EXHIBIT B-3(c)
AMENDED AND RESTATED
SERVICE AGREEMENT
BETWEEN
ENTERGY MISSISSIPPI, INC.
AND
ENTERGY ENTERPRISES, INC.
THIS AGREEMENT, made and entered into as of June 22, 1999 by
and between Entergy Mississippi, Inc., formerly Mississippi Power
& Light Company, a corporation organized under the laws of the
State of Mississippi (hereinafter sometimes referred to as "EMI")
and Entergy Enterprises, Inc., formerly Electec, Inc., a
corporation organized under the laws of the State of Louisiana
(hereinafter sometimes referred to as "EEI"), amends, restates
and supercedes in its entirety that certain Service Agreement
made and entered into as of February 22, 1984, between EMI and
EEI (the "Original Service Agreement").
W I T E S S E T H:
WHEREAS, EMI and EEI are both subsidiaries of Entergy
Corporation ("Entergy") and, together with Entergy's other direct
and indirect subsidiaries and Entergy, form the Entergy System;
and
WHEREAS, EMI is organized, staffed and equipped and is
authorized by the Securities and Exchange Commission (the
"Commission"), under Section 13(b) of the Public Utility Holding
Company Act of 1935, as amended (the "Act"), to render to EEI
services as herein provided; and
WHEREAS, in the course of its operations, EMI has acquired
and will acquire certain properties and other resources; and
WHEREAS, subject to the provisions set forth herein, EEI is
authorized by orders of the Commission dated July 8, 1993 (HCAR
No. 25848), June 30, 1995 (HCAR No. 26322) and June 22, 1999
(HCAR No. 27039) to utilize those services, properties and
resources of EMI, as well as those provided by other companies of
the Entergy System, (i) to conduct preliminary development
activities with respect to potential investments by Entergy in
various energy, energy-related and other non-utility businesses,
(ii) to provide various management, administrative and support
services to certain of its associate companies, (iii) to provide
consulting services to certain of its associate companies and to
non-associate companies, and (iv) to provide , directly or
indirectly, through one or more special purpose subsidiary
companies of Entergy or EEI, power project operations and
maintenance services to non-associate companies and to certain of
its associate companies; and
WHEREAS, economies and increased efficiencies benefiting the
Entergy System will result from the performance by EMI of
services for EEI and the provision of certain property and
resources to EEI as herein provided; and
WHEREAS, subject to the terms and conditions herein
described, EMI is willing, upon request by EEI, to render such
services and provide such property and resources to EEI, taking
into consideration the fulfillment of EMI's utility
responsibilities; and
WHEREAS, pursuant to settlement arrangements entered into by
Entergy with certain of its state and local regulators in 1992
and 1993 (collectively, the "Settlement Agreements"), Entergy has
agreed (subject to the receipt of any requisite Commission
authorization) to implement certain special provisions pertaining
to affiliate transactions between Entergy's Regulated Utilities
and Nonregulated Businesses (each as defined in Article 1 of this
Agreement), including, without limitation, (i) a provision
requiring that any services rendered by Entergy's Related
Utilities (including EMI) to its Nonregulated Businesses
(including EEI), be priced at cost plus 5%, and (ii) a provision
modifying the methodology, incorporated in the Original Service
Agreement, for the allocation of profits derived by EEI from its
marketing to non-affiliates of intellectual property developed or
otherwise acquired by Entergy's Regulated Utilities (including
EMI); and
WHEREAS, by Order dated June 22, 1999 (HCAR No. 27040), the
Commission granted Entergy's application requesting, among other
things, an exemption from the "at cost" requirements of Section
13(b) of the Act to permit implementation of the provision of the
Settlement Agreement requiring that services rendered by EMI to
EEI be rendered at cost plus 5%, and (to the extent
jurisdictional under the Act) implementation of the profit
sharing methodology required under the Settlement Agreements in
connection with the marketing by EEI of EMI developed or acquired
intellectual property; and
WHEREAS, it is necessary and appropriate to amend the
Original Service Agreement for the purpose, among other things,
of incorporating the above referenced provisions of the
Settlement Agreements.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein, the parties hereto hereby agree as
follows:
1. Definitions
As used hereinafter, the following terms, in addition to
those elsewhere defined in this Agreement, shall have the
following meanings unless the context otherwise requires:
A. "Services" shall mean those services described in Articles
3, 4 and 5 hereof.
