Entergy Arkansas is proposing a rate increase for its customers to help pay $135 million in reimbursements to customers in Louisiana, Mississippi, and Texas. According to a 2018 ruling by the Federal Energy Regulatory Commission, Entergy Arkansas violated an agreement it had with affiliates in Texas, Mississippi, and Louisiana by misreporting sales of energy to non-network entities from 2000 to 2009.
In 2009, the Louisiana Public Service Commission filed a lawsuit alleging its customers had been overcharged as a result of Entergy Arkansas's practices. Last year's ruling by the federal oversight commission required the Arkansas affiliate to repay customers in the other states. Michael Fontham, the lead lawyer for Louisiana in the case, says the stockholders, not ratepayers, should be held responsible.
"It's very clear in the findings that it was the stockholders who received the benefits of this violation, and we actually argued in the case, Louisiana argued in the case that Entergy Arkansas ratepayers were entitled to some damages as well," Fontham said. "But Entergy argued that was outside the scope of the proceeding, that should be handled in Arkansas and FERC went along with that."
David Palmer, director of regulatory affairs for Entergy Arkansas, said the company was uncertain on state regulations in Louisiana concerning the sale of power from neighboring states.
"There was some language in there that allowed us to make certain sales of energy, and the Louisiana commission interpreted that language to say things had to be done one way, and we had interpereted it to do another way," Palmer said. "The Arkansas commission actually got involved at the federal level and agreed with our interpretation of that language."
According to the Arkansas Democrat-Gazette, Entergy Arkansas's proposal to raise the rate of most customers by over $4 per month has been delayed while under review by the Arkansas Public Service Commission. Over $66 million dollars in reimbursements was paid out to customers in Louisiana earlier this year.
Palmer said the company would not have made the same mistakes were officials clear on Louisiana's regulations.
"Mathematically, we try to look back and say, 'we'll make this change and see what the outcome is,' and that results in a payment to the other companies. But in reality, it's hard to go back and say, 'this was good, this was bad,' because we would have done a host of things differently had we understood the rules," Palmer said.
Palmer said Entergy Arkansas has ongoing challenges to the judgment in federal court. The Arkansas Public Service Commission is expected to rule on the proposed rate increase within the next several months.