ENOC-14-00016, Response to Request for Voluntary Response to 2.206 Petition Regarding Financial Qualifications,

Response to Request for Voluntary Response to 2.206 Petition Regarding Financial Qualifications,

ML14212A050
Person / Time
Site:	Pilgrim, Vermont Yankee, FitzPatrick  File:NorthStar Vermont Yankee icon.png
Issue date:	07/24/2014
From:	Mccann J Entergy Nuclear Operations
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
ENOC-14-00016, TAC MF1092, TAC MF1093, TAC MF1094
Download: ML14212A050 (142)

Text

--- Entergy Entergy Nuclear Operations, Inc.

440 Hamilton Avenue White Plains, NY 10601 John F. McCann Vice President, Regulatory Assurance Tel. (914) 272-3370 ENOC-14-00016 July 24, 2014 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555-0001

SUBJECT:

Response to Request for Voluntary Response to 2.206 Petition Regarding Financial Qualifications of James A. FitzPatrick Nuclear Power Plant, Pilgrim Nuclear Power Station, and Vermont Yankee Nuclear Power Station (TAC Nos. MF1092, MF1093, and MF1094)

James A. FitzPatrick Nuclear Power Plant Docket No. 50-333 License No. DPR-59 Pilgrim Nuclear Power Station Docket No. 50-293 License No. DPR-35 Vermont Yankee Nuclear Power Station Docket No. 50-271 License No. DPR-28

REFERENCES:

1.

NRC letter to Entergy Nuclear Operations, Inc., Request for Voluntary Response to 2.206 Petition Regarding Financial Qualifications of James A. FitzPatrick Nuclear Power Plant, Pilgrim Nuclear Power Station, and Vermont Yankee Nuclear Power Station (TAC Nos.

MF1092, MF1093, and MF1094), dated June 2, 2014 (ADAMS Accession No. ML1335A024)

2.

Enforcement Petition under 10 CFR 2.206 by Alliance for a Green Economy, Citizens Awareness Network, Pilgrim Watch, and Vermont Citizens Action Network, dated March 18, 2013 (ADAMS Accession No. ML13079A022)

Dear Sir or Madam:

In Reference 1, the NRC requested voluntary information from Entergy Nuclear Operations, Inc. (ENO) pertaining to the enforcement petition in Reference 2. Enclosure 1 to this letter provides ENO's voluntary responses on behalf of the subject licensees to the NRC's requests for information (RFIs). Enclosures 2 through 7 contain supporting documents requested by the NRC.

ENOC-14-00016 Page 2 of 2 This letter contains no new commitments. If you have any questions, please contact Mr.

David Mannai, Senior Manager, Fleet Regulatory Assurance, at 802-380-1175.

Sincerely, JFM / ljs / ghd

Enclosures:

1. Response to Request for Voluntary Response to 2.206 Petition Regarding Financial Qualifications

2. Inter-Company Credit Agreement by and between Entergy International Holdings, Ltd., LLC and Entergy Nuclear Vermont Yankee, LLC

3. Inter-Company Credit Agreement by and between Entergy Global Investments, Inc. and Entergy Nuclear Vermont Yankee, LLC

4. Letter from Entergy Corporation to Vermont Yankee Nuclear Power Corporation

5. FitzPatrick Operating Agreement

6. Pilgrim Operating Agreement

7. Vermont Yankee Operating Agreement cc:

Mr. William M. Dean (w/o Enclosures 2 - 7)

Region 1 Administrator U.S. Nuclear Regulatory Commission 2100 Renaissance Blvd, Suite 100 King of Prussia, PA 19406-2713 Ms. Nadiyah Morgan Petition Manager Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Mail Stop O-8C2A Washington, DC 20555 Mr. L. M. Coyle (JAF) (w/o Enclosures 2 - 7)

M. J. A. Dent (PNP) (w/o Enclosures 2 - 7)

Mr. T. G. Mitchell (ECH) (w/o Enclosures 2 - 7)

Mr. M. Perito (ECH) (w/o Enclosures 2 - 7)

Mr. C. J. Wamser (VY) (w/o Enclosures 2 - 7)

ENCLOSURE 1 ENOC-14-00016 RESPONSE TO REQUEST FOR VOLUNTARY RESPONSE TO 2.206 PETITION REGARDING FINANCIAL QUALIFICATIONS to ENOC-14-00016 Page 1 of 5 RESPONSE TO REQUEST FOR VOLUNTARY RESPONSE TO 2.206 PETITION REGARDING FINANCIAL QUALIFICATIONS ENTERGY NUCLEAR OPERATIONS, INC.

JAMES A. FITZPATRICK NUCLEAR POWER PLANT PILGRIM NUCLEAR POWER STATION VERMONT YANKEE NUCLEAR POWER STATION DOCKET NOS. 50-333, 50-293, AND 50-271 In a letter to Entergy Nuclear Operations, Inc. (ENO) dated June 2, 2014 (ADAMS Accession No. ML1335A024), the NRC requested voluntary information pertaining to an enforcement petition filed on March 18, 2013 (ADAMS Accession No. ML13079A022). Responses to the NRC's requests for information (RFIs) are provided below.

RFI #1 Provide updated cost and revenue projections and cash flow statements for Fitzpatrick and Pilgrim for the five year period of 2014 - 2019. Include costs related to Independent Spent Fuel Storage Installation (ISFSI) operations and anticipated capital expenses.

a. Where costs exceed revenues, indicate additional source(s) of funding to cover operating and maintenance (O&M) costs, for example, parent or affiliate company guarantees, lines of credit for contingency operating funds, or cash pooling arrangements.

b. Indicate whether revenue shortfalls contributed to the recent white performance indicators at Fitzpatrick and Pilgrim.

RespDonlse ENO, acting for the owner licensees of the plants identified in the subject line of the cover to this response (collectively, Licensees), believes that there is no basis presented in the 2.206 petition for an inquiry into cost and revenue projections and cash flow statements for FitzPatrick and Pilgrim. Revenues from FitzPatrick and Pilgrim (and other merchant plants owned by Entergy Corporation subsidiaries) are reported to the U.S. Securities and Exchange Commission (SEC) in Entergy Corporation's reportable segment entitled "Entergy Wholesale Commodities" of its 10-K filings. The Entergy Wholesale Commodities segment (and the "Non-Utility Nuclear" segment that preceded it) has reported positive revenues and net income since Entergy Corporation began reporting of this segment. Reference is hereby made to the revenue and net income figures for the Entergy Wholesale Commodities segment reported in the 2013 10-K and first quarter 10-Q filings made with the SEC.

to ENOC-14-00016 Page 2 of 5 Criterion III.C.2.b in NRC Directive 8.11, provides as a ground for rejection of a 2.206 petition that "[t]he petitioner raises issues that have already been the subject of NRC staff review and evaluation either on that facility, other similar facilities, or on a generic basis, for which a resolution has been achieved, the issues have been resolved, and the resolution is applicable to the facility in question." Id. at 12. The financial qualifications of the plant owners and operators were reviewed and approved when the Commission approved the transfers of the ownership and operating licenses to Entergy Corporation subsidiaries. As noted above, Entergy Corporation's SEC filings since the Commission approved those transfers present no basis for concluding that financial information regarding FitzPatrick and Pilgrim should be required, and no other facts compel that conclusion.

Contrary to the unstated premise of this request, the financial resources available for operation of FitzPatrick and Pilgrim have not been limited to the revenues, cash flows, and assets of each individual plant owner. Although no commitment has been made, and no commitment is being made herein, from time to time, Licensees have historically shown their ability to access the funds necessary for the continued safe operation of their plants from Entergy Corporation or one or more of its subsidiaries. The NRC's Standard Review Plan on Power Reactor Licensee Financial Qualifications and Decommissioning Funding Assurance, NUREG-1577, Rev. 1, expressly recognizes that one of many bases for an NRC reviewer to find financial assurance is the availability of "corporate revenues from other sources that may be used at the nuclear plant." Id. at section II1.1.b.

The Licensees have in place substantial credit support agreements or parent guarantees as further described in the responses to other requests below. To date, the Licensees have never needed to draw, nor actually drawn, upon the funds provided by these agreements, further demonstrating adequate funds are available to them from other sources to operate their plants safely and reliably.

The Licensees further note that Entergy Corporation has demonstrated, through its decision to shut down Vermont Yankee, that it will shut down plants it deems uneconomic.

Additionally, the NRC should note that FitzPatrick is proceeding with a significant capital project to re-tube the main condenser - an action that negates any argument that might be made based upon financial projections about that plant's alleged inability to obtain the necessary capital to maintain its safe operation. Both FitzPatrick and Pilgrim have had, and continue to have, substantial capital budgets in place.

The Licensees are committed to continued safe operation of their plants and to meeting all of the NRC's requirements. Funding has not been an issue with how the Licensees have operated their facilities. In this regard, the Licensees contend that the availability of funding was not cited as a causal factor in the white performance indicators mentioned in Subpart b, above.

RFI #2 The Fitzpatrick operating license contains License Condition 2.G:

ENF [Entergy Nuclear FitzPatrick] and ENO shall take no action to cause Entergy Global Investments, Inc. or Entergy International Ltd. LLC, or their parent companies, to void, cancel, or modify the $70 million contingency to ENOC-14-00016 Page 3 of 5 commitment to provide funding for the facility as represented in the application for approval of the transfer of the facility license from PASNY to ENF and ENO, without the prior written consent of the Director, Office of Nuclear Reactor Regulation.

a. Is the contingency commitment still in effect?

b. Identify the entity that currently guarantees this commitment.

Response

a. Yes.

b. The entities responsible for satisfying the contingent commitment are Entergy Global, LLC (formerly Entergy Global Investments, Inc.) and Entergy International Ltd., LLC.

RFI #3 The Pilgrim operating license contains License Condition J.4:

Entergy Nuclear shall have access to a contingency fund of not less than fifty million dollars ($50m) for payment, if needed, of Pilgrim operating and maintenance expenses, the cost to transition to decommissioning status in the event of a decision to permanently shut down the unit, and decommissioning costs. Entergy Nuclear will take all necessary steps to ensure that access to these funds will remain available until the full amount has been exhausted for the purposes described above. Entergy Nuclear shall inform the Director, Office of Nuclear Regulation, in writing, at such time that it utilizes any of these contingency funds.

a. Is the contingency commitment still in effect?

b. Identify the entity that currently guarantees this commitment.

Response

a. Yes.

b. The entity responsible for satisfying the contingent commitment is Entergy International Ltd., LLC.

RFI #4 By letter dated March 20, 2013, the NRC staff issued "Vermont Yankee Nuclear Power Station - Request for Additional Information [RAI] Regarding 10 CFR 50.33 Financial Qualification Review (TAC MF0947)" (ADAMS Accession No. ML13077A206). The RAI was related to impairment for Vermont Yankee plant disclosed in a 1 OQ SEC filing dated November 6, 2012. The licensee responded by letter dated May 6, 2013 (ADAMS Accession No. ML13128A009).

to ENOC-14-00016 Page 4 of 5 Entergy stated in its 8K statement to the SEC dated August 27, 2013:

Vermont Yankee is expected to cease power production after its current fuel cycle and move to safe shutdown in fourth quarter 2014. This decision was approved by Entergy Corporation's Board of Directors on August 25, 2013. The decision to shut down the plant was driven by sustained low natural gas and wholesale energy prices, the high cost structure of the plant, and wholesale electricity market design flaws in the region in which the plant operates.

As a result of the decision to shut down the plant, Entergy will recognize a non-cash impairment charge of $287 million ($181 million after-tax) in third quarter 2013. Entergy performed a fair value analysis based on the income approach, a discounted cash flow method, to determine the amount of impairment. The estimated fair value of the plant and related assets at July 31, 2013 was $62 million, while the carrying value was $349 million. The carrying value of $349 million reflects the effect of a $58 million increase in Vermont Yankee's estimated decommissioning cost liability and the related asset retirement cost asset. The increase in the estimated decommissioning cost liability resulted from the change in expectation regarding the timing of decommissioning cash flows due to the decision to cease operations.

In addition to the impairment charge, through the end of 2014 Entergy expects to record additional charges totaling approximately $55 million to $60 million related to severance and employee retention costs.

a. Given that Vermont Yankee is expected to cease power production in fourth quarter 2014, indicate if this changes any of the information provided in Entergy's response to the NRC staff RAI dated May 6, 2013.

b. In its July 30, 2007 (ADAMS Accession No. ML072220219), license transfer application, Entergy described three financial support arrangements for Entergy Nuclear Vermont Yankee, LLC as follows:

$35 million provided by Entergy International Holdings, LLC for financial assurance for safe plant operation and for decommissioning.

$35 million to be provided by Entergy Corporation "if the financial assurance line is below $35M at the point that it is determined that Vermont Yankee will cease operations."

$25 million to be provided by Entergy Corporation "if the financial assurance line is below $25M at the point that it is determined that Vermont Yankee will cease operations."

(i)

Provide copies of current financial arrangements.

(ii)

Indicate the amount of funds extended by the guarantor(s) pursuant to the agreements to date.

to ENOC-14-00016 Page 5 of 5

Response

a. Yes, the forward-looking information provided in the response to the NRC staff RAI dated May 6, 2013 will have changed as a result both of more favorable power pricing in the interim, as well as the decision by Entergy Nuclear Vermont Yankee, LLC (ENVY) to cease operations at Vermont Yankee at the end of 2014. This decision will result in the plant entering into decommissioning after the cessation of power production, at which time most of the continuing costs are expected to be covered by decommissioning funds.

ENVY plans to complete its Post-Shutdown Decommissioning Activities Report (PSDAR) and submit it to the NRC by early 2015. The PSDAR will include an estimate of the expected costs during decommissioning, and will show how those costs are expected to be funded.

b. Although approved by the NRC (ADAMS Accession No. ML080940267), the license transfer was never implemented and expired on January 28, 2010 (ADAMS Accession No. ML092050378).

(i)

Copies of the credit agreements and financial arrangements pertaining to Vermont Yankee referenced in RFI 4.b, above, are provided in Enclosures 2, 3, and 4.

(ii)

No funds have been extended under the agreements provided in response to part b(i), above.

RFI #5 In its July 30, 2007 (ADAMS Accession No. ML072220219), license transfer application, Entergy stated:

ENO will receive the revenue necessary to operate and maintain the Facilities, including decommissioning funds to pay for such expenses, from the corporate entities licensed to own the Facilities pursuant to operating agreements or other intra-corporate arrangements that have been previously described to NRC.

Provide the current operating agreements and/or intra-corporate arrangements among and between Fitzpatrick, Pilgrim, Vermont Yankee and Entergy related to financing the O&M costs for NRC licensed activities.

Response

Although approved by the NRC for FitzPatrick, Pilgrim, and Vermont Yankee (ADAMS Accession Nos. ML080940553, ML080940582, and ML080940267, respectively), the license transfers were never implemented and expired on January 28, 2010 (ADAMS Accession No. ML092050378).

Copies of the current operating agreements, which provide for payment to ENO for the costs of operations of FitzPatrick, Pilgrim and Vermont Yankee, are provided in Enclosures 5, 6, and 7.

ENCLOSURE 2 ENOC-14-00016 INTER-COMPANY CREDIT AGREEMENT BY AND BETWEEN ENTERGY INTERNATIONAL HOLDINGS LTD. LLC AND ENTERGY NUCLEAR VERMONT YANKEE. LLC

INTER-COMPANY CREDIT AGREEMENT BY AND BETWEEN ENTERGY INTERNATIONAL HOLDINGS LTD LLC AND ENTERGY NUCLEAR VERMONT YANKEE, LLC Dated as of July 23, 2002 I:'s;ecshare\\ETR-NL'CL\\ENV'Y.LLC\\'tankeeClosing\\Credit Agree ments\\E IHL.S3.; N.CA.doc

Inter-Company Credit Agreement Table of Contents Parties Article I. General Provisions Article II. The Advances Article III. Termination Article IV. Miscellaneous Signatures Exhibit A Exhibit B Page 2

2 5

9 10 12 13 18 2

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INTER-COMPANY CREDIT AGREEMENT This Inter-Company Credit Agreement (this "Agreement"), dated as of the 23rd day of July, 2002 by and between Entergy International Holdings Ltd LLC, a Delaware limited liability company ("EIHL") and its affiliate Entergy Nuclear Vermont Yankee, LLC, a Delaware limited liability company ("ENVY").

ARTICLE I GENERAL PROVISIONS Section 1.01. Definitions.

"Authorized Officers" means the Chief Financial Officer or Treasurer of ENVY and such other officers or agents of ENVY as the Chief Financial Officer, by written notice to EIHL, shall designate on the Effective Date. The Chief Financial Officer may change such designation from time to time after the Effective Date by written notice to EIHL.

"Available Credit" means an aggregate principal amount not to exceed Thirty-Five Million Dollars ($35,000,000) at any time outstanding.

"Business Day" means a day on which banks are open for business in both the State of Louisiana and the State of New York.

"Commitment Fee Rate" means a rate that is designed to represent EIHL's "effective cost of capital", within the meaning of Rule 52(b) under the Public Utility Holding Company Act of 1935, as amended, as determined by EIHL from time to time and notified to ENVY, in each case, computed on the basis of a 365 day year for the actual number of days (including the first day, but excluding the last), on all of the t:\\secsharcETR-NUCL\\ýEN VY.LLC',YankeeClosing\\Credit Agreements\\EII-L.S3SM.CA.dac

Available Credit remaining undrawn for any calendar quarter. Changes to the Commitment Fee Rate shall be effective on the first day of the immediately succeeding calendar quarter.

"Dollars" or "$" means lawful money of the United States of America.

"Drawdown Date" means a Business Day selected by ENVY upon which an advance should be funded.

"Effective Date" means the "Closing Date" as such term is defined in Section 1. 1 of the Purchase and Sale Agreement.

"Purchase and Sale Agreement" means the Purchase and Sale Agreement dated August 15, 2001 by and among Vermont Yankee Nuclear Power Corporation, a Vermont corporation, ENVY and Entergy Corporation, a Delaware corporation.

"Interest Rate" means EIHL's "effective cost of capital", within the meaning of the Rule 52(b) under the Public Utility Holding Company Act of 1935, as amended, determined from time to time by EIHL and notified to ENVY, in each case, computed on the basis of a 365 day year for the actual number of days (including the first day, but excluding the last) occurring in the period such interest is payable.

"Maturity Date" means: (i) such termination date as may occur pursuant to Sections 3.01 or 3.02 or 3.03 hereof; or (ii) such later date as may be mutually agreed by the parties hereto pursuant to Section 2.09 hereof. If the Maturity Date is not a Business Day, the next succeeding Business Day shall be deemed to be the Maturity Date.

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"Note" means the promissory note of ENVY payable to the order of EIHL, substantially in the form annexed hereto as Exhibit "A", evidencing at any given time the principal amount outstanding under this Agreement.

"Person" means an individual, corporation, partnership, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

"Vermont Yankee Plant" means the Vermont Yankee Nuclear Power Station located in Vernon, Vermont.

Section 1.02. Capitalized Terms. Terms used but not herein defined shall have the respective meanings ascribed to said terms in the Purchase and Sale Agreement.

Section 1.03. Interpretation of Definitions. All definitions in the singular shall, unless the context specifies otherwise, include and mean the plural, and all references to the masculine gender shall include the feminine; and vice versa.

Section 1.04. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of EIHL and its subsidiaries' consolidated financial statements, and any financial data submitted pursuant to this Agreement shall be prepared in accordance with such principles.