B. "Non-Affiliate" means any corporation, company, agency,
government, business, entity or person other than Entergy, a
direct or indirect subsidiary of Entergy, or a person employed by
Entergy or any of such subsidiaries.
C. "Intellectual Property" means any process, program or
technique which is protected by the copyright, patent or
trademark laws, or by virtue of being a trade secret, and which
has been specifically and knowingly incorporated into, exhibited
in, or reduced to a tangible writing, drawing, manual, computer
program, product or similar manifestation or thing.
D. "Regulated Utilities" means Entergy Arkansas, Inc., Entergy
Gulf States, Inc., Entergy Louisiana, Inc., Entergy New Orleans,
Inc., Entergy Services, Inc., System Energy Resources, Inc.,
Entergy Operations Inc., System Fuels, Inc. and EMI and such
other similar subsidiaries as Entergy shall create whose
activities and operations are primarily related to the domestic
sale of electric energy at retail or at wholesale to affiliates,
or the provision of services thereto.
E. "Nonregulated Businesses" means Entergy Power, Inc., Entergy
Enterprises, Inc. and such other subsidiaries and affiliates as
Entergy shall create that are not domestic regulated electric or
combination electric and gas utilities primarily engaged in the
business of selling electric energy or natural gas at retail or
wholesale to affiliates or are not primarily engaged in the
business of providing services or goods to regulated electric or
combination electric and gas utility affiliates.
2. Agreement to Furnish Services
A. Upon its receipt of EEI's work order or other request
therefor, EMI will, if it has or can have available the personnel
and resources needed to fill the work order or request, furnish
to EEI upon the terms and conditions hereinafter set forth such
of the Services, at such times, for such periods and in such
manner as EEI may from time to time request; provided, however,
that the determination of whether EMI has the available personnel
and resources to perform in accordance with the work order or
request will be entirely within the discretion of EMI, and EMI
may at its option elect not to perform any requested Service,
except that, once having agreed to perform pursuant to a work
order or request, EMI cannot withdraw or depart from such
performance without the consent of EEI. In making its
determination as to the availability of personnel and resources,
EMI may consider whether the use thereof by EEI will interfere
with its own use of such personnel and resources.
B. The provision of Services by EMI pursuant to this Agreement
shall in all cases and notwithstanding anything herein contained
to the contrary be subject to any limitations contained in
authorizations, rules or regulations of those governmental
agencies, if any, having jurisdiction over EMI, EEI, or such
provision of Services,
3. Description of Services
The services which may be provided by EMI hereunder are
described as follows:
A. EWGs, FUCOs, Qualifying Facilities, Etc. Advise and assist
EEI regarding possible investment and participation in, and
related activities with respect to, (i) "exempt wholesale
generators" and "foreign utility companies," as such terms are
defined in Section 32 and 33 of the Act, respectively,
(ii)"qualifying facilities," including certain cogeneration
facilities and small power production facilities, as such terms
are defined under the Public Utility Regulatory Policies Act of
1978 and the rules and regulations promulgated thereunder by the
Federal Energy Regulatory Commission and (iii) other non-exempt
electric generating facilities.
B. Development of Other Business Enterprises. Advise and assist
EEI in the investigation of other business enterprises, and the
development of such other business enterprises as are approved by
the Commission or otherwise are permitted under the Act.
C. General Engineering. Perform general engineering work,
including system production and transmission studies; prepare and
analyze apparatus specifications, distribution studies and
standards, civil engineering and hydraulic studies and problems,
and fuel supply studies; and advise and assist in connection with
analyses of operations and operating and construction budgets.
