until such time that these costs are included in base rates or a purchased capacity recovery rider or other recovery mechanism.

Retail Rate Proceedings

Filings with the APSC (Entergy Arkansas)

Retail Rates

2009 Base Rate Filing

In September 2009, Entergy Arkansas filed with the APSC for a general change in rates, charges, and tariffs. In June 2010 the APSC approved a settlement and subsequent compliance tariffs that provide for a $63.7 million rate increase, effective for bills rendered for the first billing cycle of July 2010. The settlement provides for a 10.2% return on common equity.

2013 Base Rate Filing

On December 31, 2012, in accordance with the requirements of Arkansas law, Entergy Arkansas filed with the APSC notice of its intent to file an application for a general change or modification in its rates and tariffs no sooner than 60 days and no longer than 90 days from the date of its notice.

Filings with the LPSC

Retail Rates - Electric

(Entergy Gulf States Louisiana)

In October 2009 the LPSC approved a settlement that resolved Entergy Gulf States Louisiana's 2007 test year filing and provided for a formula rate plan for the 2008, 2009, and 2010 test years. 10.65% is the target midpoint return on equity for the formula rate plan, with an earnings bandwidth of +/- 75 basis points (9.90% - 11.40%). Entergy Gulf States Louisiana, effective with the November 2009 billing cycle, reset its rates to achieve a 10.65% return on equity for the 2008 test year. The rate reset, a $44.3 million increase that includes a $36.9 million cost of service adjustment, plus $7.4 million net for increased capacity costs and a base rate reclassification, was implemented for the November 2009 billing cycle, and the rate reset was subject to refund pending review of the 2008 test year filing that was made in October 2009. In January 2010, Entergy Gulf States Louisiana implemented an additional $23.9 million rate increase pursuant to a special rate implementation filing made in December 2009, primarily for incremental capacity costs approved by the LPSC. In May 2010, Entergy Gulf States Louisiana and the LPSC staff submitted a joint report on the 2008 test year filing and requested that the LPSC accept the report, which resulted in a $0.8 million reduction in rates effective in the June 2010 billing cycle and a $0.5 million refund. At its May 19, 2010 meeting, the LPSC accepted the joint report.

In May 2010, Entergy Gulf States Louisiana made its formula rate plan filing with the LPSC for the 2009 test year. The filing reflected a 10.25% return on common equity, which is within the allowed earnings bandwidth, indicating no cost of service rate change is necessary under the formula rate plan. The filing does reflect, however, a revenue requirement increase to provide supplemental funding for the decommissioning trust maintained for the LPSC-regulated 70% share of River Bend, in response to a NRC notification of a projected shortfall of decommissioning funding assurance. The filing also reflected a rate increase for incremental capacity costs. In July 2010 the LPSC approved a $7.8 million increase in the revenue requirement for decommissioning, effective September 2010. In August 2010, Entergy Gulf States Louisiana made a revised 2009 test year filing. The revised filing reflected a 10.12% earned return on common equity, which is within the allowed earnings bandwidth resulting in no cost of service adjustment. The revised filing also reflected two increases outside of the formula rate plan sharing mechanism: (1) the previously-approved decommissioning revenue requirement, and (2) $25.2 million for capacity costs. The rates reflected in the revised filing became effective, beginning with the first billing cycle of September 2010. Entergy Gulf States Louisiana and the LPSC staff subsequently submitted a joint report on the 2009 test year filing consistent with these terms and the LPSC approved the joint report in January 2011.

In May 2011, Entergy Gulf States Louisiana made a special formula rate plan rate implementation filing with the LPSC that implements effective with the May 2011 billing cycle a $5.1 million rate decrease to reflect adjustments in accordance with a previous LPSC order relating to the acquisition of Unit 2 of the Acadia Energy Center by Entergy Louisiana. As a result of the closing of the acquisition and termination of the pre-acquisition power purchase agreement with Acadia, Entergy Gulf States Louisiana's allocation of capacity related to this unit ended, resulting in a reduction in the additional capacity revenue requirement.

In May 2011, Entergy Gulf States Louisiana made its formula rate plan filing with the LPSC for the 2010 test year. The filing reflects an 11.11% earned return on common equity, which is within the allowed earnings bandwidth, indicating no cost of service rate change is necessary under the formula rate plan. The filing also reflects a $22.8 million rate decrease for incremental capacity costs. Entergy Gulf States Louisiana and the LPSC Staff subsequently filed a joint report that also stated that no cost of service rate change is necessary under the formula rate plan, and the LPSC approved it in October 2011.

In November 2011 the LPSC approved a one-year extension of Entergy Gulf States Louisiana's formula rate plan. In May 2012, Entergy Gulf States Louisiana made its formula rate plan filing with the LPSC for the 2011 test year. The filing reflected an 11.94% earned return on common equity, which is above the earnings bandwidth and would indicate a $6.5 million cost of service rate change was necessary under the formula rate plan. The filing also reflected a $22.9 million rate decrease for incremental capacity costs. Subsequently, in August 2012, Entergy Gulf States Louisiana submitted a revised filing that reflected an earned return on common equity of 11.86% indicating a $5.7 million cost of service rate decrease is necessary under the formula rate plan. The revised filing also indicates that a reduction of $20.3 million should be reflected in the incremental capacity rider. The rate reductions were implemented, subject to refund, effective for bills rendered the first billing cycle of September 2012. The September 2012 rate change reduced Entergy Gulf States Louisiana's revenues by approximately $8.7 million in 2012. Subsequently, in December 2012, Entergy Gulf States Louisiana submitted a revised evaluation report that reflects expected retail jurisdictional cost of $16.9 million for the first-year capacity charges for the purchase from Entergy Louisiana of one-third of Acadia Unit 2 capacity and energy. This rate change was implemented effective with the first billing cycle of January 2013. The 2011 test year filings remain subject to LPSC review.

In connection with its decision to extend the formula rate plan to the 2011 test year, the LPSC required that a base rate case be filed by Entergy Gulf States Louisiana, and the required filing was made on February 15, 2013. Recognizing that the final structure of Entergy Gulf States Louisiana's transmission business has not been determined, the filing presents two alternative scenarios for the LPSC to establish the appropriate level of rates for Entergy Gulf States Louisiana.

Under its primary request, Entergy Gulf States Louisiana assumes that it has completed integration into MISO and that the spin-off and merger of its transmission business with a subsidiary of ITC Holdings has occurred (the MISO/ITC Scenario). Under the MISO/ITC Scenario, Entergy Gulf States Louisiana requests:

· authorization to increase the revenue it collects from customers by approximately $28 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Gulf States Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Under the alternative request contained in its filing, Entergy Gulf States Louisiana assumes that it has completed integration into MISO, but that the spin-off and merger of its transmission business with a subsidiary of ITC Holdings has not occurred (the MISO-Only Scenario). Under the MISO-Only Scenario, Entergy Gulf States Louisiana requests:

· authorization to increase the revenue it collects from customers by approximately $24 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Gulf States Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

(Entergy Louisiana)

In October 2009 the LPSC approved a settlement that resolved Entergy Louisiana's 2006 and 2007 test year filings and provided for a new formula rate plan for the 2008, 2009, and 2010 test year 10.25% is thes. target midpoint return on equity for the formula rate plan, with an earnings bandwidth of +/- 80 basis points (9.45% - 11.05%).

Entergy Louisiana was permitted, effective with the November 2009 billing cycle, to reset its rates to achieve a 10.25% return on equity for the 2008 test year. The rate reset, a $2.5 million increase that included a $16.3 million cost of service adjustment less a $13.8 million net reduction for decreased capacity costs and a base rate reclassification, was implemented for the November 2009 billing cycle, and the rate reset was subject to refund pending review of the 2008 test year filing that was made in October 2009. In April 2010, Entergy Louisiana and the LPSC staff submitted a joint report on the 2008 test year filing and requested that the LPSC accept the report, which resulted in a $0.1 million reduction in rates effective in the May 2010 billing cycle and a $0.1 million refund. In addition, Entergy Louisiana moved the recovery of approximately $12.5 million of capacity costs from fuel adjustment clause recovery to base rate recovery. At its April 21, 2010 meeting, the LPSC accepted the joint report.

In May 2010, Entergy Louisiana made its formula rate plan filing with the LPSC for the 2009 test year. The filing reflected a 10.82% return on common equity, which is within the allowed earnings bandwidth, indicating no cost of service rate change is necessary under the formula rate plan. The filing does reflect, however, a revenue requirement increase to provide supplemental funding for the decommissioning trust maintained for Waterford 3, in response to a NRC notification of a projected shortfall of decommissioning funding assurance. The filing also reflected a rate change for incremental capacity costs. In July 2010 the LPSC approved a $3.5 million increase in the retail revenue requirement for decommissioning, effective September 2010. In August 2010, Entergy Louisiana made a revised 2009 test year formula rate plan filing. The revised filing reflected a 10.82% earned return on common equity, which is within the allowed earnings bandwidth resulting in no cost of service adjustment. The filing also reflected two increases outside of the formula rate plan sharing mechanism: (1) the previously-approved decommissioning revenue requirement, and (2) $2.2 million for capacity costs. The rates reflected in the revised filing became effective beginning with the first billing cycle of September 2010. Entergy Louisiana and the LPSC staff subsequently submitted a joint report on the 2009 test year filing consistent with these terms and the LPSC approved the joint report in December 2010.

In May 2011, Entergy Louisiana made a special formula rate plan rate implementation filing with the LPSC that implements effective with the May 2011 billing cycle a $43.1 million net rate increase to reflect adjustments in accordance with a previous LPSC order relating to the acquisition of Unit 2 of the Acadia Energy Center. The net rate increase represents the decrease in the additional capacity revenue requirement resulting from the termination of the power purchase agreement with Acadia and the increase in the revenue requirement resulting from the ownership of the Acadia facility. In August 2011, Entergy Louisiana made a filing to correct the May 2011 filing and decrease the rate by $1.1 million.

In May 2011, Entergy Louisiana made its formula rate plan filing with the LPSC for the 2010 test year. The filing reflects an 11.07% earned return on common equity, which is just outside of the allowed earnings bandwidth and results in no cost of service rate change under the formula rate plan. The filing also reflects a very slight ($9 thousand) rate increase for incremental capacity costs. Entergy Louisiana and the LPSC Staff subsequently filed a joint report that reflects an 11.07% earned return and results in no cost of service rate change under the formula rate plan, and the LPSC approved the joint report in October 2011.

In November 2011 the LPSC approved a one-year extension of Entergy Louisiana's formula rate plan. In May 2012, Entergy Louisiana made its formula rate plan filing with the LPSC for the 2011 test year. The filing reflected a 9.63% earned return on common equity, which is within the earnings bandwidth and results in no cost of service rate change under the formula rate plan. The filing also reflected an $18.1 million rate increase for incremental capacity costs. In August 2012, Entergy Louisiana submitted a revised filing that reflects an earned return on common equity of 10.38%, which is still within the earnings bandwidth, resulting in no cost of service rate change. The revised filing also indicates that an increase of $15.9 million should be reflected in the incremental capacity rider. The rate change was implemented, subject to refund, effective for bills rendered the first billing cycle of September 2012. The September 2012 rate change contributed approximately $5.3 million to Entergy Louisiana's revenues in 2012. Subsequently, in December 2012, Entergy Louisiana submitted a revised evaluation report that reflects two items: 1) a $17 million reduction for the first-year capacity charges for the purchase by Entergy Gulf States Louisiana from Entergy Louisiana of one-third of Acadia Unit 2 capacity and energy, and 2) an $88 million increase for the first-year retail revenue requirement associated with the Waterford 3 replacement steam generator project, which was in-service in December 2012. These rate changes were implemented, subject to refund, effective with the first billing cycle of January 2013. The 2011 test year filings remain subject to LPSC review. With completion of the Waterford 3 replacement steam generator project, the LPSC will undertake a prudence review in connection with a filing to be made by Entergy Louisiana on or before April 30, 2013 with regard to the following aspects of the replacement project: 1) project management; 2) cost controls; 3) success in achieving stated objectives; 4) the costs of the replacement project; and 5) the outage length and replacement power costs.

In connection with its decision to extend the formula rate plan to the 2011 test year, the LPSC required that a base rate case be filed by Entergy Louisiana, and the required filing was made on February 15, 2013. Recognizing that the final structure of Entergy Louisiana's transmission business has not been determined, the filing presents two alternative scenarios for the LPSC to establish the appropriate level of rates for Entergy Louisiana.

Under its primary request, Entergy Louisiana assumes that it has completed integration into MISO and that the spin-off and merger of its transmission business with a subsidiary of ITC Holdings has occurred (the MISO/ITC Scenario). Under the MISO/ITC Scenario, Entergy Louisiana requests:

· authorization to increase the revenue it collects from customers by approximately $169 million (which does not take into account a revenue offset of approximately $1 million resulting from a proposed increase for those customers taking service under the Qualifying Facility Standby Service);

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Under the alternative request contained in its filing, Entergy Louisiana assumes that it has completed integration into MISO, but that the spin-off and merger of its transmission business with a subsidiary of ITC Holdings has not occurred (the MISO-Only Scenario). Under the MISO-Only Scenario, Entergy Louisiana requests:

· authorization to increase the revenue it collects from customers by approximately $145 million (which does not take into account a revenue offset of approximately $2 million resulting from a proposed increase for those customers taking service under the Qualifying Facility Standby Service);

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Retail Rates - Gas (Entergy Gulf States Louisiana)

In January 2013, Entergy Gulf States Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2012. The filing showed an earned return on common equity of 11.18%, which results in a $43 thousand rate reduction. The sixty-day review and comment period for this filing remains open.

Related to the annual gas rate stabilization plan proceedings, the LPSC directed its staff to initiate an evaluation of the 10.5% allowed return on common equity for the Entergy Gulf States Louisiana gas rate stabilization plan. The LPSC directed that its staff should provide an analysis of the current return on equity and justification for any proposed changes to the return on equity. A hearing in the proceeding was held in November 2012. The ALJ issued a proposed recommendation in December 2012, finding that 9.4% is a more reasonable and appropriate rate of return on common equity. Entergy Gulf States Louisiana filed exceptions to the ALJ's recommendation and an LPSC decision is pending.

In January 2012, Entergy Gulf States Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2011. The filing showed an earned return on common equity of 10.48%, which is within the earnings bandwidth of 10.5%, plus or minus fifty basis points. In April 2012 the LPSC Staff filed its findings, suggesting adjustments that produced an 11.54% earned return on common equity for the test year and a $0.1 million rate reduction. Entergy Gulf States Louisiana accepted the LPSC Staff's recommendations, and the rate reduction was effective with the first billing cycle of May 2012.

In January 2011, Entergy Gulf States Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2010. The filing showed an earned return on common equity of 8.84% and a revenue deficiency of $0.3 million. In March 2011 the LPSC Staff filed its findings, suggesting an adjustment that produced an 11.76% earned return on common equity for the test year and a $0.2 million rate reduction. Entergy Gulf States Louisiana implemented the $0.2 million rate reduction effective with the May 2011 billing cycle. The LPSC docket is now closed.

In January 2010, Entergy Gulf States Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2009. The filing showed an earned return on common equity of 10.87%, which is within the earnings bandwidth of 10.5% plus or minus fifty basis points, resulting in no rate change. In April 2010, Entergy Gulf States Louisiana filed a revised evaluation report reflecting changes agreed upon with the LPSC Staff. The revised evaluation report also resulted in no rate change.

Filings with the MPSC (Entergy Mississippi)

Formula Rate Plan Filings

In September 2009, Entergy Mississippi filed with the MPSC proposed modifications to its formula rate plan rider. In March 2010 the MPSC issued an order: (1) providing the opportunity for a reset of Entergy Mississippi's return on common equity to a point within the formula rate plan bandwidth and eliminating the 50/50 sharing that had been in the plan, (2) modifying the performance measurement process, and (3) replacing the revenue change limit of two percent of revenues, which was subject to a $14.5 million revenue adjustment cap, with a limit of four percent of revenues, although any adjustment above two percent requires a hearing before the MPSC. The MPSC did not approve Entergy Mississippi's request to use a projected test year for its annual scheduled formula rate plan filing and, therefore, Entergy Mississippi will continue to use a historical test year for its annual evaluation reports under the plan.

In March 2010, Entergy Mississippi submitted its 2009 test year filing, its first annual filing under the new formula rate plan rider. In June 2010 the MPSC approved a joint stipulation between Entergy Mississippi and the Mississippi Public Utilities Staff that provides for no change in rates, but does provide for the deferral as a regulatory asset of $3.9 million of legal expenses associated with certain litigation involving the Mississippi Attorney General, as well as ongoing legal expenses in that litigation until the litigation is resolved.

In March 2011, Entergy Mississippi submitted its formula rate plan 2010 test year filing. The filing shows an earned return on common equity of 10.65% for the test year, which is within the earnings bandwidth and results in no change in rates. In November 2011 the MPSC approved a joint stipulation between Entergy Mississippi and the Mississippi Public Utilities Staff that provides for no change in rates.

In March 2012, Entergy Mississippi submitted its formula rate plan filing for the 2011 test year. The filing shows an earned return on common equity of 10.92% for the test year, which is within the earnings bandwidth and results in no change in rates. In February 2013 the MPSC approved a joint stipulation between Entergy Mississippi and the Mississippi Public Utilities Staff that provides for no change in rates.