ARTICLE II THE ADVANCES Section 2.01. The Advances. During the period from the Effective Date to and including the Maturity Date, EIHL agrees, on the terms and conditions set forth herein, to extend credit to ENVY in the form of advances in Dollars, such that the aggregate 1:\\secsharekETR-NUCL'.Eý4VY. LLC\\,YankeeClosing\\Credit AgrcementskE1HL.S3-5M.CA.doc

principal amount of all advances outstanding at anytime shall not exceed the Available Credit. During the term of this Agreement. ENVY, at its option without penalty or premium, may from time to time repay all or any part of the principal amount outstanding as provided in Section 2.06 hereof, and may reborrow any amount that has been repaid.

Each advance of funds under this Agreement shall be in a minimum amount of $100,000 and, if greater, shall be in an integral multiple of $10,000.

Section 2.02. Request for an Advance. Each request for an advance of funds under this Agreement shall be made not later than 9:00 a.m., Central time, three (3) business days prior to the proposed Drawdown Date (or upon such shorter period as the parties agree) by notice from an Authorized Officer of ENVY to EIHL, specifying the Drawdown Date, the amount of the advance and, a certification that such advance is for the purpose specified in Section 2.07.

Section 2.03. Interest. Interest on the principal amount outstanding shall accrue daily at the Interest Rate. Accrued interest for each quarter shall be determined as of the close on the last day of each March, June, September and December, and an advice therefor showing the outstanding balance and the interest thereon shall be rendered to ENVY, as the case may be, and interest thereon shall become due and payable periodically, as mutually agreed upon by EIHL and ENVY, but not less frequently than quarterly in arrears on the first Business Day of each April, July, October and January commencing on the Drawdown Date until paid.

Section 2.04. The Note. As soon as practicable after the Effective Date, but in any event prior to the time that ENVY requests its first advance under this Agreement, 6

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the Note, executed by a duly Authorized Officer of ENVY, shall be delivered to EIHL.

The Note shall be payable to the order of EIHL at its principal office in the City of New Orleans, Louisiana, and shall mature on the Maturity Date (subject to the terms of Article III hereof). The principal amount outstanding as evidenced by the Note, shall accrue interest at the Interest Rate as provided in Section 2.03 hereof, which interest shall be payable as specified in Section 2.03 at the principal office of EIHL in the City of New Orleans, Louisiana. Upon payment in full of the Note and all interest thereon and any other charges due thereunder or hereunder on the Maturity Date, EIHL shall promptly return such Note to ENVY.

Section 2.05. Funding and Repayment. Each advance of funds under this Agreement shall be made in Dollars in immediately available funds on each Drawdown Date, at such place as ENVY and EIHL may hereafter agree. All repayments and prepayments of principal and all payments by ENVY of interest, and all other sums due under the Note or this Agreement shall be made without deduction, setoff, abatement, suspension, deferment, defense or counterclaim, on or before the due date of repayment or payment, and shall be made in Dollars in immediately available funds at the principal office of EIHL in the City of New Orleans, Louisiana or at such other place as EIHL may hereafter designate. All payments received from ENVY shall be applied as follows: first, to the payment of all payments due hereunder or under the Note other than principal and interest; second, to the payment of interest due; and third, to the repayment of principal due on the Note.

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Section 2.06. Optional Prepayments. ENVY, at its option, may prepay all or any part of the principal amount outstanding from time to time without penalty or premium, upon at least two (2) Business Days' prior notice (which, if oral, shall be confirmed promptly in writing) to EIHL. EIHL, at its option, may waive such notice requirement as to any prepayment.

Section 2.07. Use of Proceeds. In order to provide financial assurance, any advance of the Available Credit may be used only by ENVY to meet its expenses and obligations to safely operate and maintain the Vermont Yankee Plant, including payments for nuclear property damage insurance and a retrospective premium pursuant to Rule 10, Part 140, Section 21 of the Code of Federal Regulations (10 CFR 140.21).

Section 2.08. Commitment Fee. A Commitment Fee on the Available Credit remaining undrawn shall accrue daily at the Commitment Fee Rate. The Commitment Fee for each quarter shall be determined as of the close on the last day of each March, June, September and December and an advice thereof showing the remaining Available Credit and the Commitment Fee due shall be rendered to ENVY, and such Commitment Fee shall be due quarterly in arrears on the first Business Day of each April, July, October and January commencing on the Effective Date until the Maturity Date.

Section 2.09. Extension of Maturity Date. This Agreement and the Maturity Date hereunder will be extended for successive periods of two years each upon the mutual agreement of the parties.

ARTICLE III TERMINATION I:\\secsharekET'R-NUCUENAVY.LLC\\YankeeClosingXCredit AgrecmentskE1HI-LS35M.CA.doc

Section 3.01. Termination upon Unenforceability. Subject to Sections 3.02 and 3.04 herein, ELIHL, at its option, shall have the right to cease making advances under this Agreement, to terminate this Agreement and/or to make the outstanding principal amount and interest thereon and any other sums due under the Note and this Agreement immediately due and payable upon written or oral notice to ENVY, but without the requirement of any further or other notice, demand or presentment of the Note for payment, if this Agreement or the Note shall at any time for any reason cease to be in full force and effect or shall be declared to be null and void while the Note is outstanding hereunder, or the validity or enforceability of this Agreement or the Note shall be contested by any Person, or ENVY shall deny that it has any further liability or obligation hereunder and thereunder.

Section 3.02. Termination Upon Cessation of Operations or NRC Approval.

Notwithstanding any other provisions in this Agreement or the Note to the contrary and except as provided in Section 3.03 herein, EIHL agrees that it will provide the Available Credit to ENVY for the purposes defined in Section 2.07, and in no event shall this Agreement be terminated, nor shall EIHL cease to make advances under this Agreement, until the earlier of: (i) ninety (90) days after ENVY has submitted to the NRC a written certification meeting the requirements of 10 CFR Section 50.4(b)(8) and (9) that the fuel has been permanently removed from the reactor vessel of the Vermont Yankee Plant; or (ii) the date on which the NRC has given written approval of the discontinuance or termination of this Agreement.

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Section 3.03. Substitution of Financial Assurance. EIHL can terminate this agreement upon 45 days written notice to ENVY if EIHL has procured a substitute loan facility and/or Letter of Credit for ENVY that meets the financial assurance requirements of the NRC to protect the public health and safety. Such substitute loan facility and/or Letter of Credit shall remain in effect until the earlier of (i) ninety (90) days after ENVY has submitted to the NRC a written certification meeting the requirements of 10 CFR Section 50.4(b)(8) and (9) that the fuel has been permanently removed from the reactor vessel of the Vermont Yankee Plant; or (ii) the date on which the NRC has given written approval of the discontinuance or termination of the substitute loan facility and/or Letter of Credit.

Section 3.04. Limitation on Amendment. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not be voided, canceled, modified or otherwise amended without the prior written consent of the Director of the Office of Nuclear Reactor Regulation. In addition, this Agreement will not be amended without the prior written approval of the Vermont Yankee Nuclear Power Corporation.

ARTICLE IV MISCELLANEOUS Section 4.01. Notices. Any communications between the parties hereto, and notices provided herein to be given, may be given by mailing or otherwise by delivering I:\\secshare\\ETR-NUCL\\ NVY.LLC\\YankeeClosing\\Credit Agrcements\\EIHL.S35M.CA.doc

the same to the Treasurer of EIHL and to the Treasurer of ENVY, or to such other officers or addresses as either party may in writing hereafter specify.

Section 4.02. Remedies. No delay or omission to exercise any right, power or remedy accruing to EIHL under this Agreement shall impair any such right, power or remedy of EIHL, nor shall it be construed to be a waiver of any such right, power or remedy. Any waiver, permit, consent or approval of any kind or character on the part of EIHL of any breach or default under this Agreement, or any waiver on the part of EIHL of any provision or condition of this Agreement, must be in writing and shall be effective only to the extent in such writing specifically set forth. All remedies, either under this Agreement or by law or otherwise afforded to EIHL, shall be cumulative and not alternative.

Section 4.03. Counterparts. This Agreement may be executed in as many counterparts as may be deemed necessary or convenient, all of which, when executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers, as of the date first above written.

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

e*-

rry

. Yelve.on Title/

resident and hief Executive Officer ENTERGY INTERNATIONAL HOLDINGS LTD LLC By:

Steven C. McNeal

Title:

Vice President and Treasurer 12 C:\\Documrnens and Settings\\jscoles\\.Local Settings\\Temnporary Internet Files\\0LK24R1\\EHL.S35M.CA.doc

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers, as of the date first above written.

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

Jerry W. Yelverton

Title:

President and Chief Executive Officer ENTERGY INTERNATIONAL HOLDINGS LTD LLC By:

Steven C. McNeal

Title:

Vice President and Treasurer 12

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EXHIBIT "A"

[NTER-COMPANY CREDIT NOTE

, 2002 New Orleans, Louisiana

$35,000,000 ENTERGY NUCLEAR VERMONT YANKEE, LLC ("ENVY"), a Delaware limited liability company, for value received and in consideration of the execution and delivery by Entergy International Holdings Ltd LLC, a Delaware limited liability company ("EIHL"), of that certain Inter-Company Credit Agreement, dated as of

,2002 (the "Agreement"), hereby promises to pay to the order of EIHL on the date hereof until the Maturity Date, the principal sum of $35,000,000, or so much thereof as may be outstanding hereunder, together with interest thereon on the principal amount hereof from time to time outstanding at the Interest Rate as in effect from time to time. Such interest shall be calculated on the last day of each March, June, September and December, and an advice therefor shall be rendered to ENVY, and shall be due and payable by ENVY periodically as mutually agreed upon by EIHL and ENVY but not less frequently than quarterly in arrears on the first Business Day of each April, July, October and January commencing on the Drawdown Date until paid.

This Note is issued by ENVY pursuant to the Agreement, to which reference is made for certain terms and conditions applicable hereto. Defined terms used in this Note I:\\secshare\\ETR-NUCL\\ NVY. LLC\\YankeeClosing\\Credii Agreements\\EIHL.SJ5M.CA.doc

shall, unless the context otherwise requires, have the same meanings assigned to them in the Agreement.

Both the principal of this Note and interest thereon are payable in lawful money of the United States of America, which will be immediately available on the day when payment shall become due, at the principal office of EIHL, in the City of New Orleans, Louisiana. Interest shall be paid on overdue principal hereof and, to the extent legally enforceable, on overdue interest at the Interest Rate as in effect from time to time.

The outstanding principal amount of this Note shall be increased or decreased, pro tanto, upon any increase or decrease in the outstanding aggregate principal amount as provided under the terms of Sections 2.01 and 2.02 of the Agreement; provided, however, that at no time shall the outstanding principal amount of this Note exceed the Available Credit. Upon any such increase or decrease in the principal amount of this Note, EIHL shall cause to be shown upon the grid portion of this Note the date and amount of such increase or decrease, as the case may be.

Upon payment in full of the principal of and interest on this Note and all other sums due from ENVY to EIHL under terms of this Note and the Agreement at the Maturity Date, this Note shall be canceled and returned to ENVY and shall be of no further operation or effect. The obligation of ENVY to make the payments required to be made on this Note and under the Agreement and to perform and observe the other agreements on its part contained herein and therein shall be absolute and unconditional and shall not be subject to diminution by setoff, counterclaim, abatement or otherwise.

14 I:\\secshare\\ETR-NUCL\\ENVY. LLC\\YankecClosing\\Credit Agreements\\EHL.535M.CA.dac

Upon the occurrence of an event giving rise to a right on the part of EIHL to terminate the Agreement upon enforceability, the maturity of this Note may be accelerated and the principal of and interest on and any other sums due from ENVY to EIHL under the terms of this Note may be declared immediately due and payable as provided for in the Agreement.

Upon the occurrence of a termination by EIHL pursuant to Article III of the Agreement, the maturity of this Note may be accelerated and the principal of and interest on and other sums due from ENVY to EIHL under this Note shall be immediately due and payable at the end of the calendar quarter as provided for in the Agreement.

This Note is issued with the intent that it shall be governed by, and construed in accordance with, the laws of the State of Delaware.

IN WITNESS WHEREOF, ENVY has caused this Note to be duly executed in its name, and its corporate seal to be hereunto affixed and attested, by its duly Authorized Officer all as of the day of

,2002.

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

Title:

I:ýsecsharc'%ETR-NUCLENýVY.LLC\\YankecClosing\\Credit Agreements\\EI-L.S35M.CA-doc

INCREASES AND DECREASES IN OUTSTANDING PR1INCIPAL AMOUNT OF THIS NOTE AMOUNT OF AMOUNT OF UNPAID PRINCIPAL DATE INCREASE DECREASE BALANCE I:\\secsharc\\ETR-NUCLINVY. LLC\\YankeeClosing\\Credit Agrcemcnts\\EIHL.$35M.CA.doc

EXHIBIT "B" ENTERGY NUCLEAR VERMONT YANKEE, LLC CONFIRMATION OF REQUEST FOR ADVANCE To:

Entergy International Holdings Ltd LLC From:

Date:

This will confirm a request for an advance to Entergy Nuclear Vermont Yankee, LLC pursuant to the Inter-Company Credit Agreement by and between Entergy International Holdings Ltd LLC and Entergy Nuclear Vermont Yankee, LLC dated as of

, 200_ as follows:

Amount:

Drawdown Date:

Use of Proceeds:

This certifies that the proceeds of this advance will be used only for the purposes specified in Section 2.07.

Authorized Officer IF THIS CONFIRMATION IS NOT IN ALL RESPECTS IN ACCORDANCE WITH YOUR UNDERSTANDING, PLEASE NOTIFY US IMMEDIATELY.

17 I:\\secshare\\ETR-NUCL\\ENVY. LLC',YankeeClosing\\Credit Agreements\\EIHL.S35M.CA.doc

INTER-COMPANY CREDIT NOTE July 23, 2002 New Orleans, Louisiana

$35,000,000 ENTERGY NUCLEAR VERMONT YANKEE, LLC ("ENVY"), a Delaware limited liability company, for value received and in consideration of the execution and delivery by Entergy International Holdings Ltd LLC, a Delaware limited liability company ("EIHL"), of that certain Inter-Company Credit Agreement, dated as of July 23, 2002 (the "Agreement"), hereby promises to pay to the order of EIHL on the date hereof until the Maturity Date, the principal sum of $35,000,000, or so much thereof as may be outstanding hereunder, together with interest thereon on the principal amount hereof from time to time outstanding at the Interest Rate as in effect from time to time. Such interest shall be calculated on the last day of each March, June, September and December, and an advice therefor shall be rendered to ENVY, and shall be due and payable by ENVY periodically as mutually agreed upon by EIHL and ENVY but not less frequently than quarterly in arrears on the first Business Day of each April, July, October and January commencing on the Drawdown Date until paid.

This Note is issued by ENVY pursuant to the Agreement, to which reference is made for certain terms and conditions applicable hereto. Defined terms used in this Note shall, unless the context otherwise requires, have the same meanings assigned to them in the Agreement.

[:\\sccshare\\ETR-NUCL\\ENVY.LLC\\YariktcClosing\\Credit Agreements\\$3SMM.E1HL.Note.doc

Both the principal of this Note and interest thereon are payable in lawful money of the United States of America, which will be immediately available on the day when payment shall become due, at the principal office of EIHL, in the City of New Orleans, Louisiana. Interest shall be paid on overdue principal hereof and, to the extent legally enforceable, on overdue interest at the Interest Rate as in effect from time to time.

The outstanding principal amount of this Note shall be increased or decreased, pro tanto, upon any increase or decrease in the outstanding aggregate principal amount as provided under the terms of Sections 2.01 and 2.02 of the Agreement; provided, however, that at no time shall the outstanding principal amount of this Note exceed the Available Credit. Upon any such increase or decrease in the principal amount of this Note, EIHL shall cause to be shown upon the grid portion of this Note the date and amount of such increase or decrease, as the case may be.

Upon payment in full of the principal of and interest on this Note and all other sums due from ENVY to EIHL under terms of this Note and the Agreement at the Maturity Date, this Note shall be canceled and returned to ENVY and shall be of no further operation or effect. The obligation of ENVY to make the payments required to be made on this Note and under the Agreement and to perform and observe the other agreements on its part contained herein and therein shall be absolute and unconditional and shall not be subject to diminution by setoff, counterclaim, abatement or otherwise.

Upon the occurrence of a termination by EIHL pursuant to Article III of the Agreement, the maturity of this Note may be accelerated and the principal of and interest I:\\scchare\\ETR-NUCL\\ENVY.LLC\\YankeeClosing\\Credit Agreements\\S35MM.EIHL.Note.doc

EUIL under the terms of this Note may be declared immediately due and payable as provided for in the Agreement.

Upon the occurrence of a termination by EIHL pursuant to Sections 3.02 and 3.03 of the Agreement, the maturity of this Note may be accelerated and the principal of and interest on and other sums due from ENVY to EIHL under this Note shall be immediately due and payable at the end of the calendar quarter as provided for in the Agreement.

This Note is issued with the intent that it shall be governed by, and construed in accordance with, the laws of the State of Delaware.

IN WITNESS WHEREOF, ENVY has caused this Note to be duly executed in its name, and its corporate seal to be hereunto affixed and attested, by its duly Authorized Officer all as of the kJ aJ'day of July, 2002.

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

ferry Yf Yelvvion-fPresident and Chief Executive Officer C:\\Omuments and Settings~jscoleskLocal Settings\\Temnpomzy Internt Files\\0LK24 Z\\$35MM.ElHL.Note-doc

INCREASES AND DECREASES IN OUTSTANDING PRINCIPAL AMOUNT OF THIES NOTE AMOUNT OF AMOUNT OF UNPAID PRINCIPAL DATE INCREASE DECREASE BALANCE I:\\secshare\\ETR-NUCL\\ENVY. LLC\\YankeeCtosing\\Credit Agreements\\$35MM. EffL.Nate.doc

ENCLOSURE 3 ENOC-14-00016 INTER-COMPANY CREDIT AGREEMENT BY AND BETWEEN ENTERGY GLOBAL INVESTMENTS. INC.

AND ENTERGY NUCLEAR VERMONT YANKEE. LLC

INTER-COMPANY CREDIT AGREEMENT BY AND BETWEEN ENTERGY GLOBAL INVESTMENTS, INC.

AND ENTERGY NUCLEAR VERMONT YANKEE, LLC Dated as of July 23,2002 i:\\sccshare\\etr-flucIhenvyIllc\\yankeclotsing\\credit agmcmcmnts\\$35mm-ca.egi.cnvy.doc

Inter-Company Credit Agreement Table of Contents Page Parties I

Article I. General Provisions 1

Article II. The Advances 4

Article III. Termination 7

Article IV. Miscellaneous 8

Signatures 9

Exhibit A A-i Exhibit B B-i

[:\\secshazt\\ETR-NUCL\\ENVY.LLC\\YankeeClosing\\Credit Agreements\\S35MM-CA.EGI.ENVY.doc

INTER-COMPANY CREDIT AGREEMENT This Inter-Company Credit Agreement (this "Agreement"), dated as of the 23rd day of July, 2002, by and between Entergy Global Investments, Inc., an Arkansas corporation

("EGI") and its affiliate, Entergy Nuclear Vermont Yankee, LLC, a Delaware limited liability company ("ENVY").

ARTICLE I GENERAL PROVISIONS Section 1.01. Definitions.

"Authorized Officers" means the Chief Financial Officer or Treasurer of ENVY and such other officers or agents of ENVY as the Chief Financial Officer, by written notice to EGI, shall designate on the Effective Date. The Chief Financial Officer may change such designation from time to time after the Effective Date by written notice to EGI.

"Available Credit" means an aggregate principal amount not to exceed Thirty-five Million Dollars ($35,000,000) at any time outstanding as such amount may be reduced from time to time after the fifth (5th) anniversary of the Effective Date, but in any case to not less than Twenty Million Dollars ($20,000,000).