D. Design Engineering. Perform detailed design work as
requested by EEI.
E. Accounting and Statistical. Advise and assist EEI in
connection with the installation of accounting systems and
similar problems, requirements of regulatory bodies with respect
to accounting, studies of accounting procedures and practices to
improve efficiency, book entries resulting from unusual financial
transactions, internal audits, employment of independent
auditors, preparation and analyses of financial and operating
reports and other statistical matters relating to EEI or its
customers, preparation of reports to regulatory commissions,
insurance companies and others, standardization of accounting and
statistical forms in the interest of economy, and other
accounting and statistical matters.
F. Budgeting. Advise and assist EEI in matters involving the
preparation and development of capital and operating budgets,
cash and cost forecasts, and budgetary controls.
G. Business Promotion and Public Relations. Advise and assist
EEI in the development of marketing and sales programs, in the
preparation and use of advertising and sales materials, and in
the determination and carrying out of promotional programs.
H. Systems and Procedures. Advise and assist EEI in the
establishment of good operating practices and methods of
procedure, the standardization of forms, the purchase, rental and
use of mechanical and electronic data processing, computing and
communications equipment, in conducting economic research and
planning and in the development of special economic studies.
I. Access to and Use of Resources. Subject to those conditions
with respect to EMI's discretion not to perform any requested
Service set forth in Article 2A, make available to EEI in the
conduct of its business and/or, to the extent necessary or
appropriate as required in the performance of its services to its
customers access to, use of, or rights in all EMI's resources,
including facilities, products, processes, techniques, computer
hardware and software, technical information, training aids and
properties, vehicles, equipment, machines and other property,
whether owned, leased, licensed or otherwise available to, EMI.
J. Training. Assist EEI in providing training to personnel of
EEI or its customers; develop and make available training
procedures, materials and facilities, and provide instructors.
K. General. Make available services in the areas of
construction planning and supervision, design, management
programs, quality assurance, licensing matters, research and
development, and communications systems and procedures.
L. Other Services. Render advice and assistance in connection
with such other matters as EEI may request and EMI may be able to
perform with respect to EEI's business and operations.
4. Provision of Personnel
Where specifically requested by EEI, EMI may loan its
employees to EEI. In that event, such loaned employees will be
under the sole supervision and control of EEI for such period or
periods of time as are necessary to complete the work to be
performed by such employees. Such employees may be withdrawn by
EMI from tasks assigned by EEI only with the consent of EEI. EEI
will be responsible for the actions and activities of such
employees while engaged in the performance of the work to the
same degree as though such persons were employees of EEI.
However, as part of Services, EMI during periods when such
employees are loaned to EEI will continue to provide to, and with
respect to such employees those same payroll, pension, savings,
tax withholding, Social Security, unemployment, bookkeeping and
other personnel support services then being utilized by EMI in
connection with compensating and benefiting such employees.
5. Exchange of Intellectual Property
A. Should EEI in the course of its business develop
Intellectual Property, it will make such Intellectual Property
available for utilization by EMI without charge (except the
actual expenses incurred by EEI in connection with making such
new Intellectual Property available to EMI); provided, however,
that such availability shall be dependent upon and subject to any
contractual commitments of EEI to Non-Affiliates, applicable laws
and regulations, and the legal rights and entitlements of others.
B. As part of the Services, EMI will make available to EEI for
utilization by it all Intellectual Property heretofore or
hereafter developed or obtained by EMI without charge (except for
the actual expenses incurred by EMI in making the same available
to EEI, and except as otherwise provided in Article 8 below);
provided, however, that such availability shall be dependent upon
and subject to any contractual commitments of EMI to Non-
Affiliates, applicable laws and regulations, and the legal rights
and entitlements of others.
