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SETTLEMENT AGREEMENT IN ENTERGY/GSU TEXAS MERGER CASE ALLOWS CUSTOMERS AND SHAREHOLDERS TO SHARE IN SAVINGS

 AUSTIN, Texas, March 30 /PRNewswire/ -- Entergy Corporation (NYSE: ETR), Gulf States Utilities Company (NYSE: GSU) and the staff of the Public Utility Commission of Texas (PUCT) today filed a settlement agreement resolving most issues in the companies' Texas merger proceeding.
 The Texas Office of Public Utilities Counsel, which represents residential and small commercial customers, said it supports the agreement but could not sign the document because it typically only signs settlements that are unanimous.
 Other parties in the case, particularly the Texas Industrial Energy Consumers and a group of cities participating in the merger case, are expected to support the settlement agreement.
 The agreement stipulates that the signing parties consider the merger to be in the public interest and recommend it for PUCT approval.
 Other parties that did not sign the agreement are Houston Lighting & Power, Southwestern Electric Power Co. and Cajun Electric Power Cooperative.
 The agreement provides that 100 percent of merger-created fuel savings in GSU's Texas service area will be passed through to Texas customers. It also provides that shareholders will receive almost 50 percent of non-fuel operations and maintenance savings created by the merger in Texas for an eight-year period; with ratepayers receiving the remaining percentage of non-fuel savings.
 After the eight-year period expires, all non-fuel savings as well as all fuel savings will be received by customers.
 As provided in the agreement, non-fuel operations and maintenance expense savings will be calculated from a baseline that will be Gulf States' actual expenses in these categories in calendar year 1992. The agreement provides for revisions to the allowable non-fuel O&M expenses in years four and six following closing of the merger.
 The agreement also provides for a five-year cap on GSU's Texas retail rates at the amount in effect on the merger closing date. The rate cap would prohibit any increase in GSU Texas rates during the five years following closing of the merger except for increases arising from certain extraordinary circumstances that would be declared "force majeure."
 The agreement describes the combination of the Entergy and Gulf States systems as being in the public interest because it will:
 -- produce fuel savings for GSU customers,
 -- reduce non-fuel O&M expenses to below the level that GSU could
 achieve on a stand-alone basis,
 -- provide a period of retail base rate stability for GSU customers,
 and
 -- provide the Texas communities served by GSU with a continued
 commitment to economic development from a company with stronger
 financial resources.
 It also said the merger will:
 -- permit the creation of a combined utility that is stronger
 operationally and financially than the existing separate
 companies,
 -- reduce GSU's nuclear costs through combination with Entergy's
 nuclear operations organization, and
 -- improve GSU's service because the Entergy System will offer
 enhanced fuel diversity, additional resources that can be devoted
 to customer service and more opportunities to exchange power
 with other utilities.
 Administrative Law Judge Kathleen Sanford of the PUCT has tentatively set April 13 as the date for witnesses to be cross-examined on the settlement. Meanwhile, she will reconvene the original merger proceeding tomorrow (March 31) for cross-examination of witnesses by parties who did not concur in the settlement.
 Following completion of all cross-examination, the administrative law judge must recommend to the PUCT whether it should approve the merger as being reasonable and consistent with the public interest.
 -0- 3/30/93
 /CONTACT: Media: Cyril Guerrera, 504-569-4411, or Investors: Stuart Ball, 504-569-4817, both of Entergy, or Kim McMurray of Gulf States, 409-839-2890/
 (ETR GSU)


CO: Entergy Corporation; Gulf States Utilities Company; Public
 Utility Commission of Texas ST: Texas IN: UTI SU:


BN-RA -- AT005 -- 1170 03/30/93 15:33 EST
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Date:Mar 30, 1993
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