"Business Day" means a day on which banks are open for business in both the State of Arkansas and the State of New York.

"Dollars" or "$" means lawful money of the United States of America.

"Drawdown Date" means a Business Day selected by ENVY upon which an advance should be funded.

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"Effective Date" means the Closing Date as such term is defined in Section 1. 1 of the Purchase and Sale Agreement.

"Interest Rate" means EGI's "effective cost of capital", within the meaning of Rule 52(b) under the Public Utility Holding Company Act of 1935, as determined from time to time by EGI and notified to ENVY, in each case, computed on the basis of a 365 day year for the actual number of days (including the first day, but excluding the last) occurring in the period such interest is payable.

"Maturity Date" means: (i) March 21, 2012; (ii) such earlier termination date as may occur pursuant to Section 3.01 hereof; or (iii) such later date as may be mutually agreed by the parties hereto pursuant to Section 2.09 hereof. If the Maturity Date is not a Business Day, the next succeeding Business Day shall be deemed to be the Maturity Date.

"Note" means the promissory note of ENVY payable to the order of EGI, substantially in the form annexed hereto as Exhibit "A", evidencing at any given time the principal amount outstanding under this Agreement.

"Person" means an individual, corporation, partnership, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

"Purchase and Sale Agreement" means the Purchase and Sale Agreement dated as of August 15, 2001 by and among Vermont Yankee Nuclear Power Corporation, a Vermont corporation, ENVY and Entergy Corporation, a Delaware corporation.

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"Vermont Yankee Plant" means the Vermont Yankee Nuclear Power Station located in Vernon, Vermont.

Section 1.02. Interpretation of Definitions. All definitions in the singular shall, unless the context specifies otherwise, include and mean the plural, and all references to the masculine gender shall include the feminine; and vice versa.

Section 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of EGI and its subsidiaries' consolidated financial statements, and any financial data submitted pursuant to this Agreement shall be prepared in accordance with such principles.

ARTICLE II THE ADVANCES Section 2.01. The Advances. During the period from the Effective Date to and including the Maturity Date, EGI agrees, on the terms and conditions set forth herein, to extend credit to ENVY in the form of advances in Dollars, such that the aggregate principal amount of all advances outstanding at anytime shall not exceed the Available Credit. During the term of this Agreement, ENVY, at its option without penalty or premium, may from time to time repay all or any part of the principal amount outstanding as provided in Section 2.06 hereof, and may reborrow any amount that has been repaid.

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Each advance of funds under this Agreement shall be in a minimum amount of $100,000 and, if greater, shall be in an integral multiple of $10,000.

Section 2.02. Request for an Advance. Each request for an advance of funds under this Agreement shall be made not later than 9:00 a.m., Arkansas time, three (3) business days prior to the proposed Drawdown Date (or upon such shorter period as the parties agree) by notice from an Authorized Officer of ENVY to EGI, specifying the Drawdown Date, the amount of the advance and a certification that such advance is for the purpose specified in Section 2.07.

Section 2.03. Interest. Interest on the principal amount outstanding shall accrue daily at the Interest Rate. Accrued interest for each quarter shall be determined as of the close on the last day of each March, June, September and December, and an advice therefor showing the outstanding balance and the interest thereon shall be rendered to ENVY, and interest thereon shall become due and payable periodically, as mutually agreed upon by EGI and ENVY, but not less frequently than quarterly in arrears on the first Business Day of each April, July, October and January commencing on the Drawdown Date until paid.

Section 2.04. The Note. As soon as practicable after the Effective Date, but in any event prior to the time ENVY requests its first advance under this Agreement, the Note, executed by a duly Authorized Officer of ENVY, shall be delivered to EGI. The Note shall be payable to the order of EGI at its principal office in the City of Little Rock, I:\\secsharMETR-NUCL\\ENVY.Lip\\YankceClosing\\Credit Agreements\\$35MM-CA.EGI.ENvY.doc

Arkansas, and shall mature on the Maturity Date (subject to the terms of Section 3.01 hereof). The principal amount outstanding as evidenced by the Note, shall accrue interest at the Interest Rate as provided in Section 2.03 hereof, which interest shall be payable as specified in Section 2.03 at the principal office of EGI in the City of Little Rock, Arkansas. Upon payment in full of the Note and all interest thereon and any other charges due thereunder or hereunder on the Maturity Date, EGI shall promptly return such Note to ENVY.

Section 2.05. Funding and Repayment. Each advance of funds under this Agreement shall be made in Dollars in immediately available funds on each Drawdown Date, at such place as ENVY and EGI may hereafter agree. All repayments and prepayments by ENVY of principal and all payments by ENVY of interest, and all other sums due under the Note or this Agreement shall be made without deduction, setoff, abatement, suspension, deferment, defense or counterclaim, on or before the due date of repayment or payment, and shall be made in Dollars in immediately available funds at the principal office of EGI in the City of Little Rock, Arkansas or at such other place as EGI may hereafter designate. All payments received from ENVY shall be applied as follows:

first, to the payment of all payments due hereunder or under the Note other than principal and interest; second, to the payment of interest due; and third, to the repayment of principal due on the Note.

Section 2.06. Optional Prepayments. ENVY, at its option, may prepay all or any part of the principal amount outstanding from time to time without penalty or 1:\\sccshare\\ETR-NUCL\\ENvY.LiXYankceClosing\\Credit Agreements\\535MM-CA.EGI.ENVY.doc

premium, upon at least two (2) Business Days' prior notice (which, if oral, shall be confirmed promptly in writing) to EGI. EGI, at its option, may waive such notice requirement as to any prepayment.

Section 2.07. Use of Proceeds. Any advance of the Available Credit may be used by ENVY for working capital purposes with regard to the Vermont Yankee Plant.

Section 2.08. Extension of Maturity Date. This Agreement and the Maturity Date hereunder will be extended for successive periods of two years each upon the mutual agreement of the parties.

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ARTICLE III TERMINATION Section 3.01. Termination upon Unenforceability. EGI, at its option, shall have the right to cease making advances under this Agreement, to terminate this Agreement and/or to make the outstanding principal amount and interest thereon and any other sums due under the Note and this Agreement immediately due and payable upon written or oral notice to ENVY, but without the requirement of any further or other notice, demand or presentment of the Note for payment, if this Agreement or the Note shall at any time for any reason cease to be in full force and effect or shall be declared to I:\\sechareER-NUCL\\ENVY.LI2YankccCaosig\\Credit Agreements\\S35MM-CA.EGI.ENVY.doc

be null and void while the Note is outstanding hereunder, or the validity or enforceability of this Agreement or the Note shall be contested by any Person, or ENVY shall deny that it has any further liability or obligation hereunder and thereunder.

3.02. Limitation on Amendment. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not be voided, canceled, modified or otherwise amended without the prior written consent of the Director of the Office of Nuclear Reactor Regulation. In addition, this Agreement will not be amended, other than as set forth on Schedule 7.2(n) to the Purchase and Sale Agreement without the prior written approval of the Vermont Yankee Nuclear Power Corporation.

[This space intentionally left blank]

ARTICLE IV MISCELLANEOUS Section 4.01. Notices. Any communications between the parties hereto, and notices provided herein to be given, may be given by mailing or otherwise by delivering the same to the Treasurer of EGI and to the Treasurer of ENVY, or to such other officers or addresses as either party may in writing hereafter specify.

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Section 4.02. Remedies. No delay or omission to exercise any right, power or remedy accruing to EGI under this Agreement shall impair any such right, power or remedy of EGI, nor shall it be construed to be a waiver of any such right, power or remedy. Any waiver, permit, consent or approval of any kind or character on the part of EGI of any breach or default under this Agreement, or any waiver on the part of EGI of any provision or condition of this Agreement, must be in writing and shall be effective only to the extent in such writing specifically set forth. All remedies, either under this Agreement or by law or otherwise afforded to EGI, shall be cumulative and not alternative.

Section 4.03. Counterparts. This Agreement may be executed in as many counterparts as may be deemed necessary or convenient, all of which, when executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.

[This space intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers, as of the date first above written.

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

Title:

/eresident and CEO ENTERGY GLOBAL INVESTMENTS, INC.

By:

Steven C. McNeal

Title:

Vice President and Treasurer C:\\Documents and Settings'~scolcs\\LocaI Settiggs\\Temporary Intcmet Files\\0LK241\\S35MM-CA.EGI.ENVY.doc

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers, as of the date first above written.

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

Jerry Yelverton

Title:

President and CEO ENTERGY LOBAL INVESTMENTNC.

By:

Steven C. McNeal

Title:

Vice President and Treasurer I:\\secshare\\ETf.#JUCL\\ENVY.LLC\\YankecClosing\\S35MM-CA.EGI.ENVY.doC

EXHIBIT "A" INTER-COMPANY CREDIT NOTE July _____, 2002 Little Rock, Arkansas

$35,000,000 ENTERGY NUCLEAR VERMONT YANKEE, LLC, a Delaware limited liability company ("ENVY"), for value received and in consideration of the execution and delivery by Entergy Global Investments, Inc., an Arkansas corporation ("EGI"), of that certain Inter-Company Credit Agreement, dated as of July 2002 (the "Agreement"), hereby promises to pay to the order of EGI on the date hereof until the Maturity Date, the principal sum of $35,000,000, or so much of the Available Credit (as defined in the Agreement) as may be outstanding hereunder on such date, together with interest thereon on the principal amount hereof from time to time outstanding at the Interest Rate as in effect from time to time. Such interest shall be calculated on the last day of each March, June, September and December, and an advice therefor shall be rendered to ENVY, and shall be due and payable by ENVY periodically as mutually agreed upon by EGI and ENVY, but not less frequently than quarterly in arrears on the first Business Day of each April, July, October and January commencing on the Drawdown Date until paid.

This Note is issued by ENVY pursuant to the Agreement, to which reference is made for certain terms and conditions applicable hereto. Defined terms used in this Note 1:\\secsharc\\ETR-NUCL\\ENVY.Li~'(lankecClosing\\Crcdit Agreenments\\$35MM-CA.EGI.ENVY.doc

shall, unless the context otherwise requires, have the same meanings assigned to them in the Agreement.

Both the principal of this Note and interest hereon are payable in lawful money of the United States of America, which will be immediately available on the day when payment shall become due, at the principal office of EGI, in the City of Little Rock, Arkansas. Interest shall be paid on overdue principal hereof and, to the extent legally enforceable, on overdue interest at the Interest Rate as in effect from time to time.

The outstanding principal amount of this Note shall be increased or decreased, pro tanto, upon any increase or decrease in the outstanding aggregate principal amount as provided under the terms of Sections 2.01 and 2.02 of the Agreement; provided, however, that at no time shall the outstanding principal amount of this Note exceed the Available Credit. Upon any such increase or decrease in the principal amount of this Note, EGI shall cause to be shown upon the grid portion of this Note the date and amount of such increase or decrease, as the case may be.

Upon payment in full of the principal of and interest on this Note and all other sums due from ENVY to EGI under terms of this Note and the Agreement at the Maturity Date, this Note shall be canceled and returned to ENVY and shall be of no further operation or effect. The obligation of the ENVY to make the payments required to be made on this Note and under the Agreement and to perform and observe the other I:\\secshare\\ETR-NUCL\\ENVY.LW~!ankeClosing\\Crcdit Agreements\\S35MM-CA.EGI.ENVY-doC

agreements on its part contained herein and therein shall be absolute and unconditional and shall not be subject to diminution by setoff, counterclaim, abatement or otherwise.

Upon the occurrence of a termination by EGI pursuant to Section 3.01 of the Agreement, the maturity of this Note may be accelerated and the principal of and interest in and other sums due from ENVY to EGI under this Note shall be immediately due and payable at the end of the calendar quarter as provided for in the Agreement.

This Note is issued with the intent that it shall be governed by, and construed in accordance with, the laws of the State of Delaware.

1:\\scmha&.TR-NUCL\\EVY.LWX3ankeeClosing\\Credit Agreenmcnts\\S35MM-CA.EGI.ENVY.doc

IN WITNESS WHEREOF, Entergy Nuclear Vermont Yankee, LLC has caused this Note to be duly executed in its name, and its corporate seal to be hereunto affixed and attested, by its duly Authorized Officers all as of the day of July, 2002.

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

Title:

[Vice President]

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INCREASES AND DECREASES IN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AMOUNT OF AMOUNT OF UNPAID PRINCIPAL DATE INCREASE DECREASE BALANCE 1:\\csareET-NULXNVYLW'SacelosngCretAgmemcnts\\$35MM-CA-EGI.ENVY.doc

EXHIBIT "B" ENTERGY NUCLEAR VERMONT YANKEE, LLC CONFIRMATION OF REQUEST FOR ADVANCE To:

Entergy Global Investments, Inc.

Date:

This will confirm a request for an advance to Entergy Nuclear Vermont Yankee, LLC pursuant to the Inter-Company Credit Agreement by and between Entergy Global Investments, Inc. and Entergy Nuclear Vermont Yankee, LLC dated as of_

200 as follows:

Amount:

Drawdown Date:

Use of Proceeds:

This certifies that the proceeds of this advance will be used only for the purposes specified in Section 2.07.

Authorized Officer IF THIS CONFIRMATION IS NOT IN ALL RESPECTS IN ACCORDANCE WITH YOUR UNDERSTANDING, PLEASE NOTIFY US IMMEDIATELY.

i:\\secsharc\\ctr-nuqJ1W.Ilc\\yankccclosing\\credit agrccments\\$35mm-ca~cgi.envy.doc

INTER-COMPANY CREDIT NOTE July 23, 2002 Little Rock, Arkansas

$35,000,000 ENTERGY NUCLEAR VERMONT YANKEE, LLC, a Delaware Limited Liability Company ("ENVY"), for value received and in consideration of the execution and delivery by Entergy Global Investments, Inc., an Arkansas Corporation ("EGI"), of that certain Inter-Company Credit Agreement, dated as of July 23, 2002 (the "Agreement"), hereby promises to pay to the order of EGI on the date hereof until the Maturity Date, the principal sum of $35,000,000, or so much thereof as may be outstanding hereunder, together with interest thereon on the principal amount hereof from time to time outstanding at the Interest Rate as in effect from time to time. Such interest shall be calculated on the last day of each March, June, September and December, and an advice therefor shall be rendered to ENVY, and shall be due and payable by ENVY periodically as mutually agreed upon by EGI and ENVY, but not less frequently than quarterly in arrears on the first Business Day of each April, July, October and January commencing on the Drawdown Date until paid.

This Note is issued by ENVY pursuant to the Agreement, to which reference is made for certain terms and conditions applicable hereto. Defined terms used in this Note shall, unless the context otherwise requires, have the same meanings assigned to them in the Agreement.

Both the principal of this Note and interest hereon are payable in lawful money of the United States of America, which will be immediately available on the day when payment shall become due, at the principal office of EGI, in the City of Little Rock, Arkansas.

Interest shall be paid on overdue principal hereof and, to the extent legally enforceable, on overdue interest at the Interest Rate as in effect from time to time.

The outstanding principal amount of this Note shall be increased or decreased, pro tanto, upon any increase or decrease in the outstanding aggregate principal amount as provided under the terms of Sections 2.01 and 2.02 of the Agreement; provided, however, that at no time shall the outstanding principal amount of this Note exceed the Available Credit. Upon any such increase or decrease in the principal amount of this Note, EGI shall cause to be shown upon the grid portion of this Note the date and amount of such increase or decrease, as the case may be.

Upon payment in full of the principal of and interest on this Note and all other sums due from ENVY to EGI under terms of this Note and the Agreement at the Maturity Date, this Note shall be canceled and returned to ENVY and shall be of no further operation or effect. The obligation of the ENVY to make the payments required to be made on this Note and under the Agreement and to perform and observe the other agreements on its part contained herein and therein shall be absolute and unconditional and shall not be subject to diminution by setoff, counterclaim, abatement or otherwise.

Upon the occurrence of an event giving rise to a right on the part of EGI to terminate the Agreement upon the enforceability, the maturity of this Note may be accelerated and the principal of and interest on and any other sums due from ENVY to EGI under the terms of the Note may be declared immediately due and payable as provided for in the Agreement.

Upon the occurrence of a termination by EGI pursuant to Section 3.01 of the Agreement, the maturity of this Note may be accelerated and the principal of and interest in and other sums due from ENVY to EGI under this Note shall be immediately due and payable at the end of the calendar quarter as provided for in the Agreement.

This Note is issued with the intent that it shall be governed by, and construed in accordance with, the laws of the State of Delaware.

IN WITNESS WHEREOF, Entergy Nuclear Vermont Yankee, LLC has caused this Note to be duly executed in its name, and its corporate seal to be hereunto affixed and attested, by its duly Authorized Officers all as of the A3 day of July, 2002.

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

g"

/e erry Yel, rton Title/President and Chief Executive Officer

INCREASES AND DECREASES IN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AMOUNT OF AMOUNT OF UNPAID PRINCIPAL DATE INCREASE DECREASE BALANCE 1

4*

4.

A S

.1

AMENDMENT NO. 1 TO INTERCOMPANY CREDIT AGREEMENT BY AND BETWEEN ENTERGY GLOBAL INVESTMENTS, INC. AND ENTERGY NUCLEAR VERMONT YANKEE, LLC WHEREAS, Entergy Global Investments, Inc., an Arkansas corporation ("EGIl'), and Entergy Nuclear Vermont Yankee, LLC, a Delaware corporation ("ENVY"), entered into an Intercompany Credit Agreement dated July 23, 2002 (the "Agreement");

The parties hereto agree to amend Section 2.03 of the Agreement to be as follows:

Section 2.03. Interest. Interest on the principal amount outstanding shall accrue daily at the Interest Rate. Accrued interest shall be compounded for each quarter in arrears and shall be determined as of the last day of each March, June, September and December, and an advice therefor showing the outstanding balance and the interest thereon shall be rendered to EGII, and interest thereon shall become due and payable at the Maturity Date, or earlier at the option of EGII.

Except as expressly set forth above, the Agreement as in effect on the date hereof is hereby ratified and confirmed in all respects; and further This Agreement may be executed in counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their duly authorized officers, as of

,2004.

ENTERGY GLOBAL INVESTMENTS, INC.

By:

Steven C. McNeal

Title:

Vice President & Treasurer ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

Steven C. McNeal

Title:

Vice President & Treasurer I:\\cadshare\\inancing Resolutions\\Amendment I ICCA Merge Main Doc.doc

AMENDMENT NO. 1 TO INTERCOMPANY CREDIT NOTE BY ENTERGY NUCLEAR VERMONT YANKEE, LLC IN FAVOR OF ENTERGY GLOBAL INVESTMENTS, INC.

WHEREAS, Entergy Nuclear Vermont Yankee, LLC, a Delaware corporation ("ENVY"),

entered into a Intercompany Credit Note dated July 23, 2002 in an amount of Thirty-Five Million

($35,000,000) Dollars (the "Note"), in favor of Entergy Global Investments, Inc., an Arkansas corporation ("EGL");

The parties hereto agree to amend the last sentence of the first paragraph of the Note to be as follows:

"Interest on the principal amount outstanding shall accrue daily at the Interest Rate.

Accrued interest shall be compounded for each quarter in arrears and shall be determined as of the last day of each March, June, September and December, and an advice therefor showing the outstanding balance and the interest thereon shall be rendered to EGH, and interest thereon shall become due and payable at the Maturity Date, or earlier at the option of EGII."

Except as expressly set forth above, the Note as in effect on the date hereof is hereby ratified and confirmed in all respects; and further IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their duly authorized officers, as of 4

IA

,2004.