Filings with the City Council (Entergy New Orleans)

Formula Rate Plan

In April 2009 the City Council approved a new three-year formula rate plan for Entergy New Orleans, with terms including an 11.1% benchmark electric return on common equity (ROE) with a +/- 40 basis point bandwidth and a 10.75% benchmark gas ROE with a +/- 50 basis point bandwidth. Earnings outside the bandwidth reset to the midpoint benchmark ROE, with rates changing on a prospective basis depending on whether Entergy New Orleans was over- or under-earning. The formula rate plan also included a recovery mechanism for City Council-approved capacity additions, plus provisions for extraordinary cost changes and force majeure events.

In May 2010, Entergy New Orleans filed its electric and gas formula rate plan evaluation reports. The filings requested a $12.8 million electric base revenue decrease and a $2.4 million gas base revenue increase. Entergy New Orleans and the City Council's Advisors reached a settlement that resulted in an $18.0 million electric base revenue decrease and zero gas base revenue change effective with the October 2010 billing cycle. The City Council approved the settlement in November 2010.

In May 2011, Entergy New Orleans filed its electric and gas formula rate plan evaluation reports for the 2010 test year. The filings requested a $6.5 million electric rate decrease and a $1.1 million gas rate decrease. Entergy New Orleans and the City Council's Advisors reached a settlement that results in an $8.5 million incremental electric rate decrease and a $1.6 million gas rate decrease. The settlement also provides for the deferral of $13.4 million of Michoud plant maintenance expenses incurred in 2010 and the establishment of a regulatory asset that will be amortized over the period October 2011 through September 2018. The City Council approved the settlement in September 2011. The new rates were effective with the first billing cycle of October 2011.

In May 2012, Entergy New Orleans filed its electric and gas formula rate plan evaluation reports for the 2011 test year. Subsequent adjustments agreed upon with the City Council Advisors indicate a $4.9 million electric base revenue increase and a $0.05 million gas base revenue increase as necessary under the formula rate plan. As part of the original filing, Entergy New Orleans is also requesting to increase annual funding for its storm reserve by approximately $5.7 million for the next five years. On September 26, 2012, Entergy New Orleans made a filing with the City Council that implemented the $4.9 million electric formula rate plan rate increase and the $0.05 million gas formula rate plan rate increase. The new rates were effective with the first billing cycle in October 2012. The new rates have not affected the net amount of Entergy New Orleans's operating revenues. In October 2012 the City Council approved a procedural schedule to resolve disputed items that includes a hearing in April 2013. The rates implemented in October 2012 are subject to retroactive adjustments depending on the outcome of the proceeding. The City Council has not yet acted on Entergy New Orleans's request for an increase in storm reserve funding. Entergy New Orleans's formula rate plan ended with the 2011 test year and has not yet been extended. Entergy New Orleans is expected to file a full rate case 12 months prior to the anticipated completion of the Ninemile 6 generating facility.

A 2008 rate case settlement included $3.1 million per year in electric rates to fund the Energy Smart energy efficiency programs. In September 2009 the City Council approved the energy efficiency programs filed by Entergy New Orleans. The rate settlement provides an incentive for Entergy New Orleans to meet or exceed energy savings targets set by the City Council and provides a mechanism for Entergy New Orleans to recover lost contribution to fixed costs associated with the energy savings generated from the energy efficiency programs.

Filings with the PUCT and Texas Cities (Entergy Texas)

Retail Rates

2009 Rate Case

In December 2009, Entergy Texas filed a rate case requesting a $198.7 million increase reflecting an 11.5% return on common equity based on an adjusted June 2009 test year. The rate case also included a $2.8 million revenue requirement to provide supplemental funding for the decommissioning trust maintained for the 70% share of River Bend for which Entergy Texas retail customers are partially responsible, in response to an NRC notification of a projected shortfall of decommissioning funding assurance. Beginning in May 2010, Entergy Texas implemented a $17.5 million interim rate increase, subject to refund. Intervenors and PUCT Staff filed testimony recommending adjustments that would result in a maximum rate increase, based on the PUCT Staff's testimony, of $58 million.

The parties filed a settlement in August 2010 intended to resolve the rate case proceeding. The settlement provided for a $59 million base rate increase for electricity usage beginning August 15, 2010, with an additional increase of $9 million for bills rendered beginning May 2, 2011. The settlement stipulated an authorized return on equity of 10.125%. The settlement stated that Entergy Texas's fuel costs for the period April 2007 through June 2009 are reconciled, with $3.25 million of disallowed costs, which were included in an interim fuel refund. The settlement also set River Bend decommissioning costs at $2.0 million annually. Consistent with the settlement, in the third quarter 2010, Entergy Texas amortized $11 million of rate case costs. The PUCT approved the settlement in December 2010.

2011 Rate Case

In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. The rate case also proposed a purchased power recovery rider. On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the current rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas's recovery of purchased power capacity costs and Entergy Texas's proposal to defer its MISO transition expenses. In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. A hearing was held in late-April through early-May 2012.

In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. The order includes a finding that "a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital." The order also provides for increases in depreciation rates and the annual storm reserve accrual. The order also reduced Entergy Texas's proposed purchased power capacity costs, stating that they are not known and measureable; reduced Entergy Texas's regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates, and reduced Entergy's Texas's fuel reconciliation recovery by $4.0 million because it disagreed with the line-loss factor used in the calculation. After considering the progress of the proceeding in light of the PUCT order, Entergy Texas recorded in the third quarter 2012 an approximate $24 million charge to recognize that assets associated with Hurricane Rita, financially-based incentive compensation, and fuel recovery are no longer probable of recovery. Entergy Texas continues to believe that it is entitled to recover these prudently incurred costs, however, and it filed a motion for rehearing regarding these and several other issues in the PUCT's order on October 4, 2012. Several other parties have also filed motions for rehearing of the PUCT's order. The PUCT subsequently denied rehearing of substantive issues. Several parties, including Entergy Texas, have appealed the PUCT's order to the Travis County District Court.

System Agreement Cost Equalization Proceedings

The Utility operating companies historically have engaged in the coordinated planning, construction, and operation of generating and bulk transmission facilities under the terms of the System Agreement, which is a rate schedule that has been approved by the FERC. Certain of the Utility operating companies' retail regulators and other parties are pursuing litigation involving the System Agreement at the FERC. The proceedings include challenges to the allocation of costs as defined by the System Agreement and allegations of imprudence by the Utility operating companies in their execution of their obligations under the System Agreement.

In June 2005, the FERC issued a decision in System Agreement litigation that had been commenced by the LPSC, and essentially affirmed its decision in a December 2005 order on rehearing. The FERC decision concluded, among other things, that:

· The System Agreement no longer roughly equalizes total production costs among the Utility operating companies.

· In order to reach rough production cost equalization, the FERC imposed a bandwidth remedy by which each company's total annual production costs will have to be within +/- 11% of Entergy System average total annual production costs.

· In calculating the production costs for this purpose under the FERC's order, output from the Vidalia hydroelectric power plant will not reflect the actual Vidalia price for the year but is priced at that year's average price paid by Entergy Louisiana for the exchange of electric energy under Service Schedule MSS-3 of the System Agreement, thereby reducing the amount of Vidalia costs reflected in the comparison of the Utility operating companies' total production costs.

· The remedy ordered by FERC in 2005 required no refunds and became effective based on calendar year 2006 production costs and the first reallocation payments were made in 2007.

The FERC's decision reallocates total production costs of the Utility operating companies whose relative total production costs expressed as a percentage of Entergy System average production costs are outside an upper or lower bandwidth. Under the current circumstances, this will be accomplished by payments from Utility operating companies whose production costs are more than 11% below Entergy System average production costs to Utility operating companies whose production costs are more than the Entergy System average production cost, with payments going first to those Utility operating companies whose total production costs are farthest above the Entergy System average.

Assessing the potential effects of the FERC's decision requires assumptions regarding the future total production cost of each Utility operating company, which assumptions include the mix of solid fuel and gas-fired generation available to each company and the costs of natural gas and purchased power. Entergy Louisiana, Entergy Gulf States Louisiana, Entergy Texas, and Entergy Mississippi are more dependent upon gas-fired generation sources than Entergy Arkansas or Entergy New Orleans. Of these, Entergy Arkansas is the least dependent upon gas-fired generation sources. Therefore, increases in natural gas prices likely will increase the amount by which Entergy Arkansas's total production costs are below the Entergy System average production costs.

The LPSC, APSC, MPSC, and the Arkansas Electric Energy Consumers appealed the FERC's December 2005 decision to the United States Court of Appeals for the D.C. Circuit. Entergy and the City of New Orleans intervened in the various appeals. The D.C. Circuit issued its decision in April 2008. The D.C. Circuit concluded that the FERC's orders had failed to adequately explain both its conclusion that it was prohibited from ordering refunds for the 20-month period from September 13, 2001 - May 2, 2003 and its determination to implement the bandwidth remedy commencing on January 1, 2006, rather than June 1, 2005. The D.C. Circuit remanded the case to the FERC for further proceedings on these issues.

In October 2011, the FERC issued an order addressing the D.C. Circuit remand on these two issues. On the first issue, the FERC concluded that it did have the authority to order refunds, but decided that it would exercise its equitable discretion and not require refunds for the 20-month period from September 13, 2001 - May 2, 2003. Because the ruling on refunds relied on findings in the interruptible load proceeding, which is discussed in a separate section below, the FERC concluded that the refund ruling will be held in abeyance pending the outcome of the rehearing requests in that proceeding. On the second issue, the FERC reversed its prior decision and ordered that the prospective bandwidth remedy begin on June 1, 2005 (the date of its initial order in the proceeding) rather than January 1, 2006, as it had previously ordered. Pursuant to the October 2011 order, Entergy was required to calculate the additional bandwidth payments for the period June - December 2005 utilizing the bandwidth formula tariff prescribed by the FERC that was filed in a December 2006 compliance filing and accepted by the FERC in an April 2007 order. As is the case with bandwidth remedy payments, these payments and receipts will ultimately be paid by Utility operating company customers to other Utility operating company customers.

In December 2011, Entergy filed with the FERC its compliance filing that provides the payments and receipts among the Utility operating companies pursuant to the FERC's October 2011 order. The filing shows the following payments/receipts among the Utility operating companies:

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$156
Entergy Gulf States Louisiana	($75)
Entergy Louisiana	$-
Entergy Mississippi	($33)
Entergy New Orleans	($5)
Entergy Texas	($43)

Entergy Arkansas made its payment in January 2012. In February 2012, Entergy Arkansas filed for an interim adjustment to its production cost allocation rider requesting that the $156 million payment be collected from customers over the 22-month period from March 2012 through December 2013. In March 2012 the APSC issued an order stating that the payment can be recovered from retail customers through the production cost allocation rider, subject to refund. The LPSC and the APSC have requested rehearing of the FERC's October 2011 order. The APSC, the LPSC, the PUCT, and other parties intervened in the December 2011 compliance filing proceeding, and the APSC and the LPSC also filed protests.

Calendar Year 2012 Production Costs

The liabilities and assets for the preliminary estimate of the payments and receipts required to implement the FERC's remedy based on calendar year 2012 production costs were recorded in December 2012, based on certain year-to-date information. The preliminary estimate was recorded based on the following estimate of the payments/receipts among the Utility operating companies for 2013.

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$-
Entergy Gulf States Louisiana	$-
Entergy Louisiana	$-
Entergy Mississippi	$-
Entergy New Orleans	($17)
Entergy Texas	$17

The actual payments/receipts for 2013, based on calendar year 2012 production costs, will not be calculated until the Utility operating companies' 2012 FERC Form 1s have been filed. Once the calculation is completed, it will be filed at the FERC. The level of any payments and receipts is significantly affected by a number of factors, including, among others, weather, the price of alternative fuels, the operating characteristics of the Entergy System generating fleet, and multiple factors affecting the calculation of the non-fuel related revenue requirement components of the total production costs, such as plant investment.

Rough Production Cost Equalization Rates

Each May since 2007 Entergy has filed with the FERC the rates to implement the FERC's orders in the System Agreement proceeding. These filings show the following payments/receipts among the Utility operating companies are necessary to achieve rough production cost equalization as defined by the FERC's orders:

	2007 Pmts (Rcts)	2008 Pmts (Rcts)	2009 Pmts (Rcts)	2010 Pmts (Rcts)	2011 Pmts (Rcts)	2012 Pmts (Rcts)
(in millions)
Entergy Arkansas	$252	$252	$390	$41	$77	$41
Entergy Gulf States La.	($120)	($124)	($107)	$-	($12)	$-
Entergy Louisiana	($91)	($36)	($140)	($22)	$-	($41)
Entergy Mississippi	($41)	($20)	($24)	($19)	($40)	$-
Entergy New Orleans	$-	($7)	$-	$-	($25)	$-
Entergy Texas	($30)	($65)	($119)	$-	$-	$-

The APSC has approved a production cost allocation rider for recovery from customers of the retail portion of the costs allocated to Entergy Arkansas. Management believes that any changes in the allocation of production costs resulting from the FERC's decision and related retail proceedings should result in similar rate changes for retail customers, subject to specific circumstances that have caused trapped costs. See "Fuel and purchased power cost recovery, Entergy Texas," above for discussion of a PUCT decision that resulted in $18.6 million of trapped costs between Entergy's Texas and Louisiana jurisdictions. See "2007 Rate Filing Based on Calendar Year 2006 Production Costs" below for a discussion of a FERC decision that could result in trapped costs at Entergy Arkansas related to its contract with AmerenUE.

Entergy Arkansas, and, for December 2012, Entergy Texas, records accounts payable and Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas record accounts receivable to reflect the rough production cost equalization payments and receipts required to implement the FERC's remedy. Entergy Arkansas, and, for December 2012, Entergy Texas, records a corresponding regulatory asset for its right to collect the payments from its customers, and Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas record corresponding regulatory liabilities for their obligations to pass the receipts on to their customers. The regulatory asset and liabilities are shown as "System Agreement cost equalization" on the respective balance sheets.

2007 Rate Filing Based on Calendar Year 2006 Production Costs

Several parties intervened in the 2007 rate proceeding at the FERC, including the APSC, the MPSC, the Council, and the LPSC, which have also filed protests. The PUCT also intervened. Intervenor testimony was filed in which the intervenors and also the FERC Staff advocated a number of positions on issues that affect the level of production costs the individual Utility operating companies are permitted to reflect in the bandwidth calculation, including the level of depreciation and decommissioning expense for nuclear facilities. The effect of the various positions would be to reallocate costs among the Utility operating companies. The Utility operating companies filed rebuttal testimony explaining why the bandwidth payments are properly recoverable under the AmerenUE contract, and explaining why the positions of FERC Staff and intervenors on the other issues should be rejected. A hearing in this proceeding concluded in July 2008, and the ALJ issued an initial decision in September 2008. The ALJ's initial decision concluded, among other things, that: (1) the decisions to not exercise Entergy Arkansas's option to purchase the Independence plant in 1996 and 1997 were prudent; (2) Entergy Arkansas properly flowed a portion of the bandwidth payments through to AmerenUE in accordance with the wholesale power contract; and (3) the level of nuclear depreciation and decommissioning expense reflected in the bandwidth calculation should be calculated based on NRC-authorized license life, rather than the nuclear depreciation and decommissioning expense authorized by the retail regulators for purposes of retail ratemaking. Following briefing by the parties, the matter was submitted to the FERC for decision. On January 11, 2010, the FERC issued its decision both affirming and overturning certain of the ALJ's rulings, including overturning the decision on nuclear depreciation and decommissioning expense. The FERC's conclusion related to the AmerenUE contract does not permit Entergy Arkansas to recover a portion of its bandwidth payment from AmerenUE. The Utility operating companies requested rehearing of that portion of the decision and requested clarification on certain other portions of the decision.

AmerenUE argued that its wholesale power contract with Entergy Arkansas, pursuant to which Entergy Arkansas sells power to AmerenUE, does not permit Entergy Arkansas to flow through to AmerenUE any portion of Entergy Arkansas's bandwidth payment. The AmerenUE contract expired in August 2009. In April 2008, AmerenUE filed a complaint with the FERC seeking refunds, plus interest, in the event the FERC ultimately determines that bandwidth payments are not properly recovered under the AmerenUE contract. In response to the FERC's decision discussed in the previous paragraph, Entergy Arkansas recorded a regulatory provision in the fourth quarter 2009 for a potential refund to AmerenUE.

In May 2012, the FERC issued an order on rehearing in the proceeding. The order may result in the reallocation of costs among the Utility operating companies, although there are still FERC decisions pending in other System Agreement proceedings that could affect the rough production cost equalization payments and receipts. The FERC directed Entergy, within 45 days of the issuance of a pending FERC order on rehearing regarding the functionalization of costs in the 2007 rate filing, to file a comprehensive bandwidth recalculation report showing updated payments and receipts in the 2007 rate filing proceeding. The May 2012 FERC order also denied Entergy's request for rehearing regarding the AmerenUE contract and ordered Entergy Arkansas to refund to AmerenUE the rough production cost equalization payments collected from AmerenUE. Under the terms of the FERC's order a refund of $30.6 million, including interest, was made in June 2012. Entergy and the LPSC appealed certain aspects of the FERC's decisions to the U.S. Court of Appeals for the D.C. Circuit. On December 7, 2012, the D.C. Circuit dismissed Entergy's petition for review as premature because Entergy filed a rehearing request of the May 2012 FERC order and that rehearing request is still pending. The court also ordered that the LPSC's appeal be held in abeyance and that the parties file motions to govern further proceedings within 30 days of the FERC's completion of the ongoing "Entergy bandwidth proceedings."

