For the second consecutive quarter, Entergy Mississippi will have to defend its process that sets the price of electricity.
The Mississippi Public Service Commission (PSC), in response to a 28% increase in rates for the third quarter, held a series of hearings in July and August scrutinizing the company’s quarterly fuel cost adjustment filings. Entergy said then that the increase was due to the price of natural gas, which makes up more than half the fuel mixture the company uses to manufacture electricity. State law allows public utilities to recover fuel costs dollar-for-dollar, and forbids them from profiting on over-collections. From July 2007 to July 2008, the price of a British Thermal Unit of natural gas rose 120% on the commodities market. It has since fallen, and Entergy, in its fourth quarter filing with the PSC, dropped rates.
Now Attorney General Jim Hood has sued Entergy in Hinds County Chancery Court, because he says the company has not released documents his office requested for a review of the fuel cost adjustment.
“Our question from the start has been: If Entergy has nothing to hide in Mississippi, then it should be eager to release the documents we have requested and show our ratepayers that they are not being overcharged, especially during these times of economic hardship,” Hood said in a statement announcing the lawsuit. Hood called Entergy’s practices a “shell game” in which the utility buys electricity and fuel for Mississippi at inflated rates from its sister companies in Louisiana, Arkansas and Texas and then overcharges Mississippi customers for the power.
“We have asked Entergy to ‘turn on the lights’ and justify its recent rate increases by releasing information about its business practices. Our requests have been denied, and now Entergy must tell a judge why a public utility should be allowed to hide these documents,” said Hood’s release, which cited in cases in Louisiana and Texas in which millions of dollars had been refunded to Entergy ratepayers because of over-collections.
Hood originally subpoenaed Entergy in August, asking for documents that detail the company’s methods of fuel procurement and electricity purchasing. Entergy sought an injunction in federal court, saying the AG’s office had no oversight of public utilities. Hood refuted that notion, saying the Mississippi Consumer Protection Act allowed for his office to oversee public utilities.
Entergy, like other public utilities, has to file documents with the PSC and other regulatory agencies laying out how much it costs to manufacture electricity. Those documents are public record.
That’s the basis of Entergy’s argument, spokeswoman Mara Hartmann said.
“We’re already regulated by a number of agencies,” she said. “The information (Hood wants) is already available through other channels. So for us to go back and gather 30 years’ worth of fuel purchasing documents would be extremely burdensome and expensive.”
For Mississippi College professor of law Matt Steffey, that makes Hood’s argument curious.
“I assume this means the AG thinks there are records that are not being disclosed,” Steffey said. “(Entergy) is a regulated industry, so if there were some kind of documents that were not being disclosed, that would be surprising.”
Energy costs, along with the housing market, have been the point of the spear in the current economic downturn. The price of a gallon of gasoline is roughly a dollar more than it was this time last year, which drives up the price of associated services — electricity bills, product transport fees and food costs, to name a few. Solutions have become a major political issue in state and national elections.
“If anything, this certainly gives a public face to doing something about energy costs,” Steffey said. “But I certainly anxiously await what (Hood’s lawsuit) adds to what is already being disclosed (by Entergy). It might be a lot or it might be nothing at all. But like Woody Allen said, showing up for anything is 80%. So maybe 80% of a politician’s life is showing up in public.”
Contact MBJ staff writer Clay Chandler at clay.chandler@ msbusiness.com .