Accepted and agreed to:

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

KAceE Steven C. McNeal

Title:

Vice President & Treasurer ENTERGY GLOBAL INVESTMENTS, INC.

By:

44coek-,1 Steven C. McNeal

Title:

Vice President & Treasurer

\\*metnd~lglsvc\\cadshare\\Financing Resolutions\\Amendment ICC Note Merge Main Doc.doc

EXTENSION OF MATURITY DATE No. 1 INTER-COMPANY CREDIT AGREEMENT BY AND BETWEEN ENTERGY NUCLEAR VERMONT YANKEE, LLC AND ENTERGY GLOBAL, LLC THIS EXTENSION AGREEMENT, dated March 21, 2012 (this "Extension Agreement"), is by and between Entergy Nuclear Vermont Yankee, LLC, a Delaware limited liability company ("Borrower"), and Entergy Global, LLC, an Arkansas limited liability company ("Lender"), successor to Entergy Global Investments, Inc., an Arkansas corporation. Capitalized terms used herein but not otherwise defined will have the respective meanings ascribed to them in the Agreement.

RECITALS A. Lender and Borrower are parties to that certain Inter-Company Credit Agreement, dated July 23, 2002, as amended (the "Agreement").

B. Section 2.08 of the Agreement provides that the Agreement and the Maturity Date may be extended for successive periods of two years each upon the mutual agreement of the parties.

C. The parties desire to extend the Agreement and the Maturity Date for an additional two year period.

NOW, THEREFORE, the parties hereto, intending to be legally bound, do hereby mutually agree as follows:

I.

The Agreement and the Maturity Date are extended for an additional two year period commencing on March 21, 2012 and ending on March 21, 2014.

II.

Effectiveness.

(a)

This Extension Agreement shall be effective as of the date hereof.

(b)

Except as expressly provided herein, the Agreement shall remain in full force and effect without modification or alteration.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this Extension Agreement to be executed by their duly authorized representatives as of the date first written above.

ENTERGY NUCLEAR VERMONT YANKEE, LLC By:

Name: Steven C. McNeal

Title:

Vice President and Treasurer ENTERGYG BAL, LLC Name: Steven C. McNeal

Title:

Vice President and Treasurer

EXTENSION OF MATURITY DATE No. 2 INTER-COMPANY CREDIT AGREEMENT BY AND BETWEEN ENTERGY NUCLEAR VERMONT YANKEE, LLC AND ENTERGY GLOBAL, LLC THIS EXTENSION AGREEMENT, dated March 21, 2014 (this "Extension Agreement"), is by and between Entergy Nuclear Vermont Yankee, LLC, a Delaware limited liability company ("Borrower"), and Entergy Global, LLC, an Arkansas limited liability company ("Lender"), successor to Entergy Global Investments, Inc., an Arkansas corporation. Capitalized terms used herein but not otherwise defined will have the respective meanings ascribed to them in the Agreement.

RECITALS A. Lender and Borrower are parties to that certain Inter-Company Credit Agreement, dated July 23, 2002, as amended (the "Agreement").

B. Section 2.08 of the Agreement provides that the Agreement and the Maturity Date may be extended for successive periods of two years each upon the mutual agreement of the parties.

C. The parties desire to extend the Agreement and the Maturity Date for an additional two year period.

NOW, THEREFORE, the parties hereto, intending to be legally bound, do hereby mutually agree as follows:

I.

The Agreement and the Maturity Date are extended for an additional two year period commencing on March 21, 2014 and ending on March 21, 2016.

II.

Effectiveness.

(a)

This Extension Agreement shall be effective as of the date hereof.

(b)

Except as expressly provided herein, the Agreement shall remain in full force and effect without modification or alteration.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this Extension Agreement to be executed by their duly authorized representatives as of the date first written above.

ENTERGY NUCLEAR VERMONT

YANKEE, LL?

By:__

Name: Steven C. McNeal

Title:

Vice President and Treasurer ENTERGY GL L LLC By:

Name: Steven C. McNeal

Title:

Vice President and Treasurer

ENCLOSURE 4 ENOC-14-00016 LETTER FROM ENTERGY CORPORATION TO VERMONT YANKEE NUCLEAR POWER CORPORATION

July 31, 2002 Vermont Yankee Nuclear Power Corporation Old Ferry Road Brattleboro, VT

Dear Ladies and Gentlemen:

Reference is made to the Inter-Company Credit Agreement dated as of the date hereof by and between Entergy Global Investments, Inc. (CEGI") and Entergy Nuclear Vermont Yankee, LLC

("ENVY") ("Working Capital Credit Agreement") and to the Inter-Company Credit Agreement dated as of the date hereof between Entergy International Holdings Ltd, LLC ("EIHL") and ENVY C"Financial Assurances Credit Agreement"). The Financial Assurances Credit Agreement and the Working Capital Credit Agreement are hereinafter collectively referred to as the "Credit Agreements". Pursuant to the Credit Agreements, EGI and EIHL, both of which are indirect wholly owned subsidiaries of the undersigned, have agreed to provide funding of up to

$70 million in the aggregate to ENVY in connection with ENVY's ownership of the Vermont Yankee Nuclear Power Station ("VY"). ENVY is also an indirect wholly owned subsidiary of the undersigned.

In consideration of the benefits to be derived by the undersigned from ENVY's ownership of VY, the undersigned agrees that it will cause EGI and EIHL to perform their obligations under the Financial Assurances Credit Agreement and the Working Capital Credit Agreement, respectively, including but not limited to making of advances to ENVY provided thereunder up to the aggregate amount of $60 million. The undersigned further agrees that the Credit Agreements will not be amended such that the aggregate credit available thereunder is less than

$60 million.

The undersigned further agrees that in the event ENVY makes a determination that it will permanently cease VY operations and at the time of such determination, the credit available under the Working Capital Credit Agreement is less than $25 million, the undersigned will make available to ENVY as working capital an amount equal to the differences between $25 million and the amount available under the Working Capital Credit Agreement and if at such time, the amount available under the Financial Assurances Credit Agreement is less than $35 million, the undersigned will make available to ENVY as financial assurance an amount equal to the difference between $35 million and the amount available under the Financial Assurance Credit Agreement.

This agreement shall take effect immediately and will remain in effect and remain irrevocable until such time as either (1) ENVY is no longer the owner or operator of VY, and (2) ENVY has submitted to the NRC the certification required by 10 CFR Section 50.82(aXI) that the fuel has been permanently removed from the reactor vessel of VY and ninety (90) days have passed since the NRC has received the post-shutdown decommissioning activities report ("PSDAR').

Vermont Yankee Nuclear Power Corporation July 31, 2002 Page 2 Nothing in this agreement shall restrict the right of the undersigned to require that ENVY permanently cease operations of VY rather than using funds available under the Credit Agreements for continued operations.

The undersigned hereby represents and warrants that its obligations under this agreement are valid, binding and enforceable in accordance with its terms and does not require the consent, approval or authorization of any government authority or third party other than those which have been obtained and are in full force and effect prior to the date hereof.

This agreement shall be governed by and construed in accordance with the laws of the State of Vermont without giving effect and conflict of law principles.

Sincerely, ENTERGY CORPORATION Steven C. McNeal Vice President and Treasurer LIVC/1433364.1

ENCLOSURE 5 ENOC-14-00016 FITZPATRICK OPERATING AGREEMENT

OPERATING AGREEMENT FOR JAMES A.

FITZPATRICK NUCLEAR POWER STATION This Operating Agreement is made and entered into as of October 16, 2000 between Entergy Nuclear Operations, Inc.

(Company) and Entergy Nuclear FitzPatrick, LLC (Owner).

WHEREAS, both of the parties hereto are wholly owned indirect subsidiaries of Entergy Corporation; and

WHEREAS, Owner has entered into a contract to purchase a nuclear power plant located in the State of New York, known as the James A. FitzPatrick Power Station(the Plant) which it will acquire from the Power Authority of the State of New York (NYPA); and

WHEREAS, a condition to the Closing of the acquisition of the Plant by Owner is the approval by the Nuclear Regulatory Commission (NRC) of the Joint Application of NYPA, Owner and Company for Transfer of Facility Operating License, No.

DPR-59 NRC Docket No.

50,333, for the Plant, issued by the NRC; and

WHEREAS, Owner desires to delegate to the Company certain operating responsibility for - but not ownership of the Plant; and

WHEREAS, Owner desires that such operating responsibility be consistent with Owner's obligations and responsibilities under all pertinent state and federal law; and

WHEREAS, Owner desires to contract with Company so as to enable Company to possess, use and operate the Plant as Owner's agent, I

and Company desires to undertake such responsibility, all subject to and in accordance with the terms and conditions set forth herein; NOW THEREFORE, IN CONSIDERATION of the mutual obligations set forth herein, the parties hereto agree to the following:

ARTICLE I.

DEFINITIONS As used herein:

1.1 "Application" means the Joint Application of Owner, Company and NYPA before the Nuclear Regulatory Commission to amend the Operating License so as to authorize and reflect in the license the change from NYPA to Owner as the licensee authorized to own the Plant and to reflect the change from NYPA to Company as the licensee authorized to possess, use and operate the Plant, as previously or hereafter supplemented or amended.

1.2 "Capital Improvements" means improvements, additions, modifications or replacements of property at the Plant that are properly capitalized and recorded on Owner's books of account as assets under the FERC Uniform System of Accounts, and that are in accordance with applicable rules and regulations of any regulatory authority having jurisdiction in the matter and any related Taxes incurred or accrued thereon.

1.3 "Costs of Capital Improvements" means all costs of Capital Improvements as defined in Section 1.2 herein.

1.4 "Costs of Operation" or "Cost of Operation" means all costs of Operation, decontamination and decommissioning and any related taxes incurred or accrued under or with respect to this Operating Agreement.

These costs shall include, without limitation, any costs 2

incurred in connection with the Operation of the Plant, but excluding costs paid directly by Owner for Nuclear Fuel that is owned by Owner or leased directly by Owner from one or more third parties.

All of such Costs of Operation shall be calculated, and allocation of such costs shall be made, as the parties shall from time to time agree, and shall be made in accordance with any applicable rules and regulations of the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935, the FERC under the Federal Power Act and other regulatory authorities having jurisdiction in the matter.

1.5 "Effective Date" means the effective date of this Operating Agreement as determined pursuant to Section 8.1.

1.6 "FERC" means the Federal Energy Regulatory Commission or its successor.

1.7 "Force Majeure" means any cause beyond the affected party's reasonable control.

1.8 "Good Utility Practice" means any of the practices, methods and acts engaged in or approved by a significant proportion of the nuclear power plant industry at the time of the reference, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with reliability, safety and expedition.

Good Utility Practice shall apply not only to functional parts of the Plant, but also to appropriate structures, landscaping, signs, lighting and other facilities.

Good Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all 3

others, but rather to be a spectrum of prudent and acceptable practices, methods or acts.

1.9 "Gross Negligence and/or Willful Misconduct" means any act or omission by or authorized by a party's officers, persons reporting directly to such officers or its Board of Directors that is performed, authorized or omitted consciously with prior actual knowledge or with reckless disregard of facts indicating that such conduct or omission is likely to result in actionable damages or injury to persons or property or to result in a violation of laws or regulations.

1.10 "NRC" or "Nuclear Regulatory Commission" means the United States Nuclear Regulatory Commission or its successor having responsibility for administration of the licensing and regulation of the operation of nuclear utilization facilities under the Atomic Energy Act of 1954 and amendments thereto.

1.11 "Nuclear Fuel" means any source, special nuclear or by-product material as defined in the Atomic Energy Act of 1954 and any amendments thereto, including any ores, mined or unmined, uranium concentrates, natural or enriched uranium hexafluoride, or any other material in process containing uranium, and any fuel assemblies or parts thereof, any of which are required for the generation of electricity at the Plant.

1.12 "Operate" and its derivatives means to possess, use, manage, control, maintain, repair, operate and decommission.

1.13 "Operating License" means the Facility Operating License No.

DPR-59 for the Plant and amendments thereto as issued from time to time by the NRC.

4

1.14 "Purchase and Sale Agreement" means the Purchase and Sale Agreement among Owner, NYPA and Entergy Nuclear Indian Point 3,LLC dated March 28, 2000.

1.15 "Taxes" means any or all federal, state and/or local, municipal, ad valorem, property, occupation, severance, generation, first use, conversion, Btu or power, transmission,

utility, gross receipts, privilege, sales, use, consumption, excise, lease, transaction, utility, gross receipts, privilege, sales, use, consumption, excise, lease, transaction, and other taxes, governmental charges, license fees, permit fees, assessments, or increases in or interest on or penalties relating to any of the foregoing, now existing or otherwise applicable at any time during the Term, other than taxes based on net income or net worth; except Taxes shall not include any item for which an extension or exclusion from Taxes may apply.

ARTICLE II.

COMPANY'S AUTHORITY AND RESPONSIBILITY WITH RESPECT TO OPERATION OF THE PLANT 2.1 Authority for Operation.

Company and Owner agree that Company shall act as the agent of Owner to take all actions necessary to make Capital Improvements to and to operate the Plant, each in accordance with Good Utility Practice and in the best interest of Owner.

Owner hereby grants Company the authority to take any and all action, in Owner's name and on Owner's behalf, necessary to obtain and/or maintain all licenses and permits issued by the NRC or other regulatory bodies relating to the Plant and necessary to comply with all applicable regulations of the NRC and other governmental bodies having jurisdiction over any aspect of the Cost of Operation, Cost of 5

Capital Improvements, making of Capital Improvements and/or Operation of the Plant.

Without limiting the foregoing delegation, Company shall act as the agent for Owner in all matters related to NRC licensing of the Plant.

Furthermore, Company shall provide Owner with data and assistance as may be requested by Owner to enable Owner to satisfactorily discharge, as the owner of the Plant, its responsibilities with regard to the Plant, including its responsibilities to its securities holders, to regulatory authorities and others.

Company shall Operate, and make Capital Improvements at, the Plant in accordance with the Operating License and applicable laws and regulatory requirements and shall have sole authority, as the Operator of the Plant, to make all decisions relating to public health and safety.

Subject to the provisions of Sections 2.2 and 2.3 herein, in order to enable Company fully and effectively to perform its duties hereunder, Company shall have, and Owner does hereby grant to Company, as agent for Owner, the power and authority to exercise in accordance with applicable laws, the rights of Owner under, and to execute, modify, amend or terminate, any contracts, including, without limitation, leases, easements, agreements, purchase orders, licenses, permits and privileges relating to the Operation of, and making of Capital Improvements to, the Plant, as agent for Owner.

Company may perform its duties hereunder through its employees, affiliated persons or non-affiliated persons.

Except as provided in Section 11.5 hereof, the duties of Owner and Company hereunder shall be subject in all events to receipt of any further necessary consents or regulatory approvals.

Subject to Company's obligations and responsibilities under this Operating Agreement, the Operating License and applicable laws and 6

regulatory requirements, Company agrees that it shall comply with directions from Owner relating to the Operation and making of Capital Improvements (including expenditures therefor) at the Plant.

2.2 Limitation on Company's Authority.

Notwithstanding Section 2.1 above, Company shall have no authority under this Operating Agreement without the written approval of Owner, which approval shall not be unreasonably withheld, (a) to obligate Owner to pay Costs of Capital Improvements and Costs of Operation that are either materially different from or in excess of the expenditures to be agreed upon pursuant to Section 5.1 herein, (b( to obligate Owner, to pay Costs of Capital Improvements that have not been approved pursuant to any Owner policy with respect to its Management Committee's approval of capital expenditures, and/or (c) to sell, encumber or otherwise dispose of any real property or, other than surplus or obsolete items, any equipment or personal property comprising the Plant.

In addition, Owner shall have exclusive authority to define the economic life and to determine when the economic life of the Plant has ended and, in its sole discretion, may direct Company, in writing, to retire and decommission the Plant or to operate the Plant at reduced capacity and/or to place the Plant in a safe shutdown condition; provided, however, Company shall take any such action in a manner which it determines, in its sole

judgment, is consistent with public health and safety, the Operating License and applicable laws and regulations.

In addition, Company is authorized to Operate the Plant at a reduced capacity or otherwise to place the Plant in a safe shutdown condition at any time Company determines such action is necessary to comply with the Operating License and applicable laws and regulations.

All costs incurred by

Company in taking such action relating to decommissioning or shutdown of the Plant shall be considered Costs of Operation or Costs of Capital Improvements, as the case may be.

With respect to acquisitions by

Company, as agent for Owner, of Capital Improvements and other equipment or property, including, but not limited to, materials, supplies and spare parts inventories, for the Plant, Owner's Treasurer or Chief Financial Officer shall provide Company from time to time, as necessary, with Owner's policies for prior Owner Management Committee's approval for Capital Improvements and instructions or guidelines as to the preferred financial structure of such acquisitions (i.e.,

purchase, lease, etc.), which shall be used in implementing such acquisitions.

2.3 Execution; Disclosures in Third-Party Contracts.

Contracts relating to the Operation of the Plant, including, without limitation, any contracts for Capital Improvements or contracts for the sale, lease or acquisition of materials, inventories, supplies, spare parts, equipment, fuel, Nuclear Fuel (excluding contracts for the financing through lease or otherwise for Nuclear Fuel) or services, shall be executed by Company, as agent for Owner or by Owner, upon Company's reasonable request.

If a contract subject to Section 2.1 relates to both the Plant and one or more other power plants that are operated by Company, such contracts ("Multi-Plant Contracts") shall be executed by Owner at Company's request, on reasonable grounds, or by

Company, on reasonable grounds, on behalf of Owner, and the owners of the other applicable plants.

Company further agrees that with respect to Multi-Plant Contracts, Company will not enter into such Multi-Plant Contracts without the prior written consent of Owner unless such contract contains a provision for several but not joint liability of 8

the owners of the plants under such Multi-Plant Contracts in proportion to the costs allocated to the various power plants under such contracts.

In order to induce third parties to contract with Company with regard to the performance of Company's obligations under this Operating Agreement,

Owner, hereby expressly agrees to be bound by the terms of all contracts executed by Company in accordance with its agency authority as described herein (including, without limitation, any provisions that limit or protect against a third party's liability, provisions granting indemnity to third parties and limitations or exclusions of warranties) to the same extent as if Owner were an original signatory to such contract.

In addition, if Owner's signature is deemed by Company to be necessary to induce a third party to contract with Company, Owner agrees to not unreasonably refuse to execute such third-party agreements as Company may request from time to time.

It is further agreed that the Treasurer or Chief Financial Officer of Owner shall designate and notify Company in writing of any contracts or types of contracts related to the Plant that are to be executed by Company, in its capacity as Owner's agent, that Owner desires to review and monitor so that Owner may evaluate the potential impact on Owner of such contracts and to advise Company of such impact in order that Company may take all steps to protect Owner's interests.

Accordingly, Company agrees to provide Owner copies of such designated contracts within a reasonable time prior to Company's proposed execution, amendment or termination thereof.

2.4.

Enforcement of Rights.

A.

Owner hereby recognizes that, except with respect to assets, circumstances, liabilities or claims for which NYPA will 9

retain responsibility after the Effective Date pursuant to the Purchase and Sale Agreement, Company has complete and exclusive authority with respect to the handling of the defense, prosecution and/or settlement of disputes with third parties relating in any way to the Plant, provided that Company shall obtain Owner's written consent and direction prior to instituting or settling any lawsuit, claim, proceeding or action relating to the Plant which Owner may designate in writing as requiring "Owner direction."

B.

With respect to litigation relating in any way to the Plant that arises out of facts or circumstances for which NYPA may have liability, Owner shall keep Company advised as to whether NYPA is handling the defense or prosecution of such litigation or whether Company should prosecute such litigation.

C.

