Hood fear comes true, Entergy says law ends suit

Published 7:40 pm Monday, June 25, 2018

The leader of Mississippi’s largest privately owned electrical utility said in February that a new law wouldn’t automatically kill a lawsuit by Attorney General Jim Hood, but Entergy Corp. now argues that the law, which doesn’t even take effect until July 1, does put an end to the suit.

That’s just one prong of the company’s argument to U.S. District Judge Carlton Reeves, seeking to end a suit in which the Democrat Hood alleges the utility overcharged customers.

Entergy Mississippi, a unit of the New Orleans-based company, continues to argue that even before the law, the dispute should have been handled by the Federal Energy Regulatory Commission, or at least the Mississippi Public Service Commission.

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But citing the law seems to confirm Hood’s fears that Entergy was using its lobbying muscle to cut off the lawsuit, despite denials.

“They did lie to the Legislature,” Hood said. “It was all bogus to get that bill passed.”

The law says that the Public Service Commission has “exclusive jurisdiction” over utility matters, and the attorney general can only appeal decisions to court or sue with commission permission.

Earlier this month, Entergy filed two separate motions asking Reeves for summary judgment.

“Mississippi law is clear — and since the March 19, 2018 enactment of Senate Bill 2295 is even clearer — that any challenge to a utility’s practices alleged to have impacted rates charged to retail customers must proceed first before the (Mississippi Public Service Commission),” wrote lawyers for Entergy.

Entergy Mississippi CEO Haley Fisackerly told The Associated Press in February that passage of Senate Bill 2295 wouldn’t moot the lawsuit. But spokeswoman Mara Hartman said Friday that doesn’t stop the company from relying on it in court.

“To clarify, mere passage of SB 2295 would not automatically extinguish the lawsuit or guarantee dismissal,” Hartmann wrote in an email. “Rather, the judge handling the lawsuit would have to determine whether the amended statute warrants dismissal.”

Hood claims Entergy wrongly chose to sell overpriced power from inefficient generating plants from 1998 to 2009 and should pay back up to $1.1 billion, plus penalties. His lawsuit argues Entergy instead had a duty to buy cheaper power from outside generators for its 447,000 customers in western Mississippi.

Entergy faced claims from the U.S. Department of Justice that it used its electrical grid to favor its own power plants over independent generators, even when it cost more to make electricity at Entergy plants. Many generators succumbed to financial distress and Entergy bought seven of their power plants. Entergy says it did nothing wrong. But private lawyers sued two Entergy subsidiaries in Louisiana, winning about $100 million in class-action damages. They lost a Texas suit.

Entergy also argues that even the Public Service Commission shouldn’t have jurisdiction, saying the dispute should be decided by the Federal Energy Regulatory Commission. That’s because it involved costs allocated to the Mississippi company under Entergy’s now-defunct system agreement. It covered unified operation of what were then six subsidiaries.

Entergy argues that buying more power for its Mississippi unit from independent producers would have harmed other subsidiaries under the system agreement.

The company also says that it needed its own expensive-to-run power plants that could start and stop quickly. Entergy notes that it’s required to buy electricity generated as a byproduct at industrial plants. Louisiana and Texas have many such plants and Entergy says the power supply can shift from moment to moment.

Ultimately, Entergy argues that Hood is trying to usurp the Public Service Commission’s rate-making power.

“The attorney general’s attempt to establish a dual system of utility regulation is improper and is a waste of taxpayer money,” Hartmann wrote.

Jeff Amy has covered politics and government for The Associated Press in Mississippi since 2011. Follow him on Twitter at jeffamy.