A federal regulatory judge has ruled that Entergy Corp. overcharged customers in Mississippi and three other states by selling low-cost power to third parties for profit. The decision states that shareholders should make refunds but did not specify the extent of damages.
If the decision is upheld by the Federal Energy Regulatory Commission (FERC), Mississippi could receive around $20 million, sources say.
Entergy will appeal the decision and denies any wrongdoing.
Entergy is a public electric utility required by law to provide its customers with the cheapest existing power. Selling low-cost power off system for profit would force higher costs on Entergy customers.
According to the ruling made by a FERC administrative law judge, Entergy violated system agreements in Mississippi, Arkansas, Louisiana and Texas between 2000 and 2009. The judge’s decision must be approved by FERC commissioners.
According to testimony by the Louisiana Public Service Commission, damages to the system total $144 million, including more than $20 million to Mississippians.
Entergy Mississippi spokesperson Mara Hartmann said, “This is an initial decision in the FERC docket, not a final one, and it’s subject to review by the entire commission. While we are still reviewing the initial decision, Entergy continues to believe that our actions were appropriate and consistent with the System Agreement and we will challenge the ruling. Because it’s an initial decision, it is premature to talk about any payments.”
Hartmann said Entergy will request that FERC reverse the decision in January.
Mississippi Public Service Commissioner Lynn Posey, who represents most of Entergy’s Mississippi customers, said “The (Mississippi) Commission has been aware of (the case) for a long time and has been actively involved in it.”
The Louisiana Commission filed the case against Entergy in July 2009, and Mississippi joined in, he said.
“The admin law judge – I feel sure his ruling will be appealed,” Posey said. “I think our part in it would be, as I understand it, in the $18- to $20=million range … and I haven’t had a change to get anybody to figure out what that would mean to anybody, but I plan on doing that here in just a little bit.”
Mississippi Attorney General Jim Hood filed a lawsuit against Entergy in Dec. 2008 claiming that Entergy illegally manipulated the purchase and the sale of electricity to maximize profits. The case is pending a U.S. District Court.
Hood said in a Dec. 13 statement that “Entergy is now sitting under a mountain of evidence that its business practices have been just plain bad for Mississippi ratepayers.”
In October New Orleans-based Entergy Corp. disclosed to state regulators that the U.S. Department of Justice is investigating its transmissions system and electricity-purchasing practices.
During the past year Entergy has also come under fire from the Entergy Regional State Committee (E-RSC) for allegedly not maintaining its transmissions system and thereby keeping electricity providers selling cheaper power off the grid. The E-RSC is comprised of regulators from Mississippi, Arkansas, Louisiana and Texas. Public Service Commissioner Brandon Presley is Mississippi’s E-RSC representative.
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