Subject to Article VI, it is further agreed that to the extent Company incurs any liability to a third party in performing its duties under this Operating Agreement, amounts paid by Company because of such liability and Company's expenses in defending claims by third parties or prosecuting claims against third parties shall be considered Costs of Operation.

2.5 Company's Responsibilities at Other Plants.

Company's duties and responsibilities under this Operating Agreement shall not be construed to interfere with Company's authority and responsibility to operate any other plants for which it has operating responsibility; provided, however, that Company hereby agrees that it will not knowingly take any action or fail to take any action in connection with the Plant that is inconsistent with Good Utility 10

Practice and puts Owner at a disadvantage to Company or to the owners of such other plants.

ARTICLE III.

OWNER'S RESPONSIBILITY AND OBLIGATIONS 3.1 Payment.

In consideration of the services rendered by Company hereunder, and subject to the provisions of this Operating Agreement, Owner hereby agrees to pay the Costs of Operation and Costs of Capital Improvements incurred by Company pursuant to Article V hereof.

3.2 Site Access and Control.

In order for Company to Operate the Plant in accordance with the Operating License and other applicable regulatory requirements, Owner grants Company possession and use of the property constituting the Plant and agrees to provide

Company, its agents, employees and contractors unrestricted access to the property constituting the Plant, including, without limitation, the real property and the switchyard facilities acquired by Owner, equipment and personal property located on the Plant site.

As required by the Operating License and applicable statutes, and NRC regulations, Owner further agrees that Company shall have authority to exercise complete control over the Exclusion Area as defined in the Updated Safety Analysis Report for the Plant and to determine all activities within the area.

3.3 Support Services from Owner.

Owner agrees that it will cooperate with Company in a manner so that Company may exercise its authority and fulfill its responsibilities pursuant to this Operating Agreement.

In this connection, Owner further agrees to delegate to Company, as agent for Owner, rights and obligations of I1

Owner as necessary for Company to fulfill its obligations hereunder, including without limitation, rights and obligations under the following contracts:

(1) the Interconnection and Operation between NYPA and Owner dated as of March 28, 2000 relating to services provided by NYPA to interconnect the Plant and its switchyard to NYPA's transmission system and (ii) the Emergency Preparedness Agreements set forth in Schedule 2.1(k) (ii) of the Purchase and Sale Agreement.

Owner agrees to provide directly or through its affiliated companies subject to their reasonable capability and availability and compliance with applicable laws and regulatory restrictions, additional services or assistance required by Company and agreed to by Owner in writing in connection with the Operation of the Plant, including, without limitation, the following:

(1) communications access and support, (2) transportation support, (3) payroll, benefits, and personnel assistance, and (4) other services as may be required in order to allow Company to conduct safe, economic and efficient operations at the Plant]

3.4 No Changes to Facilities, Procedures or Practices.

So that Company will be capable of Operating the Plant in accordance with the Operating License and other applicable regulatory requirements, Owner agrees that it will not make any changes or authorize others to make changes to facilities, procedures or practices that affect compliance with NRC regulations or commitments, without prior consultation with and written consent from Company, which consent Company shall not unreasonably withhold.

3.5 Off-Site Power Supply.

Prior to the Effective Date of this Operating Agreement, Owner shall enter into station service 12

agreement with Niagara Mohawk Holdings, Inc. or one of its affiliated companies providing the Plant with blackout power or off-site power.

Owner agrees that it shall provide the Plant with an assured source of off-site power in accordance with procedures to be agreed upon, from time to time, by the parties.

ARTICLE IV.

OWNERSHIP OF CAPACITY AND ENERGY 4.1 Ownership of Capacity and Energy.

Owner at all times during the term of this Operating Agreement, shall be and remain the owner of, and shall be entitled to all of, the capacity and energy from the Plant which Owner shall sell at wholesale.

4.2 Determination of Output.

Net positive output of the Plant shall be the gross generation of the Plant, less station service requirements, and less adjustments for losses experienced.

In the event the output is negative (i.e., station service and losses exceed the gross generation),

Owner shall be responsible for providing necessary power at the Plant during such period in accordance with Good Utility Practice and Section 3.5 herein.

ARTICLE V.

PAYMENT; AUDIT AND INSPECTION RIGHTS 5.1 Payment Obligation.

On or before November 1 (or such other dates as may be agreed to by the parties) of each year during the term of this Operating Agreement, (1) Company will submit for Owner's review and approval the total annual capital budget for the Plant, the annual operating and capital programs (as used herein the term "annual operating and capital programs" shall include details of the budgeted costs for those programsl for the Plant, and the components of 13

Company's five-year business plan that relate to the Plant, and (2)

Company and Owner will agree in writing upon maximum amounts to be paid, within parameters of the then-current Company five-year business plan, by Owner for the following budget year pursuant to this Operating Agreement with respect to (i) Costs of Capital Improvements and (ii)

Costs of Operation.

Owner and Company recognize that mutually agreeable adjustments may be made to such maximum amounts to be paid and/or to the previously approved capital budget, operating and capital programs or the components of Company's five-year business plan relating to the Plant, from time to time during any budget year, to reflect the impact of Force Majeure, unforeseen circumstances, financial constraints or other events.

Without limiting Owner' obligations under Article VI, Owner agrees to pay any and all Costs of Operation and Costs of Capital Improvements within such maximum amounts to be paid and consistent with the previously approved capital budget and operating and capital programs, but Owner shall not be obligated to pay Costs of Operation and Costs of Capital Improvements in excess of the applicable maximum expenditure limitations or which differ materially from the types of expenditures reflected -in the capital budget and operating programs previously approved by Owner, except for any such excess or different Costs of Operation and Costs of Capital Improvements that Owner agrees to pay.

It is further agreed that Company will keep Owner timely informed and obtain Owner's approval regarding projects which are reasonably anticipated to cause a material change to the components of the then-current Company five-year business plan that relate to the Plant as previously approved by Owner.

14

5.2 Payment and Billing.

Subject to Section 5.1 above and in accordance with procedures to be agreed upon in writing by the parties, Company hereby agrees to furnish Owner, at such times as may be required by Owner estimates of the Costs of Operation and Costs of Capital Improvements expected to be owed for the next succeeding period.

Owner shall promptly deposit in the bank account(s) to be established pursuant to Section 5.3 such funds as shall be adequate to pay Company and third parties on a timely basis with respect to Costs of Capital Improvements and Costs of Operation.

In addition, Owner will pay for costs incurred under any contracts relating to the Plant with respect to which Company, as agent, has approved and has directed the third party to provide direct billing to Owner.

Payments of the Costs of Capital Improvements and Costs of Operation specified herein shall be made notwithstanding the availability or lack of availability of the Plant to produce power.

No payment made pursuant to this Operating Agreement shall constitute a waiver of any right of Owner to question or contest the correctness of Costs of Capital Improvements and Costs of Operation charged hereunder.

5.3 Bank Accounts.

The parties agree that one or more special bank accounts may be established and maintained in one or more banks of Owner's choice, in a manner that will indicate the custodial nature of the accounts, for the deposit by Owner and disbursement by Company or Owner of Costs of Capital Improvements and Costs of Operation.

5.4 Audit and Adjustments.

Company shall maintain books and records to support the Costs of Capital Improvements and Costs of Operation for such period of time as Owner shall direct.

From time to 15

time, Owner may, and Company shall permit, at Owner's option and expense as appropriate, in accordance with any applicable Entergy System established auditing policies conduct or cause to be conducted by others, inclu~ding any regulatory authorities having jurisdiction, audits of the books and records of Company.

Such audits shall be conducted at reasonable mutually agreed upon times, with agreement not being unreasonably withheld.

Further, Company shall make available to Owner a copy of any audit reports prepared by or at the request of Company concerning its books and records relating to the Operation of the Plant, and the cost of preparing such audit reports shall be a Cost of Operation payable pursuant to this Article V.

Company shall credit Owner with recoveries, whenever received, from third parties and shall charge or credit Owner with any underpayments or overpayments of Costs of Capital Improvements and Costs of Operation, as the case may be.

Force Majeure shall not excuse failure by Company to credit Owner with third-party recoveries or overpayments of Costs of Capital Improvements and Costs of Operation owing to Owner at any time.

ARTICLE VI.

LIMITATION OF LIABILITY Release and Limitation of Liability.

To the fullest extent permitted by applicable law, Owner shall not be entitled to recover from, and Owner hereby expressly releases, Company, its

agents, officers, directors, shareholders or employees (except to the extent Owner shall be entitled to share in insurance recoveries obtained by Company hereunder) from or for any damages, claims, causes of action, losses and/or expenses of whatever kind or nature, including, but not limited to, attorneys' fees, that are in any way, directly or 16

indirectly, connected with Company's Operation of the Plant or for any damage thereto, whether arising in

tort, fraud, contract, strict liability, negligence or any other theory of legal liability or as a result of fines or other penalties imposed by the NRC or other governmental authority, unless such damages, claims, causes of action, losses and/or expenses shall have resulted from the Gross Negligence and/or Willful Misconduct of Company.

In no event shall Company or its agents, officers, directors, shareholders or employees be liable to Owner for any loss or damage suffered by Owner in connection with Company's performance under this Operating Agreement in an amount greater than Owner's uninsured loss.

The duty of Company to perform its obligations under this Operating Agreement in accordance with Good Utility Practice shall be construed or modified to the extent necessary to give full effect to the provisions of this Article VI.

ARTICLE VII.

INSURANCE 7.1 With respect to the Plant, Company, acting as Owner's agent and subject to the direction of Owner, shall provide and maintain or cause to be provided and maintained, in the name of and on behalf of

Owner, Company, and their respective mortgagees, if required, as their respective interests may appear, protection through insurance or otherwise covering Company's and Owner's obligations to pay damages because of personal injury, death or property damage, including, without limitation, obligations under applicable workers' compensation

laws, and protection through insurance or otherwise covering nuclear property and nuclear liability and other insurance and financial protection in accordance with customary industry practice and as

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necessary to comply with all applicable laws and regulations and applicable mortgages and credit arrangements of Owner.

All insurance policies obtained pursuant to this Operating Agreement shall be issued, as Owner deems appropriate, with Owner and the Company and Owner's respective mortgagees, if required, named as insureds, as their interests may appear, as appropriate to the particular coverage, and, if obtainable and economically feasible, workers' compensation and all bodily injury (including death) and property damage liability coverages shall be issued by the same insurance carrier(s).

Owner, after consultation with Company, shall determine the coverage limits and deductibles for any insurance policies obtained pursuant to this Agreement.

Additionally, all insurance coverages applicable to those obligations surviving termination of this Agreement pursuant to Section 8.3 below, shall also survive said termination to the extent that such obligations so survive and to the extent that such coverages are reasonably available.

7.2 Acting as agent for and subject to the direction of

Owner, Company will establish necessary procedures, cooperate with the insurers and otherwise comply with requirements of the insurers to maintain coverages in effect and to obtain payment of claims recoverable under such insurance applicable to the Plant.

ARTICLE VIII.

TERM AND TERMINATION 8.1 Term.

This Agreement shall become effective concurrent with the closing of Owner's acquisition of the Plant pursuant to the Purchase and Sale Agreement, subject to prior receipt of all necessary regulatory approvals of this Operating Agreement.

Unless sooner terminated as provided hereinafter, this Agreement shall remain in effect until the Plant shall have been retired and decommissioned in accordance with all applicable regulatory and governmental requirements and the parties hereto agree in writing, with agreement not to be unreasonably withheld, that all responsibilities hereunder have been fulfilled.

8.2 Termination.

This Operating Agreement may be terminated prior to the expiration of the term as set forth in Section 8.1 above, subject to receipt of any and all necessary regulatory approvals, upon (1) agreement of the parties hereto or (2) either party giving the other party at least three hundred sixty-five (365) days' prior written notice of the intention to effect such termination.

In addition, this Operating Agreement shall be modified or reformed as necessary to comply with any applicable rule, regulation or order of the NRC or Securities and Exchange Commission adopted before or after the execution hereof.

Company agrees that any and all licenses,

permits, records, books, privileges or rights acquired by Company relating to Operation of the Plant shall be assigned or otherwise transferred to Owner upon termination of this Operating Agreement.

8.3 Survival. The indemnification, release, and limitation of liability provisions contained in Article VI shall survive termination to the extent they pertain to events giving rise to such indemnification, release and liability that occurred during the term of this Operating Agreement.

Further, it is agreed that in no event shall this Operating Agreement terminate unless all payments required to have been made by Owner to Company or by Company to Owner, as the case may be, shall have been made and all necessary regulatory approval for transfer of responsibility for the Plant shall have been obtained.

ARTICLE IX.

INFORMATION PROVIDED TO OWNER 9.1 Reports to Owner.

When required by Owner, Company shall provide data and/or reports to Owner to support Costs of Capital Improvements and Costs of Operation payable by Owner so as to allow Owner to satisfy requirements of Owner's creditors and to comply with any applicable laws, rules and regulations promulgated by regulatory authorities.

Company shall also comply with any other reasonable reporting requirements.

9.2 Site Access.

Owner or its designees shall have access to the Plant, subject to Company's obligation to limit such access pursuant to the Operating License, or the applicable rules and regulations of the NRC or other regulatory authorities.

ARTICLE X.

TRANSFERS OF PERSONNEL 10.1 Transfer.

Employees who are defined as "Subject Employees" under Section 5.7 of the Purchase and Sale Agreement and who agree in writing to become an employee of Company will be transferred to the employ of Company as of the Effective Date of this Operating Agreement in accordance with Section 5.7 of the Purchase and Sale Agreement.

10.2 Union Employees.

Company agrees to assume and adopt the applicable collective bargaining agreement terms and conditions covering "Transferred Union Employees," as defined in Section 5.7 of the Purchase and Sale Agreement.

Upon the stated expiration date of the current applicable collective bargaining agreement, Company will assume the responsibility for bargaining with the union on contract renewal.

All Transferred Union Employees will be transferred to the employ of Company as of the Effective Date of this Operating Agreement.

Company will comply with all of its legal obligations with respect to collective bargaining for the Transferred Union Employees, and Company shall recognize each existing union and local representing Transferred Union Employees on the Effective Date of this Operating Agreement as the exclusive bargaining representative of such Transferred Union Employees in their job titles or related work responsibilities.

10.3.

Benefit Plans.

Company will assume the obligations for continuation of equivalent employee benefit plans for Transferred Employees, as defined in Section 5.7 of the Purchase and Sale Agreement, in accordance with Section 5.7 of the Purchase and Sale Agreement, and all costs in connection therewith shall be Costs of Operation.

ARTICLE XI.

MISCELLANEOUS 11.1 Confidentiality.

Either party may, from time to time, come into possession of information of the other party that is confidential or proprietary (including, without limitation, Safeguards Information as defined in 10 C.F.R. Part 73).

Each party having any such information which the other party has advised it is confidential or proprietary will not reproduce, copy, or disclose (except upon prompt and prior notification to the other party of the event precipitating such disclosure and upon agreement of the parties that such disclosure is required by law) any such information in whole or in part for any purpose without the prior written consent of the other party.

Safeguards information relative to The Plant shall be controlled and protected in accordance with 10 C.F.R. 73.21.

11.2 Restricted Data.

Company and Owner agree that, unless otherwise required by law, they will not permit any person to have access to Restricted Data, as defined in 42 U.S.C. §2014.y, until the federal Office of Personnel Management shall have made an investigation and report to the NRC on the character, associations and loyalty of such person and the NRC shall have determined that permitting such person to have access to Restricted Data will not endanger the common defense and security.

11.3 Assignment and Successors.

This Operating Agreement shall not be assignable by a party hereto without the prior written consent of the other party and without first obtaining all necessary regulatory approval, and any attempted assignment without such consent and approval shall be void.

Subject to the preceding sentence, this Operating Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns.

11.4 Governing Law.

The validity, interpretation and performance of this Operating Agreement and each of its provisions shall be governed by the laws of the State of New York.

11.5 No Delay in Payments.

No disagreement or dispute of any kind between the parties concerning any matter, including, without limitation, the amount of any payment due from Owner to Company or from Company to Owner, as the case may be, or the correctness of any charge made to Owner or Company, or any reason, excuse or circumstance, including Force Majeure, shall permit either party to delay or withhold payment due and owing under this Operating Agreement, except that Owner shall have the right to make any payments required of it under protest and to reserve its rights to conduct audits in accordance with Section 5.4.

11.6 Notices.

Any notice, request, consent or other communication permitted or required by this Operating Agreement shall be in writing and shall be deemed to have been given when hand-delivered or when deposited in the United States mail, first

class, postage pre-paid and, until written notice of a new address is given, shall be addressed as follows:

If to Company:

Entergy Nuclear Operations, Inc.

1340 Echelon Parkway Jackson, Mississippi 39286 If to Owner:

Entergy Nuclear FitzPatrick, LLC 639 Loyola Ave.

New Orleans, LA 70113 11.7 Amendments.

This Operating Agreement may be amended only by a written instrument duly executed and delivered by the parties hereto and with any and all necessary regulatory approvals previously obtained.

11.8 Relationship.

Nothing herein shall be construed to create a partnership or joint venture between Company and Owner or to impose a trust, fiduciary or partnership duty, obligation or liability upon Company and Owner or to create any agency relationship except as expressly granted herein.

11.9 Counterparts.

This Operating Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

11.10 Force Majeure.

Company shall not be in default in performance of its obligations or duties hereunder (other than any obligation to credit Owner with its recoveries or overpayments of Costs of Operation owing at any time) if such failure of performance is due to Force Majeure.

Owner shall not be in default in performance of any duties or obligations hereunder (other than any obligation to pay monies to or at the direction of Company as provided in this Operating Agreement) if such failure of performance is due to Force Majeure.

11.11 Good Utility Practice.

The parties hereto shall discharge any and all obligations under this Operating Agreement in accordance with Good Utility Practice.

11.12 Entire Agreement.

This Operating Agreement, shall constitute the entire understanding and agreement between the parties superseding any and all previous understandings and agreements between the parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, the parties have executed this Operating Agreement by their duly authorized representatives.

ENTERGY NUCLEAR F ATR C,LC ENTERGY NUCLEAR OPERATIONS, INC.

BY:

GYI-ERJIL, BY:

TITL Pt T

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4L I. 2*OO DATE:

40t 19 2*O C:.\\'ies\\ENI\\ i36~d.d' ENCLOSURE 6 ENOC-14-00016 PILGRIM OPERATING AGREEMENT

OPERATING AGREEMENT FOR PILGRIM NUCLEAR POWER STATION This Operating Agreement is made and entered into as of March Q 8, 2002 between Entergy Nuclear Operations, Inc.

(Company) and Entergy Nuclear Generation Company (Owner).

WHEREAS, both of the parties hereto are wholly owned indirect subsidiaries of Entergy Corporation; and

WHEREAS, Owner is the sole owner of a nuclear power plant located in the Commonwealth of Massachusetts, known as the Pilgrim Nuclear Power Station(the Plant) and currently operates the Plant pursuant to Facility Operating License, No.

DPR-35 for the Plant, issued by the Nuclear Regulatory Commission (NRC); and

WHEREAS, Owner desires to delegate to the Company certain operating responsibility for - but not ownership of the Plant; and

WHEREAS, Owner desires that such operating responsibility be consistent with Owner's obligations and responsibilities under all pertinent state and federal law; and

WHEREAS, Owner desires to contract with Company so as to enable Company to possess, use and operate the Plant as Owner's agent, and Company desires to undertake such responsibility, all subject to and in accordance with the terms and conditions set forth herein; NOW THEREFORE, IN CONSIDERATION of the mutual obligations set forth herein, the parties hereto agree to the following:

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ARTICLE I.