2008 Rate Filing Based on Calendar Year 2007 Production Costs

Several parties intervened in the 2008 rate proceeding at the FERC, including the APSC, the LPSC, and AmerenUE, which have also filed protests. Several other parties, including the MPSC and the City Council, have intervened in the proceeding without filing a protest. In direct testimony filed on January 9, 2009, certain intervenors and also the FERC staff advocated a number of positions on issues that affect the level of production costs the individual Utility operating companies are permitted to reflect in the bandwidth calculation, including the level of depreciation and decommissioning expense for the nuclear and fossil-fueled generating facilities. The effect of these various positions would be to reallocate costs among the Utility operating companies. In addition, three issues were raised alleging imprudence by the Utility operating companies, including whether the Utility operating companies had properly reflected generating units' minimum operating levels for purposes of making unit commitment and dispatch decisions, whether Entergy Arkansas's sales to third parties from its retained share of the Grand Gulf nuclear facility were reasonable, prudent, and non-discriminatory, and whether Entergy Louisiana's long-term Evangeline gas purchase contract was prudent and reasonable.

The parties reached a partial settlement agreement of certain of the issues initially raised in this proceeding. The partial settlement agreement was conditioned on the FERC accepting the agreement without modification or condition, which the FERC did on August 24, 2009. A hearing on the remaining issues in the proceeding was completed in June 2009, and in September 2009 the ALJ issued an initial decision. The initial decision affirms Entergy's position in the filing, except for two issues that may result in a reallocation of costs among the Utility operating companies. In October 2011 the FERC issued an order on the ALJ's initial decision. The FERC's order resulted in a minor reallocation of payments/receipts among the Utility operating companies on one issue in the 2008 rate filing. Entergy made a compliance filing in December 2011 showing the updated payment/receipt amounts. The LPSC filed a protest in response to the compliance filing. On January 3, 2013, the FERC issued an order accepting Entergy's compliance filing. In the January 2013 order the FERC required Entergy to include interest on the recalculated bandwidth payment and receipt amounts for the period from June 1, 2008 until the date of the Entergy intra-system bill that will reflect the bandwidth recalculation amounts for calendar year 2007. On February 4, 2013, Entergy filed a request for rehearing of the FERC's ruling requiring interest.

2009 Rate Filing Based on Calendar Year 2008 Production Costs

Several parties intervened in the 2009 rate proceeding at the FERC, including the LPSC and Ameren, which have also filed protests. In July 2009 the FERC accepted Entergy's proposed rates for filing, effective June 1, 2009, subject to refund, and set the proceeding for hearing and settlement procedures. Settlement procedures were terminated and a hearing before the ALJ was held in April 2010. In August 2010 the ALJ issued an initial decision. The initial decision substantially affirms Entergy's position in the filing, except for one issue that may result in some reallocation of costs among the Utility operating companies. The LPSC, the FERC trial staff, and Entergy submitted briefs on exceptions in the proceeding. In May 2012 the FERC issued an order affirming the ALJ's initial decision, or finding certain issues in that decision moot. Rehearing and clarification of FERC's order have been requested.

2010 Rate Filing Based on Calendar Year 2009 Production Costs

In May 2010, Entergy filed with the FERC the 2010 rates in accordance with the FERC's orders in the System Agreement proceeding, and supplemented the filing in September 2010. Several parties intervened in the proceeding at the FERC, including the LPSC and the City Council, which have also filed protests. In July 2010 the FERC accepted Entergy's proposed rates for filing, effective June 1, 2010, subject to refund, and set the proceeding for hearing and settlement procedures. Settlement procedures have been terminated, and the ALJ scheduled hearings to begin in March 2011. Subsequently, in January 2011 the ALJ issued an order directing the parties and FERC Staff to show cause why this proceeding should not be stayed pending the issuance of FERC decisions in the prior production cost proceedings currently before the FERC on review. In March 2011 the ALJ issued an order placing this proceeding in abeyance.

2011 Rate Filing Based on Calendar Year 2010 Production Costs

In May 2011, Entergy filed with the FERC the 2011 rates in accordance with the FERC's orders in the System Agreement proceeding. Several parties intervened in the proceeding at the FERC, including the LPSC, which filed a protest as well. In July 2011 the FERC accepted Entergy's proposed rates for filing, effective June 1, 2011, subject to refund, set the proceeding for hearing procedures, and then held those procedures in abeyance pending FERC decisions in the prior production cost proceedings currently before the FERC on review.

2012 Rate Filing Based on Calendar Year 2011 Production Costs

In May 2012, Entergy filed with the FERC the 2012 rates in accordance with the FERC's orders in the System Agreement proceeding. Several parties intervened in the proceeding at the FERC, including the LPSC, which filed a protest as well. In August 2012 the FERC accepted Entergy's proposed rates for filing, effective June 2012, subject to refund, set the proceeding for hearing procedures, and then held those procedures in abeyance pending FERC decisions in prior production cost proceedings currently before the FERC on review.

Interruptible Load Proceeding

In April 2007, the U.S. Court of Appeals for the D.C. Circuit issued its opinion in the LPSC's appeal of the FERC's March 2004 and April 2005 orders related to the treatment under the System Agreement of the Utility operating companies' interruptible loads. In its opinion the D.C. Circuit concluded that the FERC (1) acted arbitrarily and capriciously by allowing the Utility operating companies to phase-in the effects of the elimination of the interruptible load over a 12-month period of time; (2) failed to adequately explain why refunds could not be ordered under Section 206(c) of the Federal Power Act; and (3) exercised appropriately its discretion to defer addressing the cost of sulfur dioxide allowances until a later time. The D.C. Circuit remanded the matter to the FERC for a more considered determination on the issue of refunds. The FERC issued its order on remand in September 2007, in which it directed Entergy to make a compliance filing removing all interruptible load from the computation of peak load responsibility commencing April 1, 2004 and to issue any necessary refunds to reflect this change. In addition, the order directed the Utility operating companies to make refunds for the period May 1995 through July 1996. In November 2007 the Utility operating companies filed a refund report describing the refunds to be issued pursuant to the FERC's orders. The LPSC filed a protest to the refund report in December 2007, and the Utility operating companies filed an answer to the protest in January 2008. The refunds were made in October 2008 by the Utility operating companies that owed refunds to the Utility operating companies that were due a refund under the decision. The APSC and the Utility operating companies appealed the FERC decisions to the D.C. Circuit. Because of its refund obligation to its customers as a result of this proceeding and a related LPSC proceeding, Entergy Louisiana recorded provisions during 2008 of approximately $16 million, including interest, for rate refunds. The refunds were made in the fourth quarter 2009.

Following the filing of petitioners' initial briefs, the FERC filed a motion requesting the D.C. Circuit hold the appeal of the FERC's decisions ordering refunds in the interruptible load proceeding in abeyance and remand the record to the FERC. The D.C. Circuit granted the FERC's unopposed motion in June 2009. In December 2009 the FERC established a paper hearing to determine whether the FERC had the authority and, if so, whether it would be appropriate to order refunds resulting from changes in the treatment of interruptible load in the allocation of capacity costs by the Utility operating companies. In August 2010 the FERC issued an order stating that it has the authority and refunds are appropriate. The APSC, MPSC, and Entergy requested rehearing of the FERC's decision. In June 2011 the FERC issued an order granting rehearing in part and denying rehearing in part, in which the FERC determined to invoke its discretion to deny refunds. The FERC held that in this case where "the Entergy system as a whole collected the proper level of revenue, but, as was later established, incorrectly allocated peak load responsibility among the various Entergy operating companies….the Commission will apply here our usual practice in such cases, invoking our equitable discretion to not order refunds, notwithstanding our authority to do so." The LPSC has requested rehearing of the FERC's June 2011 decision. On October 6, 2011 the FERC issued an "Order Establishing Paper Hearing" inviting parties that oppose refunds to file briefs within 30 days addressing the LPSC's argument that FERC precedent supports refunds under the circumstances present in this proceeding. Parties that favor refunds were then invited to file reply briefs within 21 days of the date that the initial briefs are due. Briefs were submitted and the matter is pending.

In September 2010, the FERC had issued an order setting the refund report filed in the proceeding in November 2007 for hearing and settlement judge procedures. In May 2011, Entergy filed a settlement agreement that resolved all issues relating to the refund report set for hearing. In June 2011 the settlement judge certified the settlement as uncontested and the settlement agreement is currently pending before the FERC. In July 2011, Entergy filed an amended/corrected refund report and a motion to defer action on the settlement agreement until after the FERC rules on the LPSC's rehearing request regarding the June 2011 decision denying refunds.

Prior to the FERC's June 2011 order on rehearing, Entergy Arkansas filed an application in November 2010 with the APSC for recovery of the refund that it paid. The APSC denied Entergy Arkansas's application, and also denied Entergy Arkansas's petition for rehearing. If the FERC were to order Entergy Arkansas to pay refunds on rehearing in the interruptible load proceeding the APSC's decision would trap FERC-approved costs at Entergy Arkansas with no regulatory-approved mechanism to recover them. In August 2011, Entergy Arkansas filed a complaint in the United States District Court for the Eastern District of Arkansas asking for a declaratory judgment that the rejection of Entergy Arkansas's application by the APSC is preempted by the Federal Power Act. The APSC filed a motion to dismiss the complaint. In April 2012 the United States district court dismissed Entergy Arkansas's complaint without prejudice stating that Entergy Arkansas's claim is not ripe for adjudication and that Entergy Arkansas did not have standing to bring suit at this time.

Entergy Arkansas Opportunity Sales Proceeding

In June 2009, the LPSC filed a complaint requesting that the FERC determine that certain of Entergy Arkansas's sales of electric energy to third parties: (a) violated the provisions of the System Agreement that allocate the energy generated by Entergy System resources, (b) imprudently denied the Entergy System and its ultimate consumers the benefits of low-cost Entergy System generating capacity, and (c) violated the provision of the System Agreement that prohibits sales to third parties by individual companies absent an offer of a right-of-first-refusal to other Utility operating companies. The LPSC's complaint challenges sales made beginning in 2002 and requests refunds. On July 20, 2009, the Utility operating companies filed a response to the complaint requesting that the FERC dismiss the complaint on the merits without hearing because the LPSC has failed to meet its burden of showing any violation of the System Agreement and failed to produce any evidence of imprudent action by the Entergy System. In their response, the Utility operating companies explained that the System Agreement clearly contemplates that the Utility operating companies may make sales to third parties for their own account, subject to the requirement that those sales be included in the load (or load shape) for the applicable Utility operating company. The response further explains that the FERC already has determined that Entergy Arkansas's short-term wholesale sales did not trigger the "right-of-first-refusal" provision of the System Agreement. While the D.C. Circuit recently determined that the "right-of-first-refusal" issue was not properly before the FERC at the time of its earlier decision on the issue, the LPSC has raised no additional claims or facts that would warrant the FERC reaching a different conclusion.

The LPSC filed direct testimony in the proceeding alleging, among other things, (1) that Entergy violated the System Agreement by permitting Entergy Arkansas to make non-requirements sales to non-affiliated third parties rather than making such energy available to the other Utility operating companies' customers; and (2) that over the period 2000 - 2009, these non-requirements sales caused harm to the Utility operating companies' customers and these customers should be compensated for this harm by Entergy. In subsequent testimony, the LPSC modified its original damages claim in favor of quantifying damages by re-running intra-system bills. The Utility operating companies believe the LPSC's allegations are without merit. A hearing in the matter was held in August 2010.

In December 2010, the ALJ issued an initial decision. The ALJ found that the System Agreement allowed for Entergy Arkansas to make the sales to third parties but concluded that the sales should be accounted for in the same manner as joint account sales. The ALJ concluded that "shareholders" should make refunds of the damages to the Utility operating companies, along with interest. Entergy disagreed with several aspects of the ALJ's initial decision and in January 2011 filed with the FERC exceptions to the decision.

The FERC issued a decision in June 2012 and held that, while the System Agreement is ambiguous, it does provide authority for individual Utility operating companies to make opportunity sales for their own account and Entergy Arkansas made and priced these sales in good faith. The FERC found, however, that the System Agreement does not provide authority for an individual Utility operating company to allocate the energy associated with such opportunity sales as part of its load, but provides a different allocation authority. The FERC further found that the after-the-fact accounting methodology used to allocate the energy used to supply the sales was inconsistent with the System Agreement. Quantifying the effect of the FERC's decision will require re-running intra-system bills for a ten-year period, and the FERC in its decision established further hearing procedures to determine the calculation of the effects. In July 2012, Entergy and the LPSC filed requests for rehearing of the FERC's June 2012 decision, which are pending with the FERC.

As required by the procedural schedule established in the calculation proceeding, Entergy filed its direct testimony that included a proposed illustrative re-run, consistent with the directives in FERC's order, of intra-system bills for 2003, 2004, and 2006, the three years with the highest volume of opportunity sales. Entergy's proposed illustrative re-run of intra-system bills shows that the potential cost for Entergy Arkansas would be up to $12 million for the years 2003, 2004, and 2006, and the potential benefit would be significantly less than that for each of the other Utility operating companies. Entergy's proposed illustrative rerun of the intra-system bills also shows an offsetting potential benefit to Entergy Arkansas for the years 2003, 2004, and 2006 resulting from the effects of the FERC's order on System Agreement Service Schedules MSS-1, MSS-2, and MSS-3, and the potential offsetting cost would be significantly less than that for each of the other Utility operating companies. Entergy provided to the LPSC an illustrative intra-system bill recalculation as specified by the LPSC for the years 2003, 2004, and 2006, and the LPSC then filed answering testimony in December 2012. In its testimony the LPSC claims that the damages that should be paid by Entergy Arkansas to the Utility operating company's customers for 2003, 2004, and 2006 are $42 million to Entergy Gulf States, Inc., $7 million to Entergy Louisiana, $23 million to Entergy Mississippi, and $4 million to Entergy New Orleans; and that Entergy Arkansas "shareholders" should pay Entergy Arkansas customers $34 million. The FERC staff and certain intervenors filed direct and answering testimony in February 2013. A hearing is scheduled for May 2013, and the ALJ's initial decision on the calculation of the effects is due by August 28, 2013.

Storm Cost Recovery Filings with Retail Regulators

Entergy Arkansas

Entergy Arkansas January 2009 Ice Storm

In January 2009 a severe ice storm caused significant damage to Entergy Arkansas's transmission and distribution lines, equipment, poles, and other facilities. A law was enacted in April 2009 in Arkansas that authorizes securitization of storm damage restoration costs. In June 2010 the APSC issued a financing order authorizing the issuance of approximately $126.3 million in storm cost recovery bonds, which includes carrying costs of $11.5 million and $4.6 million of up-front financing costs. See Note 5 to the financial statements for a discussion of the August 2010 issuance of the securitization bonds.

Entergy Arkansas December 2012 Winter Storm

In December 2012 a severe winter storm consisting of ice, snow, and high winds caused significant damage to Entergy Arkansas's distribution lines, equipment, poles, and other facilities. Total restoration costs for the repair and/or replacement of Entergy Arkansas's electrical facilities in areas damaged from the winter storm are estimated to be in the range of $55 million to $65 million. Entergy Arkansas recorded accruals for the estimated costs incurred that were necessary to return customers to service. Entergy Arkansas recorded corresponding regulatory assets of approximately $21 million and construction work in progress of approximately $37 million. Entergy Arkansas recorded the regulatory assets in accordance with its accounting policies and based on the historic treatment of such costs in its service area because management believes that recovery through some form of regulatory mechanism is probable. Because Entergy Arkansas has not gone through the regulatory process regarding these storm costs, however, there is an element of risk, and Entergy Arkansas is unable to predict with certainty the degree of success it may have in its recovery initiatives, the amount of restoration costs that it may ultimately recover, or the timing of such recovery. Entergy Arkansas plans to present a cost recovery proposal to the APSC in a base rate case filing in March 2013.

Entergy Gulf States Louisiana and Entergy Louisiana

Hurricane Gustav and Hurricane Ike

In September 2008, Hurricane Gustav and Hurricane Ike caused catastrophic damage to Entergy's service territory. Entergy Gulf States Louisiana and Entergy Louisiana filed their Hurricane Gustav and Hurricane Ike storm cost recovery case with the LPSC in May 2009. In September 2009, Entergy Gulf States Louisiana and Entergy Louisiana and the Louisiana Utilities Restoration Corporation (LURC), an instrumentality of the State of Louisiana, filed with the LPSC an application requesting that the LPSC grant financing orders authorizing the financing of Entergy Gulf States Louisiana's and Entergy Louisiana's storm costs, storm reserves, and issuance costs pursuant to Act 55 of the Louisiana Regular Session of 2007 (Act 55 financings). Entergy Gulf States Louisiana's and Entergy Louisiana's Hurricane Katrina and Hurricane Rita storm costs were financed primarily by Act 55 financings, as discussed below. Entergy Gulf States Louisiana and Entergy Louisiana also filed an application requesting LPSC approval for ancillary issues including the mechanism to flow charges and Act 55 financing savings to customers via a Storm Cost Offset rider.

