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PROPOSAL ADOPTED IN ENTERGY/GSU LOUISIANA MERGER CASE PROVIDES SAVINGS FOR BOTH CUSTOMERS AND SHAREHOLDERS

 BATON ROUGE, La., April 27 /PRNewswire/ -- The Louisiana Public Service Commission (LPSC) today approved unanimously (5-0) the merger of Entergy Corporation (NYSE: ETR) and Gulf States Utilities Company (NYSE: GSU), subject to conditions contained in the report of its special counsel.
 The commission also unanimously adopted the recommendations contained in that report.
 The commission's order found the merger to be in the public interest and to offer significant savings for GSU's and Entergy's customers. The recommendations adopted by the commission included a regulatory proposal jointly offered to the commission by its staff and by Entergy and Gulf States. That regulatory proposal provides that 100 percent of merger- related fuel savings in Gulf States' Louisiana service area will be passed automatically through to GSU's Louisiana customers. It also provides that shareholders will receive 60 percent of non-fuel Operations and Maintenance (O&M) savings created by the merger for eight years, with customers receiving the remaining 40 percent during those eight years. Thereafter, customers will receive 100 percent of both non-fuel O&M savings and fuel savings.
 The report also provides for annual filings with the commission so that merger-related reductions in Gulf States' base rates will appear promptly on customers' bills, and provides that non-fuel O&M expense savings will be calculated from a baseline that will represent Gulf States' expenses in these categories for 1992. Baseline expenses will be compared to expenses in future years, to determine the amounts of merger-related savings.
 The report adopted by the LPSC also caps Gulf States' Louisiana electric rates in effect on the merger closing date. The rate cap, which lasts five years, prohibits any increase in Gulf States' Louisiana base rates, except for increases relating to certain extraordinary circumstances that would be declared "force majeure."
 The recommendation adopted by the commission describes the combination of the Entergy and Gulf States systems as being in the public interest because it will:
 -- produce cost reductions, including fuel and non-fuel O&M savings, for both GSU customers and customers of existing Entergy operating companies;
 -- provide economies and efficiencies to customers through coordinated planning and operations;
 -- provide a five-year ceiling on GSU's electric base rates;
 -- enhance the efficiency of GSU's River Bend nuclear plant operations through consolidation with Entergy's nuclear operations organization; and
 -- greatly strengthen the financial condition of GSU.
 The city of New Orleans indicated that it would support the merger if certain conditions protecting NOPSI customers were met. Parties that did not support the joint regulatory proposal include Cajun Electric Power Cooperative and Houston Lighting and Power.
 The provisions of the order adopted by the Louisiana Public Service Commission are similar to provisions in a settlement agreement between the companies and the staff of the Public Utility Commission of Texas.
 -0- 4/27/93
 /CONTACT: Media: Cyril Guerrera, 504-569-4411, or Investors: Stuart Ball, 504-569-4817, both of Entergy Corporation; or Kim McMurray of Gulf States Utilities, 409-839-2890/
 (ETR GSU)


CO: Entergy Corporation; Gulf States Utilities Company ST: Louisiana, Texas IN: UTI SU: TNM

BR-BN -- AT013 -- 1535 04/27/93 15:42 EDT
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Publication:PR Newswire
Date:Apr 27, 1993
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