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Presley: Utility to be held accountable

December 13, 2010

Public Service Commissioner Brandon Presley addresses the Starkville Rotary Club on Monday.


Officials will hold Entergy Corp. accountable and their “feet to the fire” for overcharging rate-payers in four states, including Mississippi, a public service official said Monday.
Brandon Presley, D-Nettleton, the northern district Public Service commissioner and the three-member panel’s current chair, spoke to the Starkville Rotary Club on Monday, when Mississippi Attorney General Jim Hood announced a ruling by an administrative law judge for the Federal Energy Regulatory Commission.
The judge found Entergy violated its own “System Agreement,” which requires it to sell its cheapest electricity to its affiliated utility companies. Instead, the judge said, Entergy Corp. sold its lowest cost power to outside parties from 2000 to 2009 for a profit, forcing higher electricity costs onto customers of the Entergy subsidiaries.
The investigation covered subsidiaries with about 2.7 million customers: Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans and Entergy Texas. Also involved is Entergy Services Inc., which provides shared services to all the utilities, such as engineering.
Entergy provides electricity to 45 counties in Mississippi, including Webster.
In talking to Starkville Rotary Club members, Presley referenced a statement
he issued Monday on the ruling. He says the company should refund customers’ money on the overcharge, “not credits on bills, that adds insult to injury, but actually put a check back in the people’s mailbox that had to pay for these overcharges over these years.”
He said: “We’re going to be working to hold that company’s feet to the fire, make sure they’re accountable ... We’re not going to let them off the hook on that.”
The case was brought by the Louisiana Public Service Commission.
Hood said the judge’s order requires Entergy’s shareholders to repay the overcharges to the subsidiary companies, but he said the money then should be refunded to rate-payers because the overcharges were passed along through monthly electricity bills.
“A judge has now found by compelling evidence that Entergy has overcharged rate-payers by selling them its most expensive electricity. This is one of the company’s methods of cheating rate-payers,” Hood said in a statement.
Entergy will file a request in early January to ask the entire Federal Energy Regulatory Commission to review last week’s initial decision, said Entergy Mississippi spokeswoman Mara Hartmann. She said it’s premature to discuss how much money would be refunded.
“We continue to believe that the sales that the Louisiana Public Service Commission challenged were appropriate and were in line with the system agreement,” said Mike Burns, a spokesman for Entergy Corp.
Hartmann called the dispute a “complex issue of tariff interpretation.”
The ruling can be appealed and no dollar amount for a potential rebate was specified by the judge.
Hood sued Entergy in December 2008, claiming the company overcharged customers by buying electricity from its sister companies at a higher rate than on the open market, then passing the inflated costs along to consumers. That suit, currently pending in federal court, is separate from the Louisiana Public Service Commission’s complaint to FERC.
Hartmann said Entergy officials believe regulatory agencies, such as FERC, are the proper groups to decide the issue.
“It’s time for him to drop his lawsuit,” Hartmann said of Hood.
In a separate matter, Presley explained his vote on the Kemper County coal plant to the Rotary audience. The PSC approved the facility in April with Presley’s dissent.
“ ... For the first time ever, and I mean ever, consumers in this project are being asked to pay up front for a plant in hopes that it’s built in the future. In regulatory law and regulatory principle, there’s something called ‘used and useful,’ meaning that the consuming public never pays for an asset by a utility until it is in fact used and useful by the consuming public,” Presley said. “ ... This allows rates to go up over $500 million before the plant is ever built, ... so we’ve got to have a hope and a prayer that that it will in fact get built at the cost they say.”
Among other reasons he declined to support the project, also, Presley says he asked Southern Co. officials to guarantee the technology will work, and “they said unequivocally ‘no.’”
The Associated Press reports officials will break ground on the $2.4 billion facility on Thursday.
Details of the event have not been announced. The Mississippi Development Authority is handling the event.
The 582-megawatt plant is being built between Mississippi 493 and Mississippi 495 near the Liberty community. It will use a process that converts coal into a synthesis gas that can generate electricity with fewer emissions than existing pulverized coal power plants.
Bob Fairbank, director of Governmental Relations for Mississippi Power, told a Philadelphia civic club that steel will be coming out of ground in 2011. Fairbank says the facility will employ about 280 people by 2014.
After the meeting, Presley listed a few of the items he expects the PSC to address in the coming months. These include:
• Net metering. Officials are working on a way to allow consumers who generate their own electricity through such means as solar panels and other means to sell this power back to the utility, he said.
• Energy efficiency. PSC officials are in the formulation process of a policy on the subject and hope to put it out in the spring, Presley said.

Editor’s note: The Associated Press contributed to this report.

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