In December 2009, Entergy Gulf States Louisiana and Entergy Louisiana entered into a stipulation agreement with the LPSC Staff that provides for total recoverable costs of approximately $234 million for Entergy Gulf States Louisiana and $394 million for Entergy Louisiana, including carrying costs. Under this stipulation, Entergy Gulf States Louisiana agrees not to recover $4.4 million and Entergy Louisiana agrees not to recover $7.2 million of their storm restoration spending. The stipulation also permits replenishing Entergy Gulf States Louisiana's storm reserve in the amount of $90 million and Entergy Louisiana's storm reserve in the amount of $200 million when the Act 55 financings are accomplished. In March and April 2010, Entergy Gulf States Louisiana, Entergy Louisiana, and other parties to the proceeding filed with the LPSC an uncontested stipulated settlement that includes these terms and also includes Entergy Gulf States Louisiana's and Entergy Louisiana's proposals under the Act 55 financings, which includes a commitment to pass on to customers a minimum of $15.5 million and $27.75 million of customer benefits, respectively, through prospective annual rate reductions of $3.1 million and $5.55 million for five years. A stipulation hearing was held before the ALJ on April 13, 2010. On April 21, 2010, the LPSC approved the settlement and subsequently issued two financing orders and one ratemaking order intended to facilitate the implementation of the Act 55 financings. In June 2010 the Louisiana State Bond Commission approved the Act 55 financings.

In July 2010, the Louisiana Local Government Environmental Facilities and Community Development Authority (LCDA) issued $468.9 million in bonds under Act 55. From the $462.4 million of bond proceeds loaned by the LCDA to the LURC, the LURC deposited $200 million in a restricted escrow account as a storm damage reserve for Entergy Louisiana and transferred $262.4 million directly to Entergy Louisiana. From the bond proceeds received by Entergy Louisiana from the LURC, Entergy Louisiana used $262.4 million to acquire 2,624,297.11 Class B preferred, non-voting, membership interest units of Entergy Holdings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a 9% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2010, and the membership interests have a liquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after ten years under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which Entergy Holdings Company LLC is subject, including the requirement to maintain a net worth of at least $1 billion.

In July 2010, the LCDA issued another $244.1 million in bonds under Act 55. From the $240.3 million of bond proceeds loaned by the LCDA to the LURC, the LURC deposited $90 million in a restricted escrow account as a storm damage reserve for Entergy Gulf States Louisiana and transferred $150.3 million directly to Entergy Gulf States Louisiana. From the bond proceeds received by Entergy Gulf States Louisiana from the LURC, Entergy Gulf States Louisiana used $150.3 million to acquire 1,502,643.04 Class B preferred, non-voting, membership interest units of Entergy Holdings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a 9% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2010, and the membership interests have a liquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after ten years under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which Entergy Holdings Company LLC is subject, including the requirement to maintain a net worth of at least $1 billion.

Entergy, Entergy Gulf States Louisiana, and Entergy Louisiana do not report the bonds on their balance sheets because the bonds are the obligation of the LCDA, and there is no recourse against Entergy, Entergy Gulf States Louisiana or Entergy Louisiana in the event of a bond default. To service the bonds, Entergy Gulf States Louisiana and Entergy Louisiana collect a system restoration charge on behalf of the LURC, and remit the collections to the bond indenture trustee. Entergy Gulf States Louisiana and Entergy Louisiana do not report the collections as revenue because they are merely acting as the billing and collection agents for the state.

Hurricane Katrina and Hurricane Rita

In August and September 2005, Hurricanes Katrina and Rita caused catastrophic damage to large portions of the Utility's service territories in Louisiana, Mississippi, and Texas, including the effect of extensive flooding that resulted from levee breaks in and around the greater New Orleans area. The storms and flooding resulted in widespread power outages, significant damage to electric distribution, transmission, and generation and gas infrastructure, and the loss of sales and customers due to mandatory evacuations and the destruction of homes and businesses.

In March 2008, Entergy Gulf States Louisiana, Entergy Louisiana, and the Louisiana Utilities Restoration Corporation (LURC), an instrumentality of the State of Louisiana, filed at the LPSC an application requesting that the LPSC grant financing orders authorizing the financing of Entergy Gulf States Louisiana and Entergy Louisiana storm costs, storm reserves, and issuance costs pursuant to Act 55 of the Louisiana Legislature (Act 55 financings). The Act 55 financings are expected to produce additional customer benefits as compared to traditional securitization. Entergy Gulf States Louisiana and Entergy Louisiana also filed an application requesting LPSC approval for ancillary issues including the mechanism to flow charges and savings to customers via a Storm Cost Offset rider. On April 8, 2008, the Louisiana Public Facilities Authority (LPFA), which is the issuer of the bonds pursuant to the Act 55 financings, approved requests for the Act 55 financings. On April 10, 2008, Entergy Gulf States Louisiana and Entergy Louisiana and the LPSC Staff filed with the LPSC an uncontested stipulated settlement that includes Entergy Gulf States Louisiana and Entergy Louisiana's proposals under the Act 55 financings, which includes a commitment to pass on to customers a minimum of $10 million and $30 million of customer benefits, respectively, through prospective annual rate reductions of $2 million and $6 million for five years. On April 16, 2008, the LPSC approved the settlement and issued two financing orders and one ratemaking order intended to facilitate implementation of the Act 55 financings. In May 2008 the Louisiana State Bond Commission granted final approval of the Act 55 financings.

In July 2008, the LPFA issued $687.7 million in bonds under the aforementioned Act 55. From the $679 million of bond proceeds loaned by the LPFA to the LURC, the LURC deposited $152 million in a restricted escrow account as a storm damage reserve for Entergy Louisiana and transferred $527 million directly to Entergy Louisiana. From the bond proceeds received by Entergy Louisiana from the LURC, Entergy Louisiana invested $545 million, including $17.8 million that was withdrawn from the restricted escrow account as approved by the April 16, 2008 LPSC orders, in exchange for 5,449,861.85 Class A preferred, non-voting, membership interest units of Entergy Holdings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a 10% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2008 and have a liquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after ten years under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which Entergy Holdings Company LLC is subject, including the requirement to maintain a net worth of at least $1 billion.

In August 2008, the LPFA issued $278.4 million in bonds under the aforementioned Act 55. From the $274.7 million of bond proceeds loaned by the LPFA to the LURC, the LURC deposited $87 million in a restricted escrow account as a storm damage reserve for Entergy Gulf States Louisiana and transferred $187.7 million directly to Entergy Gulf States Louisiana. From the bond proceeds received by Entergy Gulf States Louisiana from the LURC, Entergy Gulf States Louisiana invested $189.4 million, including $1.7 million that was withdrawn from the restricted escrow account as approved by the April 16, 2008 LPSC orders, in exchange for 1,893,918.39 Class A preferred, non-voting, membership interest units of Entergy Holdings Company LLC that carry a 10% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2008 and have a liquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after ten years under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which Entergy Holdings Company LLC is subject, including the requirement to maintain a net worth of at least $1 billion. In February 2012, Entergy Gulf States Louisiana sold 500,000 of its Class A preferred membership units in Entergy Holdings Company LLC, a wholly-owned Entergy subsidiary, to a third party in exchange for $51 million plus accrued but unpaid distributions on the units. The 500,000 preferred membership units are mandatorily redeemable in January 2112.

Entergy, Entergy Gulf States Louisiana, and Entergy Louisiana do not report the bonds on their balance sheets because the bonds are the obligation of the LPFA, and there is no recourse against Entergy, Entergy Gulf States Louisiana or Entergy Louisiana in the event of a bond default. To service the bonds, Entergy Gulf States Louisiana and Entergy Louisiana collect a system restoration charge on behalf of the LURC, and remit the collections to the bond indenture trustee. Entergy, Entergy Gulf States Louisiana, and Entergy Louisiana do not report the collections as revenue because they are merely acting as the billing and collection agent for the state.

Entergy New Orleans

In December 2005, the U.S. Congress passed the Katrina Relief Bill, a hurricane aid package that included Community Development Block Grant (CDBG) funding (for the states affected by Hurricanes Katrina, Rita, and Wilma) that allowed state and local leaders to fund individual recovery priorities. In March 2007 the City Council certified that Entergy New Orleans incurred $205 million in storm-related costs through December 2006 that are eligible for CDBG funding under the state action plan. Entergy New Orleans received $180.8 million of CDBG funds in 2007 and $19.2 million in 2010.

In October 2006, the City Council approved a rate filing settlement agreement that, among other things, authorized a $75 million storm reserve for damage from future storms, which will be created over a ten-year period through a storm reserve rider that began in March 2007. These storm reserve funds are held in a restricted escrow account until needed in response to a storm. In November 2012, Entergy New Orleans withdrew $10 million from the storm reserve escrow account to partially offset the costs associated with Hurricane Isaac.

New Nuclear Generation Development Costs

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Gulf States Louisiana and Entergy Louisiana have been developing and are preserving a project option for new nuclear generation at River Bend. In March 2010, Entergy Gulf States Louisiana and Entergy Louisiana filed with the LPSC seeking approval to continue the limited development activities necessary to preserve an option to construct a new unit at River Bend. The testimony and legal briefs of the LPSC staff generally support the request of Entergy Gulf States Louisiana and Entergy Louisiana, although other parties filed briefs, without supporting testimony, in opposition to the request. At an evidentiary hearing in October 2011, Entergy Gulf States Louisiana, Entergy Louisiana, and the LPSC staff presented testimony in support of certification of activities to preserve an option for a new nuclear plant at River Bend. The ALJ recommended, however, that the LPSC decline the request of Entergy Gulf States Louisiana and Entergy Louisiana on the basis that the LPSC's rule on new nuclear development does not apply to activities to preserve an option to develop and on the further grounds that the companies improperly engaged in advanced preparation activities prior to certification. There has been no suggestion that the planning activities or costs incurred were imprudent. At its June 28, 2012 meeting the LPSC voted to uphold the ALJ's decision and directed that Entergy Gulf States Louisiana and Entergy Louisiana be permitted to seek recovery of these costs in their anticipated, upcoming rate case filings, fully reserving the LPSC's right to determine the recoverability of such costs in rates. On September 10, 2012, Entergy Gulf States Louisiana and Entergy Louisiana filed a petition for appeal and judicial review of the LPSC's order with the Louisiana Nineteenth Judicial District Court. A schedule for the appeal has not been established. In their rate cases filed in February 2013, Entergy Gulf States Louisiana and Entergy Louisiana request recovery of their new nuclear generation development costs over a ten-year amortization period, with the costs included in rate base.

Entergy Mississippi

Pursuant to the Mississippi Baseload Act and the Mississippi Public Utilities Act, Entergy Mississippi has been developing and is preserving a project option for new nuclear generation at Grand Gulf Nuclear Station. This project is in the early stages, and several issues remain to be addressed over time before significant additional capital would be committed to this project. In October 2010, Entergy Mississippi filed an application with the MPSC requesting that the MPSC determine that it is in the public interest to preserve the option to construct new nuclear generation at Grand Gulf and that the MPSC approve the deferral of Entergy Mississippi's costs incurred to date and in the future related to this project, including the accrual of AFUDC or similar carrying charges. In October 2011, Entergy Mississippi and the Mississippi Public Utilities Staff filed with the MPSC a joint stipulation that the MPSC approved in November 2011. The stipulation states that there should be a deferral of the $57 million of costs incurred through September 2011 in connection with planning, evaluation, monitoring, and other and related generation resource development activities for new nuclear generation at Grand Gulf. The costs shall be treated as a regulatory asset until the proceeding is resolved. The Mississippi Public Utilities Staff and Entergy Mississippi also agree that the MPSC should conduct a hearing to consider the relief requested by Entergy Mississippi in its application, including evidence regarding whether costs incurred in connection with planning, evaluation, monitoring, and other and related generation resource development activities for new nuclear generation at Grand Gulf were prudently incurred and are otherwise allowable. The Mississippi Public Utilities Staff and Entergy Mississippi further agree that such prudently incurred costs shall be recoverable in a manner to be determined by the MPSC. In the Stipulation, the Mississippi Public Utilities Staff and Entergy Mississippi agree that the development of a nuclear unit project option is consistent with the Mississippi Baseload Act. The Mississippi Public Utilities Staff and Entergy Mississippi further agree that the deferral of costs incurred in connection with planning, evaluation, monitoring, and other and related generation resource development activities for new nuclear generation at Grand Gulf also is consistent with the Mississippi Baseload Act. Entergy Mississippi will not accrue carrying charges or continue to accrue AFUDC on the costs, pending the outcome of the proceeding. Further proceedings before the MPSC have not been scheduled.

Texas Power Price Lawsuit

In August 2003, a lawsuit was filed in the district court of Chambers County, Texas by Texas residents on behalf of a purported class of the Texas retail customers of Entergy Gulf States, Inc. who were billed and paid for electric power from January 1, 1994 to the present. The named defendants include Entergy Corporation, Entergy Services, Entergy Power, Entergy Power Marketing Corp., and Entergy Arkansas. Entergy Gulf States, Inc. was not a named defendant, but was alleged to be a co-conspirator. The court granted the request of Entergy Gulf States, Inc. to intervene in the lawsuit to protect its interests.

Plaintiffs allege that the defendants implemented a "price gouging accounting scheme" to sell to plaintiffs and similarly situated utility customers higher priced power generated by the defendants while rejecting less expensive power offered from off-system suppliers. In particular, plaintiffs allege that the defendants manipulated and continue to manipulate the dispatch of generation so that power is purchased from affiliated expensive resources instead of buying cheaper off-system power.

Plaintiffs stated in their pleadings that customers in Texas were charged at least $57 million above prevailing market prices for power. Plaintiffs seek actual, consequential and exemplary damages, costs and attorneys' fees, and disgorgement of profits. The plaintiffs' experts have tendered a report calculating damages in a large range, from $153 million to $972 million in present value, under various scenarios. The Entergy defendants have tendered expert reports challenging the assumptions, methodologies, and conclusions of the plaintiffs' expert reports.

The case is pending in state district court, and in March 2012 the court found that the case met the requirements to be maintained as a class action under Texas law. On April 30, 2012, the court entered an order certifying the class. The defendants have appealed the order to the Texas Court of Appeals – First District. The appeal is pending and proceedings in district court are stayed until the appeal is resolved.

Entergy Arkansas [Member]

Rate And Regulatory Matters

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets

Other Regulatory Assets

Entergy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$422.6	$395.9
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
Grand Gulf fuel - non-current and power management rider - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	35.1	12.4
New nuclear generation development costs (Note 2)	56.8	56.8
Gas hedging costs - recovered through fuel rates	8.3	30.3
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	2,866.3	2,542.0
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 – Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	970.8	996.4
Removal costs - recovered through depreciation rates (Note 9) (b)	155.7	81.2
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Incremental ice storm costs - recovered through 2032	10.0	10.5
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Unamortized loss on reacquired debt - recovered over term of debt	95.9	108.8
Other	75.1	44.4
Total	$5,025.9	$4,636.9

Entergy Arkansas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$210.2	$187.7
Incremental ice storm costs - recovered through 2032	10.0	10.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	831.2	768.3
Grand Gulf fuel - non-current - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.3	4.6
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages - recovered either through securitization or retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	115.2	114.7
Unamortized loss on reacquired debt - recovered over term of debt	31.5	34.7
Other	6.2	4.0
Entergy Arkansas Total	$1,221.6	$1,126.9

Entergy Gulf States Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$6.1	$12.8
Gas hedging costs - recovered through fuel rates	2.6	8.6
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	300.5	231.3
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	18.9	10.2
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Unamortized loss on reacquired debt - recovered over term of debt	9.9	11.6
Other	13.1	4.1
Entergy Gulf States Louisiana Total	$409.7	$333.9

Entergy Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$136.9	$125.8
Gas hedging costs - recovered through fuel rates	3.4	12.4
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	475.6	427.9
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	74.5	9.7
Unamortized loss on reacquired debt - recovered over term of debt	17.6	20.0
Other	28.0	20.3
Entergy Louisiana Total	$913.6	$814.5

Entergy Mississippi

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$5.6	$5.3
Gas hedging costs - recovered through fuel rates	2.2	7.8
Removal costs - recovered through depreciation rates (Note 9) (b)	57.4	48.5
Grand Gulf fuel - non-current and power management rider- recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.8	7.8
New nuclear generation development costs (Note 2)	56.8	56.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	234.6	221.1
Provision for storm damages - recovered through retail rates	9.2	30.7
Unamortized loss on reacquired debt - recovered over term of debt	9.6	10.7
Other	8.3	4.7
Entergy Mississippi Total	$401.5	$393.4

Entergy New Orleans

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$3.6	$3.4
Removal costs - recovered through depreciation rates (Note 9) (b)	29.9	16.3
Gas hedging costs - recovered through fuel rates	-	1.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	134.6	127.6
Provision for storm damages, including hurricane costs - recovered through insurance proceeds and retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	15.1	8.6
Unamortized loss on reacquired debt - recovered over term of debt	2.3	2.6
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Other	5.5	5.9
Entergy New Orleans Total	$202.0	$178.8

Entergy Texas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$1.2	$1.3
Removal costs - recovered through depreciation rates (Note 9) (b)	11.5	4.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	258.8	244.9
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	737.9	822.5
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Unamortized loss on reacquired debt - recovered over term of debt	9.4	10.8
Other	13.6	4.9
Entergy Texas Total	$1,114.5	$1,178.1

System Energy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$58.9	$59.6
Removal costs - recovered through depreciation rates (Note 9) (b)	56.8	11.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Other Postretirement Benefits) (b)	198.2	197.6
Unamortized loss on reacquired debt - recovered over term of debt	15.6	18.2
Other	0.6	0.6
System Energy Total	$330.1	$287.8

(a)

(b)

Does not earn a return on investment, but is offset by related liabilities.

