Hood Applauds DOJ Action Forcing Entergy Action

Jackson, MS—The Antitrust Division of the U. S. Department of Justice (DOJ) has acknowledged its investigation of Entergy for its anti-competitive activities and by inference that it is forcing Entergy to sell its transmission system and relinquish its purchasing of electricity on the open market to an independent organization. Attorney General Jim Hood emphasized that Entergy still has to pay for past actions in overcharging Mississippi ratepayers through the state lawsuit.

In DOJ’s statement issued Wednesday, it acknowledged that Entergy had violated anti-trust laws in stating, “Entergy’s commitments to obtain membership in an RTO [independent power purchaser] and divest its transmission system to a third party with the incentive to make efficient transmission investments are significant steps towards restoring competition in the Entergy service area.” Attorney General Jim Hood admitted to having brought these issues to the DOJ, but stated that although DOJ’s actions will typically stop an antitrust violation and seek fines, the State’s action is meant to ensure that ratepayers are fully protected. The state’s lawsuit is not only seeking injunctive relief and penalties for cheating ratepayers, it is also seeking restitution to the State for overpayments caused by Entergy foreclosing access to its transmission system to prevent cheaper electricity from independent generators to Mississippi ratepayers. In order to get a monopoly from the state, Entergy had a duty to sell ratepayers the lowest cost, reliable electricity. Instead, the State asserts the New Orleans based parent company of Entergy bought and sold the cheap electricity from independent generators for a profit to the parent company, but made Mississippi ratepayers to pay for the more expensive electricity generated at Entergy’s antiquated generation plants.

In the state’s suit against Entergy, which has been pending in U.S. District Court for the Southern District of Mississippi for almost four years, Entergy has repeatedly argued to the court that this is a regulatory matter for the Federal Energy Regulatory Commission, not state or federal courts or even the state Public Service Commission. The DOJ rejected Entergy’s proposed explanations related to the antitrust concerns, stating that the “professed efficiency and regulatory justifications . . . have not been persuasive.”

“We are pleased that DOJ has confirmed some of the concerns we raised in our separate case,” said Attorney General Jim Hood. “DOJ has sent a signal to Entergy, just like we will here in Mississippi, that you cannot make decisions that harm consumers and get away with it.”

In its statement, DOJ pledged to closely monitor Entergy’s actions to join the Midwest Independent Transmission System Operator, a regional transmission organization, as well as turn over its transmission decisions to an independent third party, ITC Holdings Corp. DOJ’s statement explains that “these measures will address the Antitrust Division’s concerns by eliminating Entergy’s ability to maintain barriers to wholesale power markets, ensuring that all Entergy service area generation is dispatched independently and at lowest cost, increasing market transparency and oversight, and properly aligning incentives for the construction of transmission. Such measures will also directly benefit consumers, who will ultimately enjoy lower electricity prices and improved reliability as a result of RTO integration and the transmission system divestiture.” Attorney General Jim Hood intends to monitor these developments as well as they progress before the Mississippi Public Service Commission. If Entergy doesn’t follow through on these commitments, DOJ has said that it “can and will take appropriate enforcement action, if warranted.”

“Only by agreeing to these approved steps will Entergy remove itself from federal antitrust scrutiny,” said Attorney General Hood. “Mississippi consumers can rest assured that I will continue to vigorously pursue our office’s action against Entergy. DOJ’s strong position will be helpful in getting relief to Mississippi consumers. I am ready for us to have our day in court so that Entergy will have to open its books and all Mississippi ratepayers can see just how much we have been overcharged by Entergy.”

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