DEFINITIONS As used herein:

1.1 "Application" means the Joint Application of Owner and Company before the Nuclear Regulatory Commission to amend the Operating License so as to authorize and reflect in the license the change from Owner to Company as the licensee authorized to possess, use and operate the Plant, as previously or hereafter supplemented or amended and to reflect the continued ownership of the Plant by Owner.

1.2 "Capital Improvements" means improvements, additions, modifications or replacements of property at the Plant that are properly capitalized and recorded on Owner's books of account as assets under the FERC Uniform System of Accounts, and that are in accordance with applicable rules and regulations of any regulatory authority having jurisdiction in the matter and any related Taxes incurred or accrued thereon.

1.3 "Costs of Capital Improvements" means all costs of Capital Improvements as defined in Section 1.2 herein.

1.4 "Costs of Operation" or "Cost of Operation" means all costs of Operation, decontamination and decommissioning and any related taxes incurred or accrued under or with respect to this Operating Agreement.

These costs shall include, without limitation, any costs incurred in connection with the Operation of the Plant, but excluding costs paid directly by Owner for Nuclear Fuel that is owned by Owner or leased directly by Owner from one or more third parties.

All of such Costs of Operation shall be calculated, and allocation of such costs shall be made, as the parties shall from time to time agree, and shall be made in accordance with any applicable rules and regulations of the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935, the FERC under the Federal Power Act and other regulatory authorities having jurisdiction in the matter.

1.5 "Effective Date" means the effective date of this Operating Agreement as determined pursuant to Section 8.1.

1.6 "FERC" means the Federal Energy Regulatory Commission or its successor.

1.7 "Force Majeure" means any cause beyond the affected party's reasonable control.

1.8 "Good Utility Practice" means any of the practices, methods and acts engaged in or approved by a significant proportion of the nuclear power generation industry at the time of the reference, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with reliability, safety and expedition.

Good Utility Practice shall apply not only to functional parts of the Plant, but also to appropriate structures, landscaping, signs, lighting and other facilities.

Good Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to be a spectrum of prudent and acceptable practices, methods or acts.

1.9 "Gross Negligence and/or Willful Misconduct" means any act or omission by or authorized by a party's officers, persons reporting directly to such officers or its Board of Directors that is performed, authorized or omitted consciously with prior actual knowledge or with reckless disregard of facts indicating that such conduct or omission is likely to result in actionable damages or injury to persons or property or to result in a violation of laws or regulations.

1.10 "NRC" or "Nuclear Regulatory Commission" means the United States Nuclear Regulatory Commission or its successor having responsibility for administration of the licensing and regulation of the operation of nuclear utilization facilities under the Atomic Energy Act of 1954 and amendments thereto.

1.11 "Nuclear Fuel" means any source, special nuclear or by-product material as defined in the Atomic Energy Act of 1954 and any amendments thereto, including any ores, mined or unmined, uranium concentrates, natural or enriched uranium hexafluoride, or any other material in process containing uranium, and any fuel assemblies or parts thereof, any of which are required for the generation of electricity at the Plant.

1.12 "Operate" and its derivatives means to possess, use, manage, control, maintain, repair, operate and decommission.

1.13 "Operating License" means the Facility Operating License No.

DPR-35 for the Plant and amendments thereto as issued from time to time by the NRC.

1.14 "Plant Emergency Preparedness Agreements" refers to agreements entered into to support the Plant Emergency Plan and to assure compliance with readiness requirements and emergency response actions as described in 10 CFR 50.47.

1.15 "Taxes" means any or all federal, state and/or local, municipal, ad valorem, property, occupation, severance, generation, first use, conversion, Btu or power, transmission, utility, gross receipts, privilege, sales, use, consumption, excise, lease, transaction, utility, gross receipts, privilege, sales, use, consumption, excise, lease, transaction, and other taxes, governmental charges, license fees, permit fees, assessments, or increases in or interest on or penalties relating to any of the foregoing, now existing or otherwise applicable at any time during the Term, other than taxes based on net income or net worth; except Taxes shall not include any item for which an extension or exclusion from Taxes may apply.

ARTICLE II.

COMPANY'S AUTHORITY AND RESPONSIBILITY WITH RESPECT TO OPERATION OF THE PLANT 2.1 Authority for Operation.

Company and Owner agree that Company shall act as the agent of Owner to take all actions necessary to make Capital Improvements to and to operate the Plant, each in accordance with Good Utility Practice and in the best interest of Owner.

Owner hereby grants Company the authority to take any and all action, in Owner's name and on Owner's behalf, necessary to obtain and/or maintain all licenses and permits issued by the NRC or other regulatory bodies relating to the Plant and necessary to comply with all applicable regulations of the NRC and other governmental bodies having jurisdiction over any aspect of the Cost of Operation, Cost of Capital Improvements, making of Capital Improvements and/or Operation of the Plant.

Without limiting the foregoing delegation, Company shall act as the agent for Owner in all matters related to NRC licensing of the Plant.

Furthermore, Company shall provide Owner with data and assistance as may be requested by Owner to enable Owner to satisfactorily discharge, as the owner of the Plant, its responsibilities with regard to the Plant, including its responsibilities to its securities holders, to regulatory authorities and others.

Notwithstanding any provisions to the contrary herein, or in any other agreements between the parties, Company shall Operate, and make Capital Improvements at, the Plant in accordance with the Operating License and applicable laws and regulatory requirements and shall have sole authority, as the Operator of the Plant, to make all decisions relating to public health and safety.

In order that Company may meet its responsibilities hereunder, Owner shall provide Company with financial resources as provided herein and shall otherwise cooperate so as to enable Company to comply with the Operating License and applicable laws and regulations.

Subject to the provisions of Sections 2.2 and 2.3 herein, in order to enable Company fully and effectively to perform its duties hereunder, Company shall have, and Owner does hereby grant to Company, as agent for Owner, the power and authority to exercise in accordance with applicable laws, the rights of Owner under, and to execute, modify, amend or terminate, any contracts, including, without limitation, leases, easements, agreements, purchase orders, licenses, permits and privileges relating to the Operation of, and making of Capital Improvements to, the Plant, as agent for Owner.

Company may perform its duties hereunder through its employees, affiliated persons or non-affiliated persons.

Except as provided in Section 11.5 hereof, the duties of Owner and Company hereunder shall be subject in all events to receipt of any further necessary consents or regulatory approvals.

Subject to Company's obligations and responsibilities under this Operating Agreement, the Operating License and applicable laws and regulatory requirements, Company agrees that it shall comply with directions from owner relating to the Operation and making of Capital Improvements (including expenditures therefor) at the Plant.

2.2 Limitation on Company's Authority.

Except as required for Company's compliance with the Operating License and applicable laws and regulations, Company shall have no authority under this Operating Agreement without the written approval of Owner, which approval shall not be unreasonably withheld, (a) to obligate Owner to pay Costs of Capital Improvements and Costs of Operation that are either materially different from or in excess of the expenditures to be agreed upon pursuant to Section 5.1 herein, (b) to obligate Owner, to pay Costs of Capital Improvements that have not been approved pursuant to any Owner policy with respect to its Board of Directors' approval of capital expenditures, and/or (c) to sell, encumber or otherwise dispose of any real property or, other than surplus or obsolete items, any equipment or personal property comprising the Plant.

In addition, Owner shall have exclusive authority to define the economic life and to determine when the economic life of the Plant has ended and, in its sole discretion, may direct Company, in writing, to retire and decommission the Plant or to operate the Plant at reduced capacity and/or to place the Plant in a safe shutdown condition; provided,

however, Company shall take any such action in a manner which it determines, in its sole judgment, is consistent with public health and safety, the Operating License and applicable laws and regulations.

In addition, Company is authorized to Operate the Plant at a reduced capacity or otherwise to place the Plant in a safe shutdown condition at any time Company determines such action is necessary to comply with the Operating License and applicable laws and regulations.

All costs incurred by Company in taking such action relating to decommissioning or shutdown of the Plant shall be considered Costs of Operation or Costs of Capital Improvements, as the case may be.

With respect to acquisitions by Company, as agent for Owner of Capital Improvements and other equipment or property, including, but not limited to, materials, supplies and spare parts inventories, for the Plant, Owner's Treasurer or Chief Financial Officer shall provide Company from time to time, as necessary, with any Owner's policies for prior Owner Board of Directors' approval for Capital Improvements and instructions or guidelines as to the preferred financial structure of such acquisitions (i.e., purchase, lease, etc.), which shall be used in implementing such acquisitions.

2.3 Execution; Disclosures in Third-Party Contracts.

Contracts relating to the Operation of the Plant, including, without limitation, any contracts for Capital Improvements or contracts for the sale, lease or acquisition of materials, inventories, supplies, spare parts, equipment, fuel, Nuclear Fuel (excluding contracts for the financing through lease or otherwise for Nuclear Fuel) or services, shall be executed by Company, as agent for Owner or by Owner, upon Company's reasonable request.

If a contract subject to Section 2.1 relates to both the Plant and one or more other power plants that are operated by Company, such contracts ("Multi-Plant Contracts") shall be executed by Owner at Company's request, on reasonable grounds, or by Company, on reasonable grounds, on behalf of Owner, and the owners of the other applicable plants.

Company further agrees that with respect to Multi-Plant Contracts, Company will not enter into such Multi-Plant Contracts without the prior written consent of Owner unless such contract contains a provision for several but not joint liability of the owners of the plants under such Multi-Plant Contracts in proportion to the costs allocated to the various power plants under such contracts.

In order to induce third parties to contract with Company with regard to the performance of Company's obligations under this Operating Agreement, Owner, hereby expressly agrees to be bound by the terms of all contracts executed by Company in accordance with its agency authority as described herein (including, without limitation, any provisions that limit or protect against a third party's liability, provisions granting indemnity to third parties and limitations or exclusions of warranties) to the same extent as if Owner were an original signatory to such contract.

In addition, if Owner's signature is deemed by Company to be necessary to induce a third party to contract with Company, Owner agrees to not unreasonably refuse to execute such third-party agreements as Company may request from time to time.

It is further agreed that the Treasurer or Chief Financial Officer of Owner shall designate and notify Company in writing of any contracts or types of contracts related to the Plant that are to be executed by Company, in its capacity as Owner's agent, that Owner desires to review and monitor so that Owner may evaluate the potential impact on Owner of such contracts and to advise Company of such impact in order that Company may take all steps to protect Owner's interests.

Accordingly, Company agrees to provide Owner copies of such designated contracts within a reasonable time prior to Company's proposed execution, amendment or termination thereof.

2.4.

Enforcement of Rights.

A.

Owner hereby recognizes that Company has complete and exclusive authority with respect to the handling of the defense, prosecution and/or settlement of disputes with third parties relating in any way to the Plant, provided that Company shall obtain Owner's written consent and direction prior to instituting or settling any lawsuit, claim, proceeding or action relating to the Plant which Owner may designate in writing as requiring "Owner direction."

B.

Subject to Article VI, it is further agreed that to the extent Company incurs any liability to a third party in performing its duties under this Operating Agreement, amounts paid by Company because of such liability and Company's expenses in defending claims by third parties or prosecuting claims against third parties shall be considered Costs of Operation.

2.5 Company's Responsibilities at Other Plants.

Company's duties and responsibilities under this Operating Agreement shall not be construed to interfere with Company's authority and responsibility to operate any other plants for which it has operating responsibility; provided, however, that Company hereby agrees that it will not knowingly take any action or fail to take any action in connection with the Plant that is inconsistent with Good Utility Practice and puts Owner at a disadvantage to Company or to the owners of such other plants.

ARTICLE III.

OWNER'S RESPONSIBILITY AND OBLIGATIONS 3.1 Payment.

In consideration of the services rendered by Company hereunder, and subject to the provisions of this Operating Agreement, Owner hereby agrees to pay the Costs of Operation and Costs of Capital Improvements incurred by Company pursuant to Article V hereof.

3.2 Site Access and Control.

In order for Company to Operate the Plant in accordance with the Operating License and other applicable regulatory requirements, Owner grants Company possession and use of the property constituting the Plant and agrees to provide

Company, its agents, employees and contractors unrestricted access to the property constituting the Plant, including, without limitation, the real property and the switchyard facilities acquired by Owner, equipment and personal property located on the Plant site.

As required by the Operating License and applicable statutes, and NRC regulations, Owner further agrees that Company shall have authority to exercise complete control over the Exclusion Area as defined in the Updated Safety Analysis Report for the Plant and to determine all activities within the area.

3.3 Support Services from Owner.

Owner agrees that it will cooperate with Company in a manner so that Company may exercise its authority and fulfill its responsibilities pursuant to this Operating Agreement.

In this connection, Owner further agrees to delegate to Company, as agent for Owner, rights and obligations of Owner as necessary for Company to fulfill its obligations hereunder, including without limitation, rights and obligations under the following contracts:

(1) the Interconnection and Operation Agreement between Boston Edison Company (Edison) and Owner dated as of November 18, 1998, relating to services provided by Edison to interconnect the Plant and its switchyard to Edison's transmission system and (ii) the

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Plant Emergency Preparedness Agreements.

Owner agrees to provide directly or through its affiliated companies subject to their reasonable capability and availability and compliance with applicable laws and regulatory restrictions, additional services or assistance required by Company and agreed to by Owner in writing in connection with the Operation of the Plant, including, without limitation, the following:

(1) communications access and support, (2) transportation

support, (3) payroll, benefits, and personnel assistance, and (4) other services as may be required in order to allow Company to conduct safe, economic and efficient operations at the Plant.

3.4 No Changes to Facilities, Procedures or Practices.

So that Company will be capable of Operating the Plant in accordance with the Operating License and other applicable regulatory requirements, Owner agrees that it will not make any changes or authorize others to make changes to facilities, procedures or practices that affect compliance with NRC regulations or commitments, without prior consultation with and written consent from Company, which consent Company shall not unreasonably withhold.

3.5 Off-Site Power Supply.

Owner shall cooperate with Company so as to maintain in effect a station service agreement providing the Plant with blackout power or off-site power.

Owner agrees that it shall cause to be provided to the Plant an assured source of off-site power in accordance with procedures to be agreed upon, from time to time, by the parties.

ARTICLE IV.

OWNERSHIP OF CAPACITY AND ENERGY 4.1 Ownership of Capacity and Energy.

Owner at all times during the term of this Operating Agreement, shall be and remain the owner of, and shall be entitled to all of, the capacity and energy from the Plant which Owner shall sell at wholesale.

4.2 Determination of Output.

Net positive output of the Plant shall be the gross generation of the Plant, less station service requirements, and less adjustments for losses experienced.

In the event the output is negative (i.e., station service and losses exceed the gross generation),

Owner and Company shall be responsible for assuring the availability of necessary power at the Plant during such period in accordance with Good Utility Practice and Section 3.5 herein.

ARTICLE V.

PAYMENT; AUDIT AND INSPECTION RIGHTS 5.1 Payment Obligation.

On or before November 1 (or such other dates as may be agreed to by the parties) of each year during the term of this Operating Agreement, (1) Company will submit for Owner's review and approval the total annual capital budget for the Plant, the annual operating and capital programs (as used herein the term "annual operating and capital programs" shall include details of the budgeted costs for those programs) for the Plant, and the components of Company's five-year business plan that relate to the Plant, and (2)

Company and Owner will agree in writing upon maximum amounts to be paid, within parameters of the then-current Company five-year business plan, by Owner for the following budget year pursuant to this Operating Agreement with respect to (i)

Costs of Capital Improvements and (ii)

Costs of Operation.

Owner and Company recognize that mutually agreeable adjustments may be made to such maximum amounts to be paid and/or to the previously approved capital budget, operating and capital programs or the components of Company's five-year business plan relating to the Plant, from time to time during any budget year, to reflect the impact of Force Majeure, unforeseen circumstances, financial constraints or other events.

Without limiting Owner's obligations under Article VI, Owner agrees to pay any and all Costs of Operation and Costs of Capital Improvements within such maximum amounts to be paid and consistent with the previously approved capital budget and operating and capital programs, but Owner shall not be obligated to pay Costs of Operation and Costs of Capital Improvements in excess of the applicable maximum expenditure limitations or which differ materially from the types of expenditures reflected in the capital budget and operating programs previously approved by Owner, except for any such excess or different Costs of Operation and Costs of Capital Improvements that Owner agrees to pay and except as required to enable Company to fulfill its obligation under the Operating License and applicable laws and regulations.

It is further agreed that Company will keep Owner timely informed and obtain Owner's approval regarding projects which are reasonably anticipated to cause a material change to the components of the then-current Company five-year business plan that relate to the Plant as previously approved by Owner.

5.2 Payment and Billing.

Subject to Section 5.1 above and in accordance with procedures to be agreed upon in writing by the parties, Company hereby agrees to furnish Owner, at such times as may be required by Owner estimates of the Costs of Operation and Costs of Capital Improvements expected to be owed for the next succeeding period.

Owner shall promptly deposit in the bank account(s) to be established pursuant to Section 5.3 such funds as shall be adequate to pay Company and third parties on a timely basis with respect to Costs of Capital Improvements and Costs of Operation.

I-n addition, Owner will pay for costs incurred under any contracts relating to the Plant with respect to which Company, as agent, has approved and has directed the third party to provide direct billing to Owner.

Payments of the Costs of Capital Improvements and Costs of Operation specified herein shall be made notwithstanding the availability or lack of availability of the Plant to produce power.

No payment made pursuant to this Operating Agreement shall constitute a waiver of any right of Owner to question or contest the correctness of Costs of Capital Improvements and Costs of Operation charged hereunder.

5.3 Bank Accounts.

The parties agree that one or more special bank accounts may be established and maintained in one or more banks of Owner's choice, in a manner that will indicate the custodial nature of the accounts, for the deposit by Owner and disbursement by Company or Owner of Costs of Capital Improvements and Costs of Operation.

5.4 Audit and Adjustments.

Company shall malntain books and records to support the Costs of Capital Improvements and Costs of Operation for such period of time as Owner shall direct.

From time to time, Owner may, and Company shall permit, at Owner's option and expense as appropriate, in accordance with any applicable Entergy System established auditing policies conduct or cause to be conducted by others, including any regulatory authorities having jurisdiction, audits of the books and records of Company.

Such audits shall be conducted at reasonable mutually agreed upon times, with agreement not being unreasonably withheld.

Further, Company shall make available to Owner a copy of any audit reports prepared by or at the request of Company concerning its books and records relating to the Operation of the Plant, and the cost of preparing such audit reports shall be a Cost of Operation payable pursuant to this Article V.

Company shall credit Owner with recoveries, whenever received, from third parties and shall charge or credit Owner with any underpayments or overpayments of Costs of Capital Improvements and Costs of Operation, as the case may be.

Force Majeure shall not excuse failure by Company to credit Owner with third-party recoveries or overpayments of Costs of Capital Improvements and Costs of Operation owing to Owner at any time.

ARTICLE VI.

LIMITATION OF LIABILITY Release and Limitation of Liability.

To the fullest extent permitted by applicable law, Owner shall not be entitled to recover from, and Owner hereby expressly releases, Company, its

agents, officers, directors, shareholders or employees (except to the extent Owner shall be entitled to share in insurance recoveries obtained by Company hereunder) from or for any damages, claims, causes of action, losses and/or expenses of whatever kind or nature, including, but not limited to, attorneys' fees, that are in any way, directly or indirectly, connected with Company's Operation of the Plant or for any damage thereto, whether arising in tort, fraud, contract, strict liability, negligence or any other theory of legal liability or as a result of fines or other penalties imposed by the NRC or other governmental authority, unless such damages, claims, causes of action, losses and/or expenses shall have resulted from the Gross Negligence and/or Willful Misconduct of Company.