Hurricane Isaac

Correction of Regulatory Asset for Income Taxes


	Years Ended December 31,
	2011		2010
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Income Statement
Income taxes	$88,313	$89,736	$75,878	$92,297
Net income	$203,027	$201,604	$190,738	$174,319
Earnings applicable to common equity	$202,202	$200,779	$189,911	$173,492

Statement of Cash Flows
Net income	$203,027	$201,604	$190,738	$174,319
Deferred income taxes, investment tax credits, and non-current taxes accrued	($6,268)	($4,845)	$87,920	$104,339
Changes in other regulatory assets	($80,027)	($77,713)	$114,528	$141,216
Other operating activities	($35,248)	($37,562)	$30,717	$4,029



	December 31, 2011
	As previously reported	As corrected

Balance Sheet
Regulatory asset for income taxes - net	$249,058	$173,724
Accumulated deferred income taxes - current	$5,427	$5,107
Accumulated deferred income taxes and taxes accrued	$1,397,230	$1,368,563
Member's equity	$1,439,733	$1,393,386


	Years Ended December 31, 2011 and 2010
	Member's Equity		Total Equity
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Statement of Changes in Equity
Balance at December 31, 2009	$1,473,930	$1,445,425	$1,441,759	$1,413,254
2010 Net income	$190,738	$174,319	$190,738	$174,319
Balance at December 31, 2010	$1,539,517	$1,494,593	$1,509,213	$1,464,289
2011 Net income	$203,027	$201,604	$203,027	$201,604
Balance at December 31, 2011	$1,439,733	$1,393,386	$1,380,123	$1,333,776

Fuel and purchased power cost recovery

	2012	2011
	(In Millions)

Entergy Arkansas	$97.3	$209.8
Entergy Gulf States Louisiana (a)	$99.2	$2.9
Entergy Louisiana (a)	$94.6	$1.5
Entergy Mississippi	$26.5	($15.8)
Entergy New Orleans (a)	$1.9	($7.5)
Entergy Texas	($93.3)	($64.7)

(a)

Entergy Arkansas

Production Cost Allocation Rider

Energy Cost Recovery Rider

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Mississippi Attorney General Complaint

Entergy New Orleans

Entergy Texas

Retail Rate Proceedings

Filings with the APSC (Entergy Arkansas)

Retail Rates

2009 Base Rate Filing

2013 Base Rate Filing

Filings with the LPSC

Retail Rates - Electric

(Entergy Gulf States Louisiana)

· authorization to increase the revenue it collects from customers by approximately $28 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to increase the revenue it collects from customers by approximately $24 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Gulf States Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

(Entergy Louisiana)

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Retail Rates - Gas (Entergy Gulf States Louisiana)

Filings with the MPSC (Entergy Mississippi)

Formula Rate Plan Filings

Filings with the City Council (Entergy New Orleans)

Formula Rate Plan

Filings with the PUCT and Texas Cities (Entergy Texas)

Retail Rates

2009 Rate Case

2011 Rate Case

In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. The rate case also proposed a purchased power recovery rider. On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the current rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas's recovery of purchased power capacity costs and Entergy Texas's proposal to defer its MISO transition expenses. In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. A hearing was held in late-April through early-May 2012.

In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. The order includes a finding that "a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital." The order also provides for increases in depreciation rates and the annual storm reserve accrual. The order also reduced Entergy Texas's proposed purchased power capacity costs, stating that they are not known and measureable; reduced Entergy Texas's regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates, and reduced Entergy's Texas's fuel reconciliation recovery by $4.0 million because it disagreed with the line-loss factor used in the calculation. After considering the progress of the proceeding in light of the PUCT order, Entergy Texas recorded in the third quarter 2012 an approximate $24 million charge to recognize that assets associated with Hurricane Rita, financially-based incentive compensation, and fuel recovery are no longer probable of recovery. Entergy Texas continues to believe that it is entitled to recover these prudently incurred costs, however, and it filed a motion for rehearing regarding these and several other issues in the PUCT's order on October 4, 2012. Several other parties have also filed motions for rehearing of the PUCT's order. The PUCT subsequently denied rehearing of substantive issues. Several parties, including Entergy Texas, have appealed the PUCT's order to the Travis County District Court.

System Agreement Cost Equalization Proceedings

· The System Agreement no longer roughly equalizes total production costs among the Utility operating companies.

· The remedy ordered by FERC in 2005 required no refunds and became effective based on calendar year 2006 production costs and the first reallocation payments were made in 2007.

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$156
Entergy Gulf States Louisiana	($75)
Entergy Louisiana	$-
Entergy Mississippi	($33)
Entergy New Orleans	($5)
Entergy Texas	($43)

Calendar Year 2012 Production Costs

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$-
Entergy Gulf States Louisiana	$-
Entergy Louisiana	$-
Entergy Mississippi	$-
Entergy New Orleans	($17)
Entergy Texas	$17

Rough Production Cost Equalization Rates

	2007 Pmts (Rcts)	2008 Pmts (Rcts)	2009 Pmts (Rcts)	2010 Pmts (Rcts)	2011 Pmts (Rcts)	2012 Pmts (Rcts)
(in millions)
Entergy Arkansas	$252	$252	$390	$41	$77	$41
Entergy Gulf States La.	($120)	($124)	($107)	$-	($12)	$-
Entergy Louisiana	($91)	($36)	($140)	($22)	$-	($41)
Entergy Mississippi	($41)	($20)	($24)	($19)	($40)	$-
Entergy New Orleans	$-	($7)	$-	$-	($25)	$-
Entergy Texas	($30)	($65)	($119)	$-	$-	$-

2007 Rate Filing Based on Calendar Year 2006 Production Costs

2008 Rate Filing Based on Calendar Year 2007 Production Costs

2009 Rate Filing Based on Calendar Year 2008 Production Costs

2010 Rate Filing Based on Calendar Year 2009 Production Costs

2011 Rate Filing Based on Calendar Year 2010 Production Costs

2012 Rate Filing Based on Calendar Year 2011 Production Costs

Interruptible Load Proceeding

Entergy Arkansas Opportunity Sales Proceeding

Storm Cost Recovery Filings with Retail Regulators

Entergy Arkansas

Entergy Arkansas January 2009 Ice Storm

Entergy Arkansas December 2012 Winter Storm

Entergy Gulf States Louisiana and Entergy Louisiana

Hurricane Gustav and Hurricane Ike

Hurricane Katrina and Hurricane Rita

Entergy New Orleans

New Nuclear Generation Development Costs

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Texas Power Price Lawsuit

Entergy Gulf States Louisiana [Member]

Rate And Regulatory Matters

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets

Other Regulatory Assets

Entergy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$422.6	$395.9
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
Grand Gulf fuel - non-current and power management rider - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	35.1	12.4
New nuclear generation development costs (Note 2)	56.8	56.8
Gas hedging costs - recovered through fuel rates	8.3	30.3
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	2,866.3	2,542.0
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 – Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	970.8	996.4
Removal costs - recovered through depreciation rates (Note 9) (b)	155.7	81.2
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Incremental ice storm costs - recovered through 2032	10.0	10.5
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Unamortized loss on reacquired debt - recovered over term of debt	95.9	108.8
Other	75.1	44.4
Total	$5,025.9	$4,636.9

Entergy Arkansas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$210.2	$187.7
Incremental ice storm costs - recovered through 2032	10.0	10.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	831.2	768.3
Grand Gulf fuel - non-current - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.3	4.6
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages - recovered either through securitization or retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	115.2	114.7
Unamortized loss on reacquired debt - recovered over term of debt	31.5	34.7
Other	6.2	4.0
Entergy Arkansas Total	$1,221.6	$1,126.9

Entergy Gulf States Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$6.1	$12.8
Gas hedging costs - recovered through fuel rates	2.6	8.6
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	300.5	231.3
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	18.9	10.2
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Unamortized loss on reacquired debt - recovered over term of debt	9.9	11.6
Other	13.1	4.1
Entergy Gulf States Louisiana Total	$409.7	$333.9

Entergy Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$136.9	$125.8
Gas hedging costs - recovered through fuel rates	3.4	12.4
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	475.6	427.9
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	74.5	9.7
Unamortized loss on reacquired debt - recovered over term of debt	17.6	20.0
Other	28.0	20.3
Entergy Louisiana Total	$913.6	$814.5

Entergy Mississippi

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$5.6	$5.3
Gas hedging costs - recovered through fuel rates	2.2	7.8
Removal costs - recovered through depreciation rates (Note 9) (b)	57.4	48.5
Grand Gulf fuel - non-current and power management rider- recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.8	7.8
New nuclear generation development costs (Note 2)	56.8	56.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	234.6	221.1
Provision for storm damages - recovered through retail rates	9.2	30.7
Unamortized loss on reacquired debt - recovered over term of debt	9.6	10.7
Other	8.3	4.7
Entergy Mississippi Total	$401.5	$393.4

Entergy New Orleans

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$3.6	$3.4
Removal costs - recovered through depreciation rates (Note 9) (b)	29.9	16.3
Gas hedging costs - recovered through fuel rates	-	1.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	134.6	127.6
Provision for storm damages, including hurricane costs - recovered through insurance proceeds and retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	15.1	8.6
Unamortized loss on reacquired debt - recovered over term of debt	2.3	2.6
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Other	5.5	5.9
Entergy New Orleans Total	$202.0	$178.8

Entergy Texas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$1.2	$1.3
Removal costs - recovered through depreciation rates (Note 9) (b)	11.5	4.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	258.8	244.9
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	737.9	822.5
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Unamortized loss on reacquired debt - recovered over term of debt	9.4	10.8
Other	13.6	4.9
Entergy Texas Total	$1,114.5	$1,178.1

System Energy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$58.9	$59.6
Removal costs - recovered through depreciation rates (Note 9) (b)	56.8	11.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Other Postretirement Benefits) (b)	198.2	197.6
Unamortized loss on reacquired debt - recovered over term of debt	15.6	18.2
Other	0.6	0.6
System Energy Total	$330.1	$287.8

(a)

(b)

Does not earn a return on investment, but is offset by related liabilities.

Hurricane Isaac

Correction of Regulatory Asset for Income Taxes


	Years Ended December 31,
	2011		2010
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Income Statement
Income taxes	$88,313	$89,736	$75,878	$92,297
Net income	$203,027	$201,604	$190,738	$174,319
Earnings applicable to common equity	$202,202	$200,779	$189,911	$173,492

Statement of Cash Flows
Net income	$203,027	$201,604	$190,738	$174,319
Deferred income taxes, investment tax credits, and non-current taxes accrued	($6,268)	($4,845)	$87,920	$104,339
Changes in other regulatory assets	($80,027)	($77,713)	$114,528	$141,216
Other operating activities	($35,248)	($37,562)	$30,717	$4,029



	December 31, 2011
	As previously reported	As corrected

Balance Sheet
Regulatory asset for income taxes - net	$249,058	$173,724
Accumulated deferred income taxes - current	$5,427	$5,107
Accumulated deferred income taxes and taxes accrued	$1,397,230	$1,368,563
Member's equity	$1,439,733	$1,393,386


	Years Ended December 31, 2011 and 2010
	Member's Equity		Total Equity
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Statement of Changes in Equity
Balance at December 31, 2009	$1,473,930	$1,445,425	$1,441,759	$1,413,254
2010 Net income	$190,738	$174,319	$190,738	$174,319
Balance at December 31, 2010	$1,539,517	$1,494,593	$1,509,213	$1,464,289
2011 Net income	$203,027	$201,604	$203,027	$201,604
Balance at December 31, 2011	$1,439,733	$1,393,386	$1,380,123	$1,333,776

Fuel and purchased power cost recovery

	2012	2011
	(In Millions)

Entergy Arkansas	$97.3	$209.8
Entergy Gulf States Louisiana (a)	$99.2	$2.9
Entergy Louisiana (a)	$94.6	$1.5
Entergy Mississippi	$26.5	($15.8)
Entergy New Orleans (a)	$1.9	($7.5)
Entergy Texas	($93.3)	($64.7)

(a)

Entergy Arkansas

Production Cost Allocation Rider

Energy Cost Recovery Rider

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Mississippi Attorney General Complaint

Entergy New Orleans

Entergy Texas

Retail Rate Proceedings

Filings with the APSC (Entergy Arkansas)

Retail Rates

2009 Base Rate Filing

2013 Base Rate Filing

Filings with the LPSC

Retail Rates - Electric

(Entergy Gulf States Louisiana)

· authorization to increase the revenue it collects from customers by approximately $28 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to increase the revenue it collects from customers by approximately $24 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Gulf States Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

(Entergy Louisiana)

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Retail Rates - Gas (Entergy Gulf States Louisiana)

Filings with the MPSC (Entergy Mississippi)

Formula Rate Plan Filings

Filings with the City Council (Entergy New Orleans)

Formula Rate Plan

Filings with the PUCT and Texas Cities (Entergy Texas)

Retail Rates

2009 Rate Case

2011 Rate Case

In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. The rate case also proposed a purchased power recovery rider. On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the current rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas's recovery of purchased power capacity costs and Entergy Texas's proposal to defer its MISO transition expenses. In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. A hearing was held in late-April through early-May 2012.

In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. The order includes a finding that "a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital." The order also provides for increases in depreciation rates and the annual storm reserve accrual. The order also reduced Entergy Texas's proposed purchased power capacity costs, stating that they are not known and measureable; reduced Entergy Texas's regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates, and reduced Entergy's Texas's fuel reconciliation recovery by $4.0 million because it disagreed with the line-loss factor used in the calculation. After considering the progress of the proceeding in light of the PUCT order, Entergy Texas recorded in the third quarter 2012 an approximate $24 million charge to recognize that assets associated with Hurricane Rita, financially-based incentive compensation, and fuel recovery are no longer probable of recovery. Entergy Texas continues to believe that it is entitled to recover these prudently incurred costs, however, and it filed a motion for rehearing regarding these and several other issues in the PUCT's order on October 4, 2012. Several other parties have also filed motions for rehearing of the PUCT's order. The PUCT subsequently denied rehearing of substantive issues. Several parties, including Entergy Texas, have appealed the PUCT's order to the Travis County District Court.

System Agreement Cost Equalization Proceedings

· The System Agreement no longer roughly equalizes total production costs among the Utility operating companies.

· The remedy ordered by FERC in 2005 required no refunds and became effective based on calendar year 2006 production costs and the first reallocation payments were made in 2007.