6. Compensation of EMI
As compensation for Services actually requested by EEI and
rendered to it by EMI, EEI hereby agrees to pay to EMI (except as
described in Article 5B) an amount equal to (a) all costs
properly chargeable or allocable thereto, as controlled through a
work order procedure, computed in accordance with applicable
rules and regulations (including, but not limited to, Rules 90
and 91) under the Act and appropriate accounting standards, plus
(b) a charge of five percent (5%) of such costs. Such costs
shall be determined as outlined on Exhibit A attached hereto and
incorporated herein by reference.
7. Work Orders
The Services will be performed in accordance with work
orders or requests issued or made by or on behalf of EEI and
accepted by EMI, and all Services will be assigned an applicable
work order number to enable specific work to be properly
allocated by project or other appropriate basis. Work orders
shall be as specific as practicable in defining the Services
requested to be performed and will set forth the scope and
duration of the Services to be performed and the specific
employees to be loaned to EEI pursuant to the work order. EEI
shall have the right from time to time to amend, alter or rescind
any work order, provided that (i) any such amendment or
alteration which results in a material change in the scope of the
work to be performed or equipment to be provided is agreed to by
EMI; (ii) the costs for the Services covered by the work order
will include any expense incurred by EMI as a direct result of
such amendment, alteration or rescission of the work order; and
(iii) no amendment, alteration or rescission of a work order will
release EEI from liability for all such costs already incurred or
contracted for by EMI pursuant to the work order, regardless of
whether the work associated with such costs is discontinued by
such amendment, alteration or rescission.
8. Disposition of Intellectual Property
In the event EEI with the express written consent of EMI
markets to Non-Affiliates Intellectual Property heretofore or
hereafter developed or otherwise acquired by EMI for its own use,
and such Intellectual Property is actually used by EMI, all
profits derived by EEI from such marketing transactions shall be
divided equally by EMI and EEI, after deducting all of EEI's
incremental costs associated with making the Intellectual
Property available for sale, including the cost of marketing such
Intellectual Property; provided, however, that in the event any
Intellectual Property developed or otherwise acquired by EMI for
its own use is not actually so used, and is subsequently marketed
by EEI to Non-Affiliates, EEI shall fully reimburse EMI for all
of its costs incurred to develop or otherwise acquire such
Intellectual Property before any profits derived from its
marketing of such Intellectual Property shall be so divided.
9. Limitation of Liability and Indemnification
In performing the Services hereunder (except to the extent
such Services are being performed by employees loaned to and
under the supervision of EEI), EMI will exercise due care to
assure that the Services are performed in a workmanlike manner,
meet the standards and specifications set forth in the applicable
work order or request with respect to such Services, and comply
with applicable standards of law and regulation. However,
failure to meet these obligations shall in no event subject EMI
to any claims or liabilities other than to reperform the work and
be compensated in accordance with this Agreement for such
reperformance such that it fully complies with the work order,
request or standard, as the case may be. EMI makes no other
warranty with respect to its performance of the Services, and EEI
agrees to accept such Services without further warranty of any
nature. EEI shall and does hereby indemnify and agree to save
harmless and defend EMI from liabilities, taxes, losses,
obligations, claims, damages, penalties, causes of action, suits,
costs and expenses or judgments of any nature, on account of, or
resulting from: (i) injuries to or the death of any person; (ii)
damage to or loss of any property; (iii) any alleged or actual
violation of law, court order, or governmental agency rule or
regulation committed by or existing with respect to EEI or its
employees, agents or subcontractors; (iv) any alleged or actual
breaches of contract by EEI; (v) any claims by or on account of
any employee, agent or subcontractor of EEI; (vi) services or
labor performed, labor force, materials, provisions or supplies
furnished or allegedly contracted for by or on behalf of EEI, its
employees, agents or subcontractors; and/or (vii) other damages;
which, in all cases, are attributable to or arise out of the
performance and prosecution of any project or work performed by
or on behalf of EEI, whether or not the same results or allegedly
results from the claimed or actual negligence or breach of
warranty of, or breach of contract or willful conduct by, EEI or
of its employees, agents or contractors or its or their
subcontractors or any combination thereof.