In no event shall Company or its agents, officers, directors, shareholders or employees be liable to Owner for any loss or damage suffered by Owner in connection with Company's performance under this Operating Agreement in an amount greater than Owner's uninsured loss.

The duty of Company to perform its obligations under this Operating Agreement in accordance with Good Utility Practice shall be construed or modified to the extent necessary to give full effect to the provisions of this Article VI.

ARTICLE VII.

INSURANCE 7.1 With respect to the Plant, Company, acting as Owner's agent and subject to the direction of Owner, shall provide and maintain or cause to be provided and maintained, in the name of and on behalf of

Owner, Company, and their respective mortgagees, if required, as their respective interests may appear, protection through insurance or otherwise covering Company's and Owner's obligations to pay damages because of personal injury, death or property damage, including, without limitation, obligations under applicable workers' compensation laws, and protection through insurance or otherwise covering nuclear property and nuclear liability and other insurance and financial protection in accordance with customary industry practice and as necessary to comply with all applicable laws and regulations and applicable mortgages and credit arrangements of Owner.

All insurance

-17

policies obtained pursuant to this Operating Agreement shall be issued, as Owner deems appropriate, with Owner and the Company and Owner's respective mortgagees, if required, named as insureds, as their interests may appear, as appropriate to the particular coverage, and, if obtainable and economically feasible, workers' compensation and all bodily injury (including death) and property damage liability coverages shall be issued by the same insurance carrier(s).

Owner, after consultation with Company, shall determine the coverage limits and deductibles for any insurance policies obtained pursuant to this Agreement.

Additionally, all insurance coverages applicable to those obligations, surviving termination of this Agreement pursuant to Section 8.3 below, shall also survive said termination to the extent that such obligations so survive and to the extent that such coverages are reasonably available.

7.2 Acting as agent for and subject to the direction of

Owner, Company will establish necessary procedures, cooperate with the insurers and otherwise comply with requirements of the insurers to maintain coverages in effect and to obtain payment of claims recoverable under such insurance applicable to the Plant.

ARTICLE VIII.

TERM AND TERMINATION 8.1 Term.

This Agreement shall become effective May 5, 2002, subject to prior receipt of all necessary regulatory approvals of this Operating Agreement. Unless sooner terminated as provided hereinafter, this Agreement shall remain in effect until the Plant shall have been retired and decommissioned in accordance with all applicable regulatory and governmental requirements and the parties hereto agree in writing, with agreement not to be unreasonably withheld, that all responsibilities hereunder have been fulfilled.

The Service Agreement dated December 18, 2000, between the parties hereto shall be superceded by this Operating Agreement.

8.2 Termination.

This Operating Agreement may be terminated prior to the expiration of the term as set forth in Section 8.1 above, subject to receipt of any and all necessary regulatory approvals, upon (1) agreement of the parties hereto or (2) e-ther party giving the other party at least three hundred sixty-five (365) days' prior written notice of the intention to effect such termination.

In addition, this Operating Agreement shall be modified or reformed as necessary to comply with any applicable rule, regulation or order of the NRC or Securities and Exchange Commission adopted before or after the execution hereof.

Company agrees that any and all licenses, permits, records, books, privileges or rights acquired by Company relating to Operation of the Plant shall be assigned or otherwise transferred to Owner upon termination of this Operating Agreement.

8.3 Survival. The indemnification, release, and limitation of liability provisions contained in Article VI shall survive termination to the extent they pertain to events giving rise to such indemnification, release and liability that occurred during the term of this Operating Agreement.

Further, it is agreed that in no event shall this Operating Agreement terminate unless all payments required to have been made by Owner to Company or by Company to Owner, as the case may be, shall have been made and all necessary regulatory approval for transfer of responsibility for the Plant shall have been obtained.

ARTICLE IX.

INFORMATION PROVIDED TO OWNER 9.1 Reports to Owner.

When required by Owner, Company shall provide data and/or reports to Owner to support Costs of Capital Improvements and Costs of Operation payable by Owner so as to allow Owner to satisfy requirements of Owner's creditors and to comply with any applicable laws, rules and regulations promulgated by regulatory authorities.

Company shall also comply with any other reasonable reporting requirements.

9.2 Site Access.

Owner or its designees shall have access to the Plant, subject to Company's obligation to limit such access pursuant to the Operating License, or the applicable rules and regulations of the NRC or other regulatory authorities.

ARTICLE X.

TRANSFERS OF PERSONNEL 10.1 Transfer.

All Owner non-bargaining unit employees will be transferred to the employ of Company as of the Effective Date of this Operating Agreement.

Company agrees to adopt the collective bargaining agreements currently in effect at the Plant.

Upon the stated expiration date of the current collective bargaining agreements, Company will assume the responsibility for bargaining with the unions on contract renewal.

All Owner applicable bargaining unit employees will be transferred to the employ of Company as of the Effective Date of this Operating Agreement.

10.2 Benefit Plans.

It is the objective of the parties hereto that employees transferred to the employ of Company in accordance with Section 10.1 continue to be eligible to participate in the same Employee Benefit Plans (as defined in Section 3(3) of the Employee Retirement Income Act 1974, as amended),

and on the same terms and conditions, as such employees were eligible to participate in immediately prior to their date of employment transfer, without any interruption in their System Company employment.

Notwithstanding anything to the contrary, but subject to applicable collective bargaining agreement requirements, Company, in its sole discretion, reserves the right at any time and from time to time to amend or terminate its participation in such Employee Benefit Plans.

ARTICLE XI.

MISCELLANEOUS 11.1 Confidentiality.

Either party may, from time to time, come into possession of information of the other party that is confidential or proprietary (including, without limitation, Safeguards Information as defined in 10 C.F.R. Part 73).

Each party having any such information which the other party has advised it is confidential or proprietary will not reproduce, copy, or disclose (except upon prompt and prior notification to the other party of the event precipitating such disclosure and upon agreement of the parties that such disclosure is required by law) any such information in whole or in part for any purpose without the prior written consent of the other party.

Safeguards Information relative to The Plant shall be controlled and protected in accordance with 10 C.F.R. 73.21.

11.2 Restricted Data.

Company and Owner agree that, unless otherwise required by law, they will not permit any person to have access to Restricted Data, as defined in 42 U.S.C. §2014.y, until the federal Office of Personnel Management shall have made an investigation and report to the NRC on the character, associations and loyalty of such person and the NRC shall have determined that permitting such person to have access to Restricted Data will not endanger the common defense and security.

11.3 Assignment and Successors.

This Operating Agreement shall not be assignable by a party hereto without the prior written consent of the other party and without first obtaining all necessary regulatory approval, and any attempted assignment without such consent and approval shall be void.

Subject to the preceding sentence, this Operating Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns.

11.4 Governing Law.

The validity, interpretation and performance of this Operating Agreement and each of its provisions shall be governed by the laws of the State of New York.

11.5 No Delay in Payments.

No disagreement or dispute of any kind between the parties concerning any matter, including, without limitation, the amount of any payment due from Owner to Company or from Company to Owner, as the case may be, or the correctness of any charge made to Owner or Company, or any reason, excuse or circumstance, including Force Majeure, shall permit either party to delay or withhold payment due and owing under this Operating Agreement, except that Owner shall have the right to make any payments required of it under protest and to reserve its rights to conduct audits in accordance with Section 5.4.

11.6 Notices.

Any notice, request, consent or other communication permitted or required by this Operating Agreement shall be in writing and shall be deemed to have been given when hand-delivered or when deposited in the United States mail, first

class, postage pre-paid and, until written notice of a new address is

given, shall be addressed as follows:

If to Company:

Entergy Nuclear Operations, Inc.

440 Hamilton Avenue White Plains, New York 10601 If to Owner:

Entergy Nuclear Generation Company 1340 Echelon Parkway P.

0. Box 31995 Jackson, Mississippi 39286-1995 11.7 Amendments.

This Operating Agreement may be amended only by a written instrument duly executed and delivered by the parties hereto and with any and all necessary regulatory approvals previously obtained.

11.8 Relationship.

Nothing herein shall be construed to create a partnership or joint venture between Company and Owner or to impose a trust, fiduciary or partnership duty, obligation or liability upon Company and Owner or to create any agency relationship except as expressly granted herein.

11.9 Counterparts.

This Operating Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

11.10 Force Majeure.

Company shall not be in default in performance of its obligations or duties hereunder (other than any obligation to credit Owner with its recoveries or overpayments of Costs of Operation owing at any time) if such failure of performance is due to Force Majeure.

Owner shall not be in default in performance of any duties or obligations hereunder (other than any obligation to pay monies to or at the direction of Company as provided in this Operating Agreement) if such failure of performance is due to Force Majeure.

11.11 Good Utility Practice.

The parties hereto shall discharge any and all obligations under this Operating Agreement in accordance with Good Utility Practice.

11.12 Entire Agreement.

This Operating Agreement, shall constitute the entire understanding and agreement between the parties superseding any and all previous understandings and agreements between the parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, the parties have executed this Operating Agreement by their duly authorized representatives.

ENTERGY NUCLEAR GENERATION ENTERGY NUCLEAR 10 S, COMPANY BY:

ý)-14 2K-B JJer$ W.

lverton

/

TIT: PAesident & CEO T LE: Sr. VP COo DATE: 3*--

DATE: 3-2.- 9. -

ENCLOSURE 7 ENOC-14-00016 VERMONT YANKEE OPERATING AGREEMENT

OPERATING AGREEMENT FOR VERMONT YANKEE NUCLEAR POWER STATION This Operating Agreement is made, entered into and dated as of April 18, 2002 between Entergy Nuclear Operations, Inc. (Company) and Entergy Nuclear Vermont Yankee, LLC (Owner).

WHEREAS, both of the parties hereto are wholly owned indirect subsidiaries of Entergy Corporation; and WHEREAS, Owner has entered into a contract to purchase the nuclear power plant located in the State of Vermont, known as the Vermont Yankee Nuclear Power Station (the Plant) which it will acquire from Vermont Yankee Nuclear Power Corporation (Seller); and WHEREAS, a condition to the Closing of the acquisition of the Plant by Owner is the approval by the Nuclear Regulatory Commission (NRC) of the Joint Application of Seller, Owner and Company for Transfer of Facility Operating License DPR-28, issued by the NRC; and WHEREAS, Owner desires to delegate to the Company certain operating responsibility for - but not ownership of the Plant; and 1

WHEREAS, Owner desires that such operating responsibility be consistent with Owner's obligations and responsibilities under all pertinent state and federal law; and WHEREAS, Owner desires to contract with Company so as to enable Company to possess, use and operate the Plant as Owner's agent, and Company desires to undertake such responsibility, all subject to and in accordance with the terms and conditions set forth herein; NOW THEREFORE, IN CONSIDERATION of the mutual obligations set forth herein, the parties hereto agree to the following:

ARTICLE I.

DEFINITIONS As used herein:

1.1 "Application" means the Joint Application of Owner, Company and Seller before the Nuclear Regulatory Commission to amend the Operating License so as to authorize and reflect in the license the change from Seller to Owner as the licensee authorized to own the Plant and to reflect the change from Seller to Company as the licensee authorized to possess, use and operate the Plant, as previously or hereafter supplemented or amended.

1.2 "Capital Improvements" means improvements, additions, modifications or replacements of property at the Plant that are properly capitalized and recorded on Owner's books of account as assets under the FERC Uniform System of Accounts, and that are in accordance with applicable rules 2

and regulations of any regulatory authority having jurisdiction in the matter and any related Taxes incurred or accrued thereon.

1.3 "Costs of Capital Improvements" means all costs of Capital Improvements as defined in Section 1.2 herein.

1.4 "Costs of Operation" or "Cost of Operation" means all costs of Operation, decontamination and decommissioning and any related Taxes incurred or accrued thereon under or with respect to this Operating Agreement.

These costs shall include, without limitation, any costs incurred in connection with the Operation of the Plant, but excluding costs paid directly by Owner for Nuclear Fuel that is owned by Owner or leased directly by Owner from one or more third parties. All of such Costs of Operation shall be calculated, and allocation of such costs shall be made, as the parties shall from time to time agree, and shall be made in accordance with any applicable rules and regulations of the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935, the FERC under the Federal Power Act and other regulatory authorities having jurisdiction in the matter.

1.5 "Effective Date" means the effective date of this Operating Agreement as determined pursuant to Section 8.1.

1.6 "FERC" means the Federal Energy Regulatory Commission or its successor.

1.7 "Force Majeure" means any cause beyond the affected party's reasonable control.

3

1.8 "Good Utility Practice" means any of the practices, methods and acts engaged in or approved by a significant proportion of the nuclear power plant industry at the time of the reference, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with reliability, safety and expedition. Good Utility Practice shall apply not only to functional parts of the Plant, but also to appropriate structures, landscaping, signs, lighting and other facilities. Good Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to be a spectrum of prudent and acceptable practices, methods or acts.

1.9 "Gross Negligence andlor Willful Misconduct" means any act or omission by or authorized by a party's officers, persons reporting directly to such officers or its Board of Directors that is performed, authorized or omitted consciously with prior actual knowledge or with reckless disregard of facts indicating that such conduct or omission is likely to result in actionable damages or injury to persons or property or to result in a violation of laws or regulations.

1.10 "NRC" or "Nuclear Regulatory Commission" means the United States Nuclear Regulatory Commission or its predecessor or successor having responsibility for administration of the licensing and regulation of the operation of nuclear utilization facilities under the Atomic Energy Act of 1954 and amendments thereto.

4

1.11 "Nuclear Fuel" means any source, special nuclear or by-product material as defined in the Atomic Energy Act of 1954 and any amendments thereto, including any ores, mined or unmined, uranium concentrates, natural or enriched uranium hexafluoride, or any other material in process containing uranium, and any fuel assemblies or parts thereof, any of which are required for the generation of electricity at the Plant.

1.12 "Operate" and its derivatives means to possess, use, manage, control, maintain, repair, operate and decommission.

1.13 "Operating License" means the Facility Operating License No. DPR-28 and amendments thereto as issued from time to time by the NRC.

1.14 "Purchase and Sale Agreement" means the Purchase and Sale Agreement among Owner and Seller dated August 15, 2001.

1.15 "Taxes" means any or all federal, state and/or local, municipal, ad valorem, property, occupation, severance, generation, first use, conversion, Btu or power, transmission, utility, gross receipts, privilege, sales, use, consumption, excise, lease, transaction, and other taxes, governmental charges, license fees, permit fees, assessments, or increases in or interest on or penalties relating to any of the foregoing, now existing or otherwise applicable at any time during the Term, other than taxes based on net income or net worth.

ARTICLE II.

COMPANY'S AUTHORITY AND RESPONSIBILITY WITH RESPECT TO OPERATION OF THE PLANT 5

2.1 Authority for Operation.

Company and Owner agree that Company shall act as the agent of Owner to take all actions necessary to make Capital Improvements to and to Operate the Plant, each in accordance with Good Utility Practice and in the best interest of Owner. Owner hereby grants Company the authority to take any and all action, in Owner's name and on Owner's behalf, necessary to obtain and/or maintain all licenses and permits issued by the NRC or other regulatory bodies relating to the Plant and necessary to comply with all applicable regulations of the NRC and other governmental bodies having jurisdiction over any aspect of the Cost of Operation, Cost of Capital Improvements, making of Capital Improvements and/or Operation of the Plant.

Without limiting the foregoing delegation, Company shall act as the agent for Owner in all matters related to NRC licensing of the Plant.

Furthermore, Company shall provide Owner with data and assistance as may be requested by Owner to enable Owner to satisfactorily discharge, as the owner of the Plant, its responsibilities with regard to the Plant, including its responsibilities to its securities holders, to regulatory authorities and others.

Notwithstanding any provisions to the contrary herein, or in any other agreements between the parties, Company shall Operate, and make Capital Improvements at, the Plant in accordance with the Operating License and applicable laws and regulatory requirements and shall have sole authority, as the Operator of the Plant, to make all decisions relating to public health and safety. In order that Company may fulfill its responsibilities hereunder, Owner shall provide Company with financial resources and shall otherwise cooperate so as to enable Company to comply 6

with the Operating License and applicable laws and regulations. Subject to the provisions of Sections 2.2 and 2.3 herein, in order to enable Company fully and effectively to perform its duties hereunder, Company shall have, and Owner does hereby grant to Company, as agent for Owner, the power and authority to exercise in accordance with applicable laws, the rights of Owner under, and to execute, modify, amend or terminate, any contracts, including, without limitation, leases, easements, agreements, purchase orders, licenses, permits and privileges relating to the Operation of, and making of Capital Improvements to, the Plant, as agent for Owner.

Company may perform its duties hereunder through its employees, affiliated persons or non-affiliated persons. Except as provided in Section 11.5 hereof, the duties of Owner and Company hereunder shall be subject in all events to receipt of any further necessary consents or regulatory approvals.

Subject to Company's obligations and responsibilities under this Operating Agreement, the Operating License and applicable laws and regulatory requirements, Company agrees that it shall comply with directions from Owner relating to the Operation and making of Capital Improvements (including expenditures therefor) at the Plant.

2.2 Limitation on Company's Authority.

Except as required for Company's compliance with the Operating License and applicable laws and regulations, Company shall have no authority under this Operating Agreement without the written approval of Owner, which approval shall not be unreasonably withheld, (a) to obligate Owner to pay Costs of Capital Improvements and Costs of Operation that are either materially different from or in excess of the 7

expenditures to be agreed upon pursuant to Section 5.1 herein, (b) to obligate Owner, to pay Costs of Capital Improvements that have not been approved pursuant to any Owner policy with respect to its Management Committee's approval of capital expenditures, and/or (c) to sell, encumber or otherwise dispose of any real property or, other than surplus or obsolete items, any equipment or personal property comprising the Plant. In addition, Owner shall have exclusive authority to define the economic life and to determine when the economic life of the Plant has ended and, in its sole discretion, may direct Company, in writing, to retire and decommission the Plant or to operate the Plant at reduced capacity and/or to place the Plant in a safe shutdown condition; provided, however, Company shall take any such action in a manner which it determines, in its sole judgment, is consistent with public health and safety, the Operating License and applicable laws and regulations. In addition, Company is authorized to Operate the Plant at a reduced capacity or otherwise to place the Plant in a safe shutdown condition at any time Company determines such action is necessary to comply with the Operating License and applicable laws and regulations.

All costs incurred by Company in taking such action relating to decommissioning or shutdown of the Plant shall be considered Costs of Operation or Costs of Capital Improvements, as the case may be. With respect to acquisitions by Company, as agent for Owner, of Capital Improvements and other equipment or property, including, but not limited to, materials, supplies and spare parts inventories, for the Plant, Owner's Treasurer or Chief Financial Officer may provide Company from time to time, as necessary, with Owner's policies for prior 8

Owner Management Committee's approval for Capital Improvements and instructions or guidelines as to the preferred financial structure of such acquisitions (i.e., purchase, lease, etc.), which shall be used in implementing such acquisitions.

2.3 Execution

Disclosures in Third-Party Contracts.

Contracts relating to the Operation of the Plant, including, without limitation, any contracts for Capital Improvements or contracts for the sale, lease or acquisition of materials, inventories, supplies, spare parts, equipment, fuel, Nuclear Fuel (excluding contracts for the financing through lease or otherwise for Nuclear Fuel) or services, shall be executed by Company, as agent for Owner or by Owner, upon Company's reasonable request. If a contract subject to Section 2.1 relates to both the Plant and one or more other power plants that are operated by Company, such contracts ("Multi-Plant Contracts") shall be executed by Owner at Company's request, on reasonable grounds, or by Company, on reasonable grounds, on behalf of Owner, and the owners of the other applicable plants.

