SECURITIES AND EXCHANGE COMMISSION
(Release No. 35-27725; 70-9757)
Entergy Mississippi, Inc.
Supplemental Order Authorizing Increase in Sale of Securities
September 24, 2003
Entergy Mississippi, Inc. ("EM"), Jackson, Mississippi, an electric utility subsidiary of Entergy Corporation ("Entergy"), a registered public utility holding company, has filed with the Securities and Exchange Commission ("Commission") a post-effective amendment ("Amendment") under sections 6(a) and 7 of the Public Utility Holding Company Act of 1935, as amended ("Act") and rule 53 under the Act, to an application-declaration previously filed under the Act. The Commission issued a notice of the Amendment on July 24, 2003 (HCAR No. 27702).
By order dated December 26, 2000 (HCAR No. 27317) ("2000 Order"), EM was authorized, among other things, to issue and sell up to $540 million of EM's first mortgage bonds ("Bonds") and/ or EM's debentures ("Debentures") through December 31, 2003 ("Authorization Period") with fees and commissions associated with the sale of Bonds or Debentures not to exceed 2% of the principal amount to be sold. By order dated October 2, 2002 (HCAR No. 27527) ("2002 Order"), EM was authorized to increase the amount of fees and commissions associated with the sale of Bonds or Debentures to 3.25% of the principal amount to be sold.
EM now proposes to increase the aggregate limit of Bonds and/or Debentures it may issue to $740 million through the Authorization Period under the same terms and conditions as those granted in the 2000 Order and the 2002 Order. EM states that the use of proceeds from the additional issuance will be used to prefund certain series of near-term maturing debt and refund certain series of longer-term maturing debt early.
EM states that Entergy currently meets all of the conditions of rule 53(a) except for clause (1). At June 30, 2003, Entergy's "aggregate investment," as defined in rule 53(a)(1), in "exempt wholesale generators" ("EWGs") or "foreign utility companies" ("FUCOs"), as those terms are defined in sections 32 and 33 of the Act, respectively, was approximately $2.23 billion or 54% of Entergy's consolidated retained earnings. EM further states that by order dated June 13, 2000 (HCAR No. 27184) ("June 2000 Order"), the Commission authorized Entergy to invest in EWGs and FUCOs in an aggregate amount of up to 100% of its consolidated retained earnings and asserts that Entergy's current investment of 54% of consolidated retained earnings meets this test. In addition, EM states that Entergy has complied, and will continue to comply, with the record keeping requirements of rule 53(a)(2), the limitation under rule 53(a)(3) of affiliate utility company personnel rendering services to Entergy's EWGs or FUCOs, and the requirements of rule 53(a)(4) concerning the submission of copies of certain filings under the Act to retail rate regulatory commissions. EM states that none of the circumstances described in rule 53(b) has occurred.
EM states that Entergy's investments in EWGs and FUCOs have not had any negative impact on any of Entergy's public utility subsidiaries since the June 2000 Order and, instead, Entergy's investments in EWGs and FUCOs have contributed positively to its overall earnings during the period since the Commission issued the June 2000 Order. EM states that as of March 31, 2000, the most recent calendar quarter preceding the June 2000 Order, Entergy's consolidated capitalization ratio was approximately 50.0% debt and approximately 50.0% equity. EM further states that as of June 30, 2003, Entergy's consolidated capitalization consisted of 49.7% equity and 50.3% debt. In addition, EM states that these ratios are within industry ranges set by the independent debt rating agencies for BBB-rated electric utility companies.
EM states that each of the considerations set forth in the June 2000 Order, in support of Entergy's assertion that its proposed level of investment in EWGs and FUCOs would not have an adverse impact on any Entergy operating utility subsidiaries or their ratepayers, or on the ability of interested state commissions to protect the utilities and their customers, continues to apply.
EM states that fees, commissions and expenses to be incurred, by EM, directly or indirectly, in connection with these activities are approximately $16,500. EM states that no state or federal commission, other than this Commission, has jurisdiction over the transaction proposed in the Amendment.
Due notice of the filing of this Amendment, as amended, has been given in the manner prescribed in rule 23 under the Act, and no hearing has been requested of, or ordered by, the Commission. On the basis of the facts in the record, it is found that the applicable standards of the Act and rules under the Act are satisfied, and that no adverse findings are necessary.
IT IS ORDERED, under the applicable provisions of the Act and rules under the Act, that the Amendment, as amended, be permitted to become effective immediately, subject to the terms and conditions prescribed in rule 24 under the Act.
For the Commission by the Division of Investment Management, pursuant to delegated authority.
Margaret H. McFarland