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$156
Entergy Gulf States Louisiana	($75)
Entergy Louisiana	$-
Entergy Mississippi	($33)
Entergy New Orleans	($5)
Entergy Texas	($43)

Calendar Year 2012 Production Costs

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$-
Entergy Gulf States Louisiana	$-
Entergy Louisiana	$-
Entergy Mississippi	$-
Entergy New Orleans	($17)
Entergy Texas	$17

Rough Production Cost Equalization Rates

	2007 Pmts (Rcts)	2008 Pmts (Rcts)	2009 Pmts (Rcts)	2010 Pmts (Rcts)	2011 Pmts (Rcts)	2012 Pmts (Rcts)
(in millions)
Entergy Arkansas	$252	$252	$390	$41	$77	$41
Entergy Gulf States La.	($120)	($124)	($107)	$-	($12)	$-
Entergy Louisiana	($91)	($36)	($140)	($22)	$-	($41)
Entergy Mississippi	($41)	($20)	($24)	($19)	($40)	$-
Entergy New Orleans	$-	($7)	$-	$-	($25)	$-
Entergy Texas	($30)	($65)	($119)	$-	$-	$-

2007 Rate Filing Based on Calendar Year 2006 Production Costs

2008 Rate Filing Based on Calendar Year 2007 Production Costs

2009 Rate Filing Based on Calendar Year 2008 Production Costs

2010 Rate Filing Based on Calendar Year 2009 Production Costs

2011 Rate Filing Based on Calendar Year 2010 Production Costs

2012 Rate Filing Based on Calendar Year 2011 Production Costs

Interruptible Load Proceeding

Entergy Arkansas Opportunity Sales Proceeding

Storm Cost Recovery Filings with Retail Regulators

Entergy Arkansas

Entergy Arkansas January 2009 Ice Storm

Entergy Arkansas December 2012 Winter Storm

Entergy Gulf States Louisiana and Entergy Louisiana

Hurricane Gustav and Hurricane Ike

Hurricane Katrina and Hurricane Rita

Entergy New Orleans

New Nuclear Generation Development Costs

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Texas Power Price Lawsuit

Entergy Louisiana [Member]

Rate And Regulatory Matters

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets

Other Regulatory Assets

Entergy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$422.6	$395.9
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
Grand Gulf fuel - non-current and power management rider - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	35.1	12.4
New nuclear generation development costs (Note 2)	56.8	56.8
Gas hedging costs - recovered through fuel rates	8.3	30.3
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	2,866.3	2,542.0
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 – Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	970.8	996.4
Removal costs - recovered through depreciation rates (Note 9) (b)	155.7	81.2
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Incremental ice storm costs - recovered through 2032	10.0	10.5
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Unamortized loss on reacquired debt - recovered over term of debt	95.9	108.8
Other	75.1	44.4
Total	$5,025.9	$4,636.9

Entergy Arkansas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$210.2	$187.7
Incremental ice storm costs - recovered through 2032	10.0	10.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	831.2	768.3
Grand Gulf fuel - non-current - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.3	4.6
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages - recovered either through securitization or retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	115.2	114.7
Unamortized loss on reacquired debt - recovered over term of debt	31.5	34.7
Other	6.2	4.0
Entergy Arkansas Total	$1,221.6	$1,126.9

Entergy Gulf States Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$6.1	$12.8
Gas hedging costs - recovered through fuel rates	2.6	8.6
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	300.5	231.3
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	18.9	10.2
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Unamortized loss on reacquired debt - recovered over term of debt	9.9	11.6
Other	13.1	4.1
Entergy Gulf States Louisiana Total	$409.7	$333.9

Entergy Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$136.9	$125.8
Gas hedging costs - recovered through fuel rates	3.4	12.4
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	475.6	427.9
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	74.5	9.7
Unamortized loss on reacquired debt - recovered over term of debt	17.6	20.0
Other	28.0	20.3
Entergy Louisiana Total	$913.6	$814.5

Entergy Mississippi

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$5.6	$5.3
Gas hedging costs - recovered through fuel rates	2.2	7.8
Removal costs - recovered through depreciation rates (Note 9) (b)	57.4	48.5
Grand Gulf fuel - non-current and power management rider- recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.8	7.8
New nuclear generation development costs (Note 2)	56.8	56.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	234.6	221.1
Provision for storm damages - recovered through retail rates	9.2	30.7
Unamortized loss on reacquired debt - recovered over term of debt	9.6	10.7
Other	8.3	4.7
Entergy Mississippi Total	$401.5	$393.4

Entergy New Orleans

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$3.6	$3.4
Removal costs - recovered through depreciation rates (Note 9) (b)	29.9	16.3
Gas hedging costs - recovered through fuel rates	-	1.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	134.6	127.6
Provision for storm damages, including hurricane costs - recovered through insurance proceeds and retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	15.1	8.6
Unamortized loss on reacquired debt - recovered over term of debt	2.3	2.6
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Other	5.5	5.9
Entergy New Orleans Total	$202.0	$178.8

Entergy Texas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$1.2	$1.3
Removal costs - recovered through depreciation rates (Note 9) (b)	11.5	4.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	258.8	244.9
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	737.9	822.5
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Unamortized loss on reacquired debt - recovered over term of debt	9.4	10.8
Other	13.6	4.9
Entergy Texas Total	$1,114.5	$1,178.1

System Energy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$58.9	$59.6
Removal costs - recovered through depreciation rates (Note 9) (b)	56.8	11.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Other Postretirement Benefits) (b)	198.2	197.6
Unamortized loss on reacquired debt - recovered over term of debt	15.6	18.2
Other	0.6	0.6
System Energy Total	$330.1	$287.8

(a)

(b)

Does not earn a return on investment, but is offset by related liabilities.

Hurricane Isaac

Correction of Regulatory Asset for Income Taxes


	Years Ended December 31,
	2011		2010
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Income Statement
Income taxes	$88,313	$89,736	$75,878	$92,297
Net income	$203,027	$201,604	$190,738	$174,319
Earnings applicable to common equity	$202,202	$200,779	$189,911	$173,492

Statement of Cash Flows
Net income	$203,027	$201,604	$190,738	$174,319
Deferred income taxes, investment tax credits, and non-current taxes accrued	($6,268)	($4,845)	$87,920	$104,339
Changes in other regulatory assets	($80,027)	($77,713)	$114,528	$141,216
Other operating activities	($35,248)	($37,562)	$30,717	$4,029



	December 31, 2011
	As previously reported	As corrected

Balance Sheet
Regulatory asset for income taxes - net	$249,058	$173,724
Accumulated deferred income taxes - current	$5,427	$5,107
Accumulated deferred income taxes and taxes accrued	$1,397,230	$1,368,563
Member's equity	$1,439,733	$1,393,386


	Years Ended December 31, 2011 and 2010
	Member's Equity		Total Equity
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Statement of Changes in Equity
Balance at December 31, 2009	$1,473,930	$1,445,425	$1,441,759	$1,413,254
2010 Net income	$190,738	$174,319	$190,738	$174,319
Balance at December 31, 2010	$1,539,517	$1,494,593	$1,509,213	$1,464,289
2011 Net income	$203,027	$201,604	$203,027	$201,604
Balance at December 31, 2011	$1,439,733	$1,393,386	$1,380,123	$1,333,776

Fuel and purchased power cost recovery

	2012	2011
	(In Millions)

Entergy Arkansas	$97.3	$209.8
Entergy Gulf States Louisiana (a)	$99.2	$2.9
Entergy Louisiana (a)	$94.6	$1.5
Entergy Mississippi	$26.5	($15.8)
Entergy New Orleans (a)	$1.9	($7.5)
Entergy Texas	($93.3)	($64.7)

(a)

Entergy Arkansas

Production Cost Allocation Rider

Energy Cost Recovery Rider

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Mississippi Attorney General Complaint

Entergy New Orleans

Entergy Texas

Retail Rate Proceedings

Filings with the APSC (Entergy Arkansas)

Retail Rates

2009 Base Rate Filing

2013 Base Rate Filing

Filings with the LPSC

Retail Rates - Electric

(Entergy Gulf States Louisiana)

· authorization to increase the revenue it collects from customers by approximately $28 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to increase the revenue it collects from customers by approximately $24 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Gulf States Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

(Entergy Louisiana)

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Retail Rates - Gas (Entergy Gulf States Louisiana)

Filings with the MPSC (Entergy Mississippi)

Formula Rate Plan Filings

Filings with the City Council (Entergy New Orleans)

Formula Rate Plan

Filings with the PUCT and Texas Cities (Entergy Texas)

Retail Rates

2009 Rate Case

2011 Rate Case

In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. The rate case also proposed a purchased power recovery rider. On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the current rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas's recovery of purchased power capacity costs and Entergy Texas's proposal to defer its MISO transition expenses. In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. A hearing was held in late-April through early-May 2012.

In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. The order includes a finding that "a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital." The order also provides for increases in depreciation rates and the annual storm reserve accrual. The order also reduced Entergy Texas's proposed purchased power capacity costs, stating that they are not known and measureable; reduced Entergy Texas's regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates, and reduced Entergy's Texas's fuel reconciliation recovery by $4.0 million because it disagreed with the line-loss factor used in the calculation. After considering the progress of the proceeding in light of the PUCT order, Entergy Texas recorded in the third quarter 2012 an approximate $24 million charge to recognize that assets associated with Hurricane Rita, financially-based incentive compensation, and fuel recovery are no longer probable of recovery. Entergy Texas continues to believe that it is entitled to recover these prudently incurred costs, however, and it filed a motion for rehearing regarding these and several other issues in the PUCT's order on October 4, 2012. Several other parties have also filed motions for rehearing of the PUCT's order. The PUCT subsequently denied rehearing of substantive issues. Several parties, including Entergy Texas, have appealed the PUCT's order to the Travis County District Court.

System Agreement Cost Equalization Proceedings

· The System Agreement no longer roughly equalizes total production costs among the Utility operating companies.

· The remedy ordered by FERC in 2005 required no refunds and became effective based on calendar year 2006 production costs and the first reallocation payments were made in 2007.

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$156
Entergy Gulf States Louisiana	($75)
Entergy Louisiana	$-
Entergy Mississippi	($33)
Entergy New Orleans	($5)
Entergy Texas	($43)

Calendar Year 2012 Production Costs

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$-
Entergy Gulf States Louisiana	$-
Entergy Louisiana	$-
Entergy Mississippi	$-
Entergy New Orleans	($17)
Entergy Texas	$17

Rough Production Cost Equalization Rates

	2007 Pmts (Rcts)	2008 Pmts (Rcts)	2009 Pmts (Rcts)	2010 Pmts (Rcts)	2011 Pmts (Rcts)	2012 Pmts (Rcts)
(in millions)
Entergy Arkansas	$252	$252	$390	$41	$77	$41
Entergy Gulf States La.	($120)	($124)	($107)	$-	($12)	$-
Entergy Louisiana	($91)	($36)	($140)	($22)	$-	($41)
Entergy Mississippi	($41)	($20)	($24)	($19)	($40)	$-
Entergy New Orleans	$-	($7)	$-	$-	($25)	$-
Entergy Texas	($30)	($65)	($119)	$-	$-	$-

2007 Rate Filing Based on Calendar Year 2006 Production Costs

2008 Rate Filing Based on Calendar Year 2007 Production Costs

2009 Rate Filing Based on Calendar Year 2008 Production Costs

2010 Rate Filing Based on Calendar Year 2009 Production Costs

2011 Rate Filing Based on Calendar Year 2010 Production Costs

2012 Rate Filing Based on Calendar Year 2011 Production Costs

Interruptible Load Proceeding

Entergy Arkansas Opportunity Sales Proceeding

Storm Cost Recovery Filings with Retail Regulators

Entergy Arkansas

Entergy Arkansas January 2009 Ice Storm

Entergy Arkansas December 2012 Winter Storm

Entergy Gulf States Louisiana and Entergy Louisiana

Hurricane Gustav and Hurricane Ike

Hurricane Katrina and Hurricane Rita

Entergy New Orleans

New Nuclear Generation Development Costs

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Texas Power Price Lawsuit

Entergy Mississippi [Member]

Rate And Regulatory Matters

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets

Other Regulatory Assets

Entergy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$422.6	$395.9
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
Grand Gulf fuel - non-current and power management rider - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	35.1	12.4
New nuclear generation development costs (Note 2)	56.8	56.8
Gas hedging costs - recovered through fuel rates	8.3	30.3
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	2,866.3	2,542.0
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 – Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	970.8	996.4
Removal costs - recovered through depreciation rates (Note 9) (b)	155.7	81.2
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Incremental ice storm costs - recovered through 2032	10.0	10.5
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Unamortized loss on reacquired debt - recovered over term of debt	95.9	108.8
Other	75.1	44.4
Total	$5,025.9	$4,636.9

Entergy Arkansas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$210.2	$187.7
Incremental ice storm costs - recovered through 2032	10.0	10.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	831.2	768.3
Grand Gulf fuel - non-current - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.3	4.6
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages - recovered either through securitization or retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	115.2	114.7
Unamortized loss on reacquired debt - recovered over term of debt	31.5	34.7
Other	6.2	4.0
Entergy Arkansas Total	$1,221.6	$1,126.9

Entergy Gulf States Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$6.1	$12.8
Gas hedging costs - recovered through fuel rates	2.6	8.6
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	300.5	231.3
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	18.9	10.2
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Unamortized loss on reacquired debt - recovered over term of debt	9.9	11.6
Other	13.1	4.1
Entergy Gulf States Louisiana Total	$409.7	$333.9

Entergy Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$136.9	$125.8
Gas hedging costs - recovered through fuel rates	3.4	12.4
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	475.6	427.9
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	74.5	9.7
Unamortized loss on reacquired debt - recovered over term of debt	17.6	20.0
Other	28.0	20.3
Entergy Louisiana Total	$913.6	$814.5

Entergy Mississippi

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$5.6	$5.3
Gas hedging costs - recovered through fuel rates	2.2	7.8
Removal costs - recovered through depreciation rates (Note 9) (b)	57.4	48.5
Grand Gulf fuel - non-current and power management rider- recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.8	7.8
New nuclear generation development costs (Note 2)	56.8	56.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	234.6	221.1
Provision for storm damages - recovered through retail rates	9.2	30.7
Unamortized loss on reacquired debt - recovered over term of debt	9.6	10.7
Other	8.3	4.7
Entergy Mississippi Total	$401.5	$393.4

Entergy New Orleans

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$3.6	$3.4
Removal costs - recovered through depreciation rates (Note 9) (b)	29.9	16.3
Gas hedging costs - recovered through fuel rates	-	1.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	134.6	127.6
Provision for storm damages, including hurricane costs - recovered through insurance proceeds and retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	15.1	8.6
Unamortized loss on reacquired debt - recovered over term of debt	2.3	2.6
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Other	5.5	5.9
Entergy New Orleans Total	$202.0	$178.8

Entergy Texas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$1.2	$1.3
Removal costs - recovered through depreciation rates (Note 9) (b)	11.5	4.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	258.8	244.9
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	737.9	822.5
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Unamortized loss on reacquired debt - recovered over term of debt	9.4	10.8
Other	13.6	4.9
Entergy Texas Total	$1,114.5	$1,178.1

System Energy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$58.9	$59.6
Removal costs - recovered through depreciation rates (Note 9) (b)	56.8	11.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Other Postretirement Benefits) (b)	198.2	197.6
Unamortized loss on reacquired debt - recovered over term of debt	15.6	18.2
Other	0.6	0.6
System Energy Total	$330.1	$287.8

(a)

(b)

Does not earn a return on investment, but is offset by related liabilities.

Hurricane Isaac

Correction of Regulatory Asset for Income Taxes


	Years Ended December 31,
	2011		2010
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Income Statement
Income taxes	$88,313	$89,736	$75,878	$92,297
Net income	$203,027	$201,604	$190,738	$174,319
Earnings applicable to common equity	$202,202	$200,779	$189,911	$173,492

Statement of Cash Flows
Net income	$203,027	$201,604	$190,738	$174,319
Deferred income taxes, investment tax credits, and non-current taxes accrued	($6,268)	($4,845)	$87,920	$104,339
Changes in other regulatory assets	($80,027)	($77,713)	$114,528	$141,216
Other operating activities	($35,248)	($37,562)	$30,717	$4,029



	December 31, 2011
	As previously reported	As corrected

Balance Sheet
Regulatory asset for income taxes - net	$249,058	$173,724
Accumulated deferred income taxes - current	$5,427	$5,107
Accumulated deferred income taxes and taxes accrued	$1,397,230	$1,368,563
Member's equity	$1,439,733	$1,393,386


	Years Ended December 31, 2011 and 2010
	Member's Equity		Total Equity
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Statement of Changes in Equity
Balance at December 31, 2009	$1,473,930	$1,445,425	$1,441,759	$1,413,254
2010 Net income	$190,738	$174,319	$190,738	$174,319
Balance at December 31, 2010	$1,539,517	$1,494,593	$1,509,213	$1,464,289
2011 Net income	$203,027	$201,604	$203,027	$201,604
Balance at December 31, 2011	$1,439,733	$1,393,386	$1,380,123	$1,333,776

Fuel and purchased power cost recovery

	2012	2011
	(In Millions)

Entergy Arkansas	$97.3	$209.8
Entergy Gulf States Louisiana (a)	$99.2	$2.9
Entergy Louisiana (a)	$94.6	$1.5
Entergy Mississippi	$26.5	($15.8)
Entergy New Orleans (a)	$1.9	($7.5)
Entergy Texas	($93.3)	($64.7)

(a)

Entergy Arkansas

Production Cost Allocation Rider

Energy Cost Recovery Rider

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Mississippi Attorney General Complaint

Entergy New Orleans

Entergy Texas

Retail Rate Proceedings

Filings with the APSC (Entergy Arkansas)

Retail Rates

2009 Base Rate Filing

2013 Base Rate Filing

Filings with the LPSC

Retail Rates - Electric

(Entergy Gulf States Louisiana)

· authorization to increase the revenue it collects from customers by approximately $28 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to increase the revenue it collects from customers by approximately $24 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Gulf States Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

(Entergy Louisiana)

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Retail Rates - Gas (Entergy Gulf States Louisiana)

Filings with the MPSC (Entergy Mississippi)

Formula Rate Plan Filings

Filings with the City Council (Entergy New Orleans)

Formula Rate Plan

Filings with the PUCT and Texas Cities (Entergy Texas)

Retail Rates

2009 Rate Case

2011 Rate Case

In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. The rate case also proposed a purchased power recovery rider. On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the current rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas's recovery of purchased power capacity costs and Entergy Texas's proposal to defer its MISO transition expenses. In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. A hearing was held in late-April through early-May 2012.

In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. The order includes a finding that "a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital." The order also provides for increases in depreciation rates and the annual storm reserve accrual. The order also reduced Entergy Texas's proposed purchased power capacity costs, stating that they are not known and measureable; reduced Entergy Texas's regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates, and reduced Entergy's Texas's fuel reconciliation recovery by $4.0 million because it disagreed with the line-loss factor used in the calculation. After considering the progress of the proceeding in light of the PUCT order, Entergy Texas recorded in the third quarter 2012 an approximate $24 million charge to recognize that assets associated with Hurricane Rita, financially-based incentive compensation, and fuel recovery are no longer probable of recovery. Entergy Texas continues to believe that it is entitled to recover these prudently incurred costs, however, and it filed a motion for rehearing regarding these and several other issues in the PUCT's order on October 4, 2012. Several other parties have also filed motions for rehearing of the PUCT's order. The PUCT subsequently denied rehearing of substantive issues. Several parties, including Entergy Texas, have appealed the PUCT's order to the Travis County District Court.

