A Federal Energy Regulatory Commission judge ruled last week that Entergy Corporation has been selling overpriced energy to Mississippi customers.
Judge John Dring wrote in a Dec. 9 opinion that Entergy Corp. sold its low-cost power to third parties rather than selling the cheap power to company affiliates like Entergy Mississippi, in violation of the company's agreement with multiple states.
Last year, the Louisiana Public Service Commission filed a formal complaint against Entergy Corporation and its affiliates alleging that Entergy Arkansas Inc. sold power to third-party power marketers and others that were not members of a state-supported System Agreement. LPSC claimed the setup caused the System Agreement to generate power from more expensive resources. This expense was passed onto ratepayers, who had to pay for the higher costs of replacement energy, the LPSC claimed.
The violations include Entergy Corporation's affiliate companies Entergy Louisiana LLC, Entergy Arkansas Inc., Entergy New Orleans Inc., Entergy Gulf States Louisiana LLC., Entergy Texas Inc. and Entergy Mississippi Inc.
"The completed record clearly shows that Entergy violated the System Agreement in making the sales in question without first complying with the requirements of sections 30.03 and 30.04 (of the System Agreement) thereby harming the other Operating Companies, and that Entergy should have known that the sales in question violated the System Agreement," Dring wrote.
Dring concluded that EAI violated the Entergy System Agreement and ordered shareholders to refund damages incurred between 2000 and 2009 to Entergy's affiliate companies. Entergy will calculate customer refunds through Entergy's Intra-System Billing program.
Mississippi Public Service Commission Chairman Brandon Presley said he wants the refunds for overcharges, with interest, to go straight back to Entergy Mississippi ratepayers in the form of a check.
"Having this order in hand, Entergy should immediately take steps to make these refunds and not put shareholders' interest above the public interest by trying to delay the process," Presley said in a statement. He added that the system for monitoring energy sales needed "obvious reform" to "protect against future corporate violations. He said that he planned to steer the commission into the direction of implementing new reform.
Mississippi Attorney General Jim Hood highlighted the decision as reinforcement of his own suit against Entergy Corporation and Entergy Mississippi. Hood filed a suit in 2008 in Hinds County Chancery Court seeking to force Entergy to release company information about the LPSC investigation, which found Entergy liable to the state for $72 million. Like LPSC, Hood alleges that Entergy cheated state ratepayers out of cheaper monthly electric bills by selling cheap electricity to third-party companies for profit, rather than sending it to Mississippi customers.
"A judge has now found, by compelling evidence, that Entergy has overcharged ratepayers by selling them its most expensive electricity. This is one of the company's methods of cheating ratepayers as stated in our lawsuit," Hood said in a statement. "The law is crystal clear that they must provide ratepayers with the cheapest electricity."
Entergy Corporation spokesman Michael Burns said the fight is not yet over, and that the company would appeal Dring's decision before the entire Federal Energy Regulatory Commission.
"There's a 30-day window in which we can respond. We will be filing our objections to the opinion in early January, asking that the full FERC reject the judge's reasoning and conclusions," Burns said, adding that Dring only represents one opinion of the FERC.
Read the JFP cover story "Power Plays," for an in-depth analysis on Entergy Mississippi.
Sahme on you ENTERGY! Why kick the folks in the hind-part who make it possible for your company to exist. Forget any appeal: You have been caught with your pants/shirts down. Now it's time to PAY THE PIPER.
This is the same company that is attempting to charge the ratepayers for a new plant before it is built. I always thought that those who put up the capital owned the company. Greed knows no bounds.
I need my refund check in my mailbox before Christmas or I'm fist fighting somebody at Entergy.