Louisiana regulators unsure whether to accept $121M settlement offer from Entergy

By Victor Skinner | The Center Square contributor

Entergy is proposing to send about $121 million to Louisiana to settle allegations it overcharged ratepayers with inflated costs from a nuclear plant in Mississippi, though some utility regulators aren’t convinced it’s a good deal.

Entergy is proposing to spend $588 million to settle numerous allegations it overcharged ratepayers through a variety of tax maneuvers, incentive pay for executives and other issues at its Grand Gulf, Mississippi nuclear power plant that sells wholesale power to multiple states, The Advocate reports.

The Mississippi Public Service Commission announced last week it agreed to a $300 million settlement to end the state’s part in 13 rate proceedings before the Federal Energy Regulatory Commission, finalizing a dispute that began in 2017.

The deal will use $200 million to offset high fuel prices that the company planned to pass on to customers, and $35 million in lump sum bill credits to Entergy Mississippi customers amounting to a one-time credit of $80. Another $50 million in bill credits were also made in prior refunds as part of the FERC proceedings, according to an Entergy statement.

The proposed settlement would send $95 million to the Louisiana Public Service Commission and $116 million to the New Orleans City Council, which regulate Entergy Louisiana and Entergy New Orleans respectively. Another $142 million would go to Arkansas, according to the settlement.

It remains unclear how much, if any, would be returned to Louisiana customers, but it is possible customers could win a larger settlement and other concessions if regulators continue to pursue claims through the FERC. Early recommendations in the case suggest Entergy should repay more than the settlement provides, though the FERC hasn’t made a final determination, the Advocate reports.

Louisiana Public Service Commissioner Craig Green told the news site it’s “premature” to comment on the offer, which commissioners are reviewing and plan to discuss at the commission’s July 27 meeting.

“It is important to note, though, that this was a unilateral, take-it-or-leave-it offer from Entergy and they have not engaged our legal counsel, or any regulatory body actively involved in the litigation, to afford them the opportunity to negotiate a more fair compromise,” Green said.

“And while financial settlements could benefit customers in the short term, the reason we take on these legal battles at FERC is to ensure that the practices of utilities we regulate are aligned with what is best for their customers long term,” he said. “I personally want to ensure any settlement, or decision not to settle, focuses on that principle.”

Commissioner Foster Campbell was also skeptical about the deal when contacted by The Advocate.

“I don’t have a lot of faith in their generosity,” he said.

New Orleans City Council Member JP Morrell described the proposal in a recent statement as a “ridiculous attempt by Entergy to sandbag the city council and mislead the other regulatory agencies in Louisiana and Arkansas into a bad settlement.”

“As utility bills continue to spiral out of control in New Orleans, for Entergy and Entergy New Orleans to try to manipulate us into taking less than ratepayers are entitled to is beyond offensive,” he said.

Entergy did not admit any wrongdoing as part of the settlement, and argued it’s simply attempting to mitigate costs from the ongoing FERC dispute.

“Entergy has long maintained that the disputed positions regarding the taxing, financing, accounting and operating of Grand Gulf before FERC are proper, well-reasoned and in the best interest of its customers and the company. Entergy also believes Grand Gulf has provided consistent value for its customers through its operations over the years,” an Entergy statement read. “However, Entergy officials explained that the ongoing cost of the dispute at FERC and the uncertainty it created for customers, employees and stockholders led the company to seek a resolution.”

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