10. Miscellaneous
This Agreement shall be binding upon the successors and
assigns of the parties hereto, provided that EMI shall not be
entitled to assign or subcontract out any of its obligations
under this Agreement or under any purchase order or work order
issued hereunder without the prior written approval of EEI. This
Agreement may not be modified or amended in any respect except in
writing executed by the parties hereto. This Agreement shall be
construed and enforced under and in accordance with the laws of
the State of Louisiana. This Agreement may be executed in
counterparts, each one of which when fully executed shall be
deemed to have the same dignity, force and effect as an original.
No provision of this Agreement shall be deemed waived nor breach
of this Agreement consented to unless such waiver or consent is
set forth in writing and executed by the party hereto making such
waiver or consent.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their respective corporate names by
their respective Presidents or one of their respective Vice
Presidents as of the day and year first above written.
ENTERGY MISSISSIPPI, INC.
By: /s/ C. Xxxx Xxxxxx
C. Xxxx Xxxxxx
Executive Vice President and
Chief Financial Officer
ENTERGY ENTERPRISES, INC.
By: /s/ Xxxxxx X. XxXxxx
Xxxxxx X. XxXxxx
Vice President and Treasurer
EXHIBIT A
ENTERGY ENTERPRISES, INC.
Accounting/Billing Procedures by Entergy Mississippi, Inc.
I. Introduction
This procedure establishes the guidelines for determining the
cost of Services for, and xxxxxxxx by, Entergy Mississippi, Inc.
(EMI) to Entergy Enterprises, Inc. (EEI). These xxxxxxxx will
include direct and indirect costs normally incurred by EMI in its
operations, plus a charge of five percent (5%) of the total of
such costs. Revenues and costs related to these xxxxxxxx will be
recorded in the accounting records of EMI in accordance with
generally accepted accounting principles and FERC guidelines.
The procedures to be employed in determining costs for Services
performed for EEI, and rendering billing for such Services, will
closely follow the procedures used to xxxx other System Companies
for work performed.
II. Method of Xxxxxxxx
Each Service provided by EMI is accounted for using a job order
system. Direct costs charged to each job will be made using the
current accounting system's source documents (time reports,
expense accounts, journal entries, vendor invoices). Charges for
Services (including the cost of Services plus the 5% adder) will
be billed on a monthly basis. All amounts will be payable in
accordance with agreed upon procedures between EMI and EEI.
III. Calculation of Cost
The cost of Services provided to EEI will be calculated, based on
individual projects or jobs, according to the following
guidelines:
A. Labor
Labor costs billed for Services provided include
salaries and related direct labor costs for employees.
1. Direct Labor
Direct labor costs will be based on actual
gross wage rates of employees assigned to
perform services multiplied by the actual
number of hours actually worked. These direct
labor hours will be recorded on time reports.
EXHIBIT A
2. Indirect Labor Off-Duty Wages and Benefits
A labor overhead rate (calculated annually)
will be applied to each direct labor hour for
the following:
Vacations
Holidays
Sick
Off-duty time
Pensions
Savings plan
Insurance
Salary related taxes (FICA, FUTA, SUTA,
etc)
All other employee benefits and salary
taxes
B. Employee Travel, Subsistence and Other Related Expenses
It is likely in the normal course of providing Services
to EEI that travel, meals, lodging and related expenses
will be incurred. Such expenses will be accumulated at
cost on an expense account form.
C. Vehicle and Equipment Usage
When vehicles or equipment are used by EMI in the
course of providing services, a standard rate (miles or
hours) by vehicle or equipment class will be applied to
recover all costs of operation of the vehicle or
equipment.
D. Materials
The cost of materials purchased by EMI in connection
with direct services rendered will be determined based
on the total net purchase price, plus applicable stores
overheads and taxes.
E. Administrative and Engineering Overheads
An overhead rate will be applied to total expenses in
items A-D above to compensate for indirect
administrative and engineering overheads.