System Agreement Cost Equalization Proceedings

· The System Agreement no longer roughly equalizes total production costs among the Utility operating companies.

· The remedy ordered by FERC in 2005 required no refunds and became effective based on calendar year 2006 production costs and the first reallocation payments were made in 2007.

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$156
Entergy Gulf States Louisiana	($75)
Entergy Louisiana	$-
Entergy Mississippi	($33)
Entergy New Orleans	($5)
Entergy Texas	($43)

Calendar Year 2012 Production Costs

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$-
Entergy Gulf States Louisiana	$-
Entergy Louisiana	$-
Entergy Mississippi	$-
Entergy New Orleans	($17)
Entergy Texas	$17

Rough Production Cost Equalization Rates

	2007 Pmts (Rcts)	2008 Pmts (Rcts)	2009 Pmts (Rcts)	2010 Pmts (Rcts)	2011 Pmts (Rcts)	2012 Pmts (Rcts)
(in millions)
Entergy Arkansas	$252	$252	$390	$41	$77	$41
Entergy Gulf States La.	($120)	($124)	($107)	$-	($12)	$-
Entergy Louisiana	($91)	($36)	($140)	($22)	$-	($41)
Entergy Mississippi	($41)	($20)	($24)	($19)	($40)	$-
Entergy New Orleans	$-	($7)	$-	$-	($25)	$-
Entergy Texas	($30)	($65)	($119)	$-	$-	$-

2007 Rate Filing Based on Calendar Year 2006 Production Costs

2008 Rate Filing Based on Calendar Year 2007 Production Costs

2009 Rate Filing Based on Calendar Year 2008 Production Costs

2010 Rate Filing Based on Calendar Year 2009 Production Costs

2011 Rate Filing Based on Calendar Year 2010 Production Costs

2012 Rate Filing Based on Calendar Year 2011 Production Costs

Interruptible Load Proceeding

Entergy Arkansas Opportunity Sales Proceeding

Storm Cost Recovery Filings with Retail Regulators

Entergy Arkansas

Entergy Arkansas January 2009 Ice Storm

Entergy Arkansas December 2012 Winter Storm

Entergy Gulf States Louisiana and Entergy Louisiana

Hurricane Gustav and Hurricane Ike

Hurricane Katrina and Hurricane Rita

Entergy New Orleans

New Nuclear Generation Development Costs

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Texas Power Price Lawsuit

Entergy New Orleans [Member]

Rate And Regulatory Matters

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets

Other Regulatory Assets

Entergy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$422.6	$395.9
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
Grand Gulf fuel - non-current and power management rider - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	35.1	12.4
New nuclear generation development costs (Note 2)	56.8	56.8
Gas hedging costs - recovered through fuel rates	8.3	30.3
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	2,866.3	2,542.0
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 – Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	970.8	996.4
Removal costs - recovered through depreciation rates (Note 9) (b)	155.7	81.2
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Incremental ice storm costs - recovered through 2032	10.0	10.5
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Unamortized loss on reacquired debt - recovered over term of debt	95.9	108.8
Other	75.1	44.4
Total	$5,025.9	$4,636.9

Entergy Arkansas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$210.2	$187.7
Incremental ice storm costs - recovered through 2032	10.0	10.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	831.2	768.3
Grand Gulf fuel - non-current - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.3	4.6
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages - recovered either through securitization or retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	115.2	114.7
Unamortized loss on reacquired debt - recovered over term of debt	31.5	34.7
Other	6.2	4.0
Entergy Arkansas Total	$1,221.6	$1,126.9

Entergy Gulf States Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$6.1	$12.8
Gas hedging costs - recovered through fuel rates	2.6	8.6
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	300.5	231.3
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	18.9	10.2
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Unamortized loss on reacquired debt - recovered over term of debt	9.9	11.6
Other	13.1	4.1
Entergy Gulf States Louisiana Total	$409.7	$333.9

Entergy Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$136.9	$125.8
Gas hedging costs - recovered through fuel rates	3.4	12.4
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	475.6	427.9
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	74.5	9.7
Unamortized loss on reacquired debt - recovered over term of debt	17.6	20.0
Other	28.0	20.3
Entergy Louisiana Total	$913.6	$814.5

Entergy Mississippi

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$5.6	$5.3
Gas hedging costs - recovered through fuel rates	2.2	7.8
Removal costs - recovered through depreciation rates (Note 9) (b)	57.4	48.5
Grand Gulf fuel - non-current and power management rider- recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.8	7.8
New nuclear generation development costs (Note 2)	56.8	56.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	234.6	221.1
Provision for storm damages - recovered through retail rates	9.2	30.7
Unamortized loss on reacquired debt - recovered over term of debt	9.6	10.7
Other	8.3	4.7
Entergy Mississippi Total	$401.5	$393.4

Entergy New Orleans

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$3.6	$3.4
Removal costs - recovered through depreciation rates (Note 9) (b)	29.9	16.3
Gas hedging costs - recovered through fuel rates	-	1.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	134.6	127.6
Provision for storm damages, including hurricane costs - recovered through insurance proceeds and retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	15.1	8.6
Unamortized loss on reacquired debt - recovered over term of debt	2.3	2.6
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Other	5.5	5.9
Entergy New Orleans Total	$202.0	$178.8

Entergy Texas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$1.2	$1.3
Removal costs - recovered through depreciation rates (Note 9) (b)	11.5	4.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	258.8	244.9
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	737.9	822.5
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Unamortized loss on reacquired debt - recovered over term of debt	9.4	10.8
Other	13.6	4.9
Entergy Texas Total	$1,114.5	$1,178.1

System Energy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$58.9	$59.6
Removal costs - recovered through depreciation rates (Note 9) (b)	56.8	11.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Other Postretirement Benefits) (b)	198.2	197.6
Unamortized loss on reacquired debt - recovered over term of debt	15.6	18.2
Other	0.6	0.6
System Energy Total	$330.1	$287.8

(a)

(b)

Does not earn a return on investment, but is offset by related liabilities.

Hurricane Isaac

Correction of Regulatory Asset for Income Taxes


	Years Ended December 31,
	2011		2010
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Income Statement
Income taxes	$88,313	$89,736	$75,878	$92,297
Net income	$203,027	$201,604	$190,738	$174,319
Earnings applicable to common equity	$202,202	$200,779	$189,911	$173,492

Statement of Cash Flows
Net income	$203,027	$201,604	$190,738	$174,319
Deferred income taxes, investment tax credits, and non-current taxes accrued	($6,268)	($4,845)	$87,920	$104,339
Changes in other regulatory assets	($80,027)	($77,713)	$114,528	$141,216
Other operating activities	($35,248)	($37,562)	$30,717	$4,029



	December 31, 2011
	As previously reported	As corrected

Balance Sheet
Regulatory asset for income taxes - net	$249,058	$173,724
Accumulated deferred income taxes - current	$5,427	$5,107
Accumulated deferred income taxes and taxes accrued	$1,397,230	$1,368,563
Member's equity	$1,439,733	$1,393,386


	Years Ended December 31, 2011 and 2010
	Member's Equity		Total Equity
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Statement of Changes in Equity
Balance at December 31, 2009	$1,473,930	$1,445,425	$1,441,759	$1,413,254
2010 Net income	$190,738	$174,319	$190,738	$174,319
Balance at December 31, 2010	$1,539,517	$1,494,593	$1,509,213	$1,464,289
2011 Net income	$203,027	$201,604	$203,027	$201,604
Balance at December 31, 2011	$1,439,733	$1,393,386	$1,380,123	$1,333,776

Fuel and purchased power cost recovery

	2012	2011
	(In Millions)

Entergy Arkansas	$97.3	$209.8
Entergy Gulf States Louisiana (a)	$99.2	$2.9
Entergy Louisiana (a)	$94.6	$1.5
Entergy Mississippi	$26.5	($15.8)
Entergy New Orleans (a)	$1.9	($7.5)
Entergy Texas	($93.3)	($64.7)

(a)

Entergy Arkansas

Production Cost Allocation Rider

Energy Cost Recovery Rider

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Mississippi Attorney General Complaint

Entergy New Orleans

Entergy Texas

Retail Rate Proceedings

Filings with the APSC (Entergy Arkansas)

Retail Rates

2009 Base Rate Filing

2013 Base Rate Filing

Filings with the LPSC

Retail Rates - Electric

(Entergy Gulf States Louisiana)

· authorization to increase the revenue it collects from customers by approximately $28 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to increase the revenue it collects from customers by approximately $24 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Gulf States Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

(Entergy Louisiana)

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Retail Rates - Gas (Entergy Gulf States Louisiana)

Filings with the MPSC (Entergy Mississippi)

Formula Rate Plan Filings

Filings with the City Council (Entergy New Orleans)

Formula Rate Plan

Filings with the PUCT and Texas Cities (Entergy Texas)

Retail Rates

2009 Rate Case

2011 Rate Case

In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. The rate case also proposed a purchased power recovery rider. On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the current rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas's recovery of purchased power capacity costs and Entergy Texas's proposal to defer its MISO transition expenses. In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. A hearing was held in late-April through early-May 2012.

In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. The order includes a finding that "a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital." The order also provides for increases in depreciation rates and the annual storm reserve accrual. The order also reduced Entergy Texas's proposed purchased power capacity costs, stating that they are not known and measureable; reduced Entergy Texas's regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates, and reduced Entergy's Texas's fuel reconciliation recovery by $4.0 million because it disagreed with the line-loss factor used in the calculation. After considering the progress of the proceeding in light of the PUCT order, Entergy Texas recorded in the third quarter 2012 an approximate $24 million charge to recognize that assets associated with Hurricane Rita, financially-based incentive compensation, and fuel recovery are no longer probable of recovery. Entergy Texas continues to believe that it is entitled to recover these prudently incurred costs, however, and it filed a motion for rehearing regarding these and several other issues in the PUCT's order on October 4, 2012. Several other parties have also filed motions for rehearing of the PUCT's order. The PUCT subsequently denied rehearing of substantive issues. Several parties, including Entergy Texas, have appealed the PUCT's order to the Travis County District Court.

System Agreement Cost Equalization Proceedings

· The System Agreement no longer roughly equalizes total production costs among the Utility operating companies.

· The remedy ordered by FERC in 2005 required no refunds and became effective based on calendar year 2006 production costs and the first reallocation payments were made in 2007.

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$156
Entergy Gulf States Louisiana	($75)
Entergy Louisiana	$-
Entergy Mississippi	($33)
Entergy New Orleans	($5)
Entergy Texas	($43)

Calendar Year 2012 Production Costs

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$-
Entergy Gulf States Louisiana	$-
Entergy Louisiana	$-
Entergy Mississippi	$-
Entergy New Orleans	($17)
Entergy Texas	$17

Rough Production Cost Equalization Rates

	2007 Pmts (Rcts)	2008 Pmts (Rcts)	2009 Pmts (Rcts)	2010 Pmts (Rcts)	2011 Pmts (Rcts)	2012 Pmts (Rcts)
(in millions)
Entergy Arkansas	$252	$252	$390	$41	$77	$41
Entergy Gulf States La.	($120)	($124)	($107)	$-	($12)	$-
Entergy Louisiana	($91)	($36)	($140)	($22)	$-	($41)
Entergy Mississippi	($41)	($20)	($24)	($19)	($40)	$-
Entergy New Orleans	$-	($7)	$-	$-	($25)	$-
Entergy Texas	($30)	($65)	($119)	$-	$-	$-

2007 Rate Filing Based on Calendar Year 2006 Production Costs

2008 Rate Filing Based on Calendar Year 2007 Production Costs

2009 Rate Filing Based on Calendar Year 2008 Production Costs

2010 Rate Filing Based on Calendar Year 2009 Production Costs

2011 Rate Filing Based on Calendar Year 2010 Production Costs

2012 Rate Filing Based on Calendar Year 2011 Production Costs

Interruptible Load Proceeding

Entergy Arkansas Opportunity Sales Proceeding

Storm Cost Recovery Filings with Retail Regulators

Entergy Arkansas

Entergy Arkansas January 2009 Ice Storm

Entergy Arkansas December 2012 Winter Storm

Entergy Gulf States Louisiana and Entergy Louisiana

Hurricane Gustav and Hurricane Ike

Hurricane Katrina and Hurricane Rita

Entergy New Orleans

New Nuclear Generation Development Costs

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Texas Power Price Lawsuit

Entergy Texas [Member]

Rate And Regulatory Matters

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets

Other Regulatory Assets

Entergy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$422.6	$395.9
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
Grand Gulf fuel - non-current and power management rider - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	35.1	12.4
New nuclear generation development costs (Note 2)	56.8	56.8
Gas hedging costs - recovered through fuel rates	8.3	30.3
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	2,866.3	2,542.0
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 – Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	970.8	996.4
Removal costs - recovered through depreciation rates (Note 9) (b)	155.7	81.2
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Incremental ice storm costs - recovered through 2032	10.0	10.5
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Unamortized loss on reacquired debt - recovered over term of debt	95.9	108.8
Other	75.1	44.4
Total	$5,025.9	$4,636.9

Entergy Arkansas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$210.2	$187.7
Incremental ice storm costs - recovered through 2032	10.0	10.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	831.2	768.3
Grand Gulf fuel - non-current - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.3	4.6
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages - recovered either through securitization or retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	115.2	114.7
Unamortized loss on reacquired debt - recovered over term of debt	31.5	34.7
Other	6.2	4.0
Entergy Arkansas Total	$1,221.6	$1,126.9

Entergy Gulf States Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$6.1	$12.8
Gas hedging costs - recovered through fuel rates	2.6	8.6
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	300.5	231.3
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	18.9	10.2
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Unamortized loss on reacquired debt - recovered over term of debt	9.9	11.6
Other	13.1	4.1
Entergy Gulf States Louisiana Total	$409.7	$333.9

Entergy Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$136.9	$125.8
Gas hedging costs - recovered through fuel rates	3.4	12.4
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	475.6	427.9
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	74.5	9.7
Unamortized loss on reacquired debt - recovered over term of debt	17.6	20.0
Other	28.0	20.3
Entergy Louisiana Total	$913.6	$814.5

Entergy Mississippi

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$5.6	$5.3
Gas hedging costs - recovered through fuel rates	2.2	7.8
Removal costs - recovered through depreciation rates (Note 9) (b)	57.4	48.5
Grand Gulf fuel - non-current and power management rider- recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.8	7.8
New nuclear generation development costs (Note 2)	56.8	56.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	234.6	221.1
Provision for storm damages - recovered through retail rates	9.2	30.7
Unamortized loss on reacquired debt - recovered over term of debt	9.6	10.7
Other	8.3	4.7
Entergy Mississippi Total	$401.5	$393.4

Entergy New Orleans

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$3.6	$3.4
Removal costs - recovered through depreciation rates (Note 9) (b)	29.9	16.3
Gas hedging costs - recovered through fuel rates	-	1.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	134.6	127.6
Provision for storm damages, including hurricane costs - recovered through insurance proceeds and retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	15.1	8.6
Unamortized loss on reacquired debt - recovered over term of debt	2.3	2.6
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Other	5.5	5.9
Entergy New Orleans Total	$202.0	$178.8

Entergy Texas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$1.2	$1.3
Removal costs - recovered through depreciation rates (Note 9) (b)	11.5	4.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	258.8	244.9
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	737.9	822.5
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Unamortized loss on reacquired debt - recovered over term of debt	9.4	10.8
Other	13.6	4.9
Entergy Texas Total	$1,114.5	$1,178.1

System Energy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$58.9	$59.6
Removal costs - recovered through depreciation rates (Note 9) (b)	56.8	11.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Other Postretirement Benefits) (b)	198.2	197.6
Unamortized loss on reacquired debt - recovered over term of debt	15.6	18.2
Other	0.6	0.6
System Energy Total	$330.1	$287.8

(a)

(b)

Does not earn a return on investment, but is offset by related liabilities.