Company further agrees that with respect to Multi-Plant Contracts, Company will not enter into such Multi-Plant Contracts without the prior written consent of Owner unless such contract contains a provision for several but not joint liability of the owners of the plants under such Multi-Plant Contracts. In order to induce third parties to contract with Company with regard to the performance of Company's obligations under this Operating Agreement, Owner, hereby expressly agrees to be bound by the terms of all contracts executed by Company in accordance with its agency authority as described herein (including, without 9

limitation, any provisions that limit or protect against a third party's liability, provisions granting indemnity to third parties and limitations or exclusions of warranties) to the same extent as if Owner were an original signatory to such contract.

In addition, if Owner's signature is deemed by Company to be necessary to induce a third party to contract with Company, Owner agrees to not unreasonably refuse to execute such third-party agreements as Company may request from time to time.

It is further agreed that the Treasurer or Chief Financial Officer of Owner shall designate and notify Company in writing of any contracts or types of contracts related to the Plant that are to be executed by Company, in its capacity as Owner's agent, that Owner desires to review and monitor so that Owner may evaluate the potential impact on Owner of such contracts and to advise Company of such impact in order that Company may take all steps to protect Owner's interests. Accordingly, Company agrees to provide Owner copies of such designated contracts within a reasonable time prior to Company's proposed execution, amendment or termination thereof.

2.4.

Enforcement of Rights.

A. Owner hereby recognizes that, except with respect to assets, circumstances, liabilities or claims for which Seller will retain responsibility after the Effective Date pursuant to the Purchase and Sale Agreement, Company has complete and exclusive authority with respect to the handling of the defense, prosecution and/or settlement of disputes with third parties relating in any way to the Plant, provided that Company shall obtain Owners written consent and direction prior to instituting or settling any lawsuit, claim, proceeding or action 10

relating to the Plant which Owner may designate in writing as requiring "Owner direction."

B.

With respect to litigation relating in any way to the Plant that arises out of facts or circumstances for which Seller may have liability, Owner shall keep Company advised as to whether Seller is handling the defense or prosecution of such litigation or whether Company should prosecute such litigation.

C. Subject to Article VI, it is further agreed that to the extent Company incurs any liability to a third party in performing its duties under this Operating Agreement, amounts paid by Company because of such liability and Company's expenses in defending claims by third parties or prosecuting claims against third parties shall be considered Costs of Operation.

2.5 Company's Responsibilities at Other Plants.

Company's duties and responsibilities under this Operating Agreement shall not be construed to interfere with Company's authority and responsibility to operate any other plants for which it has operating responsibility; provided, however, that Company hereby agrees that it will not knowingly take any action or fail to take any action in connection with the Plant that is inconsistent with Good Utility Practice and puts Owner at a disadvantage to Company or to the owners of such other plants.

ARTICLE III.

OWNER'S RESPONSIBILITY AND OBLIGATIONS 11

3.1 Payment.

In consideration of the services rendered by Company hereunder, and subject to the provisions of this Operating Agreement, Owner hereby agrees to pay the Costs of Operation and Costs of Capital Improvements incurred by Company pursuant to Article V hereof.

3.2 Taxes. Owner shall be responsible for all applicable Taxes levied on materials or services provided by Company to Owner pursuant to this Agreement.

Owner shall provide Company with any applicable documentation to procure available exclusion or exemption of applicable Taxes.

3.3 Site Access and Control. In order for Company to Operate the Plant in accordance with the Operating License and other applicable regulatory requirements, Owner grants Company possession and use of the property constituting the Plant and agrees to provide Company, its agents, employees and contractors unrestricted access to the property constituting the Plant, including, without limitation, the real property and the switchyard facilities acquired by Owner, equipment and personal property located on the Plant site. As required by the Operating License and applicable statutes, and NRC regulations, Owner further agrees that Company shall have authority to exercise complete control over the Exclusion Area as defined in the Updated Safety Analysis Report for the Plant and to determine all activities within the area.

3.4 Support Services from Owner.

Owner agrees that it will cooperate with Company in a manner so that Company may exercise its authority and fulfill its responsibilities pursuant to this Operating Agreement.

In this connection, Owner further agrees to delegate to Company, as agent for Owner, 12

rights and obligations of Owner as necessary for Company to fulfill its obligations hereunder, including without limitation, rights and obligations under the following contracts (i) the Interconnection Agreement between Vermont Electric Power Company, Inc. and Owner, (ii) agreements with New England Power Company relating to the Vernon Dam and (iii) any emergency preparedness agreements entered into or assigned by Owner. Owner agrees to provide directly or through its affiliated companies subject to their reasonable capability and availability and compliance with applicable laws and regulatory restrictions, additional services or assistance required by Company and agreed to by Owner in writing in connection with the Operation of the Plant, including, without limitation, any services as may be required in order to allow Company to conduct safe, economic and efficient operations at the Plant.

3.5 No Changes to Facilities, Procedures or Practices.

So that Company will be capable of Operating the Plant in accordance with the Operating License and other applicable regulatory requirements, Owner agrees that it will not make any changes or authorize others to make changes to facilities, procedures or practices that affect compliance with NRC regulations or commitments, without prior consultation with and written consent from Company, which consent Company shall not unreasonably withhold.

3.5 Off-Site Power SuPDlv.

Prior to the Effective Date of this Operating Agreement, Owner shall enter into a station service agreement providing the Plant with blackout power or off-site power. Owner agrees that it 13

shall provide the Plant with an assured source of off-site power in accordance with procedures to be agreed upon, from time to time, by the parties.

ARTICLE IV.

OWNERSHIP OF CAPACITY AND ENERGY 4.1 Ownership of Capacity and Energy. Owner at all times during the term of this Operating Agreement, shall be and remain the owner of, and shall be entitled to all of, the capacity and energy from the Plant which Owner shall sell at wholesale.

4.2 Determination of Output. Net positive output of the Plant shall be the gross generation of the Plant, less station service requirements, and less adjustments for losses experienced.

In the event the output is negative (i.e.,

station service and losses exceed the gross generation), Owner shall be responsible for providing necessary power at the Plant during such period in accordance with Good Utility Practice and Section 3.5 herein.

ARTICLE V.

PAYMENT: AUDIT AND INSPECTION RIGHTS 5.1 Payment Obli-gation. On or before November 1 (or such other dates as may be agreed to by the parties) of each year during the term of this Operating Agreement, (1) Company will submit for Owner's review and approval the total annual capital budget for the Plant, the annual operating and capital programs (as used herein the term "annual operating and capital programs" shall include details of the budgeted costs for those programs) for the Plant, and the 14

w components of Company's five-year business plan that relate to the Plant, and (2)

Company and Owner will agree in writing upon maximum amounts to be paid, within parameters of the then-current Company five-year business plan, by Owner for the following budget year pursuant to this Operating Agreement with respect to (i) Costs of Capital Improvements and (ii) Costs of Operation. Owner and Company recognize that mutually agreeable adjustments may be made to such maximum amounts to be paid and/or to the previously approved capital budget, operating and capital programs or the components of Company's five-year business plan relating to the Plant, from time to time during any budget year, to reflect the impact of Force Majeure, unforeseen circumstances, financial constraints or other events. Without limiting Owner' obligations under Article VI, Owner agrees to pay any and all Costs of Operation and Costs of Capital Improvements within such maximum amounts to be paid and consistent with the previously approved capital budget and operating and capital programs, but Owner shall not be obligated to pay Costs of Operation and Costs of Capital Improvements in excess of the applicable maximum expenditure limitations or which differ materially from the types of expenditures reflected in the capital budget and operating programs previously approved by Owner, except as required by Section 2.1 and except for any such excess or different Costs of Operation and Costs of Capital Improvements that Owner agrees to pay. It is further agreed that Company will keep Owner timely informed and obtain Owner's approval regarding projects which are reasonably anticipated to cause a material 15

change to the components of the then-current Company five-year business plan that relate to the Plant as previously approved by Owner.

5.2 Payment and Billing.

Subject to Section 5.1 above and in accordance with procedures to be agreed upon in writing by the parties, Company hereby agrees to furnish Owner, at such times as may be required by Owner, estimates of the Costs of Operation and Costs of Capital Improvements expected to be owed for the next succeeding period.

Owner shall promptly deposit in the bank account(s) to be established pursuant to Section 5.3 such funds as shall be adequate to pay Company and third parties on a timely basis with respect to Costs of Capital Improvements and Costs of Operation.

In addition, Owner will pay for costs incurred under any contracts relating to the Plant with respect to which Company, as agent, has approved and has directed the third party to provide direct billing to Owner.

Payments of the Costs of Capital Improvements and Costs of Operation specified herein shall be made notwithstanding the availability or lack of availability of the Plant to produce power. No payment made pursuant to this Operating Agreement shall constitute a waiver of any right of Owner to question or contest the correctness of Costs of Capital Improvements and Costs of Operation charged hereunder.

5.3 Bank Accounts. The parties agree that one or more special bank accounts may be established and maintained in one or more banks of Owner's choice, in a manner that will indicate the custodial nature of the accounts, for the deposit by Owner and disbursement by Company or Owner of Costs of Capital Improvements and Costs of Operation.

16

5.4 Audit and Adjustments. Company shall maintain books and records to support the Costs of Capital Improvements and Costs of Operation for such period of time as Owner shall direct. From time to time, Owner may, and Company shall permit, at Owner's option and expense as appropriate, in accordance with any applicable Entergy System established auditing policies conduct or cause to be conducted by others, including any regulatory authorities having jurisdiction, audits of the books and records of Company. Such audits shall be conducted at reasonable mutually agreed upon times, with agreement not being unreasonably withheld.

Further, Company shall make available to Owner a copy of any audit reports prepared by or at the request of Company concerning its books and records relating to the Operation of the Plant, and the cost of preparing such audit reports shall be a Cost of Operation payable pursuant to this Article V. Company shall credit Owner with recoveries, whenever received, from third parties and shall charge or credit Owner with any underpayments or overpayments of Costs of Capital Improvements and Costs of Operation, as the case may be.

Force Majeure shall not excuse failure by Company to credit Owner with third-party recoveries or overpayments of Costs of Capital Improvements and Costs of Operation owing to Owner at any time.

ARTICLE VI.

LIMITATION OF LIABILITY To the fullest extent permitted by applicable law, Owner shall not be entitled to recover from, and Owner hereby expressly releases, Company, its agents, officers, directors, shareholders or employees (except to the extent 17

Owner shall be entitled to share in insurance recoveries obtained by Company hereunder) from or for any damages, claims, causes of action, losses and/or expenses of whatever kind or nature, including, but not limited to, attorneys' fees, that are in any way, directly or indirectly, connected with Company's Operation of the Plant or for any damage thereto, whether arising in tort, fraud, contract, strict liability, negligence or any other theory of legal liability or as a result of fines or other penalties imposed by the NRC or other governmental authority, unless such damages, claims, causes of action, losses and/or expenses shall have resulted from the Gross Negligence and/or Willful Misconduct of Company. In no event shall Company or its agents, officers, directors, shareholders or employees be liable to Owner for any loss or damage suffered by Owner in connection with Company's performance under this Operating Agreement in an amount greater than Owner's uninsured loss. The duty of Company to perform its obligations under this Operating Agreement in accordance with Good Utility Practice shall be construed or modified to the extent necessary to give full effect to the provisions of this Article VI.

ARTICLE VII.

INSURANCE 7.1 Coverage.

With respect to the Plant, Company, acting as Owner's agent and subject to the direction of Owner, shall provide and maintain or cause to be provided and maintained, in the name of and on behalf of Owner, Company, and their respective mortgagees, if required, as their respective interests may appear, protection through insurance or otherwise covering 18

Company's and Owner's obligations to pay damages because of personal injury, death or property damage, including, without limitation, obligations under applicable workers' compensation laws, and protection through insurance or otherwise covering nuclear property and nuclear liability and other insurance and financial protection in accordance with customary industry practice and as necessary to comply with all applicable laws and regulations and applicable mortgages and credit arrangements of Owner. All insurance policies obtained pursuant to this Operating Agreement shall be issued, as Owner deems appropriate, with Owner and the Company and Owners respective mortgagees, if required, named as insureds, as their interests may appear, as appropriate to the particular coverage, and, if obtainable and economically feasible, workers' compensation and all bodily injury (including death) and property damage liability coverages shall be issued by the same insurance carrier(s). Owner, after consultation with Company, shall determine the coverage limits and deductibles for any insurance policies obtained pursuant to this Agreement. Additionally, all insurance coverages applicable to those obligations surviving termination of this Agreement pursuant to Section 8.3 below, shall also survive said termination to the extent that such obligations so survive and to the extent that such coverages are reasonably available.

7.2 Procedures.

Acting as agent for and subject to the direction of Owner, Company will establish necessary procedures, cooperate with the insurers and otherwise comply with requirements of the insurers to maintain 19

coverages in effect and to obtain payment of claims recoverable under such insurance applicable to the Plant.

ARTICLE VIII.

TERM AND TERMINATION 8.1 Term. This Agreement shall become effective concurrent with the closing of Owner's acquisition of the Plant pursuant to the Purchase and Sale Agreement, subject to prior receipt of all necessary regulatory approvals of this Operating Agreement. Unless sooner terminated as provided hereinafter, this Agreement shall remain in effect until the Plant shall have been retired and decommissioned in accordance with all applicable regulatory and governmental requirements and the parties hereto agree in writing, with agreement not to be unreasonably withheld, that all responsibilities hereunder have been fulfilled.

8.2 Termination. This Operating Agreement may be terminated prior to the expiration of the term as set forth in Section 8.1 above, subject to receipt of any and all necessary regulatory approvals, upon (1) agreement of the parties hereto or (2) either party giving the other party at least three hundred sixty-five (365) days' prior written notice of the intention to effect such termination. In addition, this Operating Agreement shall be modified or reformed as necessary to comply with any applicable rule, regulation or order of the NRC or Securities and Exchange Commission adopted before or after the execution hereof. Company 20

agrees that any and all licenses, permits, records, books, privileges or rights acquired by Company relating to Operation of the Plant shall be assigned or otherwise transferred to Owner upon termination of this Operating Agreement.

8.3 Survival. The release and limitation of liability provisions contained in Article VI shall survive termination to the extent they pertain to events giving rise to such release and liability that occurred during the term of this Operating Agreement. Further, it is agreed that in no event shall this Operating Agreement terminate unless all payments required to have been made by Owner to Company or by Company to Owner, as the case may be, shall have been made and all necessary regulatory approval for transfer of responsibility for the Plant shall have been obtained.

ARTICLE IX.

INFORMATION PROVIDED TO OWNER 9.1 Reports to Owner. When required by Owner, Company shall provide data andlor reports to Owner to support Costs of Capital Improvements and Costs of Operation payable by Owner so as to allow Owner to satisfy requirements of Owner's creditors and to comply with any applicable laws, rules and regulations promulgated by regulatory authorities. Company shall also comply with any other reasonable reporting requirements.

9.2 Site Access. Owner or its designees shall have access to the Plant, subject to Company's obligation to limit such access pursuant to the Operating License, or the applicable rules and regulations of the NRC or other regulatory authorities.

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ARTICLE X.

TRANSFERS OF PERSONNEL 10.1 Transfer. Employees who are defined as "Transferred Employees" under the Purchase and Sale Agreement will be transferred to the employ of Company as of the Effective Date of this Operating Agreement in accordance with Section 6.8 of the Purchase and Sale Agreement.

10.2 Union Employees. Company agrees to assume all obligations of the Seller to recognize and bargain with properly recognized or certified collective bargaining representatives and shall assume the Seller's existing and collective bargaining agreement as contemplated by Section 6.8(f) of the Purchase and Sale Agreement.

10.3. Benefit Plans. Company will assume the obligations for employee plans for Transferred Employees in accordance with Section 6.8 of the Purchase and Sale Agreement, and all costs in connection therewith shall be Costs of Operation.

ARTICLE XI.

MISCELLANEOUS 11.1 Confidentiality. Either party may, from time to time, come into possession of information of the other party that is confidential or proprietary (including, without limitation, Safeguards Information as defined in 10 C.F.R. Part 73). Each party having any such information which the other party has advised it is confidential or proprietary will not reproduce, copy, or disclose (except upon prompt and prior notification to the other party of the event precipitating such 22

disclosure and upon agreement of the parties that such disclosure is required by law) any such information in whole or in part for any purpose without the prior written consent of the other party. Safeguards Information relative to the Plant shall be controlled and protected in accordance with 10 C.F.R. 73.21.

11.2 Restricted Data. Company and Owner agree that, unless otherwise required by law, they will not permit any person to have access to Restricted Data, as defined in 42 U.S.C. §2014.y, until the federal Office of Personnel Management shall have made an investigation and report to the NRC on the character, associations and loyalty of such person and the NRC shall have determined that permitting such person to have access to Restricted Data will not endanger the common defense and security.

11.3 Assianment and Successors. This Operating Agreement shall not be assignable by a party hereto without the prior written consent of the other party and without first obtaining all necessary regulatory approval, and any attempted assignment without such consent and approval shall be void. Subject to the preceding sentence, this Operating Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns.

11.4 Governing Law. The validity, interpretation and performance of this Operating Agreement and each of its provisions shall be governed by the laws of the State of New York.

11.5 No Delay in Payments. No disagreement or dispute of any kind between the parties concerning any matter, including, without limitation, the 23

amount of any payment due from Owner to Company or from Company to Owner, as the case may be, or the correctness of any charge made to Owner or Company, or any reason, excuse or circumstance, including Force Majeure, shall permit either party to delay or withhold payment due and owing under this Operating Agreement, except that Owner shall have the right to make any payments required of it under protest and to reserve its rights to conduct audits in accordance with Section 5.4.

11.6 Notices. Any notice, request, consent or other communication permitted or required by this Operating Agreement shall be in writing and shall be deemed to have been given when hand-delivered or when deposited in the United States mail, first class, postage pre-paid and, until written notice of a new address is given, shall be addressed as follows:

If to Company:

Entergy Nuclear Operations, Inc.

1340 Echelon Parkway Jackson, Mississippi 39286 Attention: President If to Owner:

Entergy Nuclear Vermont Yankee, LLC 639 Loyola Ave.

New Orleans, LA 70113 Attention: President 11.7 Amendments. This Operating Agreement may be amended only by a written instrument duly executed and delivered by the parties hereto and with any and all necessary regulatory approvals previously obtained.

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11.8 Relationship. Nothing herein shall be construed to create a partnership or joint venture between Company and Owner or to impose a trust, fiduciary or partnership duty, obligation or liability upon Company and Owner or to create any agency relationship except as expressly granted herein.

11.9 Counterparts. This Operating Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

11.10 Force Maieure. Company shall not be in default in performance of its obligations or duties hereunder (other than any obligation to credit Owner with its recoveries or overpayments of Costs of Operation owing at any time) if such failure of performance is due to Force Majeure. Owner shall not be in default in performance of any duties or obligations hereunder (other than any obligation to pay monies to or at the direction of Company as provided in this Operating Agreement) if such failure of performance is due to Force Majeure.

11.11 Good Utility Practice. The parties hereto shall discharge any and all obligations under this Operating Agreement in accordance with Good Utility Practice.

11.12 Entire Agreement. This Operating Agreement, shall constitute the entire understanding and agreement between the parties superseding any and all previous understandings and agreements between the parties with respect to the subject matter hereof.

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IN WITNESS WHEREOF, the parties have executed this Operating Agreement by their duly authorized representatives.

ENTERGY NUCLEAR ENTERGY NUCLEA VERMONT YANKEE, LLC OPERATIONS, IN BY:

B:C erW. Ye erton a0fýchael R.Xan r

E: President & CEO TITLE: Sr. VP and 0

DATE:

.A*

A8,

-20o02.

DATE: rcA*l i % -1.002.

9

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