Hurricane Isaac

Correction of Regulatory Asset for Income Taxes


	Years Ended December 31,
	2011		2010
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Income Statement
Income taxes	$88,313	$89,736	$75,878	$92,297
Net income	$203,027	$201,604	$190,738	$174,319
Earnings applicable to common equity	$202,202	$200,779	$189,911	$173,492

Statement of Cash Flows
Net income	$203,027	$201,604	$190,738	$174,319
Deferred income taxes, investment tax credits, and non-current taxes accrued	($6,268)	($4,845)	$87,920	$104,339
Changes in other regulatory assets	($80,027)	($77,713)	$114,528	$141,216
Other operating activities	($35,248)	($37,562)	$30,717	$4,029



	December 31, 2011
	As previously reported	As corrected

Balance Sheet
Regulatory asset for income taxes - net	$249,058	$173,724
Accumulated deferred income taxes - current	$5,427	$5,107
Accumulated deferred income taxes and taxes accrued	$1,397,230	$1,368,563
Member's equity	$1,439,733	$1,393,386


	Years Ended December 31, 2011 and 2010
	Member's Equity		Total Equity
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Statement of Changes in Equity
Balance at December 31, 2009	$1,473,930	$1,445,425	$1,441,759	$1,413,254
2010 Net income	$190,738	$174,319	$190,738	$174,319
Balance at December 31, 2010	$1,539,517	$1,494,593	$1,509,213	$1,464,289
2011 Net income	$203,027	$201,604	$203,027	$201,604
Balance at December 31, 2011	$1,439,733	$1,393,386	$1,380,123	$1,333,776

Fuel and purchased power cost recovery

	2012	2011
	(In Millions)

Entergy Arkansas	$97.3	$209.8
Entergy Gulf States Louisiana (a)	$99.2	$2.9
Entergy Louisiana (a)	$94.6	$1.5
Entergy Mississippi	$26.5	($15.8)
Entergy New Orleans (a)	$1.9	($7.5)
Entergy Texas	($93.3)	($64.7)

(a)

Entergy Arkansas

Production Cost Allocation Rider

Energy Cost Recovery Rider

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Mississippi Attorney General Complaint

Entergy New Orleans

Entergy Texas

Retail Rate Proceedings

Filings with the APSC (Entergy Arkansas)

Retail Rates

2009 Base Rate Filing

2013 Base Rate Filing

Filings with the LPSC

Retail Rates - Electric

(Entergy Gulf States Louisiana)

· authorization to increase the revenue it collects from customers by approximately $28 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to increase the revenue it collects from customers by approximately $24 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Gulf States Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

(Entergy Louisiana)

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Retail Rates - Gas (Entergy Gulf States Louisiana)

Filings with the MPSC (Entergy Mississippi)

Formula Rate Plan Filings

Filings with the City Council (Entergy New Orleans)

Formula Rate Plan

Filings with the PUCT and Texas Cities (Entergy Texas)

Retail Rates

2009 Rate Case

2011 Rate Case

In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. The rate case also proposed a purchased power recovery rider. On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the current rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas's recovery of purchased power capacity costs and Entergy Texas's proposal to defer its MISO transition expenses. In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. A hearing was held in late-April through early-May 2012.

In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. The order includes a finding that "a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital." The order also provides for increases in depreciation rates and the annual storm reserve accrual. The order also reduced Entergy Texas's proposed purchased power capacity costs, stating that they are not known and measureable; reduced Entergy Texas's regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates, and reduced Entergy's Texas's fuel reconciliation recovery by $4.0 million because it disagreed with the line-loss factor used in the calculation. After considering the progress of the proceeding in light of the PUCT order, Entergy Texas recorded in the third quarter 2012 an approximate $24 million charge to recognize that assets associated with Hurricane Rita, financially-based incentive compensation, and fuel recovery are no longer probable of recovery. Entergy Texas continues to believe that it is entitled to recover these prudently incurred costs, however, and it filed a motion for rehearing regarding these and several other issues in the PUCT's order on October 4, 2012. Several other parties have also filed motions for rehearing of the PUCT's order. The PUCT subsequently denied rehearing of substantive issues. Several parties, including Entergy Texas, have appealed the PUCT's order to the Travis County District Court.

System Agreement Cost Equalization Proceedings

· The System Agreement no longer roughly equalizes total production costs among the Utility operating companies.

· The remedy ordered by FERC in 2005 required no refunds and became effective based on calendar year 2006 production costs and the first reallocation payments were made in 2007.

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$156
Entergy Gulf States Louisiana	($75)
Entergy Louisiana	$-
Entergy Mississippi	($33)
Entergy New Orleans	($5)
Entergy Texas	($43)

Calendar Year 2012 Production Costs

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$-
Entergy Gulf States Louisiana	$-
Entergy Louisiana	$-
Entergy Mississippi	$-
Entergy New Orleans	($17)
Entergy Texas	$17

Rough Production Cost Equalization Rates

	2007 Pmts (Rcts)	2008 Pmts (Rcts)	2009 Pmts (Rcts)	2010 Pmts (Rcts)	2011 Pmts (Rcts)	2012 Pmts (Rcts)
(in millions)
Entergy Arkansas	$252	$252	$390	$41	$77	$41
Entergy Gulf States La.	($120)	($124)	($107)	$-	($12)	$-
Entergy Louisiana	($91)	($36)	($140)	($22)	$-	($41)
Entergy Mississippi	($41)	($20)	($24)	($19)	($40)	$-
Entergy New Orleans	$-	($7)	$-	$-	($25)	$-
Entergy Texas	($30)	($65)	($119)	$-	$-	$-

2007 Rate Filing Based on Calendar Year 2006 Production Costs

2008 Rate Filing Based on Calendar Year 2007 Production Costs

2009 Rate Filing Based on Calendar Year 2008 Production Costs

2010 Rate Filing Based on Calendar Year 2009 Production Costs

2011 Rate Filing Based on Calendar Year 2010 Production Costs

2012 Rate Filing Based on Calendar Year 2011 Production Costs

Interruptible Load Proceeding

Entergy Arkansas Opportunity Sales Proceeding

Storm Cost Recovery Filings with Retail Regulators

Entergy Arkansas

Entergy Arkansas January 2009 Ice Storm

Entergy Arkansas December 2012 Winter Storm

Entergy Gulf States Louisiana and Entergy Louisiana

Hurricane Gustav and Hurricane Ike

Hurricane Katrina and Hurricane Rita

Entergy New Orleans

New Nuclear Generation Development Costs

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Texas Power Price Lawsuit

System Energy [Member]

Rate And Regulatory Matters

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets

Other Regulatory Assets

Entergy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$422.6	$395.9
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
Grand Gulf fuel - non-current and power management rider - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	35.1	12.4
New nuclear generation development costs (Note 2)	56.8	56.8
Gas hedging costs - recovered through fuel rates	8.3	30.3
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	2,866.3	2,542.0
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 – Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	970.8	996.4
Removal costs - recovered through depreciation rates (Note 9) (b)	155.7	81.2
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Incremental ice storm costs - recovered through 2032	10.0	10.5
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Unamortized loss on reacquired debt - recovered over term of debt	95.9	108.8
Other	75.1	44.4
Total	$5,025.9	$4,636.9

Entergy Arkansas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$210.2	$187.7
Incremental ice storm costs - recovered through 2032	10.0	10.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	831.2	768.3
Grand Gulf fuel - non-current - recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.3	4.6
Postretirement benefits - recovered through 2012 (Note 11 – Other Postretirement Benefits) (b)	-	2.4
Provision for storm damages - recovered either through securitization or retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	115.2	114.7
Unamortized loss on reacquired debt - recovered over term of debt	31.5	34.7
Other	6.2	4.0
Entergy Arkansas Total	$1,221.6	$1,126.9

Entergy Gulf States Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$6.1	$12.8
Gas hedging costs - recovered through fuel rates	2.6	8.6
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	300.5	231.3
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	18.9	10.2
Deferred capacity (Note 2 – Retail Rate Proceedings – Filings with the LPSC)	6.8	-
River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)	22.4	24.3
Spindletop gas storage facility - recovered through December 2032 (a)	29.4	31.0
Unamortized loss on reacquired debt - recovered over term of debt	9.9	11.6
Other	13.1	4.1
Entergy Gulf States Louisiana Total	$409.7	$333.9

Entergy Louisiana

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$136.9	$125.8
Gas hedging costs - recovered through fuel rates	3.4	12.4
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified Pension Plans) (b)	475.6	427.9
Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana Securitization Bonds - Little Gypsy)	177.6	198.4
Provision for storm damages, including hurricane costs - recovered through retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	74.5	9.7
Unamortized loss on reacquired debt - recovered over term of debt	17.6	20.0
Other	28.0	20.3
Entergy Louisiana Total	$913.6	$814.5

Entergy Mississippi

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$5.6	$5.3
Gas hedging costs - recovered through fuel rates	2.2	7.8
Removal costs - recovered through depreciation rates (Note 9) (b)	57.4	48.5
Grand Gulf fuel - non-current and power management rider- recovered through rate riders when rates are redetermined periodically (Note 2 – Fuel and purchased power cost recovery)	17.8	7.8
New nuclear generation development costs (Note 2)	56.8	56.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	234.6	221.1
Provision for storm damages - recovered through retail rates	9.2	30.7
Unamortized loss on reacquired debt - recovered over term of debt	9.6	10.7
Other	8.3	4.7
Entergy Mississippi Total	$401.5	$393.4

Entergy New Orleans

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$3.6	$3.4
Removal costs - recovered through depreciation rates (Note 9) (b)	29.9	16.3
Gas hedging costs - recovered through fuel rates	-	1.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	134.6	127.6
Provision for storm damages, including hurricane costs - recovered through insurance proceeds and retail rates (Note 2 - Hurricane Isaac and Storm Cost Recovery Filings with Retail Regulators)	15.1	8.6
Unamortized loss on reacquired debt - recovered over term of debt	2.3	2.6
Michoud plant maintenance – recovered over a 7-year period through September 2018	11.0	12.9
Other	5.5	5.9
Entergy New Orleans Total	$202.0	$178.8

Entergy Texas

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$1.2	$1.3
Removal costs - recovered through depreciation rates (Note 9) (b)	11.5	4.5
Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other Postretirement Benefits, and Non-Qualified Pension Plans) (b)	258.8	244.9
Provision for storm damages, including hurricane costs - recovered through securitization, insurance proceeds, and retail rates (Note 2 - Storm Cost Recovery Filings with Retail Regulators)	737.9	822.5
Transition to competition costs - recovered over a 15-year period through February 2021	82.1	89.2
Unamortized loss on reacquired debt - recovered over term of debt	9.4	10.8
Other	13.6	4.9
Entergy Texas Total	$1,114.5	$1,178.1

System Energy

	2012	2011
	(In Millions)
Asset Retirement Obligation - recovery dependent upon timing of decommissioning (Note 9) (b)	$58.9	$59.6
Removal costs - recovered through depreciation rates (Note 9) (b)	56.8	11.8
Pension & postretirement costs (Note 11 – Qualified Pension Plans and Other Postretirement Benefits) (b)	198.2	197.6
Unamortized loss on reacquired debt - recovered over term of debt	15.6	18.2
Other	0.6	0.6
System Energy Total	$330.1	$287.8

(a)

(b)

Does not earn a return on investment, but is offset by related liabilities.

Hurricane Isaac

Correction of Regulatory Asset for Income Taxes


	Years Ended December 31,
	2011		2010
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Income Statement
Income taxes	$88,313	$89,736	$75,878	$92,297
Net income	$203,027	$201,604	$190,738	$174,319
Earnings applicable to common equity	$202,202	$200,779	$189,911	$173,492

Statement of Cash Flows
Net income	$203,027	$201,604	$190,738	$174,319
Deferred income taxes, investment tax credits, and non-current taxes accrued	($6,268)	($4,845)	$87,920	$104,339
Changes in other regulatory assets	($80,027)	($77,713)	$114,528	$141,216
Other operating activities	($35,248)	($37,562)	$30,717	$4,029



	December 31, 2011
	As previously reported	As corrected

Balance Sheet
Regulatory asset for income taxes - net	$249,058	$173,724
Accumulated deferred income taxes - current	$5,427	$5,107
Accumulated deferred income taxes and taxes accrued	$1,397,230	$1,368,563
Member's equity	$1,439,733	$1,393,386


	Years Ended December 31, 2011 and 2010
	Member's Equity		Total Equity
	As previously reported	As corrected	As previously reported	As corrected
	(In Thousands)

Statement of Changes in Equity
Balance at December 31, 2009	$1,473,930	$1,445,425	$1,441,759	$1,413,254
2010 Net income	$190,738	$174,319	$190,738	$174,319
Balance at December 31, 2010	$1,539,517	$1,494,593	$1,509,213	$1,464,289
2011 Net income	$203,027	$201,604	$203,027	$201,604
Balance at December 31, 2011	$1,439,733	$1,393,386	$1,380,123	$1,333,776

Fuel and purchased power cost recovery

	2012	2011
	(In Millions)

Entergy Arkansas	$97.3	$209.8
Entergy Gulf States Louisiana (a)	$99.2	$2.9
Entergy Louisiana (a)	$94.6	$1.5
Entergy Mississippi	$26.5	($15.8)
Entergy New Orleans (a)	$1.9	($7.5)
Entergy Texas	($93.3)	($64.7)

(a)

Entergy Arkansas

Production Cost Allocation Rider

Energy Cost Recovery Rider

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Mississippi Attorney General Complaint

Entergy New Orleans

Entergy Texas

Retail Rate Proceedings

Filings with the APSC (Entergy Arkansas)

Retail Rates

2009 Base Rate Filing

2013 Base Rate Filing

Filings with the LPSC

Retail Rates - Electric

(Entergy Gulf States Louisiana)

· authorization to increase the revenue it collects from customers by approximately $28 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to increase the revenue it collects from customers by approximately $24 million;

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Gulf States Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

(Entergy Louisiana)

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement;

· authorization to implement a transmission cost recovery rider with a forward-looking test year and an annual true-up component; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

· an authorized return on common equity of 10.4%;

· authorization to increase depreciation rates embedded in the proposed revenue requirement; and,

· authorization to implement a three-year formula rate plan with a midpoint return on common equity of 10.4%, plus or minus 75 basis points (the deadband), that would provide a means for the annual re-setting of rates (commencing with calendar year 2013 as its first test year), that would include a mechanism to recover incremental transmission revenue requirement on the basis of a forward-looking test year as compared to the initial base year of 2014 with an annual true-up, that would retain the primary aspects of the prior formula rate plan, including a 60% to customers/40% to Entergy Louisiana sharing mechanism for earnings outside the deadband, and a capacity rider mechanism that would permit recovery of incremental capacity additions approved by the LPSC.

Retail Rates - Gas (Entergy Gulf States Louisiana)

Filings with the MPSC (Entergy Mississippi)

Formula Rate Plan Filings

Filings with the City Council (Entergy New Orleans)

Formula Rate Plan

Filings with the PUCT and Texas Cities (Entergy Texas)

Retail Rates

2009 Rate Case

2011 Rate Case

In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. The rate case also proposed a purchased power recovery rider. On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the current rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas's recovery of purchased power capacity costs and Entergy Texas's proposal to defer its MISO transition expenses. In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. A hearing was held in late-April through early-May 2012.

In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. The order includes a finding that "a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital." The order also provides for increases in depreciation rates and the annual storm reserve accrual. The order also reduced Entergy Texas's proposed purchased power capacity costs, stating that they are not known and measureable; reduced Entergy Texas's regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates, and reduced Entergy's Texas's fuel reconciliation recovery by $4.0 million because it disagreed with the line-loss factor used in the calculation. After considering the progress of the proceeding in light of the PUCT order, Entergy Texas recorded in the third quarter 2012 an approximate $24 million charge to recognize that assets associated with Hurricane Rita, financially-based incentive compensation, and fuel recovery are no longer probable of recovery. Entergy Texas continues to believe that it is entitled to recover these prudently incurred costs, however, and it filed a motion for rehearing regarding these and several other issues in the PUCT's order on October 4, 2012. Several other parties have also filed motions for rehearing of the PUCT's order. The PUCT subsequently denied rehearing of substantive issues. Several parties, including Entergy Texas, have appealed the PUCT's order to the Travis County District Court.

System Agreement Cost Equalization Proceedings

· The System Agreement no longer roughly equalizes total production costs among the Utility operating companies.

· The remedy ordered by FERC in 2005 required no refunds and became effective based on calendar year 2006 production costs and the first reallocation payments were made in 2007.

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$156
Entergy Gulf States Louisiana	($75)
Entergy Louisiana	$-
Entergy Mississippi	($33)
Entergy New Orleans	($5)
Entergy Texas	($43)

Calendar Year 2012 Production Costs

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$-
Entergy Gulf States Louisiana	$-
Entergy Louisiana	$-
Entergy Mississippi	$-
Entergy New Orleans	($17)
Entergy Texas	$17

Rough Production Cost Equalization Rates

	2007 Pmts (Rcts)	2008 Pmts (Rcts)	2009 Pmts (Rcts)	2010 Pmts (Rcts)	2011 Pmts (Rcts)	2012 Pmts (Rcts)
(in millions)
Entergy Arkansas	$252	$252	$390	$41	$77	$41
Entergy Gulf States La.	($120)	($124)	($107)	$-	($12)	$-
Entergy Louisiana	($91)	($36)	($140)	($22)	$-	($41)
Entergy Mississippi	($41)	($20)	($24)	($19)	($40)	$-
Entergy New Orleans	$-	($7)	$-	$-	($25)	$-
Entergy Texas	($30)	($65)	($119)	$-	$-	$-

2007 Rate Filing Based on Calendar Year 2006 Production Costs

2008 Rate Filing Based on Calendar Year 2007 Production Costs

2009 Rate Filing Based on Calendar Year 2008 Production Costs

2010 Rate Filing Based on Calendar Year 2009 Production Costs

2011 Rate Filing Based on Calendar Year 2010 Production Costs

2012 Rate Filing Based on Calendar Year 2011 Production Costs

Interruptible Load Proceeding

Entergy Arkansas Opportunity Sales Proceeding

Storm Cost Recovery Filings with Retail Regulators

Entergy Arkansas

Entergy Arkansas January 2009 Ice Storm

Entergy Arkansas December 2012 Winter Storm

Entergy Gulf States Louisiana and Entergy Louisiana

Hurricane Gustav and Hurricane Ike

Hurricane Katrina and Hurricane Rita

Entergy New Orleans

New Nuclear Generation Development Costs

Entergy Gulf States Louisiana and Entergy Louisiana

Entergy Mississippi

Texas Power